EXHIBIT 10.46
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AMENDED, CONSOLIDATED AND RESTATED EMPLOYMENT AGREEMENT
XXXXX X. XXXXXX
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THIS AMENDED, CONSOLIDATED AND RESTATED EMPLOYMENT AGREEMENT
(this "Agreement") is made as of November 1, 2001, by JEH/EAGLE
SUPPLY, INC., a Delaware corporation formerly known as JEH ACQUISITION
CORP. ("JEH/EAGLE"), EAGLE SUPPLY GROUP, INC., a Delaware corporation
("ESG," with both JEH/EAGLE and ESG being collectively referred to as
the "Employer") and XXXXX X. XXXXXX, an individual resident in
Arlington, Texas (the "Executive").
RECITALS
A. Heretofore, JEH/EAGLE acquired, pursuant to a certain Asset
Purchase Agreement by and among it as "Buyer", JEH Company, a Texas
corporation, as "Seller" and the Executive as "Shareholder" of Seller,
dated July 8, 1997 (the "Asset Purchase Agreement"), substantially all
of the assets of the Seller, including the Seller's business
operations in Texas, Colorado and Indiana (the "Acquired Business").
B. At the time of the execution of the Asset Purchase
Agreement, the Executive was the sole shareholder of the Seller and
was the Seller's President and Chief Executive Officer. The Executive
benefited substantially from the transaction set forth in the Asset
Purchase Agreement.
C. At the time of the execution of the Asset Purchase
Agreement, JEH/EAGLE wished to obtain the Executive's continued
experience and expertise with the Acquired Business and wished to
employ the Executive as President and Chief Operating Officer of
JEH/EAGLE.
D. At the time of the execution of the Asset Purchase Agreement,
the Executive wished to accept such employment and did so upon the
terms and conditions set forth in a certain written Employment
Agreement between JEH ACQUISITION CORP. and the Executive dated as of
July 1, 1997 and which was intended to run for a term of five (5)
years commencing as of July 1, 1997 and ending June 30, 2002.
E. The parties hereto, consisting of the parties to the aforesaid
written employment agreement dated as of July 1, 1997, together with
ESG, now desire to extend, restate and amend the terms and conditions
under which the Executive will be employed for an additional term as
set forth herein and under which the Executive will be employed by ESG
as well in the capacities of President and Vice-Chairman of the Board
of Directors.
Exhibit 10.46 - Pg. 1
F. The parties hereto intend that this Agreement will supersede
that certain letter understanding dated November 26, 1997 addressed to
the Executive from TDA Industries, Inc. (the "Letter Understanding").
G. The parties acknowledge the accuracy of the foreging
recitals and incorporate all of the same into this Agreement as terms
and condiitons hereof.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. CERTAIN DEFINITIONS
For the purposes of this Agreement, the following terms have the
meanings specified or referred to in this Section 1.
"Agreement" -- this Employment Agreement, including any Exhibits
hereto, as amended from time to time.
"Compensation" - Base Salary, Retirement Contribution, Basic Bonus and
Performance Bonus as set forth in Sections 3(A), 3(C), 3(D), 3(E) and
3(F).
"Benefits " -- as defined in Section 3(B).
"Board of Directors" -- the board of directors of ESG, unless the
context requires otherwise.
"Confidential Information" -- any and all:
(a) trade secrets concerning the business and affairs of the
Employer, product specifications, data, know-how, compositions,
designs, sketches, photographs, graphs, drawings, samples,
inventions and ideas, past, current, and planned research and
development, current and planned distribution methods and
processes, customer lists, current and anticipated customer
requirements, price lists, market studies, business plans, and
any other information, however documented, that is a trade secret
under New York law; and
(b) information concerning the business and affairs of the
Employer and the Acquired Business (which includes historical
financial statements, financial projections and budgets,
historical and projected sales, capital spending budgets and
plans, the names and backgrounds of key personnel, personnel
training and techniques and materials), however documented; and
(c) notes, analysis, compilations, studies, summaries, and other
material prepared by or for the Employer containing or based, in
whole or in part, on any information included in the foregoing.
Exhibit 10.46 - Pg. 2
"disability " -- as defined in Section 6.2.
"Effective Date" - July 1, 2001.
"Employee Invention" -- any idea, invention, technique, modification,
process, or improvement (whether patentable or not), any industrial
design (whether registerable or not), and any work of authorship
(whether or not copyright protection may be obtained for it) created,
conceived, or developed by the Executive, either solely or in
conjunction with others, during the Employment Period, or a period
that includes a portion of the Employment Period, that relates in any
way to, or is useful in any manner in, the business then being
conducted or proposed to be conducted by the Employer, and any such
item created by the Executive, either solely or in conjunction with
others, following termination of the Executive's employment with the
Employer, that is based upon or uses Confidential Information.
"Employment Period" -- the term of the Executive's employment under
this Agreement, as more fully described in Section 2.2.
"for cause" -- as defined in Section 6.3.
"for good reason" -- as defined in Section 6.4.
"person" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, or
governmental body.
"Post-Employment Period" -- as defined in Section 8.2.
"Proprietary Items" -- as defined in Section 7.2(a)(iv).
"Salary" -- as defined in Section 3(A).
2. EMPLOYMENT TERMS AND DUTIES
2.1 EMPLOYMENT
The Employer hereby employs the Executive, and the Executive
hereby accepts employment by the Employer, upon the terms and
conditions set forth in this Agreement.
2.2 TERM
Subject to the provisions of Section 6, the term of the
Executive's employment under this Agreement will be five years,
beginning on the Effective Date and ending on June 30, 2006.
Exhibit 10.46 - Pg. 3
2.3 DUTIES
The Executive will serve as a senior executive officer of the
Employer and have such duties and title(s) as are assigned or
delegated to the Executive by the Boards of Directors or Chief
Executive Officers of Employer, and will initially serve as President
and Chief Operating Officer of both ESG and JEH/EAGLE, as well as
Vice-Chairman of the Board of Directors of both, and he will serve as
President of Eagle Supply, Inc., a subsidiary of ESG. The Executive
will devote at least four (4) days per week to the business of the
Employer, will use his best efforts to promote the success of the
Employer's business, including all subsidiaries and affiliates of
Employer, and will cooperate fully with the Boards of Directors and
Chief Executive Officers in the advancement of the best interests of
the Employer. If the Executive is elected as a director of the
Employer or as a director or officer of any of its affiliates, the
Executive will agree to serve as such and will fulfill his duties as
director and/or officer without additional compensation.
3. COMPENSATION AND BENEFITS
(A) Base Salary. The Executive will be paid an annual base salary
of $450,000., subject to adjustment as provided below (the "Salary"),
which will be payable in equal periodic installments according to the
Employer's customary payroll practices, but no less frequently than
monthly. The Salary will be reviewed by the Board of Directors not
less frequently than annually and may be adjusted upward or downward
in the sole discretion of the Boards of Directors, but in no event
will the Salary be less than $450,000. per year.
(B) Benefits. The Executive will, during the Employment Period,
be permitted to participate in such pension, profit sharing, bonus,
life insurance, hospitalization, major medical, and other employee
benefit plans of the Employer that may be in effect from time to time,
to the extent the Executive is eligible under the terms of those plans
(collectively, the "Benefits"). As additionals Benefits, the
Executive shall be entitled to (i) an annual allowance toward the
maintenance of an automobile, which allowance shall be approximately
$10,000. annually; and (ii) an annual allowance of $50,000. toward the
payment of premiums on a policy or policies of life insurance on the
life of the Executive, the ownership and beneficiaries of which shall
be designated by the Executive.
The Executive agrees to submit to any medical examination(s) and
provide any information and documents reasonably necessary for the
Employer to obtain any insurance required by this Agreement and "Key
Man" life insurance on the Executive's life.
(C) Annual Retirement Contribution. Commencing on the Effective
Date and during the Employment Period, the Executive will be entitled
to receive a Retirement Contribution in the amount of $150,000. per
Exhibit 10.46 - Pg. 4
annum, to be paid periodically with the Executive's Salary
("Retirement Contribution").
(D) Annual Basic Bonus. During the Employment Period, the
Executive shall be paid a Basic Bonus (the "Basic Bonus") equal to
thirty-five (35%) percent of the total of his Salary plus Retirement
Contribution in the event that the defined EBIT (earnings before
interest expense, taxes and intercompany fees, charges and expenses,
all as defined in a certain Executive Compensation Recommendations
Report by CFS Consulting, Inc. dated September 20, 2001) (the "defined
EBIT") of ESG's operating subsidiaries (excluding extraordinary items)
reaches $6.5 million for each fiscal year. The aforesaid Executive
Compensation Recommendations Report of CFS Consulting, Inc. excludes
amortization of goodwill and financing charges in arriving at the
defined EBIT and both of such items are also to be excluded in making
the computation required by this subparagraph. The bonus required by
this subparagraph shall be paid not later than ninety (90) days after
the annual financial statements of ESG are completed.
(E) Annual Performance Bonus. During the Employment Period, the
Executive shall be paid a Performance Bonus (the "Performance Bonus")
equal to eight and one-third (8 1/3 %) percent of the defined EBIT of
ESG's operating subsidiaries (excluding extraordinary items) in excess
of $6.5 million for each fiscal year. The aforesaid Executive
Compensation Recommendations Report of CFS Consulting, Inc. excludes
amortization of goodwill and financing charges in arriving at the
defined EBIT and both of such items are also to be excluded in making
the computation required by this subparagraph. The bonus required by
this subparagraph shall be paid not later than ninety (90) days after
the annual financial statements of ESG are completed.
(F) Limitations on Compensation. In no event shall annual cash
compensation payable with respect to any single fiscal year during the
Employment Period, consisting of the total of Salary, Retirement
Contribution, Basic Bonus and Performance Bonus, exceed $875,000. In
the event, however, that application of the formulae for computation
of Basic Bonus and Performance Bonus would result in annual
compensation in excess of $875,000., then cash compensation shall be
limited to $875,000., but all amounts earned in excess thereof shall
be credited to a non-qualified deferred compensation account and be
paid, without interest or other earnings thereon, at the Executive's
retirement, death, disability or upon a sale of all or substantially
all of ESG's assets or stock, provided further that the total of all
such compensation consisting of Salary, Retirement Contribution, Basic
Bonus and Performance Bonus, including amounts required to be credited
toward the above mentioned deferred compensation account shall not
exceed $1,250,000. for any fiscal year during the Employment Period.
The payment of any deferred compensation required by this subparagraph
shall be paid not later than ninety (90) days after the earliest date
on which the event occurs which requires the payment of the deferred
compensation account to the Executive.
Exhibit 10.46 - Pg. 5
(G) Necessity to be Employed at End of Fiscal Year. In order to
be entitled to any payment of Basic Bonus and/or Performance Bonus for
any given fiscal year, the Executive shall be required to be employed
by the Employer at the end of each such fiscal year and, if not, there
shall be no pro rating of any such payment for any such fiscal year at
the end of which the Executive is not employed by the Employer.
(H) Auditors' Computations Binding. The computations of the
regular auditors of ESG shall be deemed accurate and binding, creating
a presumption of accuracy and regularity, which presumption may be
overcome only by a showing of fraud, impropriety, arithemetical error
or obvious irregularity. The defined EBIT is to be determined for each
fiscal year in a manner consistent with the illustrations set forth
and the method utilized in the aforesaid Executive Compensation
Recommendations Report of CFS Consulting, Inc. dated September 20,
2001, which illustrations and method are hereby incorporated herien by
reference as if fully set forth at length hereat.
4. FACILITIES AND EXPENSES
The Employer will furnish the Executive with office space,
equipment, supplies, and such other facilities and personnel as the
Employer deems necessary or appropriate for the performance of the
Executive's duties under this Agreement. The Employer will pay on
behalf of the Executive (or reimburse the Executive for) reasonable
expenses incurred by the Executive at the request of, or on behalf of,
the Employer in the performance of the Executive's duties pursuant to
this Agreement and in accordance with the Employer's employment
policies, including reasonable expenses incurred by the Executive in
attending conventions, seminars, and other business meetings, in
appropriate business entertainment activities, and for promotional
expenses. The Executive must file expense reports with respect to such
expenses in accordance with the Employer's policies.
5. VACATIONS AND HOLIDAYS
The Executive will be entitled to take up to four (4) weeks of
paid vacation annually at a time mutually convenient to the Employer
and the Executive. The Executive will also be entitled to the paid
holidays and other paid leave set forth in the Employer's policies.
6. TERMINATION
6.1 EVENTS OF TERMINATION
The Employment Period, the Executive's Compensation, and any and
all other rights of the Executive under this Agreement or otherwise as
an employee of the Employer will terminate (except as otherwise
provided in this Section 6):
(a) upon the death of the Executive;
Exhibit 10.46 - Pg. 6
(b) upon the disability of the Executive (as defined in Section
6.2) immediately upon notice;
(c) for cause (as defined in Section 6.3), at the option of the
Employer, immediately upon notice from the Employer to the Executive,
or at such later time as such notice may specify;
(d) for good reason (as defined in Section 6.4) upon not less
than thirty days prior notice from the Executive to the Employer; or
(e) upon the closing of a sale of substantially all of the assets
or stock of ESG to any nonaffiliated purchaser or purchasers in an
arm's length transaction.
6.2 DEFINITION OF DISABILITY
For purposes of Section 6.1, the Executive will be deemed to have
a "disability" if, for physical or mental reasons, the Executive is
unable to perform the essential functions of the Executive's duties
under this Agreement for 120 consecutive days, or 180 days during any
twelve month period, as determined in accordance with this Section
6.2. The disability of the Executive will be determined by a medical
doctor selected by written agreement of the Employer and the Executive
upon the request of either party by notice to the other. If the
Employer and the Executive cannot agree on the selection of a medical
doctor, each of them will select a medical doctor and the two medical
doctors will select a third medical doctor who will determine whether
the Executive has a disability. The determination of the medical
doctor selected under this Section 6.2 will be binding on both
parties. The Executive must submit to a reasonable number of
examinations by the medical doctor making the determination of
disability under this Section 6.2, and the Executive hereby authorizes
the disclosure and release to the Employer of such determination and
all supporting medical records. If the Executive is not legally
competent, the Executive's legal guardian or duly authorized attorney-
in-fact will act in the Executive's stead, under this Section 6.2, for
the purposes of submitting the Executive to the examinations, and
providing the authorization of disclosure, required under this Section
6.2.
6.3 DEFINITION OF "FOR CAUSE"
For purposes of Section 6.1, the phrase "for cause" means: (a)
the Executive's material breach of this Agreement which breach
continues for more than thirty (30) days after notice thereof has been
received by the Executive; (b) the Executive's failure to adhere to
any written Employer policy if the Executive has been given a
reasonable opportunity to comply with such policy or cure his failure
to comply (which reasonable opportunity shall not exceed thirty (30)
days); (c) the appropriation (or attempted appropriation) of a
material business opportunity of the Employer, including attempting to
secure or securing any personal profit in connection with any
transaction entered into on behalf of the Employer; (d) the
misappropriation (or attempted misappropriation) of any of the
Employer's funds or property; or (e) the conviction of, the indictment
Exhibit 10.46 - Pg. 7
for (or its procedural equivalent), or the entering of a guilty plea
or plea of no contest with respect to, a felony, the equivalent
thereof, or any other crime with respect to which imprisonment for
more than six (6) months is a possible punishment.
The Executive and the Employer acknowledge that the purchase
price paid for the Acquired Business, as set forth in the Asset
Purchase Agreement, was based in part on the Executive's commitment to
continue to serve as Chief Executive Officer of the Acquired Business.
Accordingly, if the Executive commits an act described in Sections 6.3
(a), (b), (c), (d) or (e) and the Employer elects to terminate the
Executive's employment, Employer shall be relieved of its obligation
to make any of the contingent payments required by Sections 2.4 (a),
(b) or (c) of the Asset Purchase Agreement subsequent to the date of
such termination.
6.4 DEFINITION OF "FOR GOOD REASON"
For purposes of Section 6.1, the phrase "for good reason" means
any of the following: (a) the Employer's material breach of this
Agreement which breach continues for more than thirty (30) days after
notice has been received by the Employer; (b) the assignment of the
Executive without his consent to a position, responsibilities, or
duties of a materially lesser status or degree of responsibility than
a senior officer of the Employer; or (c) the Employer's material
breach of the Asset Purchase Agreement which breach continues for more
than thirty (30) days after notice has been received by the Employer.
6.5 TERMINATION PAY
Effective upon the termination of this Agreement, the Employer
will be obligated to pay the Executive (or, in the event of his death,
his designated beneficiary as defined below) only such compensation as
is provided in this Section 6.5 and in lieu of all other amounts and
in settlement and complete release of all claims the Executive may
have against the Employer. For purposes of this Section 6.5, the
Executive's designated beneficiary will be such individual beneficiary
or trust, located at such address, as the Executive may designate by
notice to the Employer from time to time or, if the Executive fails to
give notice to the Employer of such a beneficiary, the Executive's
estate. Notwithstanding the preceding sentence, the Employer will have
no duty, in any circumstances, to attempt to open an estate on behalf
of the Executive, to determine whether any beneficiary designated by
the Executive is alive or to ascertain the address of any such
beneficiary, to determine the existence of any trust, to determine
whether any person or entity purporting to act as the Executive's
personal representative (or the trustee of a trust established by the
Executive) is duly authorized to act in that capacity, or to locate or
attempt to locate any beneficiary, personal representative, or
trustee.
(A) Termination by the Executive for Good Reason. If the
Executive terminates this Agreement for good reason, the Employer will
pay the Executive the Executive's Salary for the remainder, if any, of
the calendar month in which such termination is effective.
Exhibit 10.46 - Pg. 8
(B) Termination by the Employer for Cause. If the Employer
terminates this Agreement for cause, the Executive will be entitled to
receive his Salary only through the date such termination is
effective.
(C) Termination upon Disability. If this Agreement is terminated
by either party as a result of the Executive's disability, as
determined under Section 6.2, the Employer will pay the Executive his
Salary and normal disability and medical insurance benefits for a
period of one (1) year after the date of termination for disability.
(D) Termination upon Death. If this Agreement is terminated
because of the Executive's death, the Executive or his beneficiaries
or, in the absence of any designated beneficiaries, his estate, will
be entitled to receive his Salary for a period of one (1) year after
the date of death.
(E) Sale. If this Agreement is terminated as a result of a sale
as provided hereinabove in Section 6.1(e), the Executive will be
entitled to receive his Salary and Retirement Contribution for a
period of six (6) months after the closing of such sale and the amount
credited to the Executive's non-qualified, non-interest bearing and
non-income earning deferred compensation account, as set forth in
Section 3(F) hereof.
(F) Benefits. The Executive's accrual of, or participation in
plans providing for, the Benefits will cease at the effective date of
the termination of this Agreement, and the Executive will be entitled
to accrued Benefits pursuant to such plans only as provided in such
plans; provided, however, that upon the expiration of the term of the
Executive's employment, and provided that the Executive is in
compliance with all Post-Employment Period obligations, the Employer
shall endeavor to continue the Executive's participation in the
Employer's health insurance plan until such time as the Executive
reaches age 65. The Employer shall not be required to pay any premiums
on behalf of the Executive in excess of those paid during the
Executive's last year of employment with the Employer.
(G) In addition to the foregoing, within ninety (90) days from
the date of termination, for any reason whatsoever, all amounts, if
any, standing to the credit of the Executive in his non-qualified
deferred compensation account as set forth in Section 3(F) shall be
paid to the Executive or his representative.
7. NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS
7.1 ACKNOWLEDGMENTS BY THE EXECUTIVE
The Executive acknowledges that (a) during the Employment Period
and as a part of his employment, the Executive will be afforded access
to Confidential Information; (b) public disclosure of such
Confidential Information could have an adverse effect on the Employer
and its business; (c) because the Executive possesses substantial
technical expertise and skill with respect to the Employer's business,
Exhibit 10.46 - Pg. 9
the Employer desires to obtain exclusive ownership of each Employee
Invention, and the Employer will be at a substantial competitive
disadvantage if it fails to acquire exclusive ownership of each
Employee Invention; (d) the Buyer has required that the Executive make
the covenants in this Section 7 as a condition to its purchase of the
Acquired Business; and (e) the provisions of this Section 7 are
reasonable and necessary to prevent the improper use or disclosure of
Confidential Information and to provide the Employer with exclusive
ownership of all Employee Inventions.
7.2 AGREEMENTS OF THE EXECUTIVE
In consideration of the compensation and benefits to be paid or
provided to the Executive by the Employer under this Agreement, the
Executive covenants as follows:
(A) Confidentiality.
(i) During and following the Employment Period, the Executive
will hold in confidence the Confidential Information and will not
disclose it to any person except with the specific prior written
consent of the Employer or except as otherwise expressly
permitted by the terms of this Agreement.
(ii) Any trade secrets of the Employer will be entitled to all of
the protections and benefits under New York and any other
applicable law. If any information that the Employer deems to be
a trade secret is found by a court of competent jurisdiction not
to be a trade secret for purposes of this Agreement, such
information will, nevertheless, be considered Confidential
Information for purposes of this Agreement. The Executive hereby
waives any requirement that the Employer submit proof of the
economic value of any trade secret or post a bond or other
security.
(iii) None of the foregoing obligations and restrictions applies
to any part of the Confidential Information that the Executive
demonstrates was or became generally available to the public
other than as a result of a disclosure by the Executive.
(iv) The Executive will not remove from the Employer's premises
(except to the extent such removal is for purposes of the
performance of the Executive's duties at home or while traveling,
or except as otherwise specifically authorized by the Employer)
any document, record, notebook, plan, model, component, device,
or computer software or code, whether embodied in a disk or in
any other form (collectively, the "Proprietary Items"). The
Executive recognizes that, as between the Employer and the
Executive, all of the Proprietary Items, whether or not developed
by the Executive, are the exclusive property of the Employer.
Upon termination of this Agreement by either party, or upon the
request of the Employer during the Employment Period, the
Executive will return to the Employer all of the Proprietary
Items in the Executive's possession or subject to the Executive's
Exhibit 10.46 - Pg. 10
control, and the Executive shall not retain any copies,
abstracts, sketches, or other physical embodiment of any of the
Proprietary Items.
(B) Employee Inventions. Each Employee Invention will belong
exclusively to the Employer. The Executive acknowledges that all of
the Executive's writing, works of authorship, specially commissioned
works, and other Employee Inventions are works made for hire and the
property of the Employer, including any copyrights, patents, or other
intellectual property rights pertaining thereto. If it is determined
that any such works are not works made for hire, the Executive hereby
assigns to the Employer all of the Executive's right, title, and
interest, including all rights of copyright, patent, and other
intellectual property rights, to or in such Employee Inventions. The
Executive covenants that he will promptly:
(i) disclose to the Employer in writing any Employee Invention;
(ii) assign to the Employer or to a party designated by the
Employer, at the Employer's request and without additional
compensation, all of the Executive's right to the Employee
Invention for the United States and all foreign jurisdictions;
(iii) execute and deliver to the Employer such applications,
assignments, and other documents as the Employer may request in
order to apply for and obtain patents or other registrations with
respect to any Employee Invention in the United States and any
foreign jurisdictions;
(iv) sign all other papers necessary to carry out the above
obligations; and
(v) give testimony and render any other assistance in support of
the Employer's rights to any Employee Invention.
7.3 DISPUTES OR CONTROVERSIES
The Executive recognizes that should a dispute or controversy
arising from or relating to this Agreement be submitted for
adjudication to any court, arbitration panel, or other third party,
the preservation of the secrecy of Confidential Information may be
jeopardized. All pleadings, documents, testimony, and records relating
to any such adjudication will be maintained in secrecy and will be
available for inspection by the Employer, the Executive, and their
respective attorneys and experts, who will agree, in advance and in
writing, to receive and maintain all such information in secrecy,
except as may be limited by them in writing.
8. NON-COMPETITION AND NON-INTERFERENCE
8.1 ACKNOWLEDGMENTS BY THE EXECUTIVE
The Executive acknowledges that: (a) the services to be performed
by him under this Agreement are of a special, unique, unusual,
extraordinary, and intellectual character; (b) the Employer's business
Exhibit 10.46 - Pg. 11
is currently regional in scope but may become national in scope and
its products are currently marketed in five or more regions but may in
the future be marketed throughout the United States; (c) the Employer
competes with other businesses that are or could be located in any
part of the United States; (d) the Buyer has required that the
Executive make the covenants set forth in this Section 8 as a
condition to the Buyer's purchase of the Acquired Business; and (e)
the provisions of this Section 8 are reasonable and necessary to
protect the Employer's business.
8.2 COVENANTS OF THE EXECUTIVE
In consideration of the acknowledgments by the Executive, and in
consideration of the compensation and benefits to be paid or provided
to the Executive by the Employer, the Executive covenants that he will
not, directly or indirectly:
(a) during the Employment Period, except in the course of his
employment hereunder, and during the Post-Employment Period, engage or
invest in, own, manage, operate, finance, control, or participate in
the ownership, management, operation, financing, or control of, be
employed by, associated with, or in any manner connected with, lend
the Executive's name or any similar name to, lend Executive's credit
to or render services or advice to, any business whose products or
activities compete in whole or in part with the products or activities
of the Employer; provided, however, that the Executive may purchase or
otherwise acquire up to (but not more than) one percent of any class
of securities of any enterprise (but without otherwise participating
in the activities of such enterprise) if such securities are listed on
any national or regional securities exchange or have been registered
under Section 12(g) of the Securities Exchange Act of 1934;
(b) whether for the Executive's own account or for the account
of any other person, at any time during the Employment Period and the
Post-Employment Period, solicit business of the same or similar type
being carried on by the Employer, from any person known by the
Executive to be a customer of the Employer, whether or not the
Executive had personal contact with such person during and by reason
of the Executive's employment with the Employer;
(c) whether for the Executive's own account or the account of any
other person (i) at any time during the Employment Period or the Post-
Employment Period, solicit, employ, or otherwise engage as an
employee, independent contractor, or otherwise, any person who is or
was an employee of the Employer at any time during the Employment
Period or in any manner induce or attempt to induce any employee of
the Employer to terminate his employment with the Employer; or (ii) at
any time during the Employment Period or the Post Employment Period,
interfere with the Employer's relationship with any person, including
any person who at any time during the Employment Period was an
employee, contractor, supplier, or customer of the Employer; or
Exhibit 10.46 - Xx. 00
(x) at any time during or after the Employment Period, disparage
the Employer or any of its shareholders, directors, officers,
employees, or agents.
For purposes of this Section 8.2, the term "Post-Employment Period"
means the two year period beginning on the date of termination of the
Executive's employment with the Employer.
If any covenant in this Section 8.2 is held to be unreasonable,
arbitrary, or against public policy, such covenant will be considered
to be divisible with respect to scope, time, and geographic area, and
such lesser scope, time, or geographic area, or all of them, as a
court of competent jurisdiction may determine to be reasonable, not
arbitrary, and not against public policy, will be effective, binding,
and enforceable against the Executive.
The period of time applicable to any covenant in this Section 8.2
will be extended by the duration of any violation by the Executive of
such covenant.
The Executive will, while the covenant under this Section 8.2 is
in effect, give notice to the Employer, within ten days after
accepting any other employment, of the identity of the Executive's
employer. The Employer may notify such employer that the Executive is
bound by this Agreement and, at the Employer's election, furnish such
employer with a copy of this Agreement or relevant portions thereof.
9. GENERAL PROVISIONS
9.1 INJUNCTIVE RELIEF AND ADDITIONAL REMEDY
The Executive acknowledges that the injury that would be suffered
by the Employer as a result of a breach of the provisions of this
Agreement (including any provision of Sections 7 and 8) would be
irreparable and that an award of monetary damages to the Employer for
such a breach would be an inadequate remedy. Consequently, the
Employer will have the right, in addition to any other rights it may
have, to obtain injunctive relief to restrain any breach or threatened
breach or otherwise to specifically enforce any provision of this
Agreement, and the Employer will not be obligated to post bond or
other security in seeking such relief. Without limiting the Employer's
rights under this Section 9 or any other remedies of the Employer, if
the Executive breaches any of the provisions of Section 7 or 8, the
Employer will have the right to cease making any payments otherwise
due to the Executive under this Agreement.
9.2 COVENANTS OF SECTIONS 7 AND 8 ARE ESSENTIAL AND INDEPENDENT
COVENANTS
The covenants by the Executive in Sections 7 and 8 are essential
elements of this Agreement and the Asset Purchase Agreement, and
without the Executive's agreement to comply with such covenants, the
Buyer would not have purchased the Acquired Business under the Asset
Exhibit 10.46 - Xx. 00
Xxxxxxxx Agreement and the Employer would not have entered into this
Agreement or employed the Executive. The Employer and the Executive
have independently consulted their respective counsel and have been
advised in all respects concerning the reasonableness and propriety of
such covenants, with specific regard to the nature of the business
conducted by the Employer.
The Executive's covenants in Sections 7 and 8 are independent
covenants and the existence of any claim by the Executive against the
Employer under this Agreement or otherwise, or against the Buyer, will
not excuse the Executive's breach of any covenant in Section 7 or 8.
If the Executive's employment hereunder expires or is terminated,
this Agreement will continue in full force and effect as is necessary
or appropriate to enforce the covenants and agreements of the
Executive in Sections 7 and 8.
9.4 REPRESENTATIONS AND WARRANTIES BY THE EXECUTIVE
The Executive represents and warrants to the Employer that the
execution and delivery by the Executive of this Agreement do not, and
the performance by the Executive of the Executive's obligations
hereunder will not, with or without the giving of notice or the
passage of time, or both: (a) violate any judgment, writ, injunction,
or order of any court, arbitrator, or governmental agency applicable
to the Executive; or (b) conflict with, result in the breach of any
provisions of or the termination of, or constitute a default under,
any agreement to which the Executive is a party or by which the
Executive is or may be bound.
9.5 OBLIGATIONS CONTINGENT ON PERFORMANCE
The obligations of the Employer hereunder, including its
obligation to pay the compensation provided for herein, are contingent
upon the Executive's substantial performance of the Executive's
obligations hereunder.
9.6 WAIVER
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by
either party in exercising any right, power, or privilege under this
Agreement will operate as a waiver of such right, power, or privilege,
and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or
privilege. To the maximum extent permitted by applicable law: (a) no
claim or right arising out of this Agreement can be discharged by one
party, in whole or in part, by a waiver or renunciation of the claim
or right unless in writing signed by the other party; (b) no waiver
that may be given by a party will be applicable except in the specific
instance for which it is given; and (c) no notice to or demand on one
party will be deemed to be a waiver of any obligation of such party or
Exhibit 10.46 - Pg. 14
of the right of the party giving such notice or demand to take further
action without notice or demand as provided in this Agreement.
9.7 BINDING EFFECT; DELEGATION OF DUTIES PROHIBITED
This Agreement shall inure to the benefit of, and shall be
binding upon, the parties hereto and their respective successors,
assigns, heirs, and legal representatives, including any entity with
which the Employer may merge or consolidate or to which all or
substantially all of its assets may be transferred. The duties and
covenants of the Executive under this Agreement, being personal, may
not be delegated.
9.8 NOTICES
All notices, consents, waivers, and other communications under
this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by facsimile (with written confirmation of
receipt), provided that a copy is mailed by certified mail, return
receipt requested, or (c) when received by the addressee, if sent by a
nationally recognized overnight delivery service (receipt requested),
in each case to the appropriate addresses and facsimile numbers set
forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
If to Employer: Eagle Supply Group, Inc. or
JEH/Eagle Supply Inc.
c/o TDA Industries, Inc.
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx,
Chief Executive Officer
With a copy to: Xxxxxx X. Xxxxx, Esq.
Xxxxxx, Davidoff, Wolfe,
Xxxxxxxxx & Kass, P.C.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, X.X. 00000 (xx by mail)
If to the Executive: Xxxxx X. Xxxxxx
0000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxx 00000
With a copy to: Xxxxxxx Xxxxx, Esq.
0000 X. Xxxxxx Xxxxx Xxxxx
Xxxxx X
Xxxxxxxxx, Xxxxx 00000
Exhibit 10.46 - Pg. 15
9.9 ENTIRE AGREEMENT; AMENDMENTS
This Agreement, the Asset Purchase Agreement, and the documents
executed in connection with the Asset Purchase Agreement, contain the
entire agreement between the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings,
oral or written, between the parties hereto with respect to the
subject matter hereof. This Agreement may not be amended orally, but
only by an agreement in writing signed by the parties hereto. This
Agreement is intended as an Amended, Consolidated and Restated
Agreement superseding the Employment Agreement between JEH Acquisition
Corp. and the Executive dated July 1, 1987 and the Letter
Understanding.
9.10 GOVERNING LAW
This Agreement will be governed by the laws of the State of New
York without regard to conflicts of laws principles.
9.11 JURISDICTION
Any action or proceeding seeking to enforce any provision of, or
based on any right arising out of, this Agreement may be brought
against either of the parties in the courts of the State of New York
in New York County, New York, or, if it has or can acquire
jurisdiction, in the United States District Court for the Southern
District of New York, or the Middle District of Florida, and each of
the parties consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding and
waives any objection to venue laid therein. The parties agree to
accept service of process by certified mail, or such other means as
permitted for the giving of notices hereunder. Process in any action
or proceeding referred to in the preceding sentence may be served on
any party anywhere in the world.
9.12 SECTION HEADINGS; CONSTRUCTION
The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or
interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement unless otherwise
specified. All words used in this Agreement will be construed to be of
such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding
words or terms.
9.13 SEVERABILITY
If any provision of this Agreement is held invalid or
unenforceable in any jurisdiction by any court of competent
jurisdiction, the other provisions of this Agreement will remain in
full force and effect in such jurisdiction. Any provision of this
Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or
unenforceable.
Exhibit 10.46 - Pg. 16
9.14 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each
of which will be deemed to be an original copy of this Agreement and
all of which, when taken together, will be deemed to constitute one
and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date above first written above.
JEH/EAGLE SUPPLY, INC.
By: _______________________
EAGLE SUPPLY GROUP, INC.
By: _______________________
___________________________
XXXXX X. XXXXXX
Exhibit 10.46 - Pg. 17
