Exhibit 10.4
EMPLOYMENT and CONSULTING AGREEMENT
THIS EMPLOYMENT AND CONSULTING AGREEMENT ("Agreement") is made this
1st day of July, 1998 by and between Innovative Coatings Corporation, a
Georgia corporation having its principal office at 0000 Xxxx Xxxx Xxxxx
Xxxxx, Xxxxxxxx, Xxxxxxx 00000 (the "Company"); and Xxxxx Xxxxx, an
individual residing at 000 Xxxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxx,
("Xxxxx" or "Employee").
FOR AND IN CONSIDERATION of the mutual promises, agreements and
covenants contained herein, the parties hereto, intending to be legally
bound, do hereby agree as follows:
1. Employment: Position and Duties. The Company hereby agrees to employ
Xxxxx to act as, and to exercise all of the powers and functions of, its
Vice President of Engineering and Production during the term hereof (as
set forth in paragraph 4 herein) and to perform such acts and duties and
to generally furnish such services to the Company and its subsidiaries
(if any) as is customary for a senior management person with a similar
position in like companies; and he shall have such specific powers,
duties and responsibilities as the Board of Directors of the Company
shall from time to time reasonably prescribe, provided that such duties
and responsibilities are consistent with Xxxxx'x senior management
position. Xxxxx hereby agrees to accept such employment and shall perform
and discharge faithfully, diligently, and to the best of his abilities
such duties and responsibilities and shall devote most of his working
time and efforts to the business and affairs of the Company and its
subsidiaries; provided however, that, to the extent consistent with the
needs of the Company, Xxxxx shall be entitled to expend a reasonable
amount of time on civic, public, industry, and philanthropic activities
and on the management of his own investments and assets. Xxxxx recognizes
that as a matter of law the election of a person to a board of directors
is performed by the shareholders of a corporation and that such election
cannot generally be the subject of a contractual agreement, however, as
long as Xxxxx is elected to the board as a director, Xxxxx shall perform
all those duties of a Director.
2. Place of Employment. During his employment hereunder, Xxxxx'x
principal place of employment shall be located at the Company's principal
place of business or principal executive office, wherever located as
designated from time to time by the Board of Directors of the Company;
provided however, notwithstanding the foregoing, Xxxxx shall be required
to conduct his duties and responsibilities hereunder (except for routine
and customary business travel) only from executive offices located in
Georgia.
3. Compensation.
(a) Base Salary. The Company shall pay to Xxxxx an annual base
salary ("Base Salary") of $80,000, payable in accordance with the
Company's customary payroll policy for its executives, and subject to
applicable tax and payroll deductions. Xxxxx'x Base Salary shall be
reviewed annually by the Company's Board of Directors which may make
upward adjustments as within its discretion and it deems appropriate.
(b) Incentive Compensation. Xxxxx'x incentive compensation, if any,
shall be determined annually by the Company's Board of Directors.
(c) Certain Other Benefits. During the term of this Agreement, Xxxxx
shall be entitled to equity participate in any and all Xxxxx benefit
plans and arrangements which are available to senior executive officers
of the Company, including without limitation, group medical and life
insurance plans, accidental death benefit plans, disability insurance
plans, pension plans, and automobile expense reimbursement allowances or
Company-provided automobiles.
4. Term. The term of Xxxxx'x employment with the Company shall be for a
one-year period commencing July 1, 1998 or earlier and continuing through
June 30, 1999 (the "initial term"); provided, however, that this
Agreement shall be automatically renewed for successive one-year periods
(each a "successor term"; and together with the initial term, generally
'the term') unless either party hereto gives written notice of
termination to the other party at least twelve months prior to the
expiration of the initial term or of any successor term. By way of
illustration, if neither party gives to the other party a written notice
of termination by June 30, 1999 this Agreement shall be automatically
renewed for a one-year period ending on June 30, 2000.
5. Stock Options. Periodic stock and incentive stock option grants to
Xxxxx, if any, shall be determined by the Board of Directors.
6. Unauthorized Disclosure and Xxxxx'x Right of Ownership. For a period
of two years after termination of employment, Xxxxx shall not without the
written consent of the Company, disclose to any person, other than person
to whom disclosure is reasonably necessary or appropriate in connection
with the performance by Xxxxx of his duties as an executive officer of
the Company, any material confidential information obtained by Xxxxx
while in the employ of the Company with respect to the businesses of the
Company or any of its subsidiaries, including by not limited to,
operations, pricing, contractual or personnel date, products,
discoveries, improvements, trade secrets, license agreements, marketing
information, suppliers, dealers, principals, customers, or methods of
distribution, or any other confidential information the disclosure of
which Xxxxx knows or in the exercise of reasonable care should know will
be damaging to the Company; provided, however, that confidential
information shall not include any information known generally to the
public (other than as a result of unauthorized disclosure by Employee) or
any information not otherwise considered by the Company to be
confidential. Furthermore, all inventions conceived or developed by Xxxxx
in which the equipment, supplies, facilities, or trade secret information
of the Company was used, or that relate to the business of the Company or
to the Company's actual or demonstrably anticipated research and
development, or that result from any work performed by Xxxxx for the
Company will remain the property of the Company. All other inventions
conceived or developed by Xxxxx during the term of this Agreement will
remain the property of Employee.
7. Indemnification of Employee. The Company shall indemnify Xxxxx if
Xxxxx is made a party, or threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative, or investigative, because Xxxxx is or
was an officer or director of the Company or any of its subsidiaries,
affiliates, or successors, against expenses (including reasonable
attorneys fees and disbursements), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding to the fullest extent and in the manner
set forth in and permitted by the General Corporation Law of the State of
Georgia and any other applicable law in effort from time to time.
8. Termination.
(a) Termination Upon Death. If Xxxxx dies during the term of this
Agreement, Xxxxx'x legal representatives shall be entitled to receive the
Base Salary through the last day of the first month following the month
in which Xxxxx'x death occurred. If in respect of the fiscal year in
which Xxxxx dies he would otherwise have been entitled to receive
incentive compensation under paragraph 3(c) by reason of the operations
of the Company during such fiscal year, Xxxxx'x legal representatives
shall be entitled to receive a pro rata portion of such incentive
compensation determined by multiplying the dollar amount of the incentive
compensation involved by a fraction, the numerator of which shall be the
number of complete calendar months that elapsed during the fisc4d year
through the end of the month in which Xxxxx died and denominator of which
shall be twelve.
(b) Termination Upon Disability or Incapacity. The Company may
terminate Xxxxx'x employment hereunder at the end of any calendar month
by giving written notice of termination to Xxxxx in the event of Xxxxx'x
incapacity due to physical or mental illness which prevents the proper
performance of the duties of Xxxxx set forth herein or established
pursuant hereto for a substantial portion of any six-month period of
Xxxxx'x term of employment hereunder. Any questions as to the existence
or extent of illness or incapacity of Xxxxx upon which the Company and
Xxxxx cannot agree shall be determined by a qualified independent
physician selected by the Company and approved by Xxxxx (or, if Xxxxx is
unable to give such approval, by any adult member of the immediate family
or the duly appointed guardian of Employee). The determination of such
physician certified in writing to the Company and to Xxxxx shall be final
and conclusive for all purposes of this Agreement. In the event of any
such termination pursuant to this subparagraph 8(b), Xxxxx shaft be
entitled to receive his Base Wary through the last day of the month in
which this Agreement is terminated. If in respect of the fiscal year in
which Xxxxx'x employment terminates pursuant to this subparagraph 8(b) he
would otherwise have been entitled to receive incentive compensation
under paragraph 3(c) by reason of the operations of the Company during
such fiscal year, Xxxxx shall be entitled to receive a pro rata portion
of such incentive compensation determined by multiplying the dollar
amount of the incentive compensation by a fraction, the numerator of
which shall be the number of complete calendar months that elapsed during
the fiscal year through the end of the month in which Xxxxx'x employment
terminated pursuant to subparagraph 8(b) and the denominator of which
shall be twelve.
(c)Termination for Cause. The Company may terminate Xxxxx'x
employment hereunder for "cause" (as hereinafter defined) by giving
written notice of termination of this Agreement to Employee. For the
purpose of this Agreement, the Company shall have "cause" to terminate
Xxxxx'x employment hereunder upon Xxxxx'x (l) habitual drunkenness or
drug addiction or willful failure materially to perform and discharge his
duties and responsibilities hereunder, or (ii) misconduct that is
materially and significantly injurious to the Company, or (iii)
conviction of a felony involving the personal dishonesty of Xxxxx or
moral turpitude, or (iv) conviction of Xxxxx of any crime or offense
involving the property of the Company. Upon any such termination for
cause under this subparagraph 8(c), the Company shall pay Xxxxx his Base
Salary through the date of termination, and the Company shall have no
further obligations under this Agreement.
(d) Termination Without Cause. The Company shall have the right to
terminate Xxxxx'x employment under this Agreement at any time, without
cause, by giving Xxxxx not less than sixty (60) days prior written notice
of such termination. Until the effective date of any such termination,
the Company shall continue to pay to Xxxxx the full compensation
specified in this Agreement. In addition, on the effective date of
termination the Company shad pay to Xxxxx the full amount of all Base
Salary to which Xxxxx would otherwise have been paid throughout the
remaining term (including any successor term, if applicable) of this
Agreement.
9. Reimbursement of Legal Fees. The Company agrees to reimburse Xxxxx for
reasonable attorneys fees, if any, incurred in connection with the
negotiation, preparation, and execution of this Agreement.
10. Application for Insurance. The Company at its option has the right to
obtain a "key-man" life insurance policy, at the Company's expense, with
the Company being the sole beneficiary of such policy. Xxxxx hereby
agrees to undergo the necessary physical examinations and disclose any
pertinent disclaimers and information to obtain said policy.
11. Miscellaneous.
(a) Assignment and Binding Effect. The respective rights and
obligations of the parties under this Agreement shall be binding upon the
parties hereto and their heirs, executors, administrators, successors,
and assigns, including, in the case of the Company, any other corporation
or entity with which the Company may be merged or otherwise combined or
which may acquire all or substantially all of the Company's assets and,
in the case of Employee, his estate or other legal representatives;
provided that Xxxxx may not assign his rights hereunder without the prior
written consent of the Company.
(b) Governing Law. This Agreement shall be governed as to its
validity, interpretation and effect by the laws of the State of Georgia.
(c) Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid, illegal, or unenforceable
for any reason, the remaining provisions and portions of this Agreement
shall remain in full force and effect to the fullest extent permitted by
law. Such invalid, illegal, or unenforceable provision(s) shall be deemed
modified to the extent necessary to make it (them) valid, legal and
enforceable.
(d) Entire Agreement; Amendments. This Agreement constitutes the
entire agreement and understanding of the Company and Xxxxx with respect
to the terms of Xxxxx'x employment with the Company and supersedes all
prior discussions, understandings, and agreements with respect thereto.
(e) Captions. All captions and headings used herein are for
convenient reference only and do not form part of this Agreement.
(f) Waiver. The waiver of a breach of any term or provision of this
Agreement shall not operate as or be construed to be a waiver of any
other or subsequent breach or this Agreement.
(g) Notice. Any notice or communication required or permitted under
this Agreement shall be made in writing and shall be delivered by hand,
or mailed by registered or certified mail, return receipt requested,
first class postage prepaid, addressed as follows:
If to Xxxxx:
Xxxxx Xxxxx
000 Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxx 00000
If to the Company:
Innovative Coatings Corporation
Suite 200
0000 Xxxx Xxxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attn: Chief Executive Officer
(h) Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
Employee Innovative Coatings Corporation
/s/ Xxxxx Xxxxx By: /s/ Xxxxx X. Xxxxxxxx
Xxxxx Xxxxx Xxxxx X. Xxxxxxxx
Its: President and CEO
