EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of November 20, 2007, between
Tarpon Industries, Inc., a Michigan corporation (the "Company"), and Xxxxxx X.
Xxxxx ("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 Sections 2 and 4), 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 will serve as Chief Financial Officer of
the Company, or in such other position with the Company, as the Board of
Directors of the Company will, 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 and as are established from time to time by, or in accordance with
procedures established by the Company's Chief Executive Officer or Board of
Directors.
(b) Performance. Employee will perform the duties called for under this
Agreement to the best of his ability and shall devote all 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 Chief Executive Officer or Board of
Directors of the Company as applicable. Employee shall be based in the vicinity
of Marysville, Michigan area and perform duties in the State of Michigan except
for travel incidental to the performance of his duties for the Company and under
this Agreement.
2. Term.
The term of Employee's employment under this Agreement will begin on the
date of this Agreement and shall continue for two years, unless earlier
terminated 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 will 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 $165,000.00 (the "Base Salary"). The Base Salary will be increased
to $180,000.00 upon successful completion of the secondary equity
raise in the amount of $6 million minimum, and when the Tarpon
Industries accounting consultants fees have been reduced by a minimum
of fifty percent.
(b) Performance Based Bonus. In every year during the Term, Employee shall
be eligible to participate in the Company's bonus plan, once
established, and will be eligible to receive a performance-based bonus
of up to 25% of your base salary, based on company profit targets and
established by the Compensation Committee of the Board of Directors in
accordance with the terms and conditions to be determined by the
Compensation Committee that is applicable to the Company's executive
officers. If services are rendered for only a fraction of any year,
the bonus for such year shall be appropriately pro-rated.
(c) 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 business, for which Employee submits
appropriate receipts and which are consistent with the company policy
or have been authorized by the Company's Board of Directors.
(d) Options.
(i) The Company will grant Employee an option to purchase 100,000
common shares, which will be issued pursuant to the Company's
Stock Option Plan ("Option Shares"), subject to the three year
vesting restrictions determined by the Board of Directors;
provided that the 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). The exercise price shall be fair
market value of the Company's common stock as of November 20,
2007, provided that if there is no a regular trading market on
such date, the determination of fair market value as of such date
shall be made in good faith by the Board of Directors.
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(ii) In addition, upon consummation of a pubic offering by the Company
of its common shares for its account, the Company will grant
Employee an additional option to purchase 50,000 common shares on
the same terms set forth above except that: (A) the exercise
price shall be the public offering price, (B) vesting shall be
measured from the date hereof and (C) the option shall terminate
on the same date as the option described above.
(e) Benefits. Employee shall be eligible to participate in all fringe
benefits, currently including major medical, disability 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.
(f) Vacation. Employee will be entitled to four (4) weeks of paid vacation
time per each year of this Agreement, in accordance with the Company's
current vacation policy. If Employee leaves the company within the
first year of employment, Employee will not be eligible for any unused
vacation pay.
(g) Indemnification. 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.
(h) Automobile, Cellular Phone. The Company shall provide Employee with an
automobile allowance of an aggregate of $500.00 per month. The Company
shall also provide Employee with a cellular phone and shall pay or
reimburse Employee for all such cellular phone costs incurred by
Employee in connection with the Company's business.
4. Termination
(a) Death. Employee's employment under this Agreement will terminate
immediately upon Employee's death.
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(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 day after six (6) consecutive months during which Employee
suffers from a "total disability".. "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
or its equivalent provided by Section 3(e), 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 the Employee, and, if necessary, a Doctor mutually
chosen by such Doctors. Employee shall continue to receive
compensation pursuant to this 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 or its equivalent provided by Section 3 (e) 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) With 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 material
breach by Employee of this Agreement, any material breach by Employee
of his fiduciary duties to the Company, material failure to perform
his duties under this Agreement continuing for 30 days following
written notice by the Company of 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 an
adverse effect upon the Company or any act of theft or dishonesty by
Employee.
(d) Without Cause. The Company and Employee shall each have the right,
upon written notice to each other, to terminate Employee's employment
under this Agreement without cause. Such termination shall be
effective 30 days after such notice is deemed given pursuant to the
provisions set forth in this Agreement.
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5. Effects of Termination
(a) If Employee's employment under this Agreement is terminated pursuant to
Sections 4 (a), (b) or (c), or if Employee resigns pursuant to Section 4 (d),
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(c) and all vacation leave and other benefits actually due
pursuant to Sections 3(e)and 3(f) accrued and unpaid through the date of
termination; (ii) pay to Employee (or his estate) any salary and bonus
compensation, pursuant to Sections 3(a) and 3(b), actually earned, accrued and
unpaid through the date of termination, and (iii) indemnify Employee as provided
under section 3(g).
(b) 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 pay aggregate compensation for a period of 6 months and
provide the aggregate benefits for a period of 12 months set forth in Sections
3(a), 3 (b), 3(e) and 3 (h) beginning after the 30 days written notice, subject
to earlier termination upon the occurrence of any of the events described in
Sections 4 (a) or 4(c).
(c) If Employee's employment under this Agreement terminates other than
pursuant to Section 4 of this Agreement (such as, for example, expiration of the
term of Employee's employment under Section 2 of this Agreement), in addition to
its obligations under Section 5 (a), the Company shall pay aggregate
compensation for a period of six (6) months and provide the aggregate benefits
for a period of six (6) months set forth in Sections 3(a), 3(b), 3(e) and 3(h),
beginning immediately after such termination, subject to earlier termination
upon the occurrence of any events described in Sections 4 (a) or 4 (c), provided
that the Company shall have no obligation under this Section 5(c) if at the
expiration of the original term of this Agreement pursuant to Section 2, the
Company offers to extend the term of Employee's employment for an additional
year on the same terms and conditions as set forth in this Agreement and
Employee does not accept such offer.
(d) Termination of Employee's employment under this Agreement shall not
affect any party's rights and obligations under Section 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, for any reason, notwithstanding any breach of
this Agreement by Employee or by the Company.
6. Conflicts of Interest. While employed by the Company, Employee shall
not, directly or indirectly:
(a) participate in any way in the benefits of transactions between the
Company and its suppliers or customers, or have personal financial transactions
with any of the Company's suppliers or customers, including, without limitation,
having a financial interest in the Company's suppliers or customers, or making
loans to, or receiving loans from, the Company's suppliers or customers;
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(b) realize a personal gain or advantage from a transaction in which the
Company has an interest or use information obtained in connection with
Employee's employment with the Company for Employee's personal advantage or
gain; or
(c) 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 that does business with the Company.
7. Solicitation of Employees, Consultants and Customers
Upon termination of Employee's employment with the Company under this
Agreement, with or without cause, by the Company or Employee, Employee shall not
for a period of two years following the date of such termination, directly or
indirectly: (a) solicit or attempt to hire any person who is then employed by,
or is a consultant to, the Company or who, to Employee's knowledge, was employed
by, or was a consultant to, the Company at any time during the year before the
termination of Employee's employment with the Company under this Agreement. (b)
encourage any such person to terminate his or her employment with the Company.
8. Covenant Not To Compete
During the term of Employee's employment under this Agreement and for a
period of one year following the termination of Employee's employment with the
Company under this Agreement pursuant to Section 4(b) or 4(c) or by Employee
pursuant to Section 4 (d), or if applicable, for the period of time in which
Employee is paid pursuant to Section 5(b) following termination of Employee's
employment with the Company under this Agreement by the Company pursuant to
Section 4(d), or (c) for a period of one year following the termination of
Employee's employment with the Company under this Agreement other than as set
forth in (a) or (b) above ("the Period"), Employee shall not, directly or
indirectly, himself, or through or for an individual, person or entity wherever
located:
(a) 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 during the term of Employee's
employment under this Agreement; or
(b) 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 business;
provided, that Employee may own, for investment purposes only, up to 3% of the
stock of any publicly traded business 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 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 for a period of two years,
solicit any entity that, to Employee's knowledge was a customer of the Company
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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 to such customer during the term
of such employment under this Agreement.
10. Return of Documents.
Upon 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 if applicable.
11. Company's 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, 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, will 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 will order.
12. Employee's Remedies.
Employee's exclusive remedy against the Company for breach of this
Agreement and/or wrongful termination of his employment is the collection of any
compensation due him as provided in Sections 3 and 5 of this Agreement and other
such 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. 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's business. This Agreement will be binding upon, and shall inure to
the benefit of the Company, the Employee and their permitted successors and
assigns.
14. Company's and EWCO's Obligations Unfunded.
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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's obligation 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 in person or
three business days after mailed to him by certified or registered mail, postage
prepaid, return receipt requested, to:
Xxxxxx X. Xxxxx
0000 Xxxxxxx
Xxxxxxxxxx Xxxxxxx, XX 00000
or at such other address as Employee will 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 three business days after mailed by certified or
registered mail, postage prepaid, return receipt requested, to:
Tarpon Industries, Inc.
0000 Xxxxx Xx.
Xxxxxxxxxx, XX 00000
A copy should be sent to: (?)
Xxxxxx X. Xxxxxx
Ruskin Xxxxxx Xxxxxxxxxx, X.X.
Xxxx Xxxxx, 00xx Xxxxx
000 XxxXxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
or at such other address as the Company will have advised Employee in writing.
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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 will
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,
will 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 will 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 Companies will be instituted
only in the state or federal court of proper jurisdiction in the state of
Michigan and those courts will 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 will be held to be illegal, void or
invalid by any competent court or under any applicable law, such provision will
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 will not in any way be affected or impaired, but will remain binding
in accordance with their terms.
21. No Waiver.
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No waiver of any provision of this Agreement will 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 will 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 has urged Employee to so consult with such counsel.
23. 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 he 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 stated.
Tarpon Industries, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
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Its: CEO
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Date: 11/20/07
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/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
11/20/07
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Date
