EX-10.3
Xxxx Environmental, Inc.
Executive Employment Agreement
This Executive Employment Agreement ("the Agreement") is made and entered into
this November 27, 1996, by and between Xxxxxxx X. Xxxxxx (hereinafter referred
to as "Employee"), and Xxxx Environmental, Inc., an Oklahoma corporation,
(hereinafter referred to as "Company") with reference to the following facts and
objectives:
Recitals
A. Employee has been providing services as the President, Chief Executive
Officer, Chairman of the Board and related activities as an Employee of the
Company.
B. Company is a corporation organized and in good standing under the laws of the
State Oklahoma and desires to employ Employee under the terms and conditions of
this Agreement.
Now, therefore, in reliance on the foregoing Recitals, and in consideration of
the mutual promises and covenants contained herein, Company and Employee hereby
agree as follows:
1. Employment. During the term hereof, Company hereby employs Employee and
Employee hereby accepts and agrees to furnish Company with all the Employee's
skills and abilities under the designation as President, Chief Executive
Officer, and Chairman of the Board of the Company.
2. Duties. During the term of the Agreement, Employee shall devote all of
Employee's services, best efforts, and all reasonable work time (excluding
vacation and personal time) toward his employment with the Company, to further
Company's interests and to perform diligently and in good faith such duties as
are or may be, from time to time, required by Company in connection with his
employment hereunder. The Employee shall, at all times, comply with the policies
and procedures promulgated by the Company. The making of passive and personal
investments and conducting private business affairs not inconsistent with the
Agreement by the Employee shall not be prohibited under this Agreement.
3. Company's Authority. Employee shall perform in proper form orders,
directions, and policies by the Company to the Employee periodically not
inconsistent with the provisions of this Agreement. Employee agrees to accept
the decisions of the Company in the establishment and amendment of working
facilities, conditions, not otherwise agreed upon herein.
4. Term. The term of this Agreement shall begin on November 27, 1996 (the
"Effective Date") and shall be for a period of 5 years, with automatic renewal
terms of equal length subject to the Company's prior written notification of 30
days before the expiration of the original term of its decision not to renew
this Agreement, beginning on the Effective Date of this Agreement.
5. Compensation.
(a) Base Salary. In consideration of the faithful performance of the
above duties and responsibilities to and on behalf of the Company, the Company
agrees to pay the Employee during the period of Employee's employment with
Company a base annual salary of $240,000 (the "Base Salary"). The Base Salary
shall be due and payable semi-monthly or on a more frequent basis and reviewed
at the Employee's anniversary date by the Board of Directors of Company;
provided, however, that such Base Salary shall in any event be increased as of
January 1 of each calendar year at a rate greater than the percentage increase
in the National Consumer Price Index, as reported by the United States
Department of Labor for the immediately preceding calendar year, or as otherwise
determined by the Board of Directors (or Compensation Committee, if any) of the
Company.
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(b) Bonus. As further compensation, the Company may pay the Employee
such bonus or bonuses and stock options as may, from time to time, be awarded or
granted to the Employee by the Company exercising its sole and absolute
discretion.
(1) Stock Incentive Bonus Plan. The Company agrees to issue
Employee 1,000,000 shares of Company common stock, once a year, at the end of
each fiscal year, as part of an incentive program based upon Executive's efforts
to increase the value of the Company's stock.
(d) Employment Taxes. Unless otherwise provided by law, all
compensation paid to the Employee shall be subject to the customary withholding
tax, other employment taxes and withholding amounts as required with respect to
compensation paid by the Company to the Employee.
6. Health Insurance. The Company shall provide, at its expense, complete family
health insurance coverage for the Employee and his family. The Employee will be
eligible to participate in any other benefit program or plan offered to
similarly situated employees, subject to any limitations or restrictions
associated with said program or plan (such as waiting periods, vesting
schedules, and pre-existing condition limitations).
7. Business Expense. Business Expense of the Employee incurred in the
performance of his duties, including the costs of attending meetings, promotion,
and entertainment expenses shall be borne by the Company and reimbursable to
Employee upon presentation of appropriate documentation by the Employee to the
Company and compliance with Company's established practices and procedures.
8. Other Company Benefits. Employee shall be entitled to participate in all
employee benefit programs made available to Company's executives or salaried
employees generally, as such programs may be offered from time to time.
9. Absences. The Employee shall be entitled to 2 weeks away from work for paid
vacation. Company may, from time to time, allow Employee additional time away
from employment in the Company's sole discretion. The parties acknowledge that
such exercise of discretion in one event shall not create a right to also be
permitted reasonable numbers of days away from work for sick days or leaves of
absences.
10. Death of Disability. Except as otherwise provided in this paragraph 10, in
the event of Employee's death or "Disability" (as hereinafter defined) occurring
during the term of this Agreement, Employee or his estate, as the case may be,
shall be entitled to: (i) that portion of any unpaid salary together with the
benefits accrued and earned by Employee hereunder up to and including the last
day of the month in which the death or disability occurs, as the case may be,
(ii) any death or disability-related benefits pursuant to the insurance program
set forth above and any employee benefit plan to which Employee or his
beneficiary may be entitled hereunder; (iii) any unpaid Bonus Amount earned by
the Employee for the prior fiscal year of the Company and approved by Company if
such approval is required hereunder shall be prorated based upon the length of
Employee's service during the applicable year over 365 days; and (iv) a payment
equal to one year's Base Salary then in effect for Employee if the remaining
term of this Agreement is less than one year, or, if more than one year remains
under the Agreement, the Estate may elect to continue to receive the payments
due under the Agreement specified as salary. A "Disability" shall be deemed to
have occurred if Employee shall have been unable to discharge his normal duties
and job description under this Agreement for a period of ninety (90) days in the
aggregate during any consecutive four (4) month period, his employment shall
thereupon terminate at the end of the calendar month in which such period ends.
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11. Termination. Employee's employment with the Company shall be terminated if
any of the following occur:
(a) At the expiration of the term of this Agreement if Company gives
written notice of its intention not to renew this Agreement one hundred eighty
(180) days prior to the expiration of the term;
(a) On the death of the Employee;
(b) Whenever the Employee shall fail to cure or rectify a material
breach of any of the terms, covenants and conditions of this Agreement within
thirty (30) days after Employee receives written notice from the Company to cure
such default (except when terminated for those causes that allow immediate
termination as described in Section 12(b));
(c) For "Cause" as defined in Paragraph 14 below; or
(d) Upon the Disability of the Employee as set forth in Paragraph 12
above.
12. Definition of "Cause"
(a) For purposes of this Agreement, the term "Cause" shall include:
(i) incompetence, failure, inability, or refusal to perform assigned
duties;
(ii) gross negligence, willful misconduct or breach of fiduciary duty;
(iii) being under the influence of, or use, sale, distribution, or
possession of unauthorized or illegal drugs or intoxicating
beverages while on duty or on the Company's or a subsidiary's
premises;
(iv) willful destruction or defacement of Company's or a subsidiary's,
a customer's, or an employee's property;
(v) unauthorized disclosure of confidential information; and
(vi) continued and unexplained absences from work.
(b) For the purposes of this Agreement, Employee shall be immediately
terminated without notice for the following Causes:
(i) unauthorized entry into Company's secured non-public areas;
(ii) falsifying or altering the Company's or subsidiary's records;
(iii) theft, embezzlement, fraud or forgery
(iv) any act which results or was intended to result in significant
gain or personal enrichment to the Employee at the Company's
expense.
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13. Confidential and Secret Information/Company Property. Employee acknowledges
that he will have access to items used in the Company's business which the
Company deems to be secret, confidential, unique and valuable; were developed by
Company at a great cost and over a long period of time; and that disclosure of
any of these items to anyone other than Company's officers, directors, agents or
authorized employees will cause Company irreparable injury. Employee agrees that
upon termination of this Agreement, he will return any and all documentary
information or written documents to Company. Such items and information shall be
held in strict confidence by the Employee and shall not be revealed to any third
party unless otherwise required by law. All other material and property that may
be furnished to employee during the course of his employment with the Company
such as customer lists, customer tracking, automobiles, books and records shall
be and remain the Company's property and shall be returned to the Company at any
time upon demand.
14. Severance Pay. In the event Company terminates Employee's employment
hereunder, Company shall pay to Employee a sum equivalent to the balance of the
salary due to be paid under this Agreement or 300% of the Base Salary (excluding
bonuses and other compensation), whichever is greater.
15. Change of Control. Immediately upon a Change of Control, if Executive's
employment with the Company is terminated within twenty-four (24) months
following such Change of Control, either without cause or pursuant to this
Agreement, in addition to any other compensation or benefits payable pursuant to
this Agreement, Executive shall be entitled to: Payment in cash equal to four
times his Base Salary, plus immediate vesting of 100% of all Employee's stock;
stock options or other awards to the Executive under any of the Company's
incentive plans. The Executive's rights upon a Change of Control to benefit
under programs, plans and policies of the Company shall be determined according
to the terms and provisions of such programs, plans and policies.
16. Arbitration. Any and all disputes, controversies or claims arising under or
in conjunction with this Agreement other than the right to injunctive relief as
set forth in Paragraph 12 above, including without limitation, the general
validity or enforceability of this Agreement, shall be governed by the laws of
the State of California, without giving effect to its conflict of law provisions
and shall be submitted to binding arbitration rules of the American Arbitration
Association conducted in Los Angeles County, California. All expenses of any
arbitration shall be borne equally by the parties. The award to the arbitrator,
including any award of attorney's fees, shall be final and enforceable in the
courts of California. All costs of enforcing a judgment following the
arbitration are to be borne by the losing party. In reaching his or her
decision, the arbitrator shall have no authority to change or modify any
provision of this Agreement. Each party shall have the right to discovery in
accordance with the California Rules of Civil Procedure.
17. Modification. This Agreement shall not be modified, amended, supplemented,
or extended except by written consent executed by both the Company and Employee,
except as expressly provided herein to the contrary.
18. Assignment. Neither the Employee nor the Company shall voluntarily
subcontract or assign any of their respective rights, duties, or obligations
hereunder without first obtaining the other party's written consent.
19. Notice. Except as expressly provided to the contrary herein, any notices or
other communications required, permitted, or made necessary by the terms of this
Agreement may be given to the respective representatives of the Company and the
employee designated herein by written communication. Written notices shall be
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personally delivered to the Company's representatives or the Employee as
appropriate or sent by the United States registered or certified mail, postage
prepaid, return receipt requested, addressed to the Company to its principal
corporate office and to the Employee at the Employee's residential address.
Notices sent by mail shall be deemed made, delivered, and received on the date
of the United States' postmark thereon. Upon receipt of notice Employee shall
have thirty (30) days to cure or rectify all items described in the Notice.
Federal Express and similar services shall be considered personal service or
delivery. Personal delivery of written notice hereunder may also be given by
facsimile or other electronic transmission (provided that the sender of a
telephone facsimile or other electronic transmission has received a facsimile
confirmation report showing the number to which the facsimile was transmitted).
Either party may change its address for notice by giving notice of such change
to the other party in the manner specified in this section.
20. No Waiver. No waiver of any breach or default in any of the terms and
provisions of this Agreement shall be deemed to constitute or be construed as a
waiver of the subsequent breach of default of the same, similar, or dissimilar
nature.
21. Choice of Law and Invalidity. The validity, construction, performance and
effect of this Agreement shall be governed by the laws of the State of Oklahoma.
In case any one or more of the provisions contained herein shall for any reason
be held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other
provisions of this Agreement, but this Agreement shall be construed as if such
invalid, illegal, or unenforceable provisions contained herein shall, for any
reason, be held to be excessively broad to time, duration, geographical scope,
activity or subject, said provision shall be construed by limiting and reducing
it so as to be enforceable to the extent compatible with the then applicable
law, it being the intent of the parties hereto to give the maximum permitted
effect to the restrictions set forth herein.
22. Interpretation. If necessary to give effect to the terms and provisions
hereof, the masculine, feminine, and neuter gender in the singular and plural
number shall each be deemed to include the other whenever the context to
indicates. To the unenforceable, it is agreed that the essential terms of this
Agreement shall be and remain enforceable against the parties.
23. Headings. Headings to this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the scope, extent, or intent of this Agreement or any provision hereof.
24. Counterparts. This Agreement may be executed in any number of counterparts,
any of which may be constituted in the agreement between the parties hereto.
25. Time. Time is of the essence for all obligations contemplated in this
Agreement.
26. Entire Agreement. This Agreement, and any schedules and exhibits attached
thereto contain and set forth the entire Agreement between the parties with
respect to the subject matter hereof. All prior negotiations and agreements
between the parties with respect to the scope of this Agreement are mutually
rescinded, replaced, and superseded hereby.
27. Authority. The Company warrants and represents that it is a corporation
organized and existing under the laws of the State of Oklahoma, that the
undersigned is authorized to execute this Agreement on behalf of the Company;
that the employment of the Employee under the terms of this Agreement has been
duly authorized by the Company.
28. Inurement. Each covenant and condition in this Agreement shall be binding
on, and shall inure solely to the benefit of the parties to it, their respective
heirs, legal representatives, successors, and assigns.
32. Presumption. This Agreement or any section of this Agreement shall not be
construed against any party due to the fact that the Agreement or any section of
it was drafted by said party.
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In Witness Whereof, the parties to this Employment Agreement have duly executed
it on the day and year first above written.
Employee:/s/ Xxxxxxx X. Xxxxxx Company: /s/ Xxxx Environmental, Inc.,
an Oklahoma corporation
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