99.1 Employment Agreement of J. Xxxxxxx Xxxxxxxxxxx, Xx. dated June 7, 2006
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of June 7, 2006 between Tarpon
Industries, Inc., a Michigan corporation (the "Company"), and J. Xxxxxxx
Xxxxxxxxxxx, Xx. ("Employee").
In consideration of the mutual covenants contained in this Agreement, the
Company and Employee agree as follows:
1. Employment.
During the term of this Agreement (as defined in Section 2), the Company
shall employ Employee, and Employee hereby accepts such employment by the
Company, in accordance with the terms and conditions set forth in this
Agreement.
(a) Position and Duties. Employee shall serve as Chief Financial Officer of
the Company or in such other position with the Company, as the Board of
Directors of the Company shall, from time to time, specify. Employee shall
perform all duties, services and responsibilities and have such authority and
powers for, and on behalf of, the Company as are customary and appropriate for
such position designated by, as are established from time to time by, or in
accordance with procedures established by, the Company's Board of Directors.
(b) Performance. Employee shall perform the duties called for under this
Agreement to the best of his ability and shall devote an appropriate amount of
his business time, energies, efforts and skill to such duties during the term of
his employment and shall not accept employment with any other employer or
business or engage in any other business of any nature whatsoever, in any
capacity whatsoever, unless approved in writing in advance by the Board of
Directors of the Company .
2. Term.
The term of Employee's employment under this Agreement shall begin on June
26, 2006 and shall continue until the second anniversary of the date of this
Agreement, at which time it shall continue from year to year thereafter, unless
notice of termination is given by either party at least 180 days prior to any
one year extension, in any case subject to termination pursuant to Section 4.
3. Compensation, Expenses and Benefits.
As full compensation for Employee's performance of his duties pursuant to
this Agreement, the Company shall pay Employee during the term of this
Agreement, and Employee shall accept as full payment for such performance, the
following aggregate amounts and benefits:
(a) Salary. As salary for Employee's services to be rendered under this
Agreement, the Company shall pay Employee an aggregate annual salary of
$175,000, such salary to be payable semi-monthly in arrears, or at such other
interval, not less frequent than monthly, as the Company shall designate. In
addition, Employee shall receive such bonuses as may be granted by the Board of
Directors from time to time, and shall participate in any bonus plan formulated
by the Board of Directors.
(b) Business Expenses. The Company shall pay or reimburse Employee for all
reasonable, ordinary and necessary travel, entertainment, meals, lodging, and
other out-of-pocket expenses incurred by Employee in connection with the
Company's businesses, for which Employee submits appropriate receipts and which
are consistent with Company policy or have been authorized by the Company's
Board of Directors.
(c) Options. Tarpon will grant Employee 40,000 shares of stock upon hire
date, to be vested ratably over the subsequent three years at each anniversary
of hire date, and an additional 40,000 options at market value on the date of
hire, also to be vested on the same schedule (one third at each anniversary
date). Such option are to be issued pursuant to the Company's Stock Option Plan
("Option Shares") and subject to vesting restrictions determined by the Board of
Directors. Vesting of such option shall accelerate so that it becomes 100%
exercisable immediately upon termination of Employee's employment under this
Agreement by the Company without cause pursuant to Section 4(d) or should the
company be acquired or a participant in a business alliance whereby Tarpon
controls no greater than 50% ownership.
(d) Benefits. Employee shall be eligible to participate in all fringe
benefits, currently including major medical and dental insurance, a 401(k) plan
and other employee benefit plans, applicable to other similar employees of the
Company, when and if adopted and made available during the term of this
Agreement to employees with similar periods of service, subject to any
eligibility or other requirements for participating in such fringe benefits and
to the actual existence of the respective plans.
(e) Indemnification; Directors and Officers Insurance. The Company shall,
to the fullest extent authorized or permitted by the Michigan Business
Corporation Act, defend, indemnify and hold Employee, his heirs, executors,
administrators and other legal representatives, harmless from and against any
and all claims, suits, debts, causes of action, proceedings or other actions, at
law or in equity, including costs and reasonable attorney fees which any person
or entity may have had, now has or may in the future have with respect to
Employee's service to the Company as an officer, director, employee or agent
thereof. This provision shall survive the termination of this agreement.
(f) Relocation Expenses. Employee shall relocate to the Company's
headquarters when the same are located in or about Chicago, Illinois. Employee
shall be reimbursed for his reasonable expenses of relocation to such Company
headquarters, subject to the approval of the Company, which approval will not be
unreasonably withheld or delayed.
(g) Car Allowance. Employee shall be entitled to a car allowance of $350.00
per month.
4. Termination
(a) Death. Employee's employment under this Agreement shall terminate
immediately upon Employee's death.
(b) Disability. Employee's employment under this Agreement shall terminate,
at the Company's option, immediately upon notice to Employee given after
Employee's "total disability", but no earlier than the later of (i) the day
after 90 consecutive days during which Employee suffers from a "total
disability", and (ii) the day that Employee is eligible to begin receiving
disability benefits under the insurance policy or its equivalent. "Total
disability" shall mean Employee's physical or mental condition entitling him to
disability benefits, after the passage of time, pursuant to the insurance
policy, assuming such condition continues, all, if permitted by such insurance
policy or its equivalent, as determined by a doctor chosen by the Company and a
doctor chosen by Employee, and, if necessary, a doctor mutually chosen by such
doctors. Employee shall continue to receive compensation pursuant to Section 3
during the period prior to termination of Employee's employment pursuant to this
Section 4(b), if Employee's employment is not otherwise terminated pursuant to
this Agreement, less any disability benefits Employee receives pursuant to the
insurance policy with respect to such period. There shall be no such deduction
for disability benefits received by Employee if Employee pays the premiums on
such disability insurance policy.
(c) Cause. The Company shall have the right, upon written notice to
Employee, to terminate Employee's employment under this Agreement for "Cause."
Such termination shall be effective immediately upon Employee's receipt of such
written notice. "Cause" means (1) material breach by Employee of this Agreement,
(2) any material breach by Employee of his fiduciary duties to the Company, (3)
material failure to perform his duties under this Agreement continuing for 30
days following written notice by the Company of such material failure which
notice shall specify the act or omission constituting such material failure,
gross neglect, abuse of office amounting to a breach of trust, fraud, any
willful violation of any law, rule or regulation (other than traffic violations
and similar offenses), which violation shall have a material adverse effect upon
the Company, or (4) any act of theft or dishonesty by Employee.
(d) Without Cause. The Company can terminate this Agreement without cause
on thirty (30) days' notice.
5. Effects of Expiration or Termination
(a) Expiration under Section 2 or Termination under Sections 4(a), (b) or
(c). If this Agreement expires or Employee's employment under this Agreement is
terminated pursuant to Sections 4(a), (b) or (c), the Company's obligations
under this Agreement, including obligations under Section 3, shall end except
for the Company's obligation to: (i) reimburse Employee (or his estate) for all
out-of-pocket expenses incurred and unpaid pursuant to Section 3(b) and other
benefits actually due pursuant to Sections 3(d), accrued and unpaid through the
date of termination; (ii) pay to Employee (or his estate) any salary
compensation, pursuant to Sections 3(a), actually earned, accrued and unpaid
through the date of termination and (iii) indemnify employee as provided under
section 3 (e).
(b) Termination under Section 4(d). If Employee's employment under this
Agreement is terminated by the Company pursuant to Section 4(d), in addition to
its obligations under Section 5(a), the Company shall be obligated to pay to
Employee an amount equal to the base compensation paid to Employee during the
twelve (12) month period preceding the effective date of such termination
("General Severance Payment"). Such General Severance Payment shall be payable
in equal installments over a period of twelve (12) months beginning on the
effective date of such termination. During such twelve (12) month period,
Employee shall continue his medical and dental benefits set forth in Section
3(d) and the Company shall pay the premiums related thereto.
(c) Rights and Obligations. Termination of Employee's employment under this
Agreement for any reason shall not affect any party's rights and obligations
under Sections 3 (subject to the limitations set forth in Sections 5(a) and
(b)), 5, 7, 8, 9, 10 and 11, such rights and obligations shall continue and
survive the termination of Employee's employment and this Agreement.
6. Conflicts of Interest.
While employed by the Company, Employee shall not, directly or indirectly:
(i) participate in any way in the benefits of transactions between the
Company, its subsidiaries and their suppliers or customers, or have personal
financial transactions with the Company or its subsidiaries' suppliers or
customers, including, without limitation, having a financial interest in the
Company's or its subsidiaries' suppliers or customers, or making loans to, or
receiving loans from, the Company's or its subsidiaries' suppliers or customers;
(ii) realize a personal gain or advantage from a transaction in which the
Company or its subsidiaries have an interest or use information obtained in
connection with Employee's employment with the Company for Employee's personal
advantage or gain; or
(ii) accept any offer to serve as an officer, director, partner,
consultant, agent or manager with, or to be employed in a sales or technical
capacity by, a person or entity which does business with the Company or its
subsidiaries.
7. Solicitation of Employees and Consultants.
Upon expiration of this Agreement or termination of Employee's employment
with the Company under this Agreement, with or without cause, by either the
Company or Employee, Employee shall not for a period of one year following the
date of such termination, directly or indirectly:
(i) solicit or attempt to hire any person who is then employed by, or is a
consultant to, the Company or its subsidiaries or who, to Employee's knowledge,
was employed by, or was a consultant to, the Company or its subsidiaries at any
time during the year before the termination of Employee's employment with the
Company under this Agreement; or
(ii) encourage any such person to terminate his or her employment or
consultation with the Company or its subsidiaries.
8. Covenant Not to Compete.
During the term of Employee's employment under this Agreement and for a
period of one year following expiration of this Agreement or the termination of
Employee's employment with the Company under this Agreement, Employee shall not,
directly or indirectly, himself, or through or for an individual, person or
entity wherever located:
(i) engage in any activities, perform any services in connection with any
products, or sell any products, which are similar to the activities or services
performed by, or products sold by, the Company or its subsidiaries during the
term of Employee's employment under this Agreement; or
(ii) be employed by, consult with, own any capital stock of, or have any
financial interest of any kind in, any individual, person or entity, wherever
located, which conducts a business reasonably similar to the Company's or its
subsidiaries' business; provided that Employee may own, for investment purposes
only, up to 3% of the stock of any such publicly traded company whose stock is
either listed on a national stock exchange or on The Nasdaq National Market (if
Employee is not otherwise affiliated with such business).
9. Solicitation of Company Customers.
Upon expiration of this Agreement or termination of Employee's employment
with the Company under this Agreement, with or without cause, by either the
Company or Employee, Employee shall not, directly or indirectly, at any time
within one year after the date of such termination, solicit any entity that, to
Employee's knowledge, was a customer of the Company or its subsidiaries within
the year before the date of such termination, to perform services or supply
products for such customer of a similar nature to those services performed or
products provided by the Company or its subsidiaries to such customer during the
term of such employment under this Agreement.
10. Return of Documents.
Upon expiration of this Agreement or termination of Employee's employment
with the Company for any reason, all documents, procedural manuals, guides,
specifications, plans, drawings, designs and similar materials, diaries,
records, customer lists, notebooks, and similar repositories of or containing
confidential information, including all copies thereof, then in Employee's
possession or control, whether prepared by Employee or others, shall be left
with, or forthwith returned by Employee to, the Company.
11. Company' Remedies.
Employee acknowledges and agrees that the covenants and undertakings
contained in Sections 1(b), 6, 7, 8, 9 and 10 of this Agreement relate to
matters which are of a special, unique and extraordinary character and that a
violation of any of the terms of such Sections will cause irreparable injury to
the Company and its subsidiaries, the amount of which will be difficult, if not
impossible, to estimate or determine and which cannot be adequately compensated.
Therefore, Employee agrees that the Company, in addition to any other available
remedies under applicable law, shall be entitled, as a matter of course, to an
injunction, restraining order or other equitable relief from any court of
competent jurisdiction, restraining any violation or threatened violation of any
such terms by Employee and such other persons as the court shall order.
12. Employee's Remedies.
Employee's remedy against the Company for breach of this Agreement is the
collection of any compensation due him as provided in Section 3 and such other
remedies available to Employee under law or in equity.
13. Assignment.
The Company shall not be required to make any payment under this Agreement
to any assignee or creditor of Employee, other than to Employee's legal
representative or his estate on death or disability. Employee's obligations
under this Agreement are personal and may not be assigned, delegated or
transferred in any manner and any attempt to do so shall be void. Employee, or
his legal representative, shall have no rights by way of anticipation or
otherwise to assign or otherwise dispose of any right of Employee under this
Agreement. The Company may assign this Agreement without Employee's consent to
any successor to the Company' business. This Agreement shall be binding upon,
and shall inure to the benefit of, the Company, Employee and their permitted
successors and assigns.
14. Company' Obligations Unfunded.
Except for any benefits under any benefit plan of the Company that are
required by law or by express agreement to be funded, it is understood that the
Company' obligations under this Agreement are not funded, and it is agreed that
the Company shall not be required to set aside or escrow any monies in advance
of the due date of the payment of such monies to Employee.
15. Notices.
(a) To Employee. Any notice to be given under this Agreement by the Company
to Employee shall be deemed to be given if delivered to Employee personally or
by recognized overnight carrier, or three business days after being mailed to
him by certified or registered mail, postage prepaid, return receipt requested,
to:
J. Xxxxxxx Xxxxxxxxxxx, Xx.
0000 Xxxxxxx Xxxx Xxxxxx
Xxxxxx, XX 00000
or at such other address as Employee shall have advised the Company in writing.
(b) To the Company. Any notice to be given by Employee to the Company shall
be deemed to be given personally or by recognized overnight carrier, or three
business days after being mailed by certified or registered mail, postage
prepaid, return receipt requested, to:
Tarpon Industries, Inc.
0000 Xxxxx Xx.
Xxxxxxxxxx, XX 00000
With a copy to:
Xxxxxx X. Xxxxxx, Esq.
Ruskin Moscou Faltischek, P.C.
0000 Xxxxxxx Xxxxx
Xxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
or at such other address as the Company shall have advised Employee in writing.
16. Amendments.
This Agreement shall not be amended, in whole or in part, except by an
agreement in writing signed by the Company and Employee.
17. Entire Agreement.
This Agreement constitutes the entire agreement between the parties with
respect to the subject matter of this Agreement and all prior agreements or
understandings, oral or written, are merged in this Agreement and are of no
further force or effect. The parties acknowledge that they are not relying on
any representations, express or implied, oral or written, (relating to any
aspect of Employee's current or future employment or otherwise), except for
those stated in this Agreement. Employee further acknowledges that his sole
rights and remedies with respect to any aspect of his employment or termination
of his employment are provided for in this Agreement.
18. Captions.
The captions of this Agreement are included for convenience only and shall
not affect the construction of any provision of this Agreement.
19. Governing Law and Forum.
This Agreement, its construction, and the determination of any rights,
duties or remedies of the parties arising out of or relating to this Agreement,
shall be governed by, and interpreted in accordance with, the laws of the state
of Michigan, except for any provisions of Michigan law which direct the
application of other states' laws, and except that if any provision of this
Agreement would be illegal, void, invalid or unenforceable under such Michigan
laws, then the laws of such other jurisdiction which would render such
provisions valid and enforceable shall govern so far as is necessary to sustain
the validity and enforceability of the terms of this Agreement. Each party
consents to be subject to personal jurisdiction of the courts of Michigan, and
any lawsuit or other court action or proceeding relating to, or arising out of,
this Agreement or Employee's employment with the Company shall be instituted
only in the state or federal court of proper jurisdiction in the state of
Michigan and those courts shall have exclusive jurisdiction over any case or
controversy arising out of or relating to this Agreement.
20. Severability.
All provisions, agreements, and covenants contained in this Agreement are
severable, and in the event any of them shall be held to be illegal, void or
invalid by any competent court or under any applicable law, such provision shall
be changed to the extent reasonably necessary to make the provision, as so
changed, legal, valid and binding. If any provision of this Agreement is held
illegal, void or invalid in its entirety, the remaining provisions of this
Agreement shall not in any way be affected or impaired, but shall remain binding
in accordance with their terms.
21. No Waiver.
No waiver of any provision of this Agreement shall be valid unless in
writing and signed by the party against whom enforcement of the waiver is
sought. The waiver by either party of any breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent
breach.
22. Consultation with Counsel.
Employee acknowledges that he has been given the opportunity to consult
with his personal legal counsel concerning all aspects of this Agreement and the
Company have urged Employee to so consult with such counsel.
23. No Conflicts.
Employee represents and warrants that his execution, delivery and
performance of this Agreement will not (i) constitute a breach or violation of
any agreement or arrangement to which he is a party or by which the is bound;
(ii) constitute a violation of any order, judgment or decree to which he is a
party; or (iii) require the consent of any third party.
IN WITNESS WHEREOF, the Company and Employee have duly executed this
Agreement as of the date and year first above written.
Tarpon Industries, Inc.
By:/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx,
Chief Executive Officer
By:/s/ J. Xxxxxxx Xxxxxxxxxxx, Xx.
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J. Xxxxxxx Xxxxxxxxxxx, Xx.,
individually
