EXHIBIT 10.100
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EMPLOYMENT CONTRACT
This Employment Contract ("Agreement") is executed and delivered as of May
24, 1999, by and between Mace Security International, Inc., a Delaware
corporation ("Company"), and Louis D. Paolino, Jr., an individual ("Employee").
RECITALS
The Company conducts diversified businesses, including, without limitation,
personal security device marketing and car wash services operations
("Business"). The Employee is an executive with extensive experience in
corporate management. The Company desires to hire Employee as Chairman and
Chief Executive Officer and the Employee desires to accept the position offered.
The Company has entered into a Stock Purchase Agreement with Employee and
others dated March 26, 1999, pursuant to which Employee will purchase a number
of shares of the common stock of the Company ("Stock Purchase Agreement").
Employee will be employed by Company in a confidential relationship wherein
Employee, in the course of employment with Company, will become familiar with
and aware of information as to the specific manner of doing business and the
customers of Company and its affiliates and the Company's future plans. The
information Employee has and will have knowledge of are trade secrets and
constitute valuable goodwill of Company. Employee recognizes that the business
of Company is dependent upon a number of trade secrets and confidential business
information, including customer lists and customer data. The protection of
these trade secrets is of critical importance to Company. Company will sustain
great loss and damage if, for whatever reason, during the term of this Agreement
or Employee's employment with Company and for a period following the termination
of this Agreement or Employee's employment, Employee should violate the
provisions of paragraph 4 of this Agreement. Further, Employee acknowledges
that any such violation would cause irreparable harm to Company and that Company
would be entitled, without limitation, to injunctive relief to remedy such
violation.
NOW, THEREFORE, in consideration of the mutual promises, terms and
conditions set forth herein and the performance of each, the parties hereby
agree as follows:
1. SERVICES.
(a) Company hereby employs Employee as its Chief Executive Officer, and the
material duties of Employee and Employee's titles and duties may not be changed
without the Employee's consent. Upon consummation of the Merger Agreement
between the Company and American Wash Services, Inc., dated March 26, 1999,
Employee shall be appointed the Chairman of the Company's Board of Directors.
(b) Employee hereby accepts employment upon the terms and conditions
contained in this Agreement. Employee shall faithfully adhere to, execute and
fulfill all directions and policies established by the Board of Directors of the
Company.
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(c) Employee's employment shall be for a full-time position, except for
Employee's provision of consulting services to U.S. Plastic Lumber Corp. and
serving as a director of U.S. Plastic Lumber Corp. throughout the term of this
Agreement, consent to which is hereby given. Employee shall not, without the
prior written consent of Company, be engaged in any other business activity
pursued for gain, profit or other pecuniary advantage, if such activity
interferes with Employee's duties and responsibilities under this Agreement.
Employee may make personal investments in such form or manner as will neither
require Employee's services in the operation or affairs of the companies or
enterprises in which such investments are made nor violate the terms of
Paragraph 4.
2. COMPENSATION.
(a) For all services to be rendered by Employee to Company, Company shall
pay Employee an initial salary computed and earned ratably over twelve months at
the rate of Three Hundred Fifty Thousand Dollars ($350,000) per year, commencing
on the date hereof, payable in accordance with Company's normal payroll
procedures. The rate of Employee's salary may be adjusted from time to time
during the term of this Agreement, upon the consent of Employee and the Board of
Directors of the Company or the compensation committee thereof.
(b) To the extent that Company, from time to time in its sole discretion,
offers or provides any of the following to its employees, then Employee, on an
equal basis with such other employees, shall be entitled to: (i) participation
in all, if any, life, health, medical, hospital, accident and disability
insurance programs of Company in existence for the benefit of its employees and
for which Employee qualifies; (ii) participation in all, if any, pension,
retirement, profit sharing or stock purchase plans for which Employee qualifies;
and (iii) participation in any other employee benefits which Company accords to
its employees and for which Employee qualifies.
(c) During the term of Employee's employment with Company, Employee shall
be entitled to reimbursement for reasonable business expenses, including
gasoline, incurred on behalf of Company. Reimbursement for business expenses
will be provided to Employee on the same basis and under the same guidelines as
are applicable to all of Company's employees. Employee shall be entitled to the
Employee Benefits set forth in Schedule A attached.
3. TERM. The period of Employee's employment with the Company shall
commence on the date of this Agreement and shall continue for four years
thereafter, unless sooner terminated in accordance with the provisions of this
Agreement ("Term"). After expiration of the Term, Employee's employment shall
continue thereafter on an at-will month-to-month basis, until terminated by
either party to the Agreement.
4. NONCOMPETITION COVENANTS.
(a) Employee agrees that the noncompetition covenants contained in this
Paragraph 4 are a material and substantial part of this Agreement.
(b) Employee covenants that during Employee's employment with Company and
for three months following the termination of Employee's employment (regardless
of the reason for the termination) the Employee shall not, directly or
indirectly, without the prior express written consent of Company, do any of the
things set forth in item (i) through (v) below:
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(i) engage, as an officer, director, shareholder, owner, partner,
joint venturer, agent, or in a managerial capacity, whether as an employee,
independent contractor, consultant, advisor or sales representative, in the
personal security device industry or in the car wash services industry within
the United States ("the Territory");
(ii) call upon any person who is, at the time of the contact, an
employee of Company or its affiliates, if the purpose and intent of the contact
is to entice such employee away from or out of the employ of Company or its
affiliates;
(iii) call upon any person or entity which is, at the time of the
contact, a customer of the Company or its affiliates for the purpose of
soliciting or selling any of the items or services which are the items or
services offered by the Company or its affiliates;
(iv) disclose the identity of the customers of Company or its
affiliates, whether in existence or proposed, to any person, firm, partnership,
corporation or other entity whatsoever, for any reason or purpose whatsoever;
(v) promote, or assist, financially or otherwise, any person, firm,
partnership, corporation or other entity whatsoever to do any of the above;
For the purposes of this Agreement, the term "affiliates" shall mean one or more
of: (A) each subsidiary of Company, and (B) each other entity under the direct
or indirect control of the Company.
(c) The Company will sustain significant losses and damages, if Employee
breaches the covenants in this Paragraph 4. There is no adequate monetary
remedy for the immediate and irreparable damage that would be caused to Company
by Employee's breach of its non-competition covenants. Employee agrees that, in
the event of a breach by him of the foregoing covenants, such covenants may be
enforced by Company by, without limitation, injunctions and restraining orders.
(d) It is agreed by the parties that the covenants in this Paragraph 4
impose a reasonable restraint on Employee in light of the activities and
business of Company on the date of the execution of this Agreement and the
future plans of Company.
(e) The covenants in this Paragraph 4 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant. If any court of competent jurisdiction shall determine that the
scope, time or territorial restrictions set forth are unreasonable, then it is
the intention of the parties that such restrictions be enforced to the fullest
extent which the court deems reasonable, and the Agreement shall thereby be
reformed.
(f) The covenants in this Paragraph 4 shall be construed as independent of
any other provision of this Agreement and the existence of any claim or cause of
action of Employee against Company whether predicated on this Agreement, or
otherwise, shall not constitute a defense to the enforcement by Company of such
covenants. It is specifically agreed that the duration of the noncompetition
covenants stated above shall be computed by excluding from such computation all
time during which Employee is in violation of any provision of this Paragraph 4
and all time during which there is pending in any court of competent
jurisdiction any action (including any appeal from any judgment) brought by any
person, whether or not a party to this Agreement, in which action Company seeks
to enforce the agreements and covenants of Employee or in which any person
contests the validity of such agreements and covenants or their enforceability
or seeks to avoid their performance or enforcement. Provided that, no such
exclusion shall include the period of time within which Employee has ceased
violating this paragraph, whether or
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not as a result of being in compliance with Court injunction or doing so
voluntarily, and whether or not any action is pending against Employee, and
provided that no such exclusion shall include the time an action is pending, if
the action is finally determined in Employee's favor.
5. CONFIDENTIAL INFORMATION. It is expressly acknowledged by the Employee
that customer lists, orders, current and closed out orders, prospect lists,
documents containing the names or addresses of existing or potential customers,
information regarding the Company's financial condition or business plans, the
methods by which the Company serves its customers or conducts its operations, as
well as other business procedures, are the property of the Company and
constitute confidential information or trade secrets of the Company
("Confidential Information"). Employee agrees to maintain the confidentiality
of the Confidential Information and further agrees that Employee will not,
directly or indirectly, use or disclose Confidential Information to any natural
or legal person, other than authorized employees or agents of the Company,
during the Term or thereafter. All Confidential Information and all
correspondence, reports, charts, products, records, designs, patents, plans,
manuals, "field guides," memoranda, advertising materials, lists and other data
or property collected by or delivered to Employee by or on behalf of Company,
its representatives, customers and government entities (including, without
limitation, customers obtained for Company by Employee), and all other materials
compiled by Employee which pertain to the business of Company shall be and shall
remain the property of Company, shall be subject at all times to its discretion
and control and shall be delivered, together with any and all copies thereof,
promptly to Company upon request at any time and without request upon completion
or other termination of Employee's employment hereunder.
6. INVENTIONS. Employee shall disclose promptly to Company any and all
conceptions and ideas for inventions, improvements, and valuable discoveries,
whether patentable or not, which are conceived or made by Employee solely or
jointly with another during the period of employment or within three months
thereafter and which are related to the business or activities of Company.
Employee hereby assigns and agrees to assign all his interests therein to
Company or its nominee. Whenever requested to do so by Company, Employee shall
execute any and all applications, assignments or other instruments that Company
shall deem necessary to apply for and obtain Letters Patent of the United States
or any foreign country or to otherwise protect Company's interest therein.
These obligations shall continue beyond the termination of employment with
respect to inventions, improvements and valuable discoveries, whether patentable
or not, conceived, made or acquired by Employee during the period of employment,
and shall be binding upon Employee's heirs, assigns, executors, administrators
and other legal representatives.
7. TERMINATION; RIGHTS OF TERMINATION. Employee's employment under this
Agreement may terminated during the term hereof in any one or more of the
following ways:
(a) Automatically upon the death or resignation of Employee, the parties
agreeing that Employee may resign at any time without such resignation
constituting a breach of this Agreement;
(b) By Company upon written notice to Employee upon:
(i) Employee's unsatisfactory performance of his duties or other
obligations under this Agreement, as determined in good faith by the Company
after having given Employee notice of the unsatisfactory performance, including
without limitation, Employee's refusal or inability to competently perform his
obligations under this Agreement, as determined in good faith by the Company,
except where non-performance is caused by disability;
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(ii) Employee's inability to perform his duties under this Agreement
because of illness or physical or mental disability or other incapacity which
continues for a period of 90 days, either consecutive or cumulative during any
one-year period;
(iii) any type of harassment, violence or threat thereof, or other
behavior toward other employees of the Company or toward third parties of a kind
that may tend to result in liability being incurred by the Company toward such
employee or third party;
(iv) alcohol abuse, use of controlled substances during employment
hours, or a positive test for use of controlled substances; or
(v) gross negligence or willful misconduct with respect to the
Company or any of its affiliates or subsidiaries, including without limitation
fraud, embezzlement, theft or proven dishonesty in the course of employment, or
a conviction of a felony or a misdemeanor involving moral turpitude, or a
finding of adjudication withheld, with imposition of a sentence, to either a
felony or a misdemeanor involving moral turpitude, or the entering of a plea of
guilty or nolo contendere to a felony.
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The written notice provided for herein shall state the reason for
Employee's termination.
(c) Upon termination of Employee's employment under this Paragraph 7 for
any reason, Employee shall be entitled to receive Employee's salary accrued
through the date of termination, plus any employee benefits which by their
terms and provisions continue after such termination. In addition, upon
termination of Employee's employment under this Paragraph 7 for any reason other
than pursuant to Paragraph 7(a) or Paragraph 7(b)(ii), Employee shall be
entitled to receive and Company shall pay Employee immediately upon such
termination a termination fee in the amount of Seven Million Dollars
($7,000,000). The parties agree that, if Employee voluntarily resigns within
the first ninety (90) days of this Agreement's term without the Company having
breached this Agreement no termination fee shall be due.
(d) In the event of termination of Employee's employment under this
Agreement for any reason provided in this paragraph 7, or if Employee resigns
prior to the expiration of the term of this Agreement, all rights and
obligations of Company and Employee under this Agreement shall cease
immediately, except that Employee's obligations under this subparagraph and
paragraphs 4, 5, and 6, and the Company's obligations under Paragraph 7(c)
herein shall survive such termination. After such termination Employee shall
have no right to receive any compensation hereunder, except as set forth in
paragraph 7(c).
8. COMPLETE AGREEMENT. This Agreement is the final, complete and
exclusive statement and expression of the agreement between Company and
employee, it being understood that there are no oral representations,
understandings or agreements covering the same subject matter as this Agreement.
This Agreement supersedes, and cannot be varied, contradicted or supplemented by
evidence of any prior or contemporaneous discussions, correspondence, or oral or
written agreements of any kind. This Agreement may be modified, altered or
otherwise amended only by a written instrument executed by both Company and
Employee.
9. NO WAIVER; REMEDIES CUMULATIVE. No waiver by the parties hereto of any
default or breach of any term, condition or covenant of this Agreement shall be
deemed to be a waiver of any subsequent default or breach of the same or any
other term, condition or covenant contained herein. No right, remedy or
election given by any term of this Agreement shall be deemed exclusive but each
shall be cumulative with all other rights, remedies and elections available at
law or in equity.
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10. ASSIGNMENT; BINDING EFFECT. Employee understands that Employee has
been selected by Company on the basis of Employee's personal qualifications,
experience and skills. Employee agrees, therefore, that he cannot assign all
or any portion of this Agreement. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and Company's successors and assigns.
It is further understood and agreed that Company may be merged or consolidated
with another entity and that any such entity shall automatically succeed to the
rights, powers and duties of Company hereunder.
11. NOTICE. All notices or other communications required or permitted
hereunder shall be in writing and may be given by depositing the same in the
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, by overnight courier or
by delivering the same in person to such party.
To Company: Chief Executive Officer
1000 Crawford Place
Mount Laurel, New Jersey 08054
To Employee: Louis D. Paolino, Jr.
500 East Mantua Ave.
Wenonah, New Jersey 08090
Notice shall be deemed given and effective the day personally delivered, the day
after being sent by overnight courier and three days after the deposit in the U.
S. mail of a writing addressed as above and sent first class mail, certified,
return receipt requested, or when actually received, if earlier. Either party
may change the address for notice by notifying the other party of such change in
accordance with this paragraph 11.
12. SEVERABILITY; HEADINGS. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. The
paragraph headings herein are for reference purposes only and are not intended
in nay way to describe, interpret, define or limit the extent or intent of this
Agreement or of any part hereof.
13. GENDER. The use of the masculine pronoun in this Agreement has been
used for convenience and shall apply to the Employee even where the Employee is
a female.
14. GOVERNING LAW. This Agreement shall in all respects be construed in
accordance with the laws of the State of New Jersey.
15. INSURANCE AND INDEMNIFICATION.
(a) Subject to applicable law, for a period of six (6) years following
completion of the Term, the Company will: (i) indemnify Employee and his heirs
and representatives to the extent provided in the Company's Certificate of
Incorporation in effect on the date of this Agreement and will not amend, reduce
or limit rights of indemnity afforded to them or the ability of the Company to
indemnify them, not hinder, delay or make more difficult the exercise of such
rights of indemnity and (ii) maintain director and officer liability insurance
coverage providing Employee with coverage (1) at least as favorable as the
policies in effect immediately prior to the date hereof covering the Company's
directors and officers or
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(2) as favorable as is available at a cost to the Company of up to 125% of the
premiums currently being paid by the Company.
(b) If any claim is (or claims are) made against Employee and his heirs
and representatives, including legal counsel, arising from Employee's services
as a director, officer and employee of the Company, within six (6) years from
the expiration of the Term, the provisions of this Paragraph 15 respecting the
Company's Certificate of Incorporation shall continue in effect until the final
disposition of all such claims.
(c) The Company agrees to provide written notice to Employee immediately
upon learning of any claim or threatened claim against Employee by any third
party relating to or arising out of the business of the Company or Employee's
prior service as a director, officer, employee or controlling shareholder of the
Company. The Company further agrees to provide to Employee any complaints and
other relevant documentation related to such claims immediately upon receipt of
such documentation.
(d) Employee agrees that he will cooperate with and assist the Company, as
is reasonably requested by the Company, in its defense of any action or
proceeding against the Company, its directors, officers, employees or affiliates
arising out of or in any way related to any transactions, events or other
matters which occurred during the period of his employment with the Company, to
the extent that such cooperation and assistance will not impair Employee's legal
rights or remedies or increase the likelihood that Employee will incur any
liabilities as a result thereof. This Agreement shall not preclude Employee from
testifying in such action or proceeding. In the event that Employee does
cooperate with and assist the Company in its defenses of such an action or
proceeding, the Company agrees to reimburse Employee for all reasonable expenses
incurred by Employee in providing such assistance.
16. ARBITRATION.
(a) Each and every controversy or claim arising out of or relating to this
Agreement shall be settled by arbitration in Philadelphia, Pennsylvania, in
accordance with the commercial rules (the "Rules") of the American Arbitration
Association then obtaining, and judgment upon the award rendered in such
arbitration shall be final and binding upon the parties and may be confirmed in
any court having jurisdiction thereof. Notwithstanding the foregoing, this
Agreement to arbitrate shall not bar any party from seeking temporary or
provisional remedies in any Court having jurisdiction. Notice of the demand for
arbitration shall be filed in writing with the other party to this Agreement,
which such demand shall set forth in the same degree of particularity as
required for complaints under the Federal Rules of Civil Procedure the claims to
be submitted to arbitration. Additionally, the demand for arbitration shall be
stated with reasonable particularity with respect to such demand with documents
attached as appropriate. In no event shall the demand for arbitration be made
after the date when institution of legal or equitable proceedings based on such
claim, dispute or other matter in question would be barred by the applicable
statutes of limitations.
(b) The arbitrators shall have the authority and jurisdiction to determine
their own jurisdiction and enter any preliminary awards that would aid and
assist the conduct of the arbitration or preserve the parties' rights with
respect to the arbitration as the arbitrators shall deem appropriate in their
discretion. The award of the arbitrators shall be in writing and it shall
specify in detail the issues submitted to arbitration and the award of the
arbitrators with respect to each of the issues so submitted.
(c) Within sixty (60) days after the commencement of any arbitration
proceeding under this Agreement, each party shall file with the arbitrators its
contemplated discovery plan outlining the desired documents to be produced, the
depositions to be take, if ordered by the arbitrators in accordance with the
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Rules, and any other discovery action sought in the arbitration proceeding.
After a preliminary hearing, the arbitrators shall fix the scope and content of
each party's discovery plan as the arbitrators deem appropriate. The arbitrators
shall have the authority to modify, amend or change the discovery plans of the
parties upon application by either party, if good cause appears for doing so.
(d) The award pursuant to such arbitration will be final, binding and
conclusive.
(e) Counsel to Company and Employee in connection with the negotiation of
and consummation of this Agreement shall be entitled to represent their
respective party in any and all proceedings under this Paragraph or in any other
proceeding (collectively, "Proceedings"). Company and Employee, respectively,
waive the right and agree they shall not seek to disqualify any such counsel in
any such Proceedings for any reason, including but not limited to the fact that
such counsel or any member thereof may be a witness in any such Proceedings or
possess or have learned of information of a confidential or financial nature of
the party whose interests are adverse to the party represented by such counsel
in any such Proceedings.
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement on
the year and day above written.
MACE SECURITY INTERNATIONAL, INC.
By:/s/ Jon E. Goodrich, Jr.
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By: Jon E. Goodrich
Its: President
/s/ Louis D. Paolino, Jr.
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Louis D. Paolino, Jr.
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