EXHIBIT 10.3
EMPLOYMENT AGREEMENT
(XXXXX X. XXXXXX)
EMPLOYMENT AGREEMENT dated August 12, 2003, by and between WHITEWING
ENVIRONMENTAL CORP. (the "Company") and XXXXX X. XXXXXX ( (the "Executive").
RECITALS:
In consideration of the mutual covenants and agreements set forth
herein, the parties agree as follows:
1. Employment and Duties.
----------------------
The Company hereby agrees to employ the Executive and the
Executive hereby accepts employment with the Company, on the terms and subject
to the conditions hereinafter set forth. Subject to the terms and conditions
contained herein, the Executive shall serve as President and Chief Executive
Officer of the Company. The Executive shall also serve as a Company Director on
its Board. In such capacities, Executive shall report directly to the Chairman
of the Board of the Company and shall have such duties as are commensurate with
the Executive's position, as well as other duties commensurate with such
positions as may be assigned to the Executive from time to time by the Company's
Board of Directors (the "Board"). In addition, Executive shall serve as a
director and/or officer of any or all of the Company's subsidiaries as
determined from time to time by the board.
2. Term of Employment.
-------------------
This Agreement shall commence and become effective as of the
"Effective Date" and end on the second anniversary of the Effective Date (the
"Employment Period"). The Employment Period shall automatically extend for
one-year successive terms unless at least three (3) months prior to the
expiration of the Employment Period (as the same may have been extended), either
party delivers to the other written notice of election not to renew.
The Company is conducting a Private Placement Offering of up
to 250,000 Units, each Unit consisting of 1 share of Series A Convertible
Preferred Stock and 40 Class A Common Stock Purchase Warrants, at an offering
price of $8.00 per unit. The "Effective Date" means the date on which the
Company consummates the sale of its securities generating gross proceeds to the
Company of at least $500,000. In the event that the Effective Date does not
occur by December 31, 2003, this Agreement shall be null and void.
3. Consideration and Benefits.
---------------------------
3.1 Base Salary.
The Company shall pay the Executive a base salary, exclusive
of any bonuses, of $150,000 per annum ("Base Salary"). The Base Salary shall be
reviewed and increased upon the completion of any Acquisition (whether by asset
purchase or purchase of a majority of stock interest) of any entity during the
Employment Period, or other mutually agreed milestones. The amount of such
increase shall be promptly determined by the Board of Directors and made
retroactive to the closing date of the Acquisition. The Base Salary shall be
payable at such intervals as salaries are paid by the Company to its other
executive employees.
3.2 Bonus.
The Executive shall receive an annual bonus ("Bonus") pursuant
to a bonus system established for its Senior Management (as hereinafter defined)
whereby, on December 31, 2003, and on each anniversary thereof (each, a "Bonus
Year"), the Company shall set aside an amount equal to seven and one half (7.5%)
percent of its earnings before interest, taxes, depreciation and amortization
(the "Bonus Pool"). Bonuses payable from the Bonus Pool shall be paid not later
1
than 30 days following the end of a Bonus Year. For the Bonus Year ending
December 31, 2003, the Company's Senior Management shall consist of its
President/CEO and its two Executive Vice Presidents, who shall each share
equally in the Bonus Pool. Commencing with the Bonus Year ending December 31,
2004, and thereafter, the Board of Directors may, in its discretion, add to the
persons constituting Senior Management and reallocate the Bonus Pool among such
Senior Management, as redefined. In the absence of any contrary action taken by
the Board of Directors during a Bonus Year, the computation and distribution of
Bonuses to Senior Management shall be that of the prior Bonus Year.
Additionally, the Board reserves the right to award Bonuses to the Executive in
excess of that prescribed above, in recognition of his individual contributions,
as and when it deems appropriate.
3.3 Benefit Plans.
During the Employment Period, Executive (and, where
appropriate, his spouse and children) shall be entitled to participate in all
plans adopted for the general benefit of the Company's executive employees, such
as pension plans, medical plans, investment plans and group or other insurance
plans and benefits (including disability and life insurance plans) to the extent
that the Executive is and remains eligible to participate therein and subject to
the eligibility provisions of such plans in effect from time to time.
3.4 Expenses.
The Executive shall be reimbursed for his reasonable
out-of-pocket expenses incurred in the performance of his duties upon submission
of appropriate evidence thereof in conformity with normal Company policy.
3.5 Stock Option.
The Executive shall be granted an option to purchase an aggregate of
2,000,000 common shares of the Company in accordance with the terms of the 2003
Stock Ownership Incentive Plan of Whitewing Environmental Corp. incorporated by
this reference, pursuant to the terms of an Option Grant which shall provide for
the exercise of said options (i) one-half upon the Effective Date of this
Employment Agreement, (ii) one-quarter on the first anniversary thereof and
(iii) one-quarter on the second anniversary thereof, each at an exercise price
equal to the closing price of the Company's common stock on the Effective Date.
3.7 Life Insurance.
The Company shall provide the Executive with $1,000,000 in
life insurance coverage, subject to his insurability at reasonable and customary
premium rates.
4. Vacation.
---------
For each year during the Employment Period, the Executive
shall be entitled to four weeks paid vacation to be taken at such times, and in
such increments, as Executive shall determine in his sole discretion.
5. Automobile/Miscellaneous.
-------------------------
The Executive shall be entitled to an automobile allowance or
the use of a Company-owned or Company-leased automobile according to policies of
the Company in place from time to time for its senior executive officers. In the
absence of such policies, the automobile allowance shall be $3,000 at the onset,
followed by payments of $500.00 per month, in the first year. Thereafter the
automobile allowance shall be $750.00 per month.
The Company shall also be responsible for reimbursing the
Executive for his reasonable cell phone usage, and will, at the very least,
reimburse him for his monthly service contract. In addition, the Company shall
provide the Executive with Blackberry (or similar) service, including the
initial equipment cost (approximately $600) and monthly subscription fee, for
the full term of his Employment.
2
6. Termination.
------------
6.1 Death.
This Agreement shall automatically terminate upon the death of
the Executive, whereupon the Company shall be obligated to the Executive's
estate for any unpaid Base Salary through the date of death, and the Bonus, if
any pro-rated to date of death. Amounts payable under this Section 6.1 shall be
payable at the times and intervals set forth in Sections 3.1 and 3.2 hereof, as
applicable.
6.2 Disability.
The Company shall have right to terminate this Agreement
during the continuance of any disability of the Executive, as hereinafter
defined, upon thirty (30) days prior notice to the Executive during the
continuation of the Disability. For purposes of this Section 6.2, Disability
shall mean the inability by Executive to perform a substantial portion of
Executive's duties hereunder by reason of physical or mental incapacity or
disability for a total of one hundred eighty (180) days or more in any
consecutive period of three hundred and sixty-five (365) days, as determined by
the Board in its good faith judgment. In the event of a termination by reason of
the Executive's Disability, the Company shall be obligated to pay the Executive
any unpaid Base Salary through the date of termination, and Bonus, if any,
pro-rated to the date of termination. Amounts payable under this Section 6.2
shall be payable at the times and intervals set forth in Sections 3.1 and 3.2
hereof, as applicable.
6.3 Termination for Cause.
The Company may terminate this Agreement for cause. "Cause"
shall mean the Executive's (i) conviction of a felony or willful gross
misconduct that, in either case, results in material and demonstrable damage to
the business or reputation of the Company; or (ii) willful and continued failure
to perform his duties under the Agreement (other than such failure resulting
from the Executive's incapacity due to physical or mental illness or after the
issuance of a notice of termination by the Executive for Good Reason) within ten
business days after the Company delivers to him a written demand for performance
that specifically identifies the actions to be performed. Upon such termination,
the Company shall only be obligated to pay the Executive his Base Salary
pro-rated to the date of termination and any then accrued benefits.
6.4 Termination for Other Reason.
If the Executive's employment is terminated other than by
reason of (i) death, (ii) Disability, (iii) for Cause or (iv) the Executive's
voluntary termination of employment, then (x) the Company shall be obligated to
pay the Executive any unpaid Base Salary through the date of termination, and
Bonus, if any, pro-rated to the date of termination, (y) the Company shall pay
the Executive severance pay equal to the Base Salary (less any applicable
withholding taxes) payable hereunder, at times and intervals set forth in
Sections 3.1 hereof, for the remainder of the term of this Agreement (the
"Severance Term"), and (z) notwithstanding anything contained in the Option
Agreement or the Company's option plans to the contrary, all options previously
awarded to the Executive shall immediately vest. The Company's obligation to
make payments hereunder to the Executive shall immediately cease upon the
Executive's subsequent death or disability or in the event the Executive shall
fail to honor the Executive's obligations under Section 7 hereof.
6.5 Termination by the Executive.
The Executive may terminate this Agreement for Good Reason.
The "Good Reason" shall mean the occurrence of any of the following without the
written consent of the Executive of his approval: (i) the assignment to the
Executive of duties inconsistent with the Agreement or a change in his title or
authority; (ii) any change in reporting responsibility so that the Executive
reports to any person other than the Board of Directors; (iii) the requirement
of the Executive to relocate to a location outside the New York Metropolitan
area; or (iv) any material breach of the Agreement by the Company. Upon such
termination, the company shall be obligated to pay the Executive as if the
Agreement was Terminated for Other Reason as defined in paragraph 6.4 above.
3
7. Restrictions.
-------------
7.1 Confidentiality.
(a) The Executive recognizes that the Executive's position
with the Company is one of trust and confidence. The Executive acknowledges
that, during the course of the Executive's employment with the Company, the
Executive will necessarily become acquainted with confidential information
relating to the suppliers of the Company, and trade secrets, such as processes,
methods of operation and other information which the Company regards as
confidential and in the nature of trade secrets (collectively "Confidential
Information"); provided, however, Confidential Information shall not include
information which (i) is already in the possession of the Executive prior to the
date of this Agreement; (ii) is or becomes generally available to the public
other than as a result of disclosure by the Executive; (iii) becomes available
to the Executive on a non-confidential basis from a source other than the
Company, or (iv) which is generally known within the industry or otherwise
obtainable through other sources. The Executive acknowledges and agrees that the
Confidential Information is valuable to the Company and that the Company could
suffer damage if any of the Confidential Information were improperly disclosed.
(a) The Executive covenants and agrees that the Executive will
not, at any time during or for a period of twelve (12) months after the
termination of the Executive's relationship with the Company, reveal, divulge,
or make known to any person, firm or corporation, any Confidential Information
made known to the Executive or of which the Executive has become aware,
regardless of whether developed, prepared, devised or otherwise created in whole
or in part by the efforts of the Executive, except and to the extent that such
disclosure is necessary to carry out the Executive's duties for the Company. The
Executive further covenants and agrees that the Executive shall retain all
Confidential Information in trust for the sole benefit of the Company, and will
not divulge or deliver or show any Confidential Information to any unauthorized
person including, without limitation, any other employer of the Executive, and
the Executive will not make use thereof in an independent business related to
the business of the Company.
(a) The Executive agrees that, upon termination of the
Executive's employment for any reason whatsoever, or for no reason, and at any
time, the Executive shall return to the Company all papers, documents and other
property of the Company which relate to Confidential Information, and the
Executive will not retain copies of any such papers, documents or other property
for any purpose whatsoever.
7.2 Non-Competition.
The Executive agrees that during the Employment Period, and
for a period of twelve (12) months thereafter (or, if Executive's employment is
terminated pursuant to Section 6.4 hereof, during the Severance Term), and
whether or not the Executive shall be entitled to the payment of any
post-termination severance benefits described in Section 6.4 hereof, the
Executive shall not, except as permitted under Section 7.3 hereof, (i) engage,
directly or indirectly, in the State of New Jersey, alone or as a shareholder,
partner, officer, director, employee or consultant of any other business
organization, in the business of the recycling of oil filters, oil and/or
antifreeze (collectively, the `Business"), (ii) divert to any organization in
the Business any customer of the Company or any of its subsidiaries or business
units, or (iii) hire, solicit or encourage any officer, employee or consultant
of the Company or any of its subsidiaries to leave its employ for employment by
or with any organization in the Business. Nothing provided in this Section 7.2
shall prevent the Executive from purchasing or otherwise beneficially owning,
without restriction on amount, any securities issued by the Company. If at any
time the provisions of this Section 7.2 shall be determined to be invalid or
unenforceable, by reason of unreasonableness as to area, duration or scope of
activity, this Section 7.2 shall be considered divisible and shall become and be
immediately amended to only such area, duration and scope of activity as shall
be determined to be reasonable and enforceable by the court or other body having
jurisdiction over the matter; and the Executive agrees that this Section 7.2 as
so amended shall be valid and binding as though any invalid or unenforceable
provision had not been included herein.
4
7.3 Exclusivity.
During the Employment Period, the Executive shall devote
substantially his full time to the business of the Company, shall faithfully
serve the Company, shall in all respects conform to and comply with the lawful
and reasonable directions and instructions given to him by the Board in
accordance with the terms of this Agreement, shall use his best efforts to
promote and serve the interest of the Company and shall not engage in any other
business activity, whether or not such activity shall be engaged in for
pecuniary profit, except that the Executive may (i) participate in the
activities of professional trade organizations related to the business of the
Company and its subsidiaries, (ii) engage in personal investing activities of
unrelated businesses and (iii) with the written consent of the Board, which
shall not be withheld unreasonably, own up to five (5%) percent of the
outstanding capital stock or profits interest of any competing Business,
provided that the activities set forth in these clauses (i), (ii) and (iii),
either singly or in the aggregate, do not interfere in any material respect with
the services to be provided by the Executive hereunder.
7.4 Due Performance By Company.
All terms and provisions of this Section 7 are subject to the
Company's due performance of all obligations on its part to be performed.
8. Enforcement.
------------
The Executive acknowledges that the Company will suffer
substantial and irreparable damages not readily ascertainable or compensable in
terms of money in the event of the breach of any of the Executive's obligations
under Section 7 hereof. The Executive therefore agrees that the Company, in
addition to any other remedies (including damages) provided by law, shall have
the right and remedy to have such provisions specifically enforced by any court
having equity jurisdiction thereof upon due notice to the Executive. The rights
and remedies set forth in this Section 8 shall be in addition to, and not in
lieu of, any other rights and remedies available to the Company under law or
equity.
9. Miscellaneous Provisions.
-------------------------
9.1 Entire Agreement; Prior Agreement Terminated.
This Agreement set forth the entire agreement and
understanding between the parties with respect to the subject matter hereof and
supersedes all prior agreements, arrangements, and understandings between the
parties with respect to the subject matter hereof. Notwithstanding the
foregoing, if the transaction set forth in paragraph 2 is not consummated, than
this agreement shall not take effect and all prior agreements, arrangements and
understandings between the parties remain in full force and effect.
9.2 Modification.
This Agreement may not be amended, modified, superseded,
canceled, renewed or extended, and the terms or covenants hereof may not be
waived, except by a written instrument executed by both of the parties or in the
case of a waiver, by the party waiving compliance.
9.3 Successors.
(a) Company's Successors. This Agreement shall be binding upon
any successor (whether direct or indirect and whether by purchase, lease,
merger, consolidation, liquidation or otherwise) to all or substantially all of
the Company's business and/or assets ("Change of Ownership"). The Company shall
require any successor, by agreement in form and substance reasonably
satisfactory to the Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. For all purposes
under this Agreement, the term "Company" shall include any successor to the
Company's business and/or assets which becomes bound by this Agreement.
(a) Executive's Successors. This Agreement and all rights of
5
Executive hereunder shall inure to the benefit of, and be enforceable by,
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
9.4 Waiver.
The failure of either party at any time or times to require
performance of any provision hereof in no manner shall affect the right at a
later time to enforce the same. No waiver by either party of a breach of any
term or covenant contained in this Agreement, whether by conduct or otherwise,
in any one or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such breach or a waiver of any other term or covenant
contained in this Agreement.
9.5 Notices.
All notices, demands, consents or other communications
hereunder shall be in writing and shall be given (and shall be deemed to have
been duly given) upon the earlier of receipt or one business day after being
sent by reputable overnight courier to the parties at the addresses set forth
above or to such other address either party shall hereafter specify by notice to
the other party. Irrespective of the foregoing, notice of change of address
shall be effective only upon receipt.
9.6 Governing Law.
This Agreement shall be construed in accordance with and
governed by the laws of the State of New Jersey applicable to contracts made and
to be performed wholly within such state.
9.7 Disputes.
All disputes between the parties arising from or in connection
with this Agreement or the Executive's employment hereunder, including those
relating to the existence and validity of this Agreement, shall be submitted to
full and binding arbitration in New York, New York, before a panel of three
arbitrators and administered by the American Arbitration Association under its
National Rules for the Resolution of Employment Disputes, and judgment upon the
award rendered by the arbitrators may be entered by any court having
jurisdiction thereof. The cost of any such arbitration shall be paid as
determined by the arbitrators. The arbitrators shall have the power to award
legal fees and expenses to the prevailing party. The parties knowingly and
voluntarily agree to enter into this arbitration clause and waive any rights
that might otherwise exist to request a jury trial or other court proceeding.
9.8 Assignability.
This Agreement and the Executive's rights and obligations
hereunder, may not be assigned by the Executive. Subject to Executive's
documentary approval rights as provided in Section 9.3, the Company may assign
its rights, together with its obligations hereunder, only to a successor by
merger or by the purchase of all or substantially all of the assets and business
of the Company and such rights and obligations shall inure to, and be binding
upon, any such successor.
9.9 Binding Effect.
This Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective legal representatives, heirs,
permitted successors and permitted assigns.
9.10 Headings and Word Meanings.
Headings and titles in this Agreement are for convenience of
reference only and shall not control the construction or interpretation of any
provision hereof. The words "herein," "hereof," "hereunder," and words of
similar import, when used anywhere in this Agreement, refer to this Agreement as
a whole and not merely to a subdivision in which such words appear, unless the
context otherwise requires. The singular shall include the plural unless the
context otherwise requires.
6
9.11 Severability.
Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
9.13 Indemnity
The Company hereby agrees to indemnify Executive and hold
Executive harmless from and Against all claims and damages (including reasonable
attorney's fees) arising out of or relating to any personal guarantees given by
Executive to secure obligations of the Company. Company's obligations under this
section shall survive the termination of this Agreement and the termination of
Executive's employment with the Company. The Company further agrees that, if
Executive is terminated without cause during the term of this Agreement, Company
will exercise best efforts to relieve Executive from his guaranteed obligations
and, failing such efforts, to attempt to refinance the indemnified obligation if
it is commercially reasonable to do so.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
THE EXECUTIVE: THE COMPANY:
WHITEWING ENVIRONMENTAL CORP.
/s/ Xxxxx X. XxXxxx /s/ Xxxxxx Xxxxxx
------------------- -----------------------------
XXXXX X. XXXXXX Xxxxxx Xxxxxx, President.
7
