AGREEMENT
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INTERNATIONAL HUMATE FERTILIZER, CO. (a Nevada corporation), located at 0000
Xxxxxxxx Xxxxx, Xxxxx 00000, hereinafter referred to as Employer, and XXXXX X.
XXXXXXXX, hereinafter referred to as Employee, in consideration of the mutual
promised made herein, agree as follows.
ARTICLE I. TERM OF EMPLOYMENT
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Specified Period
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Section 1.01. Employer hereby employs Employee and Employee hereby accepts
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employment with Employer for a period of sixty (60) months, beginning July 1,
1996 and terminating on June 30, 2001.
Automatic Renewal
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Section 1.02. This agreement shall be renewed automatically for succeeding
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terms of two (2) years each unless either party gives notice to the other at
least sixty (60) days prior to the expiration of any term his or its intention
not to renew.
"Employment Term" Defined
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Section 1.03. As used herein, the phrase "employment term" refers to the
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entire period of employment of Employee by Employer hereunder whether for the
period provided above, or whether terminated earlier as hereinafter provided or
extended by mutual agreement between Employer and Employee.
ARTICLE 2. DUTIES AND OBLIGATIONS OF EMPLOYEE
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General Duties
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Section 2.01. Employee shall serve as the President and Chief Executive
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Officer of International Humate Fertilizer, Inc. In his capacity as President
and Chief Executive Officer of International Humate Fertilizer, Inc., Employee
shall be in charge of day to day operations for the Company, including but not
limited to the hiring and firing, setting wages, and charges for Company
services, subject t all times to the policies set by Employer's Board of
Directors, and to the consent of the Board when required by the terms of this
contract. Employee agrees to spend as much time on Company matters as is
necessary to insure the proper operation of the Employer.
Matters Requiring Consent of Board of Directors
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Section 2.02. Employee shall not, without specific approval of Employer's
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Board of Directors, do or contract to do any of the following:
(1) Borrow on behalf of Employer during any one fiscal year an
amount in excess of $3,000,000.
(2) Permit any customer of Employer to become indebted to Employer
in an amount in excess of $500,000.
(3) Purchase capital equipment for amounts in excess of the
amounts approved for expenditure by the Board of Directors.
(4) Sell any single capital asset of Employer having a market
value in excess of $1,000,000 or a total of capital assets during a fiscal year
having a market value in excess of $5,000,000.
(5) Commit Employer to the expenditure of more than $150,000 in
the development and sale of new products or services.
Devotion to Employer's Business
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Section 2.03. (a) Employee shall devote as much as necessary of his
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productive time, ability, and attention to the business of Employer during the
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term of this contract, but not less than is required to insure the proper
operation of Employer.
(b) This agreement shall not be interpreted to prohibit Employee from
making passive personal investments or conducting private business affairs if
those activities do not materially interfere with the services required under
this Agreement.
Competitive Activities
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Section 2.04. During the term of this contract, Employee shall not,
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directly or indirectly, either as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director, or in any other
individual or representative capacity, engage or participate in any undisclosed
business that is in competition in any manner whatsoever with the business of
Employer.
Uniqueness of Employee's Services
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Section 2.05. Employee hereby represents and agrees that the services to
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be performed under the terms of this contract are of a special, unique, unusual,
extraordinary, and intellectual character that gives them a peculiar value, the
loss of which cannot be reasonable or adequately compensated in damages in an
action at law. Employee therefore expressly agrees that Employer, in addition
to any other rights or remedies that Employer may possess, shall be entitled to
injunctive and other equitable relief to prevent or remedy a breach of this
contract by Employee.
Identification for Negligence or Misconduct
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Section 2.06. Employee shall indemnify and hold Employer harmless from
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all liability for loss, damage, or injury to persons or property resulting from
the negligence or misconduct of Employee.
Trade Secrets
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Section 2.07. (a) The parties acknowledge and agree that during the term
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of this agreement and in the course of the discharge of his duties hereunder,
Employee shall have access to and become acquainted with information concerning
the operation of Employer, including without limitation, financial, personnel,
sales, scientific, trade, and other information that is owned and licensed by
Employer and regularly used in the operation of Employer and regularly used in
the operation of Employer's business, and that such information constitutes
Employer's trade secrets.
(b) Employee specifically agrees that he shall not misuse,
misappropriate, or disclose any such trade secrets, directly or indirectly, to
any other person r use them in any way, either during the term of this agreement
or at any other time thereafter, except as is required in the course of his
employment hereunder.
(c) Employee acknowledges and agrees that the sale or unauthorized use
or disclosure of any of Employer's trade secrets obtained by Employee during the
course of his employment under this agreement, including information concerning
employer's current or any future and proposed work, service, or products, the
facts that any such work, services, or products are planned, under
consideration, or in production, as well as any descriptions thereof, constitute
unfair competition. Employee promises and agrees not to engage in any unfair
competition with Employer, either during the term of this agreement or at any
other time thereafter.
(d) Employee further agrees that all files, records, documents,
drawings, specifications, equipment, and similar items relating to Employer's
business, whether prepared by Employee or others, are and shall remain
exclusively the property of Employer and that they shall be removed from the
premises of Employer only with the express prior written consent of Employer's
Board of Directors.
Use of Employee's Name
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Section 2.08. (a) Employer shall have the right to use the name of
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Employee as part of the trade name or trademark of Employer if it should be
deemed advisable to do so. Any trade name or trademark, of which the name of
the Employee is a part, that is adopted by Employer during the employment of
Employee may be used thereafter by Employer for as long as Employer deems
advisable.
(b) Employee shall not, either during the term of this agreement or at
any time thereafter, use or permit the use of his name in the trade name or
trademark of any other enterprise if that other enterprise is engaged in a
business similar in any respect to that conducted by Employer, unless that trade
name or trademark clearly indicates that the other enterprise is a separate
entity entirely distinct from and not to be confused with Employer and unless
that trade name or trademark excludes any words or symbols stating or suggesting
prior or current affiliation or connection by that other enterprise or its
employees with Employer.
ARTICLE 3. OBLIGATIONS OF EMPLOYER
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General Description
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Section 3.01. Employer shall provide Employee with the compensation,
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incentives, benefits, and business expense reimbursement specified elsewhere in
this agreement.
Section 3.02. Employer shall provide Employee with office space, office
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equipment, supplies, and other facilities and services, to Employee's position
and adequate for the performance of his duties.
Indemnification of Losses of Employee
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Section 3.03. Employer shall indemnify Employee for all losses sustained
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by Employee in direct consequence of the discharge of his duties on Employer's
behalf.
ARTICLE 4. COMPENSATION OF EMPLOYEE
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Annual Salary
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Section 4.01. (a) As compensation for the services to be performed
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hereunder, Employee shall receive a salary at the rate of 128,000 per annum,
payable not less than once each month for the first twelve months of the
employment term, 150,000 per annum for the second twelve months of the
employment term, and 175,000 per annum for the balance of the employment term.
(b) Employee shall receive such annual increases in salary as may be
determined by Employer's Board of Directors in its sole discretion at its annual
meeting.
Salary Continuation During Disability
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Section 4.02. If Employee for any reason whatsoever becomes permanently
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disabled so that he is unable to perform the duties prescribed herein, Employer
agrees to pay Employee 50 percent of Employee's annual salary, payable in the
same manner as provided for the payment of salary herein for the remainder of
the employment term provided for herein.
Tax Withholding Tax Withholding
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Section 4.03. Employer shall have the right to deduct or withhold from the
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compensation due to Employee hereunder any and all sums required for federal
income and Social Security taxes and all state or local taxes not applicable or
that may be enacted and become applicable in the future.
Repayment of Disallowed Salary
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Section 4.04. In the event that any portion of the compensation paid by
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Employer to Employee is disallowed as an income tax deduction on an income tax
return of Employer, Employee agrees to immediately repay to Employer the full
amount of that portion.
Automobile Rental
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Section 4.05. Employer will pay Employee an allowance for his use of an
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automobile for Employer's business in the amount of $500 per month.
ARTICLE 5. EMPLOYEE INCENTIVES
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Stock Option
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Section 5.01. (a) Employer will grant to Employee incentive stock options
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to purchase shares of common stock of International Humate Fertilizer, Inc.
after one year of employment. The specific terms and conditions governing the
grant of these options and the exercise of said options will be set forth in
more detail in an Employee Stock Option agreement approved by the stockholders
and directors of the company.
(b) These options may be assigned.
(c) These options may only be exercised by Employee during the terms of
his employment hereunder. However, in the event that the employment term is
terminated by Employer for reasons other than cause, Employee shall retain the
right to exercise any unused portion.
ARTICLE 6. EMPLOYEE BENEFITS
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Annual Vacation
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Section 6.01. Employee shall be entitled to thirty (30) days vacation time
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each year without the loss of compensation. In the event that Employee is unable
for any reason to take the total amount of vacation time authorized herein
during any year, he may accrue that time and add it to vacation time for any
following year.
Illness
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Section 6.02. Employee shall be entitled to seven (14) days per year as
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sick leave with full pay. Sick leave may be accumulated.
Medical Coverage
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Section 6.03. Employer agrees to include Employee in the coverage of any
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medical, major medical, hospital, dental, and eye care insurance program adopted
by Employer.
Life Insurance
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Section 6.04. (a) Employer agrees to obtain a life insurance policy on the
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life of Employee on the face amount of $1,000,000.00. Employer further agrees to
make that insurance policy payable to the Employer. Employer agrees to pay all
premiums on the policy during the term of employment provided herein.
(b) Employee agrees to submit to a physical examination at any time
requested by Employer for the purpose of Employer's obtaining life insurance on
the life of Employee for the benefit of Employer; provided, however, that
Employer shall bear the entire cost of that examination.
Group Term Life Insurance
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Section 6.05. Employer agrees to include Employee under Employer's
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group-term life insurance policy on the terms and conditions stated therein or
for an amount equal to twice the annual salary of Employee and including
accidental death and dismemberment coverage.
Discretionary Increase In Compensation
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Section 6.06. Employer shall pay Employee such additional compensation, if
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any, for services rendered under this contract, as may be determined in the sole
discretion of Employer's Board of Directors.
ARTICLE 7. BUSINESS EXPENSES
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Use of Credit Card
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Section 7.01. All business expenses reasonably incurred by Employee in
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promoting the business of Employer, including expenditures for entertainment,
gifts, and travel, are to be paid for, insofar as possible, by the use of credit
cards in the name of Employer which will be furnished to Employee.
Section 7.02. (a) Employer shall promptly reimburse Employee for all other
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reasonable business expenses incurred by Employee in connection with the
business of Employer.
(b) Each such expenditure shall be reimbursable only if it is of a
nature qualifying it as a proper deduction on the federal and state income tax
return of Employer.
(c) Each such expenditure shall be reimbursable only if employee
furnishes to Employer adequate records and other documentary evidence required
by federal and state statutes and regulations issued by the appropriate taxing
authorities for the substantiation of each such expenditure as an income tax
deduction.
Repayment of Disallowed Expenses
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Section 7.03. In the event that any expenses paid for Employee shall, on
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audit or other examination
ARTICLE 8. TERMINATION OF EMPLOYMENT
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Termination for Cause
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Section 8.01. (a) Employer reserves the right to terminate this agreement
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if Employee willfully breaches or grossly neglects the duties which he is
required to perform under the terms of this agreement; or commits such acts of
dishonesty, fraud, misrepresentation or other acts of moral turpitude as would
prevent the effective performance of his duties.
(b) Employer may at its option terminate this agreement for the reasons
stated in this Section by giving written notice of termination to Employee
without prejudice to any other remedy to which Employer may be entitled either
at law, in equity, or under this Agreement.
(c) The notice of termination required by this section shall specify
the ground for the termination and shall be supported by a statement of all
relevant facts.
(d) Termination under this section shall be considered "for cause" for
the purposes of this agreement.
Termination Without Cause
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Section 8.02. (a) This agreement shall be terminated upon the death of
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Employee.
(b) Employer reserves the right to terminate this agreement not less
than six (6) months after Employee suffers any physical or mental disability
that would prevent the performance of his duties under this agreement. Such a
termination shall be effected by giving thirty (30) days' written notice of
termination to Employee. Termination pursuant to this provision shall not
prejudice Employee's rights to continued compensation pursuant to Section 4.02
of this agreement.
(c) Termination under this Section shall not be considered "for cause"
for the purposes of this agreement.
Effect of Merger, Transfer of Assets, or Dissolution
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Section 8.03. (a) This agreement shall not be terminated by any voluntary
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or involuntary dissolution of Employer resulting from either a merger or
consolidation in which Employer is not the consolidated or surviving
corporation, or a transfer of all or substantially all of the assets of
Employer.
(b) In the event of any such merger or consolidation or transfer of
assets, Employer's rights, benefits, and obligations hereunder may, at
Employee's election, be assigned to the surviving or resulting corporation or
the transferee of Employer's assets, or Employee may elect payment upon merger,
etc. as set forth in Section 8.04 below.
Section 8.04. Notwithstanding any provision of this agreement, if Employer
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terminates this agreement not for cause, it shall pay the Employee an amount
equal to one (1) year's annual salary at the then current rate of compensation.
ARTICLE 9. GENERAL PROVISIONS
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Notices
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Section 9.01. Any notices to be given hereunder by either party to the
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other shall be in writing and may be transmitted by personal delivery or by
mail, registered or certified, postage prepaid with return receipt requested.
Mailed notices shall be addressed to the parties at the addresses appearing in
the introductory paragraph of this agreement, but each party may change that
address by written notice in accordance with this Section. Notices delivered
personally shall be deemed communicated as of the date of actual receipt; mailed
notices shall be deemed communicated as of five (5) days after the date of
mailing.
Arbitration
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Section 9.02. (a) Any controversy between Employer and Employee involving
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the construction or application of any of the terms, provisions, or conditions
of this agreement shall on the written request of either party served on the
other be submitted to arbitration. Arbitration shall comply with and be governed
by the provisions of the Nevada Arbitration Act.
(b) Employer and Employee shall each appoint one person to hear and
determine the dispute. If the two persons so appointed are unable to agree, then
those persons shall select a third impartial arbitrator whose decisions shall be
final and conclusive upon both parties.
(c) the cost of arbitration shall be done by the losing party or in
such proportions as the arbitrators decide.
Attorney's Fees and Costs
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Section 9.03. If any action at law or in equity is necessary to enforce or
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interpret the terms of this agreement, the prevailing party shall be entitled to
reasonable attorney's fees, costs, and necessary disbursements in addition to
any other relief to which that party may be entitled. This provision shall be
construed as applicable to the entire contract.
Entire Agreement
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Section 9.04. This agreement supersedes any and all other agreements,
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either oral or in writing between the parties hereto with respect to the
employment of Employee by Employer and contains all of the covenants and
agreements between the parties with respect to that employment in any manner
whatsoever. Each party to this agreement acknowledges that no representation,
inducements, promises, or agreements, orally or otherwise, have been made by any
party, or anyone acting on behalf of any party, which are not embodied, herein,
and that no other agreement, statement, or promise not contained in this
agreement shall be valid or binding on either party.
Modification
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Section 9.05. Any modification of this agreement will be effective only if
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it is in writing and signed by the party to be charged.
Effect of Waiver
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Section 9.06. The failure of either party to insist on strict compliance
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with any of the terms, covenants, or conditions of this agreement by the other
party shall not be deemed a waiver of that term, covenant, or condition, nor
shall any waiver or relinquishment of any right or power at any one time or
times be deemed a waiver or relinquishment of that right or power for all or any
other time.
Partial Invalidity
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Section 9.07. If any provision in this agreement is held by court of
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competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalidated in any way.
Law Governing Agreement
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Section 9.08. This agreement shall be governed by and construed in
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accordance with the laws of the State of Nevada.
--
Sums Due Deceased Employee
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Section 9.09. If Employee dies prior to the expiration of the term of his
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employment, any sums that may be due him from Employment under this agreement as
of the date of death shall be paid to Employee's executors, administrators,
heirs, personal representatives, successors, and assigns.
Executed on July 1, 1996 at Katy, Texas
EMPLOYER: International Humate Fertilizer, Co.
By: /s/ X.X. Rottweiler
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By: /s/ Xxxxx X. Xxxxxxxx
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EMPLOYEE: Xxxxx X. Xxxxxxxx
By: /s/ Xxxxx X. Xxxxxxxx
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