EMPLOYMENT AGREEMENT
EXHIBIT
10.7
THIS EMPLOYMENT AGREEMENT (the
“Agreement”) is made and entered into as of August 31, 2009, by and between The
Wood Energy Group, Inc., a Missouri corporation (“Employer”), and Xxxx X. Xxxxx,
an individual residing at 000 Xxxxx Xxxxx Xxxx, Xxxxxx, Xxxxxxxx 00000
(“Employee”).
RECITALS:
Employer desires to offer Employee an
opportunity to work for Employer as its vice president upon the terms and
conditions hereinafter set forth, and Employee desires to accept such
offer. Accordingly, the parties agree as follows:
1. EMPLOYMENT. Employer hereby
employs Employee and Employee agrees to be employed by Employer as vice
president, or in such other role to which the parties jointly agree, for an
initial five year term commencing on the date of this Agreement and terminating
on August 31, 2014 (the “Employment Period”). At least 90 days prior
to the end of the Employment Period, the parties shall consider the extension of
the Employment Period, and shall memorialize, in writing, any agreement reached
related thereto.
2. COMPENSATION. During the
Employment Period, Employee shall receive as compensation:
(a) Salary
at the annual rate of $150,000, payable not less frequently than
semi-monthly;
(b) The
right to participate in all corporate employee benefit programs offered to
senior executives of Employer or B.H.I.T. Inc., Employer’s parent company
(“BHIT”), such as health insurance, life insurance and retirement plans;
and
(c) An
opportunity to earn an annual bonus based upon goals to be established annually
by the Board of Directors of BHIT (the “Board”) and which will be, in large
measure, tied to the growth of Employer’s earnings before interest, taxes,
depreciation and amortization, or EBITDA.
(d) An
opportunity to receive BHIT equity compensation as determined by the
Board.
(e) It
is understood and agreed that the compensation set forth in this section
includes all of the compensation to be paid to Employee hereunder and that
Employee has agreed to forego any other compensation, benefits and perquisites,
including those he had received in his position as vice president of Employer’s
predecessor in the operation of the business of Employer.
3. DUTIES. During the
Employment Period, Employee shall report to the Board, who shall be entitled to
establish the duties and responsibilities of Employee hereunder, consistent with
his title, and to modify the foregoing from time to time.
4. TERMINATION.
(a) The
employment of Employee pursuant to this Agreement shall terminate automatically
and without further action or liability of either party other than as provided
for in this Agreement upon (i) the death of Employee, (ii) Employee’s
resignation, or (iv) the termination of Employee’s employment by
Employer.
(b) Employer
may elect to terminate Employee’s employment for any reason. In the
event of a termination which is not for “Cause,” Employer shall pay severance to
Employee, at a rate equal to Employee’s then current annual salary for six
months, or for such shorter period as remains in the Employment Period (the
“Severance Pay”). The Severance Pay shall be paid in installments, in
accordance with Employer’s payroll procedures as in effect on the date of this
Agreement during the six month period following the date of such termination of
employment. The Severance Pay is intended by the parties to be in
settlement of any and all claims of Employee arising out of or related to
Employee’s employment with Employer, including, without limitation, the
termination of such employment, any express or implied employment agreement,
this Agreement, or the breach thereof (collectively, “Employment
Claims”). In consideration of such payment, and as a condition
precedent to its delivery, Employee shall enter into an agreement, in a form
satisfactory to Employer, pursuant to which Employee shall release and waive any
and all Employment Claims against Employer, and covenant not to xxx Employer in
connection with any Employment Claim (the “Release and Severance
Waiver”).
(c) Employee
shall be terminated for “Cause” if the termination is because of any of the
following: (i) Employee engaging in fraud, misappropriation of funds,
embezzlement or like conduct committed against Employer or a customer or
supplier of Employer, (ii) Employee being convicted (or entering a plea of
nolo contendere) of a
crime involving dishonesty or moral turpitude, (iii) Employee engaging in any
act of sexual misconduct at or in connection with work, including sexual
harassment, (iv) Employee’s alcohol or drug abuse, (v) Employee’s appropriation
of one or more business opportunities of Employer without the prior written
consent of the Board, or other breach of the common law duty of loyalty, (vi)
Employee’s gross negligence which results in material harm to Employer, (vii)
Employee failing to fulfill the duties and responsibilities of his job, after
notice and an opportunity to cure such failure, and (viii) Employee violating,
in a material respect, any provision of this Agreement. In the event
of such a termination for Cause, Employer shall have no further obligation to
Employee pursuant to this Agreement after the date of termination other than for
the payment of compensation earned by Employee prior to the date of termination
and not yet paid.
5. COVENANTS
AGAINST COMPETITION. Employee
recognizes and acknowledges that (i) the principal business of Employer is
railroad tie reclamation and disposal (the “Company Business”); and (ii) the
work of Employee for Employer has brought Employee and will continue to bring
him into close contact with many confidential affairs not readily available to
the public. Accordingly, Employee covenants and agrees
that:
(a) Non-Compete. During
the Employment Period and for two years following the termination of Employee’s
employment hereunder, however caused, Employee shall not, directly or
indirectly, compete with Employer or any affiliate of Employer in any manner, on
behalf of himself or any other person, firm, business, corporation or other
entity (each such other person, firm, business or other entity being referred to
hereinafter as a “Person”), including, without limitation, that Employee shall
not (i) engage in the Company Business for his own account; (ii) except for
employment of Employee by Employer or an affiliate of Employer, enter the employ
of, or render any services to, any Person engaged in the Company Business; or
(iii) become interested in any Person engaged in the Company Business (other
than Employer) as an owner, partner, shareholder, officer, director, licensor,
licensee, principal, agent, employee, trustee, consultant or in any other
relationship or capacity; provided, however, that Employee may own, directly or
indirectly, solely as an investment, securities of BHIT or any corporation which
is traded on any national securities exchange if he (A) is not a controlling
person of, or a member of a group which controls, such corporation, or (B) does
not, directly or indirectly, own 1% or more of any class of securities of such
corporation.
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(b) Non-Solicitation of
Customers. In addition to the covenants of non-competition set
forth in subparagraph (a) above, during the Employment Period and for two years
following the termination of Employee’s employment with Employer, however
caused, Employee shall not, directly or indirectly, on behalf of himself or any
Person, solicit the business of any “Customer” (as hereinafter defined) of
Employer or any affiliate of Employer, or request or instigate any Customer to
withdraw, diminish, curtail or cancel any of its business with
Employer. For purposes of this Agreement, “Customer” shall mean any
Person with whom Employer or any affiliate of Employer has had material dealings
during any part of the term of Employee’s employment with Employer, and
includes, without limitation, any Person with whom Employer or any affiliate of
Employer is doing business, or any Person who has been actively solicited for
business by Employer or any affiliate of Employer or its agent and such
solicitation is ongoing, as of the date of the termination of Employee’s
employment.
(c) Confidential
Information. Employee recognizes and acknowledges that
confidential information, including, without limitation, information, knowledge
or data (i) of a technical
nature such as but not limited to methods, know-how, formulae, compositions,
processes, discoveries, machines, inventions, products, product specifications,
computer programs and similar items or research projects, and trade secrets of
Employer and Employer’s affiliates; (ii) of a business nature such as but not
limited to information about cost, purchasing, profits, market, sales or
Customers, including lists of Customers, and the financial condition of
Employer; (iii) pertaining to future developments such as but not limited to
research and development or future marketing or merchandising; and (iv) all
other matters which Employer treats as confidential (the items described above
being referred to collectively hereinafter as “Confidential Information”), are
valuable, special and unique assets of Employer and Employer’s
affiliates. Employee shall at all times keep secret and retain in
strictest confidence, and shall not use for the benefit of himself or others
except in connection with the business and affairs of Employer, any and all
Confidential Information learned by Employee before or after the date of this
Agreement, and shall not disclose such Confidential Information to anyone
outside of Employer either during or after employment by Employer, except as
required in the course of performing duties of his employment with Employer,
without the express written consent of Employer or as required by
law.
(d) Property of
Employer. Employee agrees to deliver promptly to Employer all
drawings, blueprints, manuals, letters, notes, notebooks, reports, sketches,
formulae, computer programs and files, memoranda, Customer lists and all other
materials relating in any way to the Company Business and in any way obtained by
Employee during the period of his employment with Employer which are in his
possession or under his control, and all copies thereof, (i) upon termination of
Employee’s employment with Employer, or (ii) at any other time at Employer’s
request. Employee further agrees that he will not make or retain any
copies of any of the foregoing and will so represent to Employer upon
termination of his employment.
(e) Employees of
Employer. During the Employment Period and for two years
following the termination of Employee’s employment with Employer, however
caused, Employee shall not, directly or indirectly, hire, solicit or encourage
to leave the employment of Employer or its affiliates any employee of Employer
or its affiliates, or hire any such employee who has left the employment of
Employer or its affiliates within one year of the termination of such employee’s
employment with Employer or its affiliates.
(f) Tolling. In
the event of Employee’s breach of subparagraph (a), (b) or (e) of this paragraph
5, the running of the period of time of the restriction set forth therein shall
be automatically tolled (i.e., no part of that period shall expire) from and
after the date of the first such breach.
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(g) Remedies. Employee
agree that there is no adequate remedy at law, and that money damages would not
be a sufficient remedy, for any breach of this paragraph 5, and that Employer
shall be entitled to specific performance (including but not limited to an
injunction) as a remedy for any such breach, without having to post a bond or
prove actual damages. Specific performance shall not be deemed to be
the exclusive remedy for any breach of this paragraph 5 but shall be in addition
to all other remedies provided by law or equity. Employee agree that
Employee shall indemnify and hold Employer and its members, managers, officers,
employees, agents and representatives harmless from and against all actions,
claims, liabilities, damages, expenses and costs (including reasonable legal
fees) that any of them may sustain, incur or expend as a result of any breach by
Employee of this paragraph 5. Without limiting the generality of the
foregoing, in the event that Employer takes legal proceedings to enforce the
provisions of this paragraph 5 and Employee are found to be in violation of its
terms, Employee shall reimburse Employer for the legal fees and disbursements
Employer incurs in such proceedings.
(h) Blue-Pencilling. If
any court determines that any of the covenants set forth in this paragraph 5, or
any part thereof, is unenforceable because of the scope, duration and/or
geographical area covered by such provision, such court shall have the power to
reduce the scope, duration or area of such provision and, in its reduced form,
such provision shall then be enforceable and shall be enforced.
6. NON-ASSIGNMENT. This Agreement is
a personal services contract and it is expressly agreed that the rights and
interests of Employee and Employer hereunder may not be sold, transferred,
assigned, pledged or hypothecated; provided, however, that Employer may assign
its rights and obligations hereunder to any entity which acquires a substantial
part of the assets or equity of Employer, or to any entity affiliated with
Employer, whether presently existing or formed after the date
hereof.
7. SEVERABILITY. In case any one
or more of the provisions contained in this Agreement shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect by a court of
competent jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal, or unenforceable provision had never been
contained herein.
8. EFFECT OF
CAPTIONS. The captions in
this Agreement are included for convenience only and shall not in any way effect
the interpretation or construction of any provision hereof.
9. REMEDIES
CUMULATIVE; NO WAIVER. All remedies
specified herein or otherwise available shall be cumulative and in addition to
any and every other remedy provided hereunder or now or hereafter
available. No waiver or failure (intentional or unintentional) to act
with respect to any breach or default hereunder shall be deemed to be a waiver
with respect to any subsequent breach or default, whether of a similar or
different nature.
10. NOTICES. All notices,
requests, demands, applications, services of process, and other communications
which are required to be or may be given under this Agreement shall be deemed to
have been duly given if personally delivered, if sent by facsimile transmission,
or if mailed via certified first class mail, postage prepaid, return receipt
requested, to the parties hereto at the address set forth in the first paragraph
of this Agreement, or to such other address as a party shall furnish to the
other by notice given in accordance with this paragraph.
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11. GOVERNING
LAW; JURISDICTION: LIMITATIONS ON FILING ACTIONS. This
Agreement shall be governed by and construed in accordance with the substantive
law of the State of Florida. The parties intend to and hereby do
confer jurisdiction upon the courts of any jurisdiction within the State of
Florida to determine any dispute arising out of or related to this Agreement,
including the enforcement and the breach hereof. The parties agree
that any claim arising out of or related to this Agreement, or the breach
hereof, must be filed within one year after the date of the alleged breach and
that any claim which is not filed within such one year period is waived, and
that any statute of limitations to the contrary is hereby waived.
12. SECTION
409A.
(a) To
the extent applicable, this Agreement shall be interpreted, construed and
administered in accordance with Section 409A of the Internal Revenue Code of
1986, as amended, and the U.S. Department of Treasury regulations and other
interpretive guidance issued thereunder, each as in effect from time to time
(collectively, “Section 409A”).
(b) To
ensure compliance with Section 409A, Employer shall pay any salary amount
payable under paragraph 2(a) and any bonus amount payable under paragraph 2(c)
on a date no later than the later of the fifteenth day of the third month
following the end of Employer’s or Employee’s taxable year in which
the amount was earned and accrued.
(c) Notwithstanding
anything to the contrary in this Agreement, Employer shall be under no
obligation to provide the Severance Pay described in paragraph 4(b) of this
Agreement unless Employee shall have executed the Release and Severance Waiver
(and the applicable revocation period shall have expired) within 55 days
following the date of Employee’s termination of employment. The
payment of the amounts payable under paragraph 4(b) shall begin no later than 60
days following the date of termination of employment in accordance with
paragraph 4(b) above.
(d) For
purposes of Section 409A (including, without limitation, for purposes of U.S.
Treasury Regulation Section 1.409A-2(b)(2)(iii)), Employee’s right to
receive the installment payments described in paragraph 4(b) above shall be
treated as a right to receive a series of separate payments and, accordingly,
each installment payment shall at all times be considered a separate and
distinct payment.
(e) Notwithstanding
anything herein to the contrary, to the extent any of the amounts payable under
paragraph 4(b) above are treated as non-qualified deferred compensation subject
to Section 409A, then no portion of such amounts shall be payable to Employee
unless Employee’ termination of employment constitutes a “separation from
service,” as defined in U.S. Treasury Regulation Section 409A-1(h) (and any
successor provision thereto).
(f) To
the maximum extent permitted by applicable law, the amounts payable to Employee
under this Agreement shall be made in reliance upon U.S. Treasury Regulation
Section 1.409A-1(b)(9) (with respect to separation pay plans) or U.S. Treasury
Regulation Section 1.409A-1(b)(4) (with respect to short-term
deferrals).
13.
ENTIRE
AGREEMENT. This Agreement
embodies the entire agreement and understanding between Employer and Employee
and supersedes all prior agreements and understandings relating to the subject
matter hereof.
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IN WITNESS WHEREOF, the
undersigned have hereunto set their hands on the date first hereinabove
mentioned.
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The
Wood Energy Group, Inc.
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/s/ Xxxx X. Xxxxxx
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By
Xxxx X. Xxxxxx, Chief Executive Officer
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/s/ Xxxx X. Xxxxx
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Xxxx
X. Xxxxx
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