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EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") entered into as of the eleventh
day of January, 1999 by and between MED/WASTE, INC., a Delaware corporation (the
"Company"), and XXXX. X. XXXXXXXX ("XXXXXXXX").
R E C I T A L S:
A. The Company is engaged in the medical waste management business
through its wholly owned subsidiaries (the "Business");
X. XXXXXXXX has substantial experience in the operation and management
of the medical waste business; and
C. The Company desires to employ XXXXXXXX as the Company's Vice
President of Legal Affairs and XXXXXXXX desires to be employed by the Company in
such position on the terms and conditions provided herein; and
D. The Company believes that it is in the best interest of the Company
to assure XXXXXXXX of a secure minimum compensation and to diminish the
inevitable distraction of XXXXXXXX that may result in the event of the
possibility, threat or occurrence of a Change of Control (as defined below) by
providing for certain compensation arrangements upon a Change of Control.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties agree as follows:
1. RECITATIONS. The above recitations are true and correct and are
incorporated herein by this reference.
2. POSITION OF EMPLOYMENT.
2.1. EMPLOYMENT POSITION. The Company hereby retains and
employs XXXXXXXX as Vice President of Legal Affairs of the Business during the
term set forth in this Agreement. XXXXXXXX shall perform such duties as are
usually performed by a Vice President of Legal Affairs of a business similar in
size and scope as the Company and such other reasonable additional duties as may
be prescribed from time to time by the Company's Board of Directors which are
reasonable and consistent with the Company's operations, taking into account
XXXXXXXX'x education, expertise and job responsibilities. XXXXXXXX shall report
directly to the Chief Operating Officer and
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the Board of Directors of the Company. All major actions of XXXXXXXX shall be
subject and subordinate to the review and approval of the Chief Operating
Officer and the Board of Directors. The Board of Directors shall be the final
and exclusive arbiter of all policy decisions relative to Company's Business. In
the interim between Board or Executive Committee meetings, the Chairman of the
Board shall be the exclusive arbiter of policy matters.
2.2. DEVOTION OF TIME. During the term of this Agreement,
XXXXXXXX agrees to devote full time and attention during normal business hours
to the business and affairs of the Company to the extent necessary to discharge
the responsibilities assigned to XXXXXXXX and to use best efforts to perform
faithfully and efficiently such responsibilities. During this Agreement, it
shall not be a violation of this agreement for XXXXXXXX to (i) serve on
corporate, civic or charitable boards or committees; (ii) deliver lectures,
fulfill speaking engagements or teach at educational institutions; or (iii)
manage personal investments so long as such activities do not significantly
interfere with the performance of XXXXXXXX'x responsibilities with the Company
and which investments are not in direct competition with the Company.
2.3. CORPORATE OPPORTUNITY. It is the express understanding by
and between the parties that the doctrine of corporate opportunity as set forth
in Delaware corporate law shall apply to XXXXXXXX and the Company for any
business opportunities in the medical or solid waste industries or such other
industry in which the Company operates during the term of this Agreement.
2.4. LOCATION OF EMPLOYMENT. Unless otherwise agreed by
XXXXXXXX, XXXXXXXX'x principal place of employment shall be in a mutually
agreeable location and facility within Miami-Dade County, Florida.
3. TERM OF EMPLOYMENT
3.1. TERM OF EMPLOYMENT. This Agreement shall begin as of the
date hereof (the "Commencement Date") and shall end on DECEMBER 31, 1999,
subject to automatic extension or earlier termination as otherwise set forth in
this Agreement. Notwithstanding anything herein to the contrary, upon the
effective date of a Change of Control as defined in Section 3.6 herein, the Term
of this Agreement shall automatically convert to a two (2) year term, with the
Commencement Date of the two (2) year term to be the effective date of the
Change of Control.
3.2. TERMINATION BY THE COMPANY FOR CAUSE. The Company may
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terminate XXXXXXXX'x employment effective upon written notice, if such
termination is for "Cause." For purposes of this Agreement, "Cause" is defined
as:
3.2.1. Death of XXXXXXXX;
3.2.2. A material default or breach by XXXXXXXX of
any of the provisions of this Agreement;
3.2.3. Failure to follow reasonable and lawful
directives of the Company's Board of Directors, which are consistent with
XXXXXXXX'x job responsibilities and performance;
3.2.4. Actions by XXXXXXXX constituting fraud,
embezzlement or dishonesty which result in a conviction of a criminal offense
not overturned on appeal;
3.2.5. Intentionally furnishing MATERIAL false,
misleading, or omissive information to the Company's Board of Directors or any
committee thereof;
3.2.6. Actions constituting a breach of the
confidentiality of the Business and/or trade secrets of the Company which is
materially detrimental to the Company;
3.2.7. The commission of an act by XXXXXXXX involving
moral turpitude;
3.2.8. Intoxication by alcohol or drugs during the
performance of duties on more than one occasion; or
3.2.9. In the event that XXXXXXXX shall become
mentally or physically disabled (as hereinafter defined) so as to be unable to
perform his duties for a period of thirty (30) days. During such disability and
prior to termination, XXXXXXXX shall continue to receive his Base Salary and
other compensation and benefits herein. Disability for the purposes herein shall
be the inability of XXXXXXXX to perform his duties as determined by an
independent physician mutually chosen by the Company and XXXXXXXX.
Upon termination for Cause, the Company shall not be liable for any further
compensation or benefits following the effective date of termination other than
accrued Base Salary.
3.3. TERMINATION WITHOUT CAUSE. The Company shall have the
right to
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terminate this Agreement without cause on thirty (30) days written notice,
subject to payment by the Company of the Termination Payment described in
Section 4.5 herein; provided however, that if the Company terminates this
Agreement in accordance with this Section 3.3 following a Change of Control (as
defined in Section 3.5 herein), the Company shall pay to XXXXXXXX the Severance
Payment described in Section 4.6 herein.
3.4. TERMINATION BY XXXXXXXX. XXXXXXXX may terminate this
Agreement upon thirty (30) days written notice after a material default of this
Agreement by the Company, which default is not cured within the thirty-day
notice period. Such notice shall set forth in reasonable detail the facts
underlying the default. If XXXXXXXX terminates this Agreement under this Section
3.4, prior to a Change of Control, XXXXXXXX shall be entitled to severance equal
to three (3) months Base Salary. If XXXXXXXX terminates this Agreement under
this Section 3.4 following a Change of Control, XXXXXXXX shall be entitled to
the Severance Payment as provided in Section 4.6 herein.
3.5. Change of Control is defined for the purposes of this
Agreement as any of the following acts:
3.5.1. The acquisition by any person, entity or
"group" within the meaning of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934 (the "Exchange Act") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of fifty (50%) percent or more of
either the then outstanding shares of the Company's common stock or the combined
voting power of the Company's then outstanding voting securities entitled to
vote generally in the election of directors; or
3.5.2. If the individuals who serve on the Company
Board of Directors as of the Commencement Date (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board of Directors;
provided, however, that any person who becomes a director subsequent to the
Commencement Date whose election or nomination for election by the Company's
shareholders was approved by a vote of at least a majority of the directors then
compiling the Incumbent Board shall be for purposes of this Agreement considered
as if such person was a member of the Incumbent Board; or
3.5.3. Approval by the Company's stockholders of (i)
a merger, reorganization or consolidation whereby the Company's shareholders
immediately prior to such approval do not, immediately after consummation of
such reorganization,
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merger or consolidation own more than 50% of the combined voting power entitled
to vote generally in the election of directors of the surviving entity's then
outstanding voting securities; or (ii) liquidation or dissolution of the
Company; or (iii) the sale of all or substantially all of the assets of the
Company.
Upon the effective date of a Change of Control, this Agreement
shall automatically be extended for a period of two (2) years commencing such
date.
3.6. AUTOMATIC EXTENSION. Prior to a Change of Control, this
Agreement shall be automatically extended for successive one (1) year periods at
the end of the initial or extended terms, unless either party provides written
notice of termination to the other party at least thirty (30) days prior to the
expiration of the initial or such extended term, respectively. In the event that
the Agreement is not renewed by the Company at the end of the first year of
employment, XXXXXXXX shall be entitled to receive a severance payment equal to
three (3) months of Base Salary and the Bonus payable in accordance with the
terms hereof, payable in three equal monthly installments on the first day of
each month commencing on the first day of the month following non-renewal.
4. COMPENSATION AND BENEFITS.
4.1. SALARY. For the first year of the term of this Agreement,
Company shall pay to XXXXXXXX, a base salary at a total annual rate of $80,000
(the "Base Salary"), payable in cash. Base Salary shall be paid in regular
payroll intervals consistent with payroll policy established by the Company from
time to time.
4.2. COST OF LIVING INCREASE. XXXXXXXX'x Base Salary shall be
automatically increased on January 1 of each year (the "Yearly Cash Increase")
by the greater of (i) five percent (5%), or (ii) the percentage increase, if
any, of the consumer price index for Urban Wage Earning and Clerical Workers
(Greater Metropolitan Miami Area, all items) issued by the Bureau of Labor
Statistics of the U.S. Department of Labor using the year 1967 as a base of 100
(the "Index"). In the event the Index ceases to be published during the term of
this Agreement or any extension thereof, the parties shall use a mutually
acceptable comparable statistical index on the cost of living in the United
States as shall then be computed and published by an agency of the United
States. The Company Board of Directors shall have the discretion to grant
increases of Base Salary in excess of the amount provided herein.
4.3. BONUS. At the end of each year during the term hereof,
XXXXXXXX shall be entitled to a bonus in the amount of $10,000, payable by March
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31, of the next succeeding year. In addition, XXXXXXXX shall be entitled to such
bonuses or incentive compensation as maybe determined from time to time by the
Company's Board of Directors in its sole discretion. The company's Board of
Directors or any committee thereof may establish an incentive bonus plan for
XXXXXXXX which would establish targeted profit and revenue levels, as well as
other goals. The Board shall have the full and complete discretion in the
establishment, if a all, of an incentive bonus plan for any given year or to
grant additional or discretionary bonuses to XXXXXXXX during the term of this
Agreement. Nothing set forth herein shall obligate the Company to pay XXXXXXXX
any bonus or incentive compensation.
4.4. STOCK OPTIONS. Upon the Commencement Date herein, the
Company shall cause to be granted to XXXXXXXX options to purchase an aggregate
of 5,000 shares of the Company's common stock, $.001 par value pursuant to the
Company's 1996 Employee Stock Option Plan. The exercise price shall be the
closing sale price of the company's common stock on the Commencement Date as
reported on the NASDAQ Small Cap Market. Such Options shall have a term of five
years and shall vest and be exercisable 50% six months following the
Commencement Date and the balance on the first anniversary of the Commencement
Date. Notwithstanding, vesting of options shall immediately accelerate upon an
event of Change of Control as defined in Section 3.5 herein. In the event of a
change of control, XXXXXXXX shall receive an option to purchase an additional
5,000 shares of common stock on identical terms as the grant discussed above;
provided however, that all such options shall vest immediately upon a change of
control. XXXXXXXX shall be eligible from time to time to receive grants of stock
options, under a stock option plan or otherwise, in such amount and at such
times as determined by the Board of Directors or any committee thereof.
4.5. ADDITIONAL BENEFITS.
4.5.1. VACATION. XXXXXXXX shall be entitled to a
minimum of three (3) weeks paid vacation during each twelve-month period during
the term of this Agreement; provided however, no vacation may be taken during
the first six months of this Agreement, nor may any vacation period extend
longer that fourteen (14) consecutive days. Any vacation not taken, will not be
paid in cash and will not cumulate from year to year. In addition, XXXXXXXX
shall be entitled to paid time off for the same holidays as other employees of
the Company as established by the Company's Board of Directors.
4.5.2. AUTOMOBILE EXPENSES. During the term of this
Agreement, the Company pay to XXXXXXXX an automobile expense allowance of $350
per month.
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Such automobile allowance shall be inclusive of insurance, gasoline,
maintenance, depreciation and all other expenses associated therewith.
4.5.3. REIMBURSEMENT OF EXPENSES. XXXXXXXX shall be
reimbursed by the Company for all Business expenses which are reasonably
incurred by XXXXXXXX in the performance of his duties under this Agreement. All
travel expenses shall be incurred and reimbursable in accordance with policy
established by the Board of Directors.
4.5.4. PARTICIPATION IN EMPLOYEE BENEFIT PLANS.
XXXXXXXX shall be entitled to participate, subject to eligibility and other
terms generally established by the Company's Board of Directors, in any group
hospitalization, health, disability, profit sharing and pension, and other
benefit plans, as may be adopted or amended by the Company from time to time.
The Company shall pay the premiums on all health and dental insurance for
XXXXXXXX and each of his dependents during the term
4.6. CHANGE OF CONTROL SEVERANCE PAYMENT. In the
event that XXXXXXXX'x employment is terminated following a Change of Control,
XXXXXXXX shall be entitled to the Severance Payment equal to two (2) times his
existing Base Salary, plus the bonus payable in accordance with section 4.3
herein. The Severance Payment shall be payable in twelve (12) monthly
installments on the first day of each month commencing the month following
termination, for a period of twelve months.
5. REPRESENTATION BY XXXXXXXX. XXXXXXXX hereby represents to the
Company that he is physically and mentally capable of performing his duties
hereunder and he has no knowledge of any present or past physical or mental
condition which would cause him not to be able to perform his duties hereunder.
6. CONFIDENTIALITY AND NON-DISCLOSURE OF INFORMATION.
6.1. CONFIDENTIALITY. XXXXXXXX shall not, during the term of
this Agreement or at anytime thereafter, divulge, furnish or make accessible to
anyone without Company's prior written consent any knowledge or information with
respect to any confidential or secret aspect of the Business, including but not
limited to: the Company's costs; supplier's names, pricing and terms; customer
names, addresses and telephone numbers, billing procedures; pricing; the
Company's Business techniques, computer programs and printouts; identity of
prospective customers; confidential information disclosed by the Company's
customers to the Company; the Company's banking relationships, including the
extent and terms of lines of credit and
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borrowing costs; or other information concerning the business or its employees,
UNLESS THE INFORMATION IS LEGALLY COMPELLED OR ALREADY EXISTS IN THE PUBLIC
DOMAIN.
6.2. OWNERSHIP OF INFORMATION. XXXXXXXX recognizes that all
records, customer lists, supplier lists, material cost data, files,
correspondence with customers and suppliers of material and services, computer
printouts, contacts, reports, notes, business plans, compilations of other
recorded matter, and copies or reproductions thereof, relating to the Company's
operations and activities and other information relating to the Company, its
customers and suppliers, made or received by XXXXXXXX in the course of his
employment are the exclusive property of the Company and XXXXXXXX holds and uses
same as trustee for the Company and subject to the Company's sole control and
will deliver same to the Company at the termination of his employment, or
earlier if so requested by the Company in writing, UNLESS THE INFORMATION IS
LEGALLY COMPELLED OR ALREADY EXISTS IN THE PUBLIC DOMAIN. All of such
information which if lost or used by XXXXXXXX outside the scope of his
employment could cause irreparable and continuing injury to the Company's
Business for which there may not be an adequate remedy at law.
7. RESTRICTIVE COVENANT. As an inducement to cause the Company to enter
into this Agreement, XXXXXXXX covenants and agrees that during his employment
and, for a period of twelve (12) months after he ceases to be employed by the
Company, regardless of the manner or cause of termination:
7.1. RESTRICTION. XXXXXXXX will not be an employee, agent,
director, stockholder or owner (except of not more than a controlling interest
in the voting securities of any publicly traded entity), partner, consultant,
financial backer, creditor or be otherwise directly or indirectly connected with
or participate in the management, operation or control of any Business, firms,
proprietorship, corporation, partnership, association, entity or venture engaged
in the provision of services or supplies similar to the Business (a "Competing
Business") within Dade, Broward or Palm Beach counties (the "Restricted Area").
7.2. SOLICITATION OF BUSINESS. XXXXXXXX will not initiate any
contact with, call upon, solicit business from, sell or render services to any
customer of the Company with respect to a Competing Business in the Restricted
Area or purchase from any supplier or potential supplier any materials for same
and XXXXXXXX shall not directly or indirectly aid or assist any other person,
firm or corporation to do any of the aforesaid acts.
7.3. SOLICITATION OF EMPLOYEES. XXXXXXXX will not directly or
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indirectly, as principal, agent, owner, partner, stockholder, officer, director,
employee, independent contractor or consultant or in any individual or
representative capacity for himself or on behalf of any business, firm,
corporation, partnership association or proprietorship, initiate contact with or
solicit, or directly or indirectly cause others to solicit the employment of any
officer, sales person, agent, or other employee of the Company, for the purpose
of causing said officer, sales person, agent or other employee to terminate
employment with the Company for the purpose of obtaining employment by a
Competing Business in the Restricted Area.
7.4. MATERIAL VIOLATION. A violation of Sections 6 or 7 shall
constitute a material and substantial breach of this Agreement and shall result
in the imposition of the Company's remedies contained in Section 8.
7.5. OTHER EMPLOYMENT. It is understood by and between the
parties that the covenants set forth in Sections 6 and 7 are essential elements
of this Agreement, and that but for the agreement of XXXXXXXX to comply with
such covenants, the Company would not have entered into this Agreement. Such
covenants by XXXXXXXX shall be construed as agreements independent of any other
provision of this Agreement and the existence of any claim or cause of action
XXXXXXXX may have against the Company whether predicated on this Agreement or
otherwise (other than for Termination or Severance Payments), shall not
constitute a defense to the enforcement by the Company of these covenants.
7.6. ACKNOWLEDGMENT. XXXXXXXX acknowledges and confirms that
the length of the term and geographic restrictions contained in this Agreement
are fair and reasonable and not the result of overreaching, duress or coercion
of any kind. XXXXXXXX further acknowledges and confirms that his full,
uninhibited and faithful observance of each of the covenants contained in this
Agreement will not cause any undue hardships, financial or otherwise, and that
enforcement of this Agreement will not impair XXXXXXXX'x ability to obtain
employment commensurate with XXXXXXXX'x ability and on terms fully acceptable to
XXXXXXXX. XXXXXXXX acknowledges that XXXXXXXX will be receiving significant
information regarding the Business which XXXXXXXX has not previously received
and would not receive without being employed by the Company. XXXXXXXX
acknowledges and confirms that such information would cause the Company serious
injury and loss if used by XXXXXXXX for the benefit of a competitor.
8. REMEDIES. XXXXXXXX hereby acknowledges, covenants and agrees that in
the event of a material default or breach under this Agreement:
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8.1. INJUNCTIVE RELIEF. The Company will suffer irreparable
and continuing damages as a result of such breach and its remedy at law will be
inadequate. XXXXXXXX agrees that in the event of a violation of breach of this
Agreement, in addition to any other remedies available to them, the Company
shall be entitled to an injunction restraining any such default or any other
appropriate decree of specific performance, without any requirement to prove
actual damages or to post any bond or any other security and to any other
equitable relief the court deems proper; and
8.2. NON-EXCLUSIVE REMEDY. Any and all of the Company's
remedies described in this Agreement shall not be exclusive and shall be in
addition to any other remedies which the Company may have at law or in equity
including, but not limited to, the right to monetary damages.
9. SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses, sections, subdivisions, or subsections contained in
this Agreement shall not affect the enforceability of the remaining portions of
this Agreement or any part thereof, all of which are inserted conditionally on
their being legally valid. In the event that one or more of the words, phrases,
sentences clauses, sections, subdivisions, subparagraphs, or articles are
determined to be unenforceable and if such invalidity shall be caused by the
length of any period of time or the size of any area set forth in any part
hereof, such period of time or such area, or both, shall be considered to be
reduced to a period or area which would cure such invalidity.
10. INDEMNIFICATION. The Company agrees to indemnify XXXXXXXX for any
and all liabilities to which he may be subject as a result of his service to the
company as an officer, director, or agent or of any other enterprise in which he
serves at the request of the Company, or otherwise as a result of his employment
hereunder, including all expenses, including legal fees and costs incurred as a
result of any proceedings brought or threatened against XXXXXXXX, to the fullest
extent permitted by law. Counsel's fees, to the fullest extent permitted by law,
shall be paid by the Company in advance of any final disposition of a proceeding
upon receipt of an undertaking by XXXXXXXX that he will repay such fees if it is
ultimately determined by a court of competent jurisdiction that he is not
entitled to indemnification.
11. SUCCESSORS AND ASSIGNS.
11.1. SUCCESSORS. This Agreement shall be binding upon the
parties
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hereto and their successors and assigns. For purposes of this Agreement,
the term "Successor" of Company shall include:
11.1.1. Any person or entity, whether direct or
indirect, whether by purchase, merger, consolidation, operation of law,
assignment, or otherwise acquires or controls:
11.1.1.1. All or substantially all of the
assets of Company; or
11.1.1.2. Thirty percent (30%) or more of the
total voting securities of the Company, and was not affiliated with or in common
control of Company as of the Commencement Date;
11.1.1.3. Through any other Business
combination with or without the consent of Company's shareholders.
11.2. ASSUMPTION. The Company shall require any Successor to
expressly assume and agree to be bound by the terms of this Agreement in the
same manner and to the same extent that the Company would be required to perform
if no succession had occurred. The Company shall be in material breach of this
Agreement if any such successor fails to expressly assume or otherwise agree to
guaranty performance of this Agreement to the extent the Company was obligated
prior to any succession.
11.3. ASSIGNMENT. Except as expressly stated in Section 11.1
above, this Agreement shall be non-assignable by either the Company or XXXXXXXX
without the written consent of the other party, it being understood that the
obligations and performance of this Agreement are personal in nature.
12. NOTICE. Any notices or other communications to any party pursuant
to or relating to this Agreement must be in writing and shall be deemed to have
been given or delivered when (i) hand-delivered; (ii) mailed through the U.S.
Postal Service via certified mail, return receipt requested, postage prepaid;
(iii) through a nationally recognized overnight courier; or (iv) via facsimile,
to the party at their addresses below:
XXXXXXXX: 0000 Xxxxxxxx Xxxxxxx, #0000
Xxxxx, Xxxxxxx 00000
The Company: Med/Waste,Inc.
0000 X.X. 000xx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
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With a copy to: XXXXX X. XXXXXX, ESQ.
Wallace, Bauman, Legon, Fodiman &
Xxxxxxx, P.A.
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
or such other address given by such party to the other party at any time
hereafter.
13. ENTIRE AGREEMENT. This Agreement contains the sole and entire
agreement between the parties with respect to the subject matter hereof.
14. AMENDMENT. No amendment, waiver or modification of this Agreement
or any provisions of this Agreement shall be valid unless in writing and duly
executed by both parties.
15. BINDING AGREEMENT. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective heirs, legal representatives,
successors and assigns.
16. WAIVER. Any waiver by any party of any breach of any provision of
this Agreement shall not be considered as or constitute a continuing waiver or
waiver of any other breach of any provision of this Agreement.
17. CAPTIONS. Captions contained in this Agreement are inserted only as
a matter of convenience or for reference and in no way define, limit, extend or
describe the scope of this Agreement or the intent of any provisions of this
Agreement.
18. ATTORNEY'S FEES. In the event of any litigation arising out of this
Agreement, the prevailing party shall be entitled to recover its attorneys' fees
and costs, including attorneys' fees and costs incurred on appeal.
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19. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
MED/WASTE, INC., a Delaware corporation
By:
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XXXXXX X. XXXXXXX,
President/Chief Executive Officer
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XXXX X. XXXXXXXX
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