EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is hereby entered into this
2nd day of October, 1997, between Jotan, Inc., a Florida corporation
("Employer" or "Company"), and Xxxxxx Xxxxxxxx, an individual residing in
Monroe, LA ("Employee").
WITNESSETH:
Employer wishes to obtain or keep the services of Employee and
Employee wishes to be employed by Employer upon the terms and conditions
set forth herein.
Now, therefore, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto agree as
follows:
1. Employment. Employer hereby agrees to employ or continue to
employ Employee and Employee agrees to serve Employer as an employee for
the term of this Agreement and upon the terms and conditions herein set
forth.
2. Responsibilities. During the term of this Agreement Employee
shall serve as a Vice President & Chief Financial Officer for the
Employer's headquarters location or in such other position as Employer's
Board of Directors or its designee shall determine. Employee shall be
responsible for such matters as the Board of Directors or its designee may
from time to time determine and Employee's services shall be subject to
the direction of such Board of Directors and its designees).
Employee will devote Employee's full working time, attention and
energy to the affairs of Employer or its subsidiaries, as directed by
Employer's Board of Directors or its designee. (As used herein, the term
"subsidiary" shall mean any company 51% or more of whose outstanding stock
is owned by another company and "wholly-owned subsidiary" shall mean any
company 80% or more of whose outstanding stock is owned by another
company.) Employee shall diligently and to the best of Employee's ability
perform all duties incident to Employee's employment hereunder. Employee
shall use Employee's best efforts to promote the interests of Employer.
3. Compensation. As compensation for Employee's services during
the term of this Agreement, Employer shall pay Employee in accordance with
the schedule attached hereto as Exhibit "A" and incorporated herein by
reference.
4. Term. This Agreement shall be effective as of October 1, 1997.
Subject to the provisions for termination as set forth in Section 5, the
term of this Agreement shall be for five years; provided, that the term of
this Agreement shall be automatically extended for successive one year
terms thereafter so long as neither party hereto has given the other
written notice of termination at least sixty days prior to the end of the
original term or the end of any subsequent one-year term.
5. Termination. In addition to termination pursuant to the
provision of Section 4, this Agreement will terminate (a) upon the death
of Employee, (b) upon written notice of termination from Employer after
Employee has been unable, due to a disability, to perform the essential
functions of his position, with or without reasonable accommodation, for
at least ninety (90) days in any twelve (12) month period, (c) upon thirty
(30) days written notice by Employer that it is terminating Employee
without cause, or (d) upon written notice by Employer that it is
terminating Employee for Cause.
5.1 "Cause," as used in this Section, shall be defined to
include the following:
(a) Employee commits or is convicted of a felonious
offense or a crime involving moral turpitude; or
(b) Employee has dishonestly dealt with the assets or
business of Employer in a manner which has caused the
Employer material harm; or
(c) Employee has misappropriated or disclosed to others in
competition with Employer any confidential information
of Employer, including trade secrets, customer lists,
plans, or other intellectual property interest of
Employer; or
(d) Employee has used illegal drugs, has abused
prescription drugs, has been intoxicated by alcohol or
drugs - while working or representing Employer or has
been guilty of gross negligence or misconduct in the
execution of his duties for Employer which has caused
the Employer material harm; or
(e) Employee fails to abide by reasonable rules of conduct
or policies promulgated by Employer governing conduct
of its Employees or Employee engages in any activity
or business relationship that conflicts with any
interest of Employer and as a result of either of
these two faults has caused the Employer material
harm; or
(f) Employee has breached the terms of this Agreement or
has otherwise materially failed to perform his
obligations hereunder.
5.2 If Employee is terminated with Cause, Employer shall be
required to pay only Employee's compensation through the effective
date of termination and Employer shall be entitled to relieve
Employee of Employee's duties during any notice period prior to the
effective date of termination.
5.3 Employee may resign Employee's employment hereunder upon
ninety (90) days written notice of his intent to resign; provided,
however, that Employee agrees to remain employed pursuant to the
terms of this Agreement for an additional period of up to ninety (90)
days after the initial notice period at the request of Employer if
Employer makes such request more than ten (10) days prior to the end
of the initial notice period. If Employee resigns, Employer shall be
entitled to relieve Employee of Employee's duties during any portion,
or all, of the notice period.
6. Non-Competition.
6.1 The parties acknowledge:
(a) that Employee's services under this Agreement will
require special expertise and talent in the Business
Activities (as defined below) and that Employee has
developed or will develop substantial contacts with
suppliers and industrial and commercial customers of
Employer and its subsidiaries;
(b) that Employee will be well-compensated under this
Agreement for the expertise, knowledge and contacts
Employee has obtained and will obtain;
(c) that pursuant to this Agreement, Employee will be
placed in a position of trust and responsibility and
he will have access to a substantial amount of
Confidential Information and Trade Secrets and that
Employer is placing Employee in such position and
giving Employee access to such information in reliance
upon Employee's not competing against Employer or its
subsidiaries, and not soliciting Employer's or its
subsidiaries, industrial and commercial customers
during the time periods set forth in this Agreement;
(d) that due to Employee's special experience and talent,
the loss of Employee's services to Company under this
Agreement cannot reasonably or adequately be
compensated solely by damages in an action at law;
(e) that Employee is or will be capable of competing with
and substantially harming Employer and its
subsidiaries and has or will have more than adequate
experience, customer contact, supplier contact, name
recognition and industry reputation to start and/or
sustain a competing business; and
(f) that the terms of this Section 6 are necessary to
protect Employer's legitimate business interests and
confidential information and that Employee's
competition with Employer or its subsidiaries or other
violation of the covenants set forth below would cause
substantial and irreparable harm to Employer.
6.2 For purposes of this Agreement, "Trade Secrets" shall mean
all secret, proprietary or confidential information regarding
Employer or its business, whether developed by Employee or otherwise,
including any and all information not generally known to, or
ascertainable by, persons not employed by Employer, the disclosure or
knowledge of which would permit those persons to derive actual or
potential economic value therefrom or to cause economic or financial
harm to Employer. "Trade Secrets" shall not include information that
has become generally available to the public by the act of one who
has the right to disclose such information without violating a legal
right of Employer.
6.3 For purposes of this Agreement, "Confidential Information"
means information, other than Trade Secrets, which relates to
Employer, Employer's business, or Employer's suppliers or customers
that is not generally known by persons not employed by Employer and
which Employee has learned as a consequence of Employee's
relationship to Employer. Such information includes, without
limitation, financial information, strategic plans and forecasts,
marketing plans and forecasts, customer lists, customer pricing and
order data, supplier lists, or technical information relating to
Employer's products or services. Confidential Information shall not
include information which has become generally available to the
public by the act of one who has the right to disclose such
information without violating a legal right of Employer.
6.4 During the time that Employee is an employee of Employer,
and for a period of one (1) year thereafter (regardless of whether
Employee's employment terminates voluntarily or involuntarily or with
or without cause), Employee shall not, directly or indirectly, seek
or obtain a "Competitive Position" in the "Territory" with a
"Competitor" of Employer. For purposes of this Agreement, a
"Competitor" of Employer is any entity, individual, partnership,
joint venture, association, firm or corporation engaged, wholly or in
part, in "Business Activities"; a "Competitive Position" is any
employment with a "Competitor" of Employer in which Employee will use
or is likely to use any Confidential Information or Trade Secrets (as
those terms are defined above in this Agreement), or in which
Employee has duties for such "Competitor" of Employer that relate to
"Business Activities" and that are the same or similar to those
actually performed by Employee for Employer; "Business Activities"
shall mean the wholesale distribution and sale of packaging materials
to industrial and commercial accounts and customers in the moving and
storage industry, the air freight industry, the perishables
transportation industry, and the perishable product industry; and
"Territory" shall mean the geographic area consisting of the
territory within two hundred and fifty (250) miles of each of the
distribution centers operated by Employer. Employee acknowledges and
agrees that the foregoing Territory is reasonable because Employee
has performed and/or will perform substantial work in connection with
sales made, and Confidential Information and Trade Secrets relating
to, all of the listed locations and the areas surrounding them.
6.5 Notwithstanding anything contained herein, Employee may own
up to 5% of the shares of a publicly-held corporation which competes
with Employer or its subsidiaries, provided that none of Employee's
other relationships with such corporation violate the terms of this
Section 6.
6.6 During the Term of this Agreement and for two (2) years
thereafter, Employee shall not, on Employee's behalf or on behalf of
others, use or disclose any Confidential Information or Trade Secrets
except in the furtherance of the business of Employer. Trade Secrets
shall not lose the protection of this provision at the end of the
two-year period. Employee shall not use or disclose any Trade Secret
at any time while the information remains a Trade Secret. Nothing in
this provision shall limit the protections available to Employer
under any federal, state or local statute or legal principle
governing confidential information or trade secrets.
6.7 All records, files, software, memoranda, reports, price
lists, customer lists, drawings, plans, sketches, documents,
technical information, information on the use, development and
integration of Employer products or materials, and the like (together
with all copies of such documents and things) relating to the
business of Employer, including any and all Trade Secrets and
Confidential Information, which Employee shall use or prepare or come
in contact with in the course of, or as a result of, his employment
shall, as between the parties to this Agreement, remain the sole
property of Employer and Employee hereby conveys such property to
Employer. Employee agrees that he shall return to Employer all such
information and materials, including all copies thereof immediately
upon the termination of his employment with Employer and, at the
request of Employer, he shall cooperate with Employer to assign such
information and materials to Employer and/or to register or obtain
patent, trademark, service xxxx or copyright protection in favor of
Employer with respect to all such information and materials.
6.8 Notwithstanding anything else in this Agreement, the terms
of this Section 6 shall survive the expiration or termination of
Employee's employment or of this Agreement. In addition to any other
remedies available to Employer, if Employee violates any portion of
this Section 6, he shall forfeit and return all severance due to him,
or already paid to him pursuant to this Agreement or any other
agreement.
Employee acknowledges that this agreement not to compete with
Employer and its subsidiaries is necessarily of a special, unique and
extraordinary nature, and that the loss arising from a breach thereof
cannot reasonably be compensated by money damages and will cause Employer
and its subsidiaries irreparable harm. Accordingly, upon the failure of
Employee to comply with the terms of this Section 6 at any time, Employer
and its subsidiaries shall be entitled to injunctive and other
extraordinary relief in case of such breach, such injunctive or other
extraordinary relief to be cumulative to, but not in limitation of, any
other remedies to which Employer or its subsidiaries may be entitled.
Employer and Employee intend that Employer have the broadest possible
protection from unfair competition by Employee with Employer and its
subsidiaries, consistent with public policy. Accordingly, should any
court of competent jurisdiction determine that, consistent with the
established precedent of the forum state, the public policy of such state
requires a more limited restriction in duration, geographic area, nature
of restricted activity, or any combination thereof, it would be in
furtherance of the intentions of the parties hereto for the court to so
interpret and construe the terms of this Agreement to apply to only such
more limited restrictions to an appropriate degree.
7. Transfer. This Agreement and all rights and obligations
hereunder are personal to Employer and may not be assigned, transferred,
alienated or hypothecated by Employee without the express written consent
of the Employer.
8. Miscellaneous.
8.1 Amendment. This Agreement shall not be amended except by a
written agreement signed and delivered by the parties hereto.
8.2 Governing Law. The interpretation and construction of this
Agreement shall be governed by the laws of the State of Florida.
8.3 Notices. All notices and communications given pursuant
hereto shall be in writing and shall be deemed to have been duly
given if mailed by registered mail, return receipt requested:
(a) if to Employer:
Jotan, Inc.
000 Xxxx Xxxxx Xx.
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: President
(b) if to Employee:
_______________________________________
_______________________________________
_______________________________________
Either party may change the address to which such notices and
communications shall be sent by written notice to the other party.
8.4 Scope. This Agreement constitutes the entire understanding
of Employee with respect to Employer and supersedes all agreements or
understandings previously made between the parties hereto relating to
this subject matter.
8.5 Gender. Pronouns of any gender used herein shall include
the other gender and the neuter, and the singular and the plural
shall each include the other.
8.6 Change of Control. This agreement will be binding on any
successor(s) to the Employer.
8.7 In the event of a Change of Control, where a simple
majority of the outstanding common shares of the Company is owned by
individuals or institutions who are not now owners of at least twenty
(20) percent of said shares, the Employee will have all earned and
awarded unvested stock options to purchase capital stock of the
Company then held by the Employee become immediately vested and
exercisable upon his voluntary or involuntary termination.
IN WITNESS WHEREOF, the parties hereby have executed this Agreement
as to the day and year first above written.
EMPLOYER:
JOTAN, INC.
BY:_____________________________________
Title:__________________________________
EMPLOYEE:
EXHIBIT A
JOTAN, INC.
000 X. Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
September 19, 1997
Xx. Xxxxxx X. Xxxxxxxx
000 X. Xxxxxxxxx'x Xxxx Xxxx
Xxxxxx, XX 00000
Dear Ed:
This letter will confirm our offer to you as Vice President & Chief
Financial Officer including the following terms.
Salary: $120,000 annually, with annual reviews.
Bonus: 30% of annual salary at target (potential to exceed this
amount).
Guaranteed minimum bonus of 15% of salary for the first
twelve months.
Stock Options: 150,000 possible over five periods (30,000 possible
annually.)
Each period you will have the right to earn up to 30,000
options. You will receive 40% for remaining a full-time
employee and up to 60% for meeting specific goals.
The first period would be your date of employment until
12/31/97. The other four periods would be the four
calendar years 1998 - 2001. Options awarded would vest
equally over a four-year period. The strike price for all
options would be the average trading price on your first
day of employment.
Vacation: 4 weeks
Relocation: Normal and customary expenses for moving, house
hunting trips, and real estate fee for selling
existing residence.
Severance: You will be asked to sign a five-year employment
agreement containing a non-compete agreement. In
return, you will receive a severance agreement which
will provide you with severance equal to one year's
salary if you are terminated not-for-cause during the
contract period. A copy of this agreement is
attached.
Benefits: Standard company benefits including our 401(k) plan with a
50% match beginning after you have been an employee over
six months.
This offer is based on the assumption that you will begin employment no
later than October 1, 1997.
If this offer is satisfactory to you please sign it and fax it back to me
at 000-000-0000.
I look forward to working with you.
Sincerely,
/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
President
ACCEPTED
(Xx Xxxxxxxx) (Date)