Document:

<PAGE>

                                                                   EXHIBIT 10.26

                             EMPLOYMENT AGREEMENT

     This Employment Agreement (this "Agreement"), dated as of March 8, 2000,
is by and among IFCO Systems N.V. (the "Company"), a public limited liability
company incorporated under the laws of the Netherlands, and Edward Rhyne
("Employee").

                                    RECITALS

     WHEREAS, the Company is engaged, directly or through its subsidiaries, in
the following businesses:  (i) providing round-trip systems, including, without
limitation, round-trip containers, and other services related thereto, (ii)
manufacturing, recycling, repairing,  marketing, distributing, brokering,
leasing, managing and/or transporting new or used pallets or pallet parts and
other logistics and related services with respect thereto, and (iii)
reconditioning, distributing, brokering, leasing, managing and/or transporting
drums and providing other logistics and related services with respect thereto;
and

     WHEREAS, the Company, PalEx, Inc. ("PalEx"), and the other parties named
therein, are parties to that certain Amended and Restated Agreement and Plan of
Reorganization (the "Merger Agreement") dated as of October 6, 1999, but
effective as of March 29, 1999, which, inter alia, provides for the merger of
PalEx with and into a subsidiary of the Company (the "Merger"); and

     WHEREAS, the Merger is closing on the date first written above; and

     WHEREAS, prior to the Merger, Employee has been employed by PalEx and,
together with PalEx, is a party to that certain Employment Agreement dated as of
April 24, 1997 (the "Original Employment Agreement"); and

     WHEREAS, the consummation of the Merger results in a "Change in Control,"
as such term is defined and used in the Original Employment Agreement; and

     WHEREAS, in connection with the transactions contemplated by the Merger
Agreement, Employee, Martin Schoeller and Christoph Schoeller, affiliates of the
Company, entered into an Employment Agreement Terms agreement dated December 21,
1999, on behalf of the Company, which provides for the terms of the Company's
employment of Employee (the "Employment Terms Agreement"); and

     WHEREAS, the Company desires to retain Employee as an employee and officer
of the Company in accordance with the terms of the Employment Terms Agreement
and as reflected in this Agreement, and Employee desires to accept such
employment on such terms; and

     WHEREAS, the Company and Employee desire to terminate the Original
Employment Agreement as of the date hereof and provide for Employee's waiver of
any right to payments or damages as a result of such termination, including,
without limitation, any payments arising under Sections 5(e) and 12 of the
Original Employment Agreement;

     Therefore, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto, it is hereby agreed as follows:
<PAGE>

                              A G R E E M E N T S

     1.   Employment and Duties

     (a) The Company hereby employs Employee as Executive Vice President and
General Counsel. As such, Employee shall have responsibilities, duties and
authority reasonably accorded to and expected of an Executive Vice President and
of its General Counsel and shall be based in the Company's executive offices in
Houston, Texas.  Employee will report directly to the Chief Executive Officer
and Board of Directors (the "Board") of the Company.  Employee hereby accepts
this employment upon the terms and conditions herein contained and agrees to
devote his time, attention and efforts to promote and further the business of
the Company.

     (b) Employee shall faithfully adhere to, execute and fulfill all policies
established by the Company.

     (c) Employee shall not, during the term of his employment hereunder, be
engaged in any other business activity pursued for gain, profit or other
pecuniary advantage if such activity materially interferes with Employee's
duties and responsibilities hereunder, unless approved by the Chief Executive
Officer or the Board.  However, the foregoing limitations shall not be construed
as prohibiting Employee from making personal investments in such form or manner
as will neither require his services in the operation or affairs of the
companies or enterprises in which such investments are made nor violate the
terms of Section 3 hereof.

     (d) Employee and the Company hereby agree the Original Employment Agreement
is terminated effective as of the date hereof.  Employee hereby waives any right
he has or may have to receive, or to elect to receive, any payment from the
Company or PalEx as a result of the Change in Control (as such term is defined
in the Original Employment Agreement) resulting from the Merger, including,
without limitation, rights under Sections 5(e) and 12 of the Original Employment
Agreement.

     2.   Compensation.  For all services rendered by Employee, the Company
shall compensate Employee as follows:

     (a) Base Salary. Beginning on the date of this Agreement, the base salary
payable to Employee shall be $236,000 per year, payable on a regular monthly or
weekly basis in accordance with the Company's standard payroll procedures.
Effective June 1, 2000, Employee's base salary shall be increased to $250,000
per year, payable on a regular monthly or weekly basis in accordance with the
Company's standard payroll procedures.  On at least an annual basis, the
Compensation Committee of the Board of Directors of the Company (the
"Committee") will review Employee's performance and may recommend increases to
such base salary if, in the Committee's discretion, any such increase is
warranted.

     (b) Closing Bonus.  On the date first written above, the Company shall pay
Employee a Merger closing bonus of $236,000, less any applicable withholdings.
The Company shall pay Employee an additional Merger closing bonus of $189,000
(the "Additional Bonus") in 12 equal monthly installments of $15,750, less any
applicable withholdings.  The Company shall pay Employee the first installment
of the Additional Bonus on the date first written above and each succeeding
installment of the Additional Bonus on the first of each month following the
date first written above.

                                                                    Page 2 of 12
<PAGE>

     (c) Incentive Bonus Plan. For 2000 and subsequent years during the Term, it
is the Company's intent to develop a written Incentive Bonus Plan setting forth
the criteria under which Employee and other officers and key employees will be
eligible to receive year-end bonus awards.  Employee's targeted annual bonus
(which term shall be defined consistent with the bonus plan being developed by
the Company and PalEx with the assistance of Towers Perrin) shall be 30% of
Employee's then current base salary.

     (d)  Stock Options.

          (i)   Employee's current nonqualified options to purchase 200,000
                shares of PalEx Common Stock, $.01 par value ("PalEx Common
                Stock") are hereby terminated (such options being herein
                referred to as the "Original Options").

          (ii)  The Company hereby grants Employee nonqualified options to
                purchase 300,000 Ordinary Shares (the "Options") at $14.90 per
                share, which options shall (A) vest and become exercisable (1)
                133,000 per year on each of the first two anniversary dates of
                the date first written above, and (2) 34,000 on the third
                anniversary of the date first written above, and (B) have the
                same terms and conditions as the Original Options, except as
                otherwise provided herein.

          (iii) The Options shall have a term of ten years from the date first
                written above.  Vested Options shall not be subject to earlier
                termination as a result of the termination (whether or not
                voluntary, with or without cause, with good reason or as a
                result of death or disability) of Employee's employment with the
                Company.

          (iv)  Promptly after the execution of this Agreement, the Company and
                Employee shall enter into a stock option agreement with respect
                to the Options, the terms and conditions of which agreement
                shall be substantially the same as the stock option agreements
                relating to the Original Options, except as otherwise provided
                in this Agreement.

     (e) Executive Perquisites, Benefits and Other Compensation.  Employee shall
be entitled to receive additional benefits and compensation from the Company in
such form and to such extent as specified below:

          (i)   Payment of all premiums for coverage for Employee and his
                dependent family members under health, hospitalization,
                disability, dental, life and other insurance plans that the
                Company or PalEx may have in effect from time to time.

          (ii)  Reimbursements for all business travel and other out-of-pocket
                expenses (including those costs to maintain any professional
                certification held or obtained by Employee) reasonably incurred
                by Employee in the performance of his services pursuant to this
                Agreement. Such reimbursement shall include travel and duplicate
                living expenses incurred in traveling to and from his primary
                residence in the Houston, Texas, area and added income taxes
                that Employee may incur if any such travel expenses are not
                deductible for tax purposes. All reimbursable expenses shall be
                appropriately documented in reasonable detail by Employee upon
                submission of any request for

                                                                    Page 3 of 12
<PAGE>

                reimbursement and in a format and manner consistent with the
                Company's expense reporting policy.

          (iii) Four weeks of paid vacation or such greater amount as may be
                afforded officers and key employees at similar levels under the
                Company's policies in effect from time to time.

          (iv)  The Company shall provide Employee with (a) other executive
                perquisites as may be available to other senior executives of
                the Company or deemed appropriate for Employee by the Board or
                the Committee, (b) participation in all other Company-wide
                employee benefits as available from time to time, and (c)
                participation in any other insurance and employee benefits or
                plans that include a majority of the other executive officers of
                the Company.

     3.   Non-Competition Agreement

     (a) Employee shall not, during the period of his employment by or with the
Company, and for a period of two years immediately following the termination of
his employment under this Agreement, for any reason whatsoever, directly or
indirectly, for himself or on behalf of or in conjunction with any other person,
persons, company, partnership, corporation or business of whatever nature:

          (i)   engage, as an officer, director, shareholder, owner, partner,
                joint venturer, or in a managerial capacity, whether as an
                employee, independent contractor, consultant or advisor, or as a
                sales representative, in any business selling any products or
                services in direct competition with the Company or any of the
                Company's subsidiaries, within 100 miles of where the Company or
                any of the Company's subsidiaries conducts business, including
                any territory serviced by the Company or any of such
                subsidiaries (the "Territory");

          (ii)  call upon any person who is, at that time, within the Territory,
                an employee of the Company (including its subsidiaries) in a
                managerial capacity for the purpose or with the intent of
                enticing such employees away from or out of the employ of the
                Company (including its subsidiaries), provided that after
                Employee has ceased employment hereunder, Employee shall be
                permitted to call upon and hire any member of his or her
                immediate family;

          (iii) call upon any person or entity which is, at that time, or which
                has been, within one year prior to that time, a customer of the
                Company (including its subsidiaries) within the Territory for
                the purpose of soliciting or selling products or services in
                direct competition with the Company within the Territory;

          (iv)  call upon any prospective acquisition candidate, on Employee's
                own behalf or on behalf of any competitor, which candidate was
                either called upon by the Company (including its subsidiaries)
                or for which the Company made an acquisition analysis, for the
                purpose of acquiring such entity during the term of Employee's
                employment.

                                                                    Page 4 of 12
<PAGE>

     Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit Employee from acquiring as an investment not more than 1% of the
capital stock of a competing business, whose stock is traded on a national
securities exchange or over-the-counter.

     (b) Because of the difficulty of measuring economic losses to the Company
as a result of a breach of the foregoing covenant, and because of the immediate
and irreparable damage that could be caused to the Company for which it would
have no other adequate remedy, Employee agrees that the foregoing covenant may
be enforced by the Company in the event of breach by him, by injunctions and
restraining orders.

     (c) It is agreed by the parties that the foregoing covenants in this
Section 3 impose a reasonable restraint on Employee in light of the activities
and business of the Company (including the Company's subsidiaries) on the date
of the execution of this Agreement and the current plans of the Company; but it
is also the intent of the Company and Employee that such covenants be construed
and enforced in accordance with the changing activities and business of the
Company (including its subsidiaries) throughout the term of this covenant,
whether before or after the date of termination of the employment of Employee.
For example, if, during the term of this Agreement, the Company enters a new and
different business in addition to the businesses currently being pursued by the
Company, then Employee will be precluded from soliciting the customers or
employees of such new business and from directly competing with such new
business within 100 miles of its operating location(s) through the term of this
covenant.

     (d) The covenants in this Section 3 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant.  Moreover, in the event any court of competent jurisdiction
shall determine that the scope, time or territorial restrictions set forth in
this Section 3 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 this Agreement shall thereby be reformed.

     (e) All of the covenants in this Section 3 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants.  It is specifically
agreed that the period of two years stated at the beginning of this Section 3,
during which the agreements and covenants of Employee made in this Section 3
shall be effective, shall be computed by excluding from such computation any
time during which Employee is in violation of any provision of this Section 3
and any time during which there is pending in any court of competent
jurisdiction any action (including any appeal from any final judgment) brought
by any person, whether or not a party to this Agreement, in which action the
Company seeks in good faith 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.

     4.  Place of Performance

     (a) Employee shall be based in Houston, Texas, during the Initial Term. The
Company shall not require Employee to move his existing permanent residence from
Houston, Texas, or to relocate the principal office from which Employee works
from Houston, Texas, during the Initial Term.

     (b) After the Initial Term, Employee understands that he may be requested
to relocate from Houston, Texas, to another geographic location in order to more
efficiently carry out his duties and responsibilities under this Agreement or as
part of a promotion or other increase in duties and

                                                                    Page 5 of 12
<PAGE>

responsibilities. In connection with a possible relocation from Houston and any
subsequent relocation requested by the Company, the Company shall pay all
relocation costs to move Employee, his immediate family and their personal
property and effects. Such costs may include by way of example, but are not
limited, to pre-move visits to search for a new residence, investigate schools
or for other purposes; temporary lodging and living costs prior to moving into a
new permanent residence; duplicate home carrying costs; all closing costs on the
sale of Employee's present residence and on the purchase of a comparable
residence in the new location; and added income taxes that Employee may incur if
any relocation costs are not deductible for tax purposes. The general intent of
the foregoing is that Employee shall not personally bear any out-of pocket cost
as a result of the relocation, with an understanding that Employee will use his
best efforts to incur only those costs which are reasonable and necessary to
effect a smooth, efficient and orderly relocation with minimal disruption to the
business affairs of the Company and the personal life of Employee and his
family.

     (c) If Employee is relocated after the Initial Term to a state which has a
personal income tax, Employee's base annual salary in effect at the time of such
relocation shall immediately be increased by 70% of the highest personal income
tax rate of such state.  For example, if Employee moves to a state with a six
percent personal income tax rate when his base annual salary is $236,000, then
such annual salary will be increased by $9,912 (computed as 70% x 6% x
$236,000).

     (d) Notwithstanding the above or anything to the contrary contained herein,
if Employee is required to move his permanent residence from Houston, Texas, or
to relocate the principal office from which Employee works from Houston, Texas,
and Employee refuses, such refusal shall not constitute "good cause" for
termination of this Agreement under the terms of Section 5(a)(iii).  Any such
requirement during the Initial Term shall, however, constitute a "good reason"
for Employee's voluntary termination of his employment under the terms of
Section 5(a)(v).

     5.  Term; Termination; Rights on Termination.

     (a) The term of this Agreement shall begin on the date hereof and continue
for three years (the "Initial Term"), and, unless terminated sooner as herein
provided, shall continue thereafter on a year-to-year basis on the same terms
and conditions contained herein.  This Agreement and Employee's employment may
be terminated in any one of the following ways:

          (i)   Death.  The death of Employee shall immediately terminate this
                Agreement with no severance compensation due to Employee's
                estate.

          (ii)  Disability.  If, as a result of incapacity due to physical or
                mental illness or injury, Employee shall have been absent from
                his full-time duties hereunder for four consecutive months, then
                30 days after receiving written notice (which notice may occur
                before or after the end of such four month period, but which
                shall not be effective earlier than the last day of such four
                month period) the Company may terminate Employee's employment
                hereunder provided Employee is unable to resume his full-time
                duties at the conclusion of such notice period.  Also, Employee
                may terminate his employment hereunder if his health should
                become impaired to an extent that makes the continued
                performance of his duties hereunder hazardous to his physical or
                mental health or his life, provided that Employee shall have
                furnished the Company with a written statement from a qualified
                doctor to such effect and

                                                                    Page 6 of 12
<PAGE>

                 provided, further, that at the Company's request made within 30
                 days of the date of such written statement, Employee shall
                 submit to an examination by a doctor selected by the Company
                 who is reasonably acceptable to Employee or Employee's doctor
                 and such doctor shall have concurred in the conclusion of
                 Employee's doctor. In the event this Agreement is terminated as
                 a result of Employee's disability, Employee shall receive from
                 the Company, in a lump-sum payment due within 10 days of the
                 effective date of termination, the base salary at the rate then
                 in effect for whatever time period is remaining under the
                 Initial Term of this Agreement or for six months, whichever
                 amount is greater.

          (iii)  Good Cause.  The Company may terminate this Agreement 10 days
                 after written notice to Employee for good cause, which shall
                 be: (i) Employee's material breach of this Agreement
                 (continuing for 10 days after receipt of written notice of need
                 to cure); (ii) Employee's gross negligence in the performance
                 or intentional nonperformance (continuing for 10 days after
                 receipt of written notice of need to cure) of any of Employee's
                 material duties and responsibilities hereunder; (iii)
                 Employee's dishonesty, fraud or misconduct with respect to the
                 business or affairs of the Company which materially and
                 adversely affects the operations or reputation of the Company;
                 (iv) Employee's conviction of a felony crime; or (v) chronic
                 alcohol abuse or illegal drug abuse by Employee. In the event
                 of a termination for good cause, as enumerated above, Employee
                 shall have no right to any severance compensation.

          (iv)   Without Cause. At any time after the commencement of
                 employment, the Company or Employee may, without cause,
                 terminate this Agreement and Employee's employment effective 30
                 days after written notice is provided to the other party.
                 Should Employee be terminated by the Company without cause,
                 Employee shall receive from the Company, in a lump-sum payment
                 due on the effective date of termination:

                 (A)  if such termination occurs during the first two years of
                      the Initial Term, an amount equal to (1) the excess of (y)
                      two times Employee's then current annual base salary over
                      (z) the amount of the Additional Bonus previously paid to
                      Employee, plus (2) $210,000; and

                 (B)  if such termination occurs after the first two years of
                      the Initial Term, an amount equal to Employee's annual
                      base salary at the rate then in effect for whatever time
                      period is remaining under the Initial Term of this
                      Agreement or for 12 months, whichever amount is greater,
                      plus $210,000; provided, however, if such termination
                      occurs to avoid the voluntary termination for good reason
                      provision set forth in Section 5(a)(v)(B), then such
                      termination shall be deemed a voluntary termination for
                      good reason under Section 5(a)(v)(B).

                 In addition, if Employee is terminated by the Company without
                 cause, then Options to purchase a number of Ordinary Shares
                 equal to the excess of 165,000 over the

                                                                    Page 7 of 12
<PAGE>

                 number of previously vested Options shall automatically vest
                 and become fully exercisable.

          (v)    Voluntary Termination for Good Reason.  At any time after the
                 commencement of employment, Employee may, for "good reason,"
                 voluntarily terminate this Agreement and his employment with
                 the Company effective 30 days after written notice is provided
                 to the Company. Should Employee voluntarily terminate his
                 employment for good reason, Employee shall receive from the
                 Company, in a lump-sum payment due on the effective date of
                 termination:

                 (A)  if such voluntary termination occurs during the first two
                      years of the Initial Term, an amount equal to (1) the
                      excess of (y) two times Employee's then current annual
                      base salary over (z) the amount of the Additional Bonus
                      previously paid to Employee, plus (2) $210,000; and

                 (B)  if such voluntary termination occurs after the first two
                      years of the Initial Term as a result of the circumstances
                      described in Section 4(d), an amount equal to the excess
                      of (y) two times Employee's then current annual base
                      salary over (z) the amount of the Additional Bonus
                      previously paid to Employee, plus (2) $210,000.

                 In addition, if Employee voluntarily terminates his employment
                 for good reason, then Options to purchase a number of Ordinary
                 Shares equal to the excess of 165,000 over the number of
                 previously vested Options shall automatically vest and become
                 fully exercisable.

                 For purposes of this Agreement, the term "good reason" shall
                 mean each of the following reasons:

                    (1)  a demotion (including a de facto demotion) or
                         significant change of responsibilities;

                    (2)  a significant change in working conditions;

                    (3)  a voluntary termination of employment within six months
                         following the change of the principal executive officer
                         of the Company or Employee's immediate supervisor; and

                    (4)  as described in Section 4(d).

     (b) Any termination without cause by the Company, or any voluntary
termination of employment by Employee for good reason, shall operate to shorten
the period set forth in the Section 3(a) and during which the terms of Section 3
apply to one year from the date of termination of employment.  If Employee
resigns or otherwise voluntarily terminates his employment without cause or
without good reason as described in Section 5(a), Employee shall receive no
severance compensation.

                                                                    Page 8 of 12
<PAGE>

     (c) Upon termination of this Agreement for any reason provided above,
Employee shall be entitled to receive all compensation earned and all benefits
and reimbursements due through the effective date of termination.  Additional
compensation subsequent to termination, if any, will be due and payable to
Employee only to the extent and in the manner expressly provided herein.  All
other rights and obligations of the Company and Employee under this Agreement
shall cease as of the effective date of termination, except that the Company's
obligations under Section 9 herein, and Employee's obligations under Sections 3,
6, 7, 8 and 10 herein, shall survive such termination in accordance with their
terms.

     (d) If termination of Employee's employment arises out the Company's
failure to pay Employee on a timely basis the amounts to which he is entitled
under this Agreement or as a result of any other breach of this Agreement by the
Company, as determined by a court of competent jurisdiction or pursuant to the
provisions of Section 15 below, the Company shall pay all amounts and damages to
which Employee may be entitled as a result of such breach, including interest
thereon and all reasonable legal fees and expenses and other costs incurred by
Employee to enforce his rights hereunder.  Further, none of the provisions of
Section 3 shall apply in the event this Agreement is terminated as a result of a
breach by the Company.

     6.   Return of Company Property.  All records, designs, patents, business
plans, financial statements, manuals, memoranda, lists and other property
delivered to or compiled by Employee by or on behalf of the Company or the
representatives, vendors or customers thereof which pertain to the business of
the Company shall be and remain the property of the Company and be subject at
all times to the discretion and control thereof.  Likewise, all correspondence,
reports, records, charts, advertising materials and other similar data
pertaining to the business, activities or future plans of the Company which are
collected by Employee shall be delivered promptly to the Company without request
by it upon termination of Employee's employment.

     7.   Inventions.  Employee shall disclose promptly to the Company any and
all significant 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 one
year thereafter, and which are directly related to the business or activities of
the Company and which Employee conceives as a result of his employment by the
Company.  Employee hereby assigns and agrees to assign all his interests therein
to the Company or its nominee.  Whenever requested to do so by the Company,
Employee shall execute any and all applications, assignments or other
instruments that the Company shall deem necessary to apply for and obtain
Letters Patent of the United States or any foreign country or to otherwise
protect the Company's interest therein.

     8.   Trade Secrets.  Employee agrees that he will not, during or after the
term of this Agreement with the Company, disclose the specific terms of the
Company relationships or agreements with its significant vendors or customers or
any other significant and material trade secret of the Company, whether in
existence or proposed, to any person, firm, partnership, corporation or business
for any reason or purpose whatsoever.

     9.   Indemnification.  In the event Employee is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Employee), by reason of the fact that he is or was performing services
under this Agreement, or in the name or on behalf of the Company, then the
Company shall indemnify Employee, and hold him harmless, against all expenses
(including attorneys' fees and the advancement of expenses as incurred),
judgments, fines and amounts paid in settlement, as and when actually and
reasonably incurred

                                                                    Page 9 of 12
<PAGE>

by Employee in connection therewith. If both Employee and the Company are made a
party to the same third-party action, complaint, suit or proceeding, the Company
agrees to engage competent legal representation, and Employee agrees to use the
same representation, provided that if counsel selected by the Company shall have
a conflict of interest that prevents such counsel from representing Employee,
Employee may engage separate counsel and the Company shall pay all attorneys'
fees of such separate counsel. Further, while Employee is expected at all times
to use his best efforts to faithfully discharge his duties under this Agreement,
Employee cannot be held liable to the Company for errors or omissions made in
good faith where Employee has not exhibited gross, willful and wanton negligence
and misconduct or performed criminal and fraudulent acts which materially damage
the business of the Company.

     10.  No Prior Agreements.  Employee hereby represents and warrants to the
Company that the execution of this Agreement by Employee and his employment by
the Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client or any other person or
entity.  Further, Employees agrees to indemnify the Company for any claim,
including, not limited to, attorneys' fees and expenses of investigation, any
third party may now have or may hereafter come to have against the Company based
upon or arising out of any noncompetition agreement, invention or secrecy
agreement between Employee and such third party which was in existence as of the
date of this Agreement.

     11.  Assignment; Binding Effect.  Employee understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience and skills.  Employee agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement.  Subject to
the preceding two sentences, this Agreement shall be binding upon, much to the
benefit of and be enforceable by the parties hereto and their respective heirs,
legal representatives, successors and assigns.

     12.  Complete Agreement.  Except as expressly provided herein, this
Agreement is not a promise of future employment.  Except for the Employment
Terms Agreement, Employee has no oral or written understandings or agreements
with the Company or any of its officers, directors or representatives covering
the same subject matter as this Agreement.  This Agreement supersedes the
Employment Terms Agreement. Upon execution and delivery of this Agreement by
each party hereto, the Employment Terms Agreement shall automatically terminate
and Christoph Schoeller and Martin Schoeller shall be automatically released
from liability under the Employment Terms Agreement.  This written Agreement is
the final, complete and exclusive statement and expression of the agreement
between the Company and Employee and of all the terms of this Agreement, and it
cannot be varied, contradicted or supplemented by evidence of any prior or
contemporaneous oral or written agreements.  This written Agreement may not be
later modified except by a further writing signed by a duly authorized officer
of the Company and Employee, and no term of this Agreement may be waived except
by writing signed by the party waiving the benefit of such term.

     13.  Notice.  All notices and other communications required hereunder must
be in writing and will be deemed to be delivered and received if personally
delivered or if delivered by telex, telegram, facsimile or courier service, when
actually received by the party to whom notice is sent, addressed to the
appropriate party or parties, at the address of such party or parties set forth
below (or at such other address as such party may designate by written notice to
all other parties in accordance herewith):

          To the Company:     IFCO Systems N.V.
                              Rivierstaete
                              Amsteldijk 166
                              1079 LH
                              Amsterdam, The Netherlands

                                                                   Page 10 of 12
<PAGE>

          With a Copy to:     IFCO Systems N.V.
                              Zugspitzstrasse 15
                              D-82049  Pullach
                              Germany
                              Attention: Chief Executive Officer

          To Employee:        Edward Rhyne
                              607 Glenchester
                              Houston, Texas 77079

     14.  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
section headings herein are for references purposes only and are not intended in
any way to describe, interpret, define or limit the extent or intent of the
Agreement or of any part hereof.

     15.  Arbitration.  Any unresolved dispute or controversy arising or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators in Houston, Texas, in accordance
with the rules of the American Arbitration Association then in effect.  The
arbitrators shall not have the authority to add to, detract from, or modify any
provision hereof nor to award punitive damages to any injured party.  The
arbitrators shall have the authority to order back-pay, severance compensation,
vesting of options (or cash compensation in lieu of vesting of options),
reimbursement of costs, including those incurred to enforce this Agreement, and
interest thereon in the event the arbitrators determine that Employee was
terminated without disability or good cause or voluntarily terminated his
employment for good reason, as defined in Section 5(a), respectively, or that
the Company has otherwise materially breached this Agreement.  A decision by a
majority of the arbitration panel shall be final and binding.  Judgment may be
entered on the arbitrators' award in any court having jurisdiction.  The direct
expense of any arbitration proceeding shall be borne by the Company.

     16.  Governing Law.  This Agreement shall in all respects be construed
according to the laws of the State of Texas.

                                                                   Page 11 of 12
<PAGE>

     IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
duly executed this Agreement effective as of the date first written above.

                              IFCO SYSTEMS N.V.

                              By:  /s/ Christoph Schoeller
                                   ---------------------------------------------
                                    Christoph Schoeller

                              Its: Chairman
                                   ---------------------------------------------

                              By:
                                   ---------------------------------------------

                                   ---------------------------------------------

                              Its:
                                   ---------------------------------------------

                              EMPLOYEE:

                              /s/ Edward Rhyne
                              --------------------------------------------------
                              Edward Rhyne

                                                                   Page 12 of 12<PAGE>

                                                                   EXHIBIT 10.27

                   EMPLOYMENT AND NON-COMPETITION AGREEMENT

     This Employment and Non-Competition Agreement (this "Agreement"), dated as
of March 8, 2000, is by and among IFCO Systems N.V. (the "Company"), a public
limited liability company incorporated under the laws of the Netherlands, and
Howe Q. Wallace ("Employee").

                                    RECITALS

     WHEREAS, the Company is engaged, directly or through its subsidiaries, in
the following businesses:  (i) providing round-trip systems, including, without
limitation, round-trip containers, and other services related thereto, (ii)
manufacturing, recycling, repairing,  marketing, distributing, brokering,
leasing, managing and/or transporting new or used pallets or pallet parts and
other logistics and related services with respect thereto, and (iii)
reconditioning, distributing, brokering, leasing, managing and/or transporting
drums and providing other logistics and related services with respect thereto;
and

     WHEREAS, the Company, PalEx, Inc. ("PalEx"), and the other parties named
therein, are parties to that certain Amended and Restated Agreement and Plan of
Reorganization (the "Merger Agreement") dated as of October 6, 1999, but
effective as of March 29, 1999, which, inter alia, provides for the merger of
PalEx with and into a subsidiary of the Company (the "Merger"); and

     WHEREAS, the Merger is closing on the date first written above; and

     WHEREAS, prior to the Merger, Employee has been employed by PalEx and,
together with PalEx, is a party to that certain Employment and Non-Competition
Agreement dated as of March 19, 1997 (the "Original Employment Agreement"); and

     WHEREAS, the consummation of the Merger results in a "Change in Control,"
as such term is defined and used in the Original Employment Agreement; and

     WHEREAS, in connection with the transactions contemplated by the Merger
Agreement, the Company desires to retain Employee as an employee and officer of
the Company in accordance with the terms of this Agreement, and Employee desires
to accept such employment on such terms; and

     WHEREAS, the Company and Employee desire to terminate the Original
Employment Agreement as of the date hereof and provide for Employee's waiver of
any right to payments or damages as a result of such termination, including,
without limitation, any payments arising under Sections 4(e) and 11 of the
Original Employment Agreement;

     NOW, THEREFORE, in consideration of the mutual promises, terms, covenants
and conditions set forth herein and the performance of each, it is hereby agreed
as follows:
<PAGE>

                                   AGREEMENTS

     1.   Employment and Duties; Termination of Original Employment Agreement.

     (a) The Company hereby employs Employee as its Executive Vice President,
Human Resources.  As such, Employee shall have responsibilities, duties and
authority commensurate with such position.  Employee will report to the Chief
Executive Officer of the Company.  Employee shall be based at the Company's
principal offices in the Tampa, Orlando, or Bartow, Florida area. Employee
hereby accepts this employment upon the terms and conditions herein contained
and agrees to devote Employee's time, attention and best efforts to promote and
further the business of the Company.

     (b) Employee shall faithfully adhere to, execute and fulfill all policies
established by the Company.

     (c) Employee shall not, during the term of Employee's employment hereunder,
be engaged in any business activity pursued for gain, profit or other pecuniary
advantage if such activity interferes with Employee's duties and
responsibilities hereunder. However, the foregoing limitations shall not be
construed as prohibiting Employee from performing services for Sunbelt Forest
Products Corporation, if applicable, to the extent such services do not
interfere with employee's duties or responsibilities hereunder or from making
personal investments in such form or manner as will neither require his services
in the operation or affairs of the enterprises in which such investments are
made nor violate the terms of Section 3 hereof.

     (d) Employee and the Company hereby agree the Original Employment Agreement
is terminated effective as of the date hereof.  Employee hereby waives any right
he has or may have to receive, or to elect to receive, any payment from the
Company as a result of the Change in Control (as such term is defined in the
Original Employment Agreement) resulting from the Merger, including, without
limitation, rights under Sections 4(e) and 11 of the Original Employment
Agreement.

     2.   Compensation.  For all services rendered by Employee, the Company
shall compensate Employee as follows:

     (a) Base Salary.  Beginning on the date of this Agreement and through the
end of the Term (as hereinafter defined), the base salary payable to Employee
shall be $225,000 per year, payable on a regular basis in accordance with the
Company's standard payroll procedures.  On at least an annual basis after the
first year of the Term, the Compensation Committee of the Board of Directors of
the Company (the "Committee") shall review Employee's performance and may
recommend increases to such base salary if, in the Committee's discretion, any
such increase is warranted.

                                      -2-
<PAGE>

     (b) Closing Bonus.  On the date first written above, the Company shall pay
Employee a Merger closing bonus of $82,500, less any applicable withholdings.

     (c) Stock Option Grant.  The Company shall cause to be issued to Employee
non-qualified options to purchase 50,000 shares of the common stock of the
Company at the initial public offering price of such shares, which options shall
(i) vest in equal annual installments over a four-year period from the date of
grant, (ii) not terminate if Employee's employment is terminated "without
cause," as defined in Section 4(d), to the extent such options are vested at the
time of such termination, (iii) be granted in accordance with the terms of the
Company's employee stock option plan (the "Option Plan"), and (iv) be subject to
Employee executing and delivering the form of stock option agreement and any
other documents required under the Option Plan.

     (d) Incentive Bonus Plan.  For 2000 and subsequent years during the Term,
it is the Company's intent to develop a written Incentive Bonus Plan setting
forth the criteria under which Employee and other officers and key employees
will be eligible to receive year-end bonus awards. Employee's targeted annual
bonus (which term shall be defined consistent with the bonus plan being
developed by the Company with the assistance of Towers Perrin) shall be 30% of
base salary.

     (e) Perquisites, Benefits and Other Compensation.  Employee shall be
entitled to receive additional benefits and compensation from the Company in
such form and to such extent as specified below:

          (i)   Reimbursement for all business travel and other out-of-pocket
                expenses reasonably incurred by Employee in the performance of
                his services pursuant to this Agreement.  All reimbursable
                expenses shall be appropriately documented in reasonable detail
                by Employee upon submission of any request for reimbursement,
                and in a format and manner consistent with the Company's expense
                reporting policy.

          (ii)  Three weeks of paid vacation per year or such greater amount as
                may be afforded officers and key employees at similar levels
                under the Company's policies in effect from time to time.

          (iii) The Company shall provide Employee with other executive
                perquisites as may be available to or deemed appropriate for
                Employee by the Board or the Committee, participation in all
                other Company-wide employee benefits as may be adopted from time
                to time by the Company.

     3.   Non-Competition Agreement.

     (a) Employee recognizes that the Company's willingness to enter into this
Agreement and agreement to provide Employee with Confidential Information is
based in material part on Employee's agreement to the provisions of this Section
3 and that Employee's breach of the

                                      -3-
<PAGE>

provisions of this Section could materially damage the Company. Therefore, in
consideration of the benefits to be received by Employee pursuant to the terms
of this Agreement, including the provisions regarding severance payments
hereunder, and in consideration of the Company's agreement to provide
Confidential Information to Employee, Employee agrees that Employee will not,
during the period of Employee's employment by or with the Company, and for two
years following the date thereof, for any reason whatsoever, directly or
indirectly, for himself or on behalf of or in conjunction with any other person,
persons, company, partnership, corporation or business of whatever nature:

          (i)   engage, as an officer, director, shareholder, owner, partner,
                joint venturer, or in a managerial capacity, whether as an
                employee, independent contractor, consultant or advisor, or as a
                sales representative, in any business selling any products or
                services in direct competition with the Company or any of its
                subsidiaries;

          (ii)  call upon any person who is, at that time, an employee of the
                Company or any of its subsidiaries, for the purpose or with the
                intent of enticing such employee away from or out of the employ
                of such party; or

          (iii) call upon any person or entity which is a customer of the
                Company or any of its subsidiaries for the purpose of soliciting
                or selling products or services in direct competition with the
                Company or any of its subsidiaries.

     Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit Employee from acquiring as an investment not more than one percent (1%)
of the capital stock of a competing business, provided the stock of such
competitor is traded on a national securities exchange or over-the-counter.

     (b) Because of the difficulty of measuring economic losses to the Company
as a result of a breach of the foregoing covenant, and because of the immediate
and irreparable damage that could be caused to the Company for which it would
have no other adequate remedy, Employee agrees that the foregoing covenant may
be enforced by the Company by injunctions, restraining orders and other
equitable actions.

     (c) The covenants in this Section 3 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant.  Moreover, in the event any court of competent jurisdiction
shall determine that the scope, time or territorial restrictions set forth in
this Section 3 are unreasonable and therefore unenforceable, then it is the
intention of the parties that such restrictions be enforced to the fullest
extent which the court deems reasonable, and this Agreement shall thereby be
reformed.

                                      -4-
<PAGE>

     (d) Employee hereby agrees that the period during which the agreements and
covenants of Employee made in this Section 3 shall be effective shall be
computed by excluding from such computation any time during which Employee is in
violation of any provision of this Section 3.

     4.   Term; Termination; Rights on Termination.  The term of this Agreement
shall begin on the date hereof and continue for three years (the "Term").  This
Agreement and Employee's employment may be terminated in any one of the
following ways:

     (a) Death.  The death of the Employee shall immediately terminate this
Agreement with no severance compensation due to Employee's estate.

     (b) Disability.  If, as a result of incapacity due to physical or mental
illness or injury, Employee shall have been absent from full-time duties
hereunder for four consecutive months, then 30 days after receiving written
notice (which notice may occur before or after the end of such four-month
period, but which shall not be effective earlier than the last day of such four-
month period), the Company may terminate Employee's employment hereunder
provided Employee is unable to resume full-time duties at the conclusion of such
notice period.  Also, Employee may terminate his employment hereunder if his
health should become impaired to an extent that makes the continued performance
of his duties hereunder hazardous to his physical or mental health or Employee's
life, provided that Employee shall have furnished the Company with a written
statement from a qualified doctor to such effect and provided, further, that, at
the Company's request made within 30 days of the date of such written statement,
Employee shall submit to an examination by a doctor selected by the Company who
is reasonably acceptable to Employee or Employee's doctor and such doctor shall
have concurred in the conclusion of Employee's doctor.  If this Agreement is
terminated as a result of Employee's disability, Employee shall receive from the
Company, in a lump-sum payment due within 10 days of the effective date of
termination, the base salary at the rate then in effect for whatever time period
is remaining under the Term or for six months, whichever amount is greater.

     (c) Good Cause.  The Company may terminate this Agreement 10 days after
written notice to Employee for good cause, which shall be: (i) Employee's
material and irreparable breach of this Agreement; (ii) Employee's gross
negligence in the performance or intentional material nonperformance (continuing
for 10 days after receipt of written notice of need to cure) of any of
Employee's material duties and responsibilities hereunder; (iii) Employee's
dishonesty, fraud or misconduct with respect to the business or affairs of the
Company which materially and adversely affects the operations or reputation of
the Company; (iv) Employee's conviction of a felony crime; or (v) chronic
alcohol abuse or illegal drug abuse by Employee.  In the event of a termination
for good cause, as enumerated above, Employee shall have no right to any
severance compensation.

     (d) Without Cause.  At any time during the Term, the Company or Employee
may, without cause, terminate this Agreement and Employee's employment,
effective 30 days after written notice is provided to the other party.  The
Company shall be deemed to have terminated the Employee's employment without
cause, if the Company requires the Employee to relocate his permanent residence
during the Term and if the Employee refuses to relocate and terminates his

                                      -5-
<PAGE>

employment as a result of such requirement.  Should Employee be terminated by
the Company without cause during the Term, Employee shall receive from the
Company, in a lump-sum payment due on the effective date of termination, the
base salary at the rate then in effect for whatever time period is remaining
under  the Term or 12 months, whichever amount is greater.  Further, any
termination without cause by the Company shall operate to shorten the period set
forth in Section 3(a) and during which the terms of Section 3 apply to one year
from the date of termination of employment.  If Employee resigns or otherwise
terminates his employment without cause pursuant to this Section 4(d), Employee
shall receive no severance compensation and the period set forth in Section 3(a)
shall not be shortened.

     (e) Expiration of Term. The Company may terminate this Agreement effective
upon the expiration of the Term.  Employee acknowledges that this Agreement may
be terminated pursuant to this Section 4(e) with or without a corresponding
termination of Employee's employment with the Company.  If this Agreement is
terminated pursuant to this Section 4(e) and Employee remains employed by the
Company thereafter, then Employee shall be an "at will" employee of the Company
following such termination.  In the event of a termination of Employee's
employment pursuant to this Section 4(e), Employee shall have no right to any
severance compensation.

     (f) Effect of Termination.  Upon termination of this Agreement for any
reason provided in subsections (a) through (e) above, Employee shall be entitled
to receive all compensation earned and all benefits and reimbursements due
through the effective date of termination.  Additional compensation subsequent
to termination, if any, will be due and payable Employee only to the extent and
in the manner expressly provided herein.  All other rights and obligations of
the Company and Employee under this Agreement shall cease as of the effective
date of termination, except that Employee's obligations under Sections 3, 5, 6,
7 and 8 herein shall survive such termination in accordance with their terms.

     If termination of Employee's employment arises out of the Company's failure
to pay Employee on a timely basis the amounts to which Employee is entitled
under this Agreement or as a result of any other breach of this Agreement by the
Company, as determined by a court of competent jurisdiction or pursuant to the
provisions of Section 14 below, the Company shall pay all amounts and damages to
which Employee may be entitled as a result of such breach, including interest
thereon and all reasonable legal fees and expenses and other costs incurred by
Employee to enforce Employee's rights hereunder.

     5.   Return of Company Property.  All records, designs, patents, business
plans, financial statements, manuals, memoranda, lists and other property
delivered to or compiled by Employee by or on behalf of the Company or any of
its subsidiaries or the representatives, vendors or customers thereof that
pertain to the business of the Company or any of its subsidiaries shall be and
remain the property of the Company or such subsidiary, as the case may be, and
be subject at all times to the discretion and control thereof.  Likewise, all
correspondence, reports, records, charts, advertising materials and other
similar data pertaining to the business, activities or future plans of the
Company or any subsidiary of the Company that are collected or held by Employee
shall be delivered promptly

                                      -6-
<PAGE>

to the Company or such subsidiary, as the case may be, without request by such
party, upon termination of Employee's employment, without regard to the cause or
reasons for such termination.

     6.   Inventions.  Employee shall disclose promptly to the Company any and
all significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are (a) conceived or made by
Employee, solely or jointly with another, during the period of employment or
within one year thereafter, (b) directly related to the business or activities
of the Company or any of its subsidiaries, or (c) conceived by Employee as a
result of Employee's employment by the Company.  Employee hereby assigns and
agrees to assign all Employee's interests in any such invention, improvement or
valuable discovery to the Company or its nominee. Whenever requested to do so by
the Company, Employee shall execute any and all applications, assignments or
other instruments that the Company shall deem necessary to apply for and obtain
Letters Patent of the United States or any foreign country or to otherwise
protect the Company's or its subsidiaries' interests in any such invention,
improvement or valuable discovery.

     7.   Confidentiality.

     (a) The Company agrees to provide Employee with Confidential Information
(as defined below) during the term of Employee's employment with the Company.
Employee acknowledges and agrees that he will have access to and receive
Confidential Information and that all Confidential Information is confidential
and a valuable, special, and unique asset of the Company that gives the Company
and its subsidiaries advantages over their actual and potential, current and
future competitors.  Employee further acknowledges and agrees that Employee owes
the Company a fiduciary duty to preserve and protect all Confidential
Information from unauthorized disclosure or unauthorized use; certain
Confidential Information constitutes "trade secrets" under the laws of the State
of Florida; and unauthorized disclosure or unauthorized use of the Confidential
Information would irreparably injure the Company and its subsidiaries.

     (b) Both during the term of Employee's employment and after the termination
of Employee's employment for any reason (including wrongful termination),
Employee shall hold all Confidential Information in strict confidence, and shall
not use any Confidential Information except for the benefit of the Company, in
accordance with the duties assigned to Employee by the Company. Employee shall
not, at any time (either during or after the term of Employee's employment),
disclose any Confidential Information to any person or entity (except other
employees of the Company who have a need to know the information in connection
with the performance of their employment duties), or copy, reproduce, modify,
decompile, or reverse engineer any Confidential Information, or remove any
Confidential Information from the Company's premises, without the prior written
consent of the Chief Executive Officer of the Company, or permit any other
person to do so. Employee shall take reasonable precautions to protect the
physical security of all documents and other material containing Confidential
Information (regardless of the medium on which the Confidential Information is
stored).  This Agreement applies to all Confidential Information, whether now
known or later to become known to Employee.

                                      -7-
<PAGE>

     (c) Upon the termination of Employee's employment with the Company for any
reason (including wrongful termination), and upon request of the Company at any
other time, Employee shall promptly surrender and deliver to the Company all
documents and other written material of any nature containing or pertaining to
any Confidential Information and shall not retain any such document or other
material.  Within five days of any such request, Employee shall certify to the
Company in writing that all such materials have been returned.

     (d) As used in this Agreement, the term "Confidential Information" shall
mean any information or material known to or used by or for the Company or any
of its subsidiaries (whether or not owned or developed by the Company or such
subsidiary and whether or not developed by Employee) that is not generally known
to the public.  Confidential information includes, but is not limited to, the
following: (i) all trade secrets of the Company and its subsidiaries; (ii) all
information that the Company or any of its subsidiaries has marked as
confidential or has otherwise described to Employee (either in writing or
orally) as confidential; (iii) all nonpublic information concerning the
Company's or any of its subsidiaries' products, services, prospective products
or services, research, product designs, prices, discounts, costs, marketing
plans, marketing techniques, market studies, competition, test data, customers,
customer lists and records, suppliers and contracts; (iv) all business records
and plans of the Company or any of its subsidiaries; (v) all personnel files of
the Company and its subsidiaries;(vi) all financial information of or concerning
the Company and its subsidiaries; (vii) all information relating to operating
system software, application software, software and system methodology, hardware
platforms, technical information, inventions, computer programs and listings,
source codes, object codes, copyrights, and other intellectual property; (viii)
all technical specifications; (ix) any proprietary information belonging to the
Company or any of its subsidiaries; and (x) all of the Company's or any of its
subsidiaries' computer hardware or software, training or instruction manuals and
data and computer system passwords and user codes.

     8.   Indemnification.  If Employee is made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by the Company or any of
its subsidiaries against Employee), by reason of the fact that he is or was
performing services under this Agreement, then the Company shall indemnify
Employee against all expenses (including reasonable attorneys' fees), judgments,
fines and amounts paid in settlement, as actually and reasonably incurred by
Employee in connection therewith. If both Employee and the Company or any of its
subsidiaries are made a party to the same third-party action, complaint, suit or
proceeding, then the Company agrees to engage competent legal representation,
and Employee agrees to use the same representation, provided that if counsel
selected by the Company shall have a conflict of interest that prevents such
counsel from representing Employee, Employee may engage separate counsel and the
Company shall  pay all reasonable attorneys' fees of such separate counsel.
Further, while Employee is expected at all times to use his best efforts to
faithfully discharge his duties under this Agreement, Employee cannot be held
liable to the Company or any of its subsidiaries for errors or omissions made in
good faith, where Employee has not exhibited gross, willful and wanton
negligence and misconduct or performed criminal and fraudulent acts that
materially damage the business of the Company or any of its subsidiaries.

                                      -8-
<PAGE>

     9.   Assignment; Binding Effect.  Employee understands that Employee has
been selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement.  Subject to
the preceding two sentences, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties hereto and their respective heirs,
legal representatives, successors and assigns.

     10.  Complete Agreement.  Except as expressly provided herein, this
Agreement is not a promise of future employment.  Employee has no oral
understandings or agreements with the Company or any of its officers, directors
or representatives covering the same subject matter as this Agreement.  This
written Agreement is the final, complete and exclusive statement and expression
of the agreement between the Company and Employee and of all the terms of this
Agreement, and it cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous oral or written agreements.  This written Agreement
may not be later modified except by a further writing signed by a duly
authorized officer of the Company and Employee, and no term of this Agreement
may be waived except by writing signed by the party waiving the benefit of such
term.

     11.  Notice.  Whenever any notice is required hereunder it shall be given
in writing addressed as follows:

     To the Company:          PalEx, Inc.
                              6829 Flintlock Road
                              Houston, Texas 77040
                              Attention: President and General Counsel

     To Employee:             Howe Q. Wallace
                              1180 George Street
                              Bartow, Florida 33830

     Notice shall be deemed given and effective 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.  Either party
may change the address for notice by notifying the other party of such change in
accordance with this Section 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
Section headings herein are for reference purposes only and are not intended in
any way to describe, interpret, define or limit the extent or intent of the
Agreement or any part hereof.

     13.  Dispute Resolution.  Except with respect to injunctive relief as
provided in Section 3(b), neither party shall institute a proceeding in any
court or administrative agency to resolve a

                                      -9-
<PAGE>

dispute between the parties before that party has sought to resolve the dispute
through direct negotiation with the other party. If the dispute is not resolved
within three weeks after a demand for direct negotiation, the parties shall
attempt to resolve the dispute through mediation. If the parties do not promptly
agree on a mediator either party may request the then chief judge of the Tenth
Judicial Circuit of Florida to appoint a circuit mediator certified by the
Supreme Court of Florida. If the mediator is unable to facilitate a settlement
of the dispute within a reasonable period of time, as determined by the
mediator, the mediator shall issue a written statement to the parties to that
effect and any unresolved dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration, conducted
before a panel of three arbitrators in Orlando, Florida, in accordance with the
rules of the American Arbitration Association then in effect. The arbitrators
shall not have the authority to add to, detract from, or modify any provision
hereof nor to award punitive damages to any injured party. The arbitrators shall
have the authority to order back-pay, severance compensation, vesting of options
(or cash compensation in lieu of vesting of options), reimbursement of costs,
including those incurred to enforce this Agreement, and interest thereon in the
event the arbitrators determine that Employee was terminated without disability
or good cause, as defined in Section 4(b) and (c), respectively, or that the
Company has otherwise materially breached this Agreement. A decision by a
majority of the arbitration panel shall be final and binding. Judgment may be
entered on the arbitrators' award in any court having jurisdiction.

     14.  Governing Law.  This Agreement shall in all respects be construed
according to the laws of the State of Florida.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

                                      -10-
<PAGE>

                              IFCO SYSTEMS N.V.

                              By: /s/ Edward Rhyne
                                  ---------------------------------------------
                                  Edward Rhyne, Executive Vice President

                              EMPLOYEE:

                              /s/ Howe Q. Wallace
                              --------------------------------------------------
                              Howe Q. Wallace

                                      -11-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00012-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00012-of-00352.parquet"}]]