Key Employee Retention Agreement
This Key
Employee Retention Agreement (the “Agreement”), is entered into as of this
1st
day of September, 2009 (the “Effective Date”), by and between XsunX, Inc., a
Colorado corporation, (the “Company”), and Xxxxxx X. Xxxxx (the
“Employee”). Company and Employee may be referred collectively
hereafter as the “Parties” and individually as a “Party”.
RECITALS
WHEREAS, the Company recognizes the
valuable services that the Employee will render to the Company and the Company
desires to retain the services of Employee; and
WHEREAS, the Employee is willing to
serve the Company, but desires a severance arrangement in the event the
Employee’s employment is terminated as provided herein.
NOW, THEREFORE, in consideration of the
Employee’s service to the Company and the mutual agreements herein contained,
and for other god and valuable consideration, the receipt of which is hereby
acknowledged, the Company and the Employee agree as follows:
AGREEMENT
ARTICLE
1
Eligibility of
Benefits
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1.1
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Qualifying
Termination. A “Qualifying Termination” shall mean the
termination of the Employee’s employment by the Company due to any of the
following:
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(a)
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The
sale of all or substantially all of the assets of the Company which
results in the termination without cause of Employee within three (3)
months of a sale of all or substantially all of the assets of the Company;
or
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(b)
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A
reduction in force; or
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(c)
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Elimination
of Employee’s position; or
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(d)
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Other
termination without cause.
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The
Company shall not be required to provide any benefits to the Employee pursuant
to this Agreement unless a Qualifying Termination occurs and all other
conditions provided herein are met.
1.2 Termination for
Cause. For the purpose of this Agreement, the
Company or a successor company shall have “Cause” to terminate the Employee only
in the event of:
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(a)
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The
conviction of a felony; or
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(b)
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The
willful engaging by the Employee in gross misconduct, which material and
demonstrably injures the Company or it affiliates. For the
purposes of this paragraph, no act or failure to act on the part of the
Employee shall be considered “willful” unless done or omitted to be done
by Employee not in good faith and without reasonable belief the Employee’s
action or omission was in the best interest of the Company or its
affiliates; or
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(c)
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Employee
fails to perform all duties required of Employee to reasonable
satisfaction of Company in accordance with performance standards imposed
by Company.
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1.3 Term
of Agreement. This agreement shall be effective as of the date first
indicated above and shall remain in effect until the earlier of: (a) Two years
from the Effective Date; or (b) the effective date of Employee’s promotion to
another position in the Company which position provides severance or change in
control benefits in an amount which exceeds the amount of severance payable to
Employee in the event of a Qualifying Termination hereunder, or (c) the Employee
and Company agree to the mutual termination of this Agreement.
ARTICLE
II
Benefits After A Qualifying
Termination
2.1 Release
Agreement. Prior to and as a condition
of the payment of any severance or benefit amounts by the Company to the
Employee hereunder, the Employee shall execute a Release and Compromise of All
Claims Agreement in the form similar to Exhibit “A” attached hereto and
incorporated herein (the “Release”).
2.2 Basic Severance
Payment. The Company shall pay to the
Employee as severance pay, a cash lump sum amount to twelve (12) month’s salary
at the base salary amount at the Effective Date of this
agreement. This includes the cash value of Employee’s accrued and
unused vacation benefits up to the date of the Qualifying
Termination. Said severance payment shall be made by the Company to
the Employee after the Release becomes effective, as set forth in the
Release.
2.3 Benefits.
If the Employee was a participant in one of the Company’s sponsored
medical and/or dental plans at the time of the Qualifying Termination and the
Employee elects to receive continuing medical and/or dental coverage under COBRA
following such Qualifying Termination, the Company shall reimburse Employee for
actual costs paid by Employee per month for such COBRA coverage, up to the same
dollar contribution level previously paid by the Company at the time of the
Qualifying Termination. Such reimbursement payments shall commence on
the date employee makes his first COBRA payment for continuation coverage and
shall continue until the earlier of the Employee’s termination of said COBRA
coverage or twelve (12) months following the Qualifying
Termination. The Employee must continue to pay the monthly COBRA
premiums to receive continued medical/dental benefits during said twelve month
period will be made available to the Employee at his sole cost under
COBRA.
2.4 Relocation.
It is understood by Company that Employee has relocated for the
benefit of the Company. Upon a Qualifying Termination, the Company
will pay to the Employee reasonable cost up to $2,500 dollars to relocate to his
permanent address and for any cost incurred for breaking lease obligations at
his temporary housing location.
2.5 Income Tax
Withholding. The Company may withhold from
any payments made under this Agreement all federal, state, city or other taxes
as shall be required pursuant to any law or governmental regulation or
ruling.
2.6 Sole Severance
Obligation. The severance, benefit, and
relocation amounts set forth in Sections 2.2, 2.3, and 2.4 herein shall be the
sole severance obligation of the Company to Employee in the event of a
Qualifying Termination. This Agreement does not preclude Employee’s
participation in any voluntary severance plan that the Company may establish in
the future, in accordance with the provision specified in any such
plan. For the purpose of this Agreement, the Employee’s participation
in any such voluntary severance plan shall not constitute a Qualifying
Termination.
ARTICLE
III
Miscellaneous
3.1 At-Will
Employment. Employee and Company
acknowledge that, except and otherwise may be provided under any other written
agreement between Company and Employee, the employment of Employee is “at will”,
meaning either Party may terminate employment for any reason at any time with or
without Cause. Employee acknowledges no statements, representation or
promises as to employment longevity have been made to Employee
whatsoever.
3.2 Arbitration. Any
controversy or claim arising out of or relating to this Agreement or the breach
thereof, shall be settled by arbitration. The Party desiring
arbitration shall deliver written notice of demand for arbitration to the other
Party within a reasonable time after the controversy or claim arises, but in not
event after the date when institution of legal or equitable proceedings based on
such controversy or claim would be barred by applicable statute of
limitations.
The arbitration shall be heard before a
single neutral arbitrator appointed by mutual agreement of the
Parties. If the Parties fail to agree upon a single arbitrator within
ten (10) days of the referral of the dispute to arbitration, each Party shall
choose on arbitrator who shall sit on a three-member arbitration
panel. The two arbitrators so chosen shall within ten (10) days
select a third arbitrator. In either case, the arbitrator(s) shall be
knowledgeable in executive and employee compensation matters, and shall not have
any current or past substantial business or financial relationships with any
Party to the arbitration. The arbitration shall be conducted under
the rules of the Federal Arbitration Act, except as modified herein, and shall
take place in Golden, Colorado. No discovery shall be
permitted. The arbitrator shall issue a scheduling order that shall
not be modified except by the mutual agreement of the Parties. The
award of the arbitrator(s) shall be final and binding and shall be enforceable
in any court of competent jurisdiction.
3.3 Entire
Understanding. This Agreement contains the
entire understanding between the Company and the Employee with respect to the
subject matter hereof and supersedes any prior employee retention agreement
between the Company and the Employee.
3.4 Severability.
If, for any reason, any one or more of the provisions or part of a
provision contained in the Agreement shall be held to be invalid, illegal or
unenforceable in any respect, such validity, illegality, or unenforceability
shall not affect any other provision or part of a provision of this Agreement
not held so invalid, illegal or unenforceable, and each other provision or part
of a provision shall, to the full extent consistent with law, continue in full
force and effect.
3.5 Consolidation, Merger, or
Sale of Assets. Nothing in the Agreement
shall preclude the Company from consolidating or merging into or with or
transferring all or substantially all of its assets to another corporation which
assumes this Agreement and all obligations and undertaking of the Company
hereunder. Upon such a consolidation, merger or transfer of assets
and assumption, the term, “the Company”, as used here shall mean such other
corporation and this Agreement shall continue in full force and
effect.
3.6 Notices.
All notices, request, demands and other communications required or
permitted hereunder shall be given in writing and shall be deemed to have been
duty given if delivered or mailed, postage prepaid, first class as
follows:
To the
Company
Attention: Xxx
Xxxxxxxxx
To the
employee:
XXXXX
Attention: Xxxxxx
Xxxxx
or to
such other addresses as wither Party shall have previously specified in writing
to the other.
3.7 No
Attachment. Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or
to execution attachment, levy, or similar process or assignment by operation of
law, or any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect.
3.8 Binding
Agreement. This agreement shall be binding
upon and shall inure to the benefit of, the Employee and the Company and their
respective successors and permitted assigns.
3.9 Modification and
Waiver. This Agreement may not be modified
or amended except by an instrument in writing and signed by the
Parties. No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement except by written instrument signed by the Party
charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver unless specifically stated therein, and each such
waiver shall operate only as to the specific term or condition waived and shall
not constitute a waiver of such term or condition for the future or as to any
act other than that specifically waived.
3.10 Headings.
The headings contained in the Agreement are included solely for
convenience and shall not in any way affect the meaning or interpretation of any
of the provision of this Agreement.
3.11 Governing
Law. This agreement and its validity,
interpretation, performance, and enforcement shall be governed by the laws of
the State of Colorado, without regard to the choice of law provisions
thereof.
3.12 Entire
Agreement. This Agreement constitutes the entire agreement between
the parties respecting the subject matter hereof, and there are no
representations, warranties, agreements or commitments between the parties
hereto except as set forth herein. The Agreement controls over any
and all provisions or guidelines contained in any Employee Manual, Employee
Handbook, Company Policy Manual or other similar document. Employee
expressly acknowledges that no Employee Manual, Employee Handbook, Company
Policy Manual or other similar document is or shall become a contract between
the Company and Employee.
IN WITNESS WHEREOF ,
THE Company has caused this Agreement to be executed by its officers thereunto
duty authorized, and the Employee has signed this Agreement, all as the date
first written.
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XSUNX,
INC.
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EMPLOYEE
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Xxx
Xxxxxxxxx
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Xxxxxx
X Xxxxx
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CEO
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Exhibit
“A”
RELEASE AND SETTLEMENT
AGREEMENT
This Release and Settlement Agreement
(the “Agreement”) is between _______________ (hereinafter “Employee”) and XsunX,
Inc. (hereinafter “the Company). The employment relationship between
Employee and the Company has ceased, effective ________________. The
Company and Employee desire to enter into this Agreement to compromise, release
and settle those claims decribed herein relating to employment or
termination.
The Company and Employee hereby agree
as follows:
1. Employee’s
employment with the Company will terminate as of ______________ (the “Effective
Date”.
2. Employee
shall receive from the Company, in cash, payable on or as soon as practicable
after the seventh day following the execution of this Agreement by Employee the
sum of _______________________________________ dollars ($__________), less all
applicable taxes. Employee will also received twelve (12) months
continued benefits coverage.
3. For and
in consideration of the mutual covenants herein, including the cash payment to
Employee, all of which are described above, Employee agrees to compromise,
release and fully and forever discharge and convenants not to xxx the Company,
including, but not in limitation thereof, all directors, officers, employees,
agents, or attorneys thereof, from and with respect to any and all claims of
whatever kind or nature, known or unknown, suspected or unsuspected, and however
arising, including, but, not in limitation thereof, all claims for personal
injury (including all claims for medical treatment related thereto), pain and
suffering, mental anguish, humiliation or embarrassment, loss of diminution of
self or professional esteem, reputation, or any and all claims of whatever kind
or nature, known or unknown, suspected or unsuspected, arising out of ,
resulting from or concerning Employee’s employment with the Company or
Employee’s cessation or employment with the Company or the circumstances leading
thereto
4. This
compromise, release and discharge shall specifically include, and shall
constitute as knowing and voluntary waiver of, any and all claims, of whatever
kind or nature, and however arising, Employee has or may have pursuant to or
under the Age Discrimination in Employment Act of 1967 (hereinafter “ADEA”), 29
U.S.C. § 621, et
seq., the Civil Rights Act of 1964 42 U.S.C. §2000e, et seq., and any and
all statutes of a similar nature or import, or concerning the same subject
matter, whether federal statues, those of the State of Colorado, including
specifically, but not in limitation thereof, the Colorado Civil Rights Act
_______________ et seq., and other applicable employment law
statutes.
5. In
connection with any waiver of any potential claims under the ADEA, Employee
further expressly acknowledges and agrees:
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(a)
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Employee’s
waiver of any potential rights or claims under the ADEA that have arisen
on or before the date of this
Agreement;
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(b)
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In
return for this Agreement, Employee will receive consideration beyond that
which Employee was already entitled to receive before entering into this
Agreement;
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(c)
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Employee
has been advised by the Company to consult with an attorney of the
Employee’s choice before signing this
Agreement;
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(d)
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Employee
was given a copy of this Agreement on _____________, and informed that
Employee had twenty-one (21) days within which to consider the Agreement;
and
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(e)
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Employee
was informed that Employee has until seven (7) days following the date of
execution of this Agreement in which to revoke this Agreement and this
Agreement will not be effective or enforceable until the revocation period
has expired.
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6. This
compromise, release and discharge shall also specifically include any and all
claims, of whatever kind or nature, and however arising, and however
characterized, Employee has or may have for wrongful discharge or breach of any
express or implied employment agreement, whether arising under the law of the
United States, the State of Colorado, or otherwise.
7. Employee
further acknowledges, agree and warrants that the compromise, release and
discharge is done knowingly, and voluntarily, that Employee has had the
opportunity to fully consider and understand the terms of this compromise,
release and discharge. Employee further acknowledges that no
representation or coercion of any kind have been made or used to induce Employee
to enter into this compromise, release and discharge, and that the mutual
considerations herein for this compromise, release and discharge are fair and
are fully satisfactory.
8. This
compromise, release and discharge shall be binding upon, and the benefits shall
accrue to, the heirs, representatives, successors and assigns of the parties
hereto.
9. Employee
understands that this compromise, release and discharge shall not be effective
until seven (7) days from the date of Employee’s execution of this Agreement,
and that Employee may revoke this compromise, release and discharge with that
seven day period, but after that seven day period, the compromise, release and
discharge shall be fully binding and effective.
10. Employee
agrees that Employee’s current employment with the Company will end irrevocably
on the _____date_______, with not guarantee of future employment.
11. This
instrument constitutes and contains the entire agreement and final understanding
concerning Employee’s employment, termination from the same and the other
subject matters addressed herein between the parties. It is intended
by the parties as a complete and exclusive statement of the terms of their
agreement. It supersedes and replaces all prior negotiations and all
agreement, proposed or otherwise, whether written or oral, concerning the
subject matters hereof. Any representation, promise or agreement not
specifically included in this Agreement shall not be binding upon enforceable
against either party. This is a fully integrated
agreement.
12. The
parties hereto hereby sign and execute this Release and Settlement Agreement in
accordance with the terms contained herein.
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Xxxxxx
X. Xxxxx
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Date
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XsunX,
Inc.
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By
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Date
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STATE
OF COLORADO
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)
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COUNTY
OF JEFFERSON
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The foregoing instrument was
acknowledged before me this _____ day of _________________, by Xxxxxx X
Xxxxx.
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Public
Notary
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My
Commission Expires:
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STATE
OF COLORADO
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)
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COUNTY
OF JEFFERSON
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The foregoing instrument was
acknowledged before me this _____ day of _________________, by , of XsunX, Inc,
a Colorado corporation, on behalf of the corporation.
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Public
Notary
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My
Commission Expires:
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