Exhibit 10.15
CONSULTING AND
NONCOMPETITION AGREEMENT
------------------------
This CONSULTING AND NONCOMPETITION AGREEMENT (the "Agreement"), is made
and entered into as of December 31, 1992, by and between XXXXXX X. XXXX of
Lexington, Massachusetts ("Executive") and MAC-GRAY CO., INC., a Delaware
corporation ("Company").
W I T N E S S E T H:
--------------------
WHEREAS, Executive and Company have an employment relationship pursuant
to which Executive currently serves as President of Company, and
WHEREAS, Company wishes to engage Executive as a consultant to provide
services of an advisory and consulting nature as more particularly set forth
herein following the termination of Executive's employment with Company.
NOW, THEREFORE, for valuable consideration, including the promises and
covenants of the parties hereto contained herein, the receipt and sufficiency of
which are hereby acknowledged by each of the parties hereto, Executive and
Company hereby represent, warrant, covenant and agree as follows:
ARTICLE I
TERMINATION OF EMPLOYMENT
-------------------------
1.1 Notwithstanding any other agreement or understanding to the
contrary, Executive's employment with Company shall terminate on the earlier of
(i) December 31, 1994, or (ii) the last day of the calendar quarter in which the
Board of Directors of the Company, in its sole discretion, notifies Executive in
writing during the first 45 days of such calendar quarter of its desire to
terminate Executive's employment with Company (either such date, the
"Termination Date"); provided, however, that in no event shall the Termination
Date be earlier than June 30, 1994. Executive shall be deemed to have resigned
as President of the Company as of the Termination Date.
ARTICLE II
TERMS OF CONSULTING ARRANGEMENT
-------------------------------
2.1 Executive shall serve as a consultant to Company for eight (8)
years, such term to commence on the Termination Date and to expire on the eighth
anniversary of the Termination Date (such term, the "Consulting Period").
2.2 During the Consulting Period, Executive shall render such services
of an advisory or consulting nature as the Chairman of the Board of Directors of
Company or Company's Chief Executive Officer or President, and/or their
respective designees, may, from time to time, reasonably request, upon
reasonable notice, in order that Company may continue to have the benefit of
Executive's experience and knowledge of the affairs of Company; provided,
however, that all advisory or consulting services to be rendered by Executive
pursuant to this Agreement shall be reasonably related to Executive's area of
expertise. During the Consulting Period, Executive undertakes to remain
available to such officers for (a) up to 10 hours per month under ordinary
circumstances and (b) up to 40 hours per month during any period when, in the
reasonable business judgment of Company, the services of Executive are necessary
or desirable in connection with an acquisition, merger, sale, restructuring or
similar corporate transaction involving the Company.
2.3 Services contemplated herein will be performed primarily in
Massachusetts, although services shall also be performed elsewhere within the
United States as may be required under this Agreement; provided, however, that
in the event services are required other than in Massachusetts, reasonable
notice shall be given to Executive and all reasonable efforts shall be made to
schedule the performance of such services at mutually agreeable times and
places; and further provided that in the event services are required other than
at Executive's then current residence, Company shall reimburse Executive for all
reasonable travel and accommodation costs incurred by Executive in connection
therewith within fifteen (15) days after receipt by Company of copies of
relevant invoices and other appropriate documentation reasonably satisfactory to
Company. Notwithstanding anything in this Section 2.3 to the contrary, if
Executive requests that services contemplated hereunder be performed over the
telephone, Company shall allow such services to be so performed as long as
Executive's physical presence is not, in the reasonable business judgment of
Company, necessary or desirable to satisfactorily perform such services.
3
2.4 During the Consulting Period, so long as Executive is not in breach
of this Agreement, Company shall pay Executive gross compensation at the annual
rate of five hundred thousand dollars ($500,000), which amount shall be payable
in quarterly installments of one hundred twenty five thousand dollars ($125,000)
on each January 1st, April 1st, July 1st, and October 1st during the Consulting
Period, subject to applicable withholding and deductions.
ARTICLE III
CERTAIN PROMISES, COVENANTS AND OBLIGATIONS OF EXECUTIVE
--------------------------------------------------------
3.1 Executive hereby acknowledges and confirms that in Executive's
position as President of Company, Executive has been, and that in Executive's
position as a consultant hereunder Executive may be, made privy to and put into
the possession of certain confidential information and proprietary property and
trade secrets of Company, and that the disclosure or use by Executive of any
such information, property or trade secrets would damage Company. Accordingly,
Executive hereby acknowledges his continuing duty of confidentiality to Company
and agrees as follows:
(a) For a period of eight (8) years following the Termination
Date, Executive will not, without the express prior written consent of
Company, which consent shall be determined by the Board of Directors of
the Company and shall not be unreasonably withheld or delayed, directly
or indirectly engage, participate or invest in or assist, as owner,
part-owner, stockholder, partner, director, officer, trustee, employee,
agent or consultant, or through any corporation, partnership or other
entity (including, without limitation, a sole proprietorship), or in
any other capacity, any business organization anywhere in the United
States where Company then conducts or plans to conduct business which
is engaged in the coin operated or non-coin operated laundry business
currently conducted by Company; provided, however, that the foregoing
-------- -------
shall not prevent (x) Executive from making passive investments in a
competitive enterprise, the shares of which are publicly traded, if
Executive's aggregate investment in such enterprise constitutes less
than five percent (5%) of the equity ownership of such enterprise or
(y) Executive from serving in a director capacity with the
Multi-Housing Laundry Association. Without implied limitation, the
foregoing covenant shall include (i) hiring, attempting to
4
hire or otherwise soliciting, for or on behalf of any entity or person,
any officer or other employee of Company, or authorizing or approving
any such action by any other person, (ii) encouraging for or on behalf
of any entity or person any officer or other employee to terminate his
or her relationship or employment with Company, (iii) soliciting for or
on behalf of any entity or person any customer of Company and (iv)
diverting to any entity or person any customer of Company.
(b) For a period of eight (8) years following the Termination
Date, Executive shall keep secret and shall not publish, divulge,
furnish, use or make accessible to anyone (otherwise than as may be
necessary for Executive to fulfill his duties to Company or as may be
required under applicable law, and except for information which comes
into the public domain through a third party who has no duty not to
disclose) any confidential or proprietary information about, or
confidential or proprietary records, documentation or data of, Company,
including without limitation: (i) any patents, inventions, proprietary
information, trade secrets, customer lists, sales representative lists,
supplier lists and manufacturing and secret processes, and (ii)
knowledge or information of a confidential or proprietary nature with
respect to any plans, policies, practices, programs, products,
materials, production methods, systems, designs, suppliers, customers,
customer requirements, business operations or techniques or strategies
of Company.
3.2 The parties hereto agree that no adequate remedy at law exists for
the breach by Executive of the provisions of this Article III. As a result, such
provisions of this Agreement shall be enforceable by specific performance and
injunctive relief or at law in an action for damages.
ARTICLE IV
ADDITIONAL PROVISIONS
---------------------
4.1 Executive expressly declares that Executive has been supplied with,
and has read, a copy of this Agreement. Executive further declares that
Executive has had adequate time and opportunity to examine the meaning of the
terms and conditions contained herein, to consult with an attorney and other
parties of Executive's own choosing regarding the meaning of the terms and
conditions contained herein and does, in fact, fully understand the content and
effect of this Agreement.
5
Executive further acknowledges that Executive accepts the terms and provisions
of this Agreement in their entirety and agrees to be bound thereby.
4.2 This Agreement is personal as to Executive and shall not be
assignable by Executive and shall not be subject to attachment, execution,
pledge or hypothecation. This Agreement shall be binding upon and shall inure to
the benefit of the successors of the Company by way of merger, consolidation or
transfer of all or substantially all of the assets of the Company.
4.3 In the event of Executive's death or permanent disability before or
during the Consulting Period, Company shall pay to the estate of Executive, as a
death or disability benefit, throughout the unexpired balance of the term of the
Consulting Period, the quarterly payments due under Section 2.4 hereof, on the
dates upon which such payments would have been payable to Executive hereunder
had Executive survived or not been disabled.
4.4 All notices which Company is required or permitted to give to
Executive shall be given by registered or certified mail or overnight courier,
addressed to Executive at the address designated in writing by Executive from
time to time. All notices which Executive is required or permitted to give to
Company shall be given by registered or certified mail or overnight courier,
addressed to Company at its principal offices or at such other address as
Company may from time to time designate in writing. A notice will be deemed
given upon the mailing thereof or delivery to an overnight courier for delivery
the next business day.
4.5 This Agreement shall be construed according to and governed by the
laws of The Commonwealth of Massachusetts.
4.6 This Agreement shall not be modified or discharged in whole or in
part except by an agreement in writing signed by the parties hereto.
4.7 Notwithstanding anything to the contrary contained herein, all
remedies provided herein for the benefit of either party are non-exclusive,
distinct and cumulative to and from any other right or remedy provided herein or
to which a party may be entitled at law or in equity. Except as expressly
otherwise provided herein, each party reserves any and all rights and remedies
to which it may be entitled at law or in equity.
6
4.8 No delay or omission on the part of Company or Executive in
exercising any right under this Agreement shall operate as a waiver of such
right or any other right. No consent or waiver, express or implied, by either
party to or of any breach of any covenant, condition or duty of the other shall
be construed as consent or waiver of the same or any other covenant, condition
or duty.
4.9 In case any of the provisions contained in this Agreement shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
or part of a provision of this Agreement, but this Agreement shall be construed
as if such invalid, illegal or unenforceable provision or part of a provision
had been limited or modified (consistent with its general intent) to the extent
necessary so that it shall be valid, legal and enforceable, or if it shall not
be possible to so limit or modify such invalid or illegal or unenforceable
provision or part of a provision, this Agreement shall be construed as if such
invalid or illegal or unenforceable provision or part of a provision had never
been contained herein, and the parties will use their best efforts to substitute
a valid, legal and enforceable provision which, insofar as practicable,
implements the purpose and intent of the provision or part of such provision
originally contained herein.
4.10 Company covenants and agrees that it will not take any action
which would result in Executive having a more limited entitlement to
indemnification, whether under its Certificate of Incorporation, By-laws or
otherwise, than Executive has as of the date of this Agreement.
4.11 This Agreement may be simultaneously executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but such counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
an instrument under seal as of the day and year first above written.
MAC-GRAY CO., INC.
By /s/ Xxxxxxx X. XxxXxxxxx, Xx.
-----------------------------
Xxxxxxx X. XxxXxxxxx, Xx.
Secretary
7
/s/ Xxxxxx X. Xxxx
---------------------------------
Xxxxxx X. Xxxx
8
