EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), made and entered into
as of the 31st day of October 1996, by and between COMMODORE ENVIRONMENTAL
SERVICES, INC., a Delaware corporation having offices at 000 Xxxx 00xx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), and XXXXX X. XXXXXX, an
individual residing at 0000 Xxxxxxxxxx Xxxxx, XxXxxx, Xxxxxxxx 00000 (the
"Employee").
W I T N E S S E T H:
WHEREAS, the Employee has substantial knowledge and experience
relating to the management and operation of technology-driven developmental
businesses, and the Company desires to obtain the full-time services of the
Employee to serve in an executive capacity with the Company; and
WHEREAS, the Employee is ready, willing and able to serve as
an executive officer of the Company, all upon the terms and subject to the
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants herein contained, the parties hereto hereby agree as
follows:
Part A. Employment.
1. Duties. Subject to the terms and conditions of this
Agreement, the Company shall employ the Employee and the Employee shall render
services to the Company in the capacities and with the titles of President and
Chief Operating Officer of the Company. In addition, the Employee shall serve in
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such capacity and have such title with such of the Company's subsidiaries as may
be requested from time to time by the Company, without requirement of any
additional compensation to the Employee.
2. Full-Time Employment. Throughout the period of his
employment hereunder (except for such transitional services which the Employee
may render through February 3, 1997 to the Association of American Railroads),
the Employee shall devote his full and entire professional and business time,
attention, knowledge and skills to faithfully, diligently and to the best of his
abilities perform his duties hereunder. It is expected that the Employee will
render his services primarily from the Company's Washington, DC office (as and
when located), provided that the Employee will engage in such travelling as may
be reasonably required in connection with the performance of his duties
hereunder.
3. Director. The Company will cause the Employee to be elected
a member of the Board of Directors of the Company and each of its
publicly-traded subsidiaries, for so long as the Employee remains the Company's
President and Chief Operating Officer.
4. Ability to Perform. The Employee hereby represents and
warrants to the Company that he is under no legal disability and has entered
into no agreements which in any way limit or render the Employee incapable of
performing his obligations under this Agreement or his fiduciary duties as the
President and Chief Operating Officer of the Company (except for such
transitional services which the Employee may render through February 3, 1997 to
the Association of American Railroads). The Employee further covenants that he
will not impair his ability to carry out his obligations under this Agreement or
his fiduciary duties as the President and Chief Operating Officer of the Company
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by entering into any agreement or in any way assisting others, directly or
indirectly, to enter into any agreement which will violate the confidentiality
and non-competition provisions of Part D of this Agreement.
Part B. Term of Employment; Termination of Agreement.
1. Term. Subject to prior termination in accordance with the
provisions hereof, the term of this Agreement shall commence on November 18,
1996 and shall continue through and including December 31, 1999 (the "Term").
2. Termination For Cause. Anything contained in Section 1 of
this Part B to the contrary notwithstanding, this Agreement may be terminated at
the option of the Board of Directors of the Company (the "Board") for "Cause"
(as hereinafter defined), effective upon the giving of written notice of
termination to the Employee. As used herein, the term "Cause" shall mean and be
limited to:
(a) any act committed by the Employee against the Company,
or any of its subsidiaries or divisions, constituting: (i) fraud, (ii)
misappropriation of corporate opportunity, breach of fiduciary duty or
non-disclosure of a conflict of interest, (iii) self-dealing, (iv) embezzlement
of funds, (v) felony conviction for conduct involving moral turpitude or other
criminal conduct, or (vi) the disregard by the Employee of the reasonable
directions of the Board; or
(b) the breach or default by the Employee in the
performance of any material provision of this Agreement (including but not
limited to Part D below); or
(c) alcoholism or any other form of addiction which impairs
the Employee's ability to perform his duties hereunder.
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3. Death or Disability. Anything contained in Section 1 of
this Part B to the contrary notwithstanding, this Agreement may be terminated by
the Company: (i) upon the death of the Employee, or (ii) on thirty (30) days'
prior written notice to the Employee, in the event that the Employee shall be
physically or mentally disabled or impaired so as to prevent him from continuing
the normal and proper performance of his duties and responsibilities hereunder
for a period of three (3) consecutive months. The initial determination as to
whether the Employee is disabled or impaired shall be made by the physician
regularly treating the condition causing the disability. The Company shall have
the right to require the Employee to be examined by a physician duly licensed to
practice medicine in the State in which the Employee has his primary residence
to determine such physician's opinion as to the Employee's disability. If such
physician's opinion differs from that of the physician treating the Employee, or
a physician thereafter retained by the Employee, they shall forthwith select a
third physician so licensed whose opinion, after examination and review of
available information, shall be conclusive and binding upon all parties hereto.
All costs of the physician regularly treating or thereafter retained by the
Employee shall be paid by the Employee. All costs of the physician retained by
the Company shall be paid by the Company. If a third physician is required, then
the costs of that physician shall be paid by the Company.
4. No Further Obligations. Upon any termination of this
Agreement by the Company for "Cause" pursuant to Section 2 of this Part B, or by
reason of the Employee's death or disability pursuant to Section 3 of this Part
B, neither the Company nor any subsidiary or division thereof shall be liable
for or be required to pay to the Employee any further remuneration, compensation
or other benefits hereunder.
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Part C. Compensation; Expenses.
1. Base Salary. As compensation for his services during the
Term, the Company shall pay or cause to be paid to the Employee a fixed base
salary at the annual rate of Three Hundred Seventy-Five Thousand Dollars
($375,000).
2. Signing Bonus. As a signing bonus, upon the commencement of
this Agreement, the Employee shall be (a) paid $100,000 in cash and (b) granted
375,000 shares of common stock, par value $.01 per share, of the Company (the
"Common Stock"). The Company further agrees to pay the Employee up to $175,000
of any tax liability that arises out of payments made to the Employee or stock
granted to the Employee under this Section 2 of Part C of this Agreement. Any
payments required to be made under this Section 2 will be made in advance of the
Employee's need for such funds, but in no event sooner than March 31, 1997,
provided that (i) the Employee shall give the Company reasonable notice in
advance of his need for such funds and (ii) the Employee shall present to the
Company all supporting documentation therefor, including, without limitation,
copies of his tax returns.
3. Company Stock Options. In consideration for the Employee's
entering into this Agreement with the Company, the Company is, as of the date
hereof, granting to the Employee a stock option (the "Stock Option") to purchase
an aggregate of 2,000,000 shares of Common Stock at an exercise price per share
equal to the closing sale or bid price of the Common Stock as reported or quoted
on the OTC Bulletin Board, Nasdaq Stock Market or American Stock Exchange, as
the case may be, on the last trading day prior to the date hereof. Provided that
the Employee is in the full-time employ of the Company on each date of exercise,
such Stock Option will be exercisable as to 200,000 shares of Common Stock
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commencing on the date hereof (the "Initial Vesting Date") and as to an
additional 360,000 shares of Common Stock commencing on each of the five
successive anniversaries of the Initial Vesting Date. The other terms and
conditions of the Stock Option shall be as set forth in a separate Stock Option
Agreement between the Company and the Employee.
4. Subsidiary Stock Options. As additional consideration for
the Employee's entering into this Agreement with the Company, the Company is, as
of the date hereof granting, and will from time to time in the future grant, as
applicable, to the Employee stock options to purchase common stock of each
publicly-traded subsidiary of the Company in the amount of .75% of such
subsidiary's total outstanding shares of common stock on the date of grant and
at an exercise price per share equal to the then-current fair market value per
share on the date of grant.
5. Incentive Compensation. The Employee will be entitled to
receive incentive compensation of up to $175,000 per year for achieving goals
established and determined by the parties within 120 days after the date of this
Agreement.
6. Benefits. In addition to the foregoing compensation, the
Employee shall, throughout the period of his employment hereunder, be eligible
to participate in any and all group health, group life and/or other benefit
plans generally made available by the Company to its employees, provided that
nothing herein contained shall be deemed to require the Company to maintain or
continue any particular plan or policy.
7. Vacation. The Employee shall be entitled to up to four (4)
weeks of vacation per year, to be taken at such times as shall be mutually
agreeable to the Company and the Employee, and so as not to unduly interfere
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with the business of the Company. The Employee may carry over, to the next
annual period hereunder, up to two (2) weeks of unused vacation time as at the
end of each year of the term of this Agreement.
8. Expenses. In addition to the compensation set forth above,
throughout the period of the Employee's employment hereunder, the Company shall
also reimburse the Employee or cause the Employee to be reimbursed, upon
presentment by the Employee to the Company of appropriate receipts and vouchers
therefor, for any reasonable business expenses incurred by the Employee in
connection with the performance of his duties and responsibilities hereunder;
provided, however, that in order to be reimbursable hereunder, any such expense
must be deductible (in whole or in part) by the Company for federal income tax
purposes.
Part D. Confidentiality; Non-Competition. As a material inducement to
cause the Company to enter into this Agreement, the Employee hereby covenants
and agrees that:
1. Confidential Information. The Employee shall, at all times
during and subsequent to the Term, keep secret and retain in strictest
confidence all confidential matters of the Company, and the "know-how", trade
secrets, technical processes, inventions, equipment specifications, equipment
designs, plans, drawings, research projects, confidential client lists, details
of client, subcontractor or consultant contracts, pricing policies, operational
methods, marketing plans and strategies, project development, acquisition and
bidding techniques and plans, business acquisition plans, and new personnel
acquisition plans of the Company and its subsidiaries and divisions (whether now
known or hereafter learned by the Employee), except to the extent that (i) such
information is generally available to the public without restriction, (ii) the
Employee obtains confidentiality agreements with respect to such confidential
information, (iii) the Employee is requested by the Board of Directors of the
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Company or a Committee thereof, or by the Chairman of the Company, to disclose
such confidential information, (iv) such information is provided to a customer
of the Company pursuant to a request received from such customer in the ordinary
course of business, or (v) the Employee is under compulsion of either a court
order or a governmental agency's or authority's inquiry, order or request to so
disclose such information.
2. Property of the Company.
(a) Except as otherwise provided herein, all lists, records
and other non-personal documents or papers (and all copies thereof) relating to
the Company and/or any of its subsidiaries or divisions, including such items
stored in computer memories, on microfiche or by any other means, made or
compiled by or on behalf of the Employee, or made available to the Employee, are
and shall be the property of the Company, and shall be delivered to the Company
on the date of termination of the Employee's employment with the Company, or
sooner upon request of the Company at any time or from time to time.
(b) All inventions, including any procedures, formulas,
methods, processes, uses, apparatuses, patterns, designs, plans, drawings,
devices or configurations of any kind, any and all improvements to them which
are developed, discovered, made or produced, and all trade secrets and
information used by the Company and/or its subsidiaries and divisions
(including, without limitation, any such matters created or developed by the
Employee during the term of this Agreement), shall be the exclusive property of
the Company or the subject subsidiary, and shall be delivered to the Company or
the subject subsidiary (without the Employee retaining any copies, components or
records thereof) on the date of termination of the Employee's employment with
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the Company; provided, however, that nothing herein contained shall be deemed to
grant to the Company any property rights in any inventions or other intellectual
property which may at any time be developed by the Employee which is wholly
unrelated to any business then engaged in or under development by the Company.
3. Employees of the Company. The Employee shall not, at any
time (whether during the term of this Agreement or at any time thereafter),
directly or indirectly, for or on behalf of any business enterprise other than
the Company and/or its subsidiaries and affiliates, solicit any employee of the
Company or any of its subsidiaries to leave his or her employment with the
Company or such subsidiary, or encourage any such employee to leave such
employment, without the prior written approval of the Company in each instance.
4. Non-Competition. For so long as the Employee shall be
receiving any compensation or remuneration under this Agreement, and for a
further period of one (1) year thereafter, the Employee shall not, directly or
indirectly, whether individually or as an employee, stockholder (other than the
passive ownership of up to 5% of the capital stock of a publicly traded
corporation), partner, joint venturer, agent or other representative of any
other person, firm or corporation, engage or have any interest in any business
(other than the Company or any of its subsidiaries or affiliates) which, in any
country in which the Company or any of its subsidiaries or divisions does or
solicits business during the Term, is engaged in or derives any revenues from
performing any functionally equivalent services or marketing any functionally
equivalent products as those services provided and products marketed by the
Company or any of its subsidiaries or divisions during the Term.
5. Severability of Covenants. The Employee acknowledges and
agrees that the provisions of this Part D are (a) made in consideration of the
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premises and undertakings of the Company set forth herein, (b) made for good,
valuable and adequate consideration received and to be received by the Employee,
and (c) reasonable and necessary, in terms of the time, geographic scope and
nature of the restrictions, for the protection of the Company and the business
and good will thereof. It is intended that the provisions of this Part D be
fully severable, and in the event that any of the foregoing restrictions, or any
portion of the foregoing restrictions, shall be deemed contrary to law, invalid
or unenforceable in any respect by any court or tribunal of competent
jurisdiction, then such restrictions shall be deemed to be amended, modified and
reduced in scope and effect, as to duration and/or geographic area, only to that
extent necessary to render same valid and enforceable (and in such reduced form,
such provisions shall then be enforceable), and any other of the foregoing
restrictions shall be unaffected and shall remain in full force and effect.
6. Equitable Remedies. The parties hereby acknowledge that, in
the event of any breach or threatened breach by the Employee of the provisions
of this Part D, the Company will suffer irreparable harm and will not have an
adequate remedy at law. Accordingly, in the event of any such breach or
threatened breach, the Company may seek and obtain appropriate equitable relief
to restrain or enjoin such breach or threatened breach and/or to compel
compliance herewith.
Part E. Miscellaneous.
1. Binding Effect. All of the terms and conditions of this
Agreement shall be binding upon and inure to the benefit of the Employee, the
Company and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
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2. Notices. Except as may otherwise be provided herein, any
notice, request, demand or other communication required or permitted under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or when mailed by certified mail, return receipt requested,
addressed to a party at the address of such party first set forth above, or at
such other address as such party may hereafter have designated by notice. Copies
of all notices hereunder shall simultaneously be sent by first class post-paid
mail to Greenberg, Traurig, Hoffman, Lipoff, Xxxxx & Xxxxxxx, Citicorp Center,
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxxxxx X. Xxxxx, Esq.
3. Waivers. Neither this Agreement nor any of the terms or
conditions hereof may be waived, amended or modified except by means of a
written instrument duly executed by the party to be charged therewith.
4. Captions. The captions and paragraph headings used in this
Agreement are for convenience of reference only, and shall not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.
5. Governing Law. This Agreement, and all matters or disputes
relating to the validity, construction, performance or enforcement hereof, shall
be governed by, and construed under, the laws of the State of New York, without
giving effect to principles of conflicts of laws thereof.
6. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original hereof, but all
of which together shall constitute one and the same instrument.
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7. Arbitration. Except for any court action or proceeding to
obtain equitable relief in respect of the provisions of Part D above, any
dispute involving the interpretation or application of this Agreement shall be
resolved by final and binding arbitration before an arbitrator designated by,
and mutually acceptable to, the Company and the Employee. In the event that the
parties cannot agree to the appointment of a mutually acceptable arbitrator, the
subject dispute shall be resolved by final and binding arbitration before one or
more arbitrators designated by the American Arbitration Association in New York,
New York, unless mutually agreed to otherwise. The award of any of such
arbitrator(s) may be enforced in any court of competent jurisdiction.
8. Assignment.
(a) This Agreement is intended for the sole and exclusive
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns, and
no other person or entity shall have any right to rely on this Agreement or to
claim or derive any benefit herefrom absent the express written consent of the
party to be charged with such reliance or benefit.
(b) The Employee may not assign or otherwise transfer any
of his obligations or duties hereunder to any other person, firm or corporation,
it being understood and agreed that this Agreement is intended to be for the
personal services of the Employee only and of no other person.
(c) The Company shall have the right, at any time and from
time to time, to cause any payments required hereunder to be made by any
subsidiary of the Company. Furthermore, the Company may assign this Agreement to
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any successor-in-interest who may acquire, whether by direct purchase, sale of
securities, merger or consolidation, the assets, business or properties of the
Company; provided that no such assignment shall relieve the Company of its
duties and obligations to the Employee hereunder, without the prior written
consent of the Employee.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on and as of the date first set forth above.
COMMODORE ENVIRONMENTAL SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
Chief Executive Officer
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
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