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EXHIBIT 10(e)
EMPLOYMENT AGREEMENT WITH XXXX XXXXX
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EMPLOYMENT AGREEMENT
THIS AGREEMENT, effective as of June 30, 1997 ("Agreement"), is made by and
between INNOVA/PURE WATER, INC., a Florida corporation (the "Corporation"), and
XXXX X. XXXXX ("the Executive").
WITNESSETH:
WHEREAS, the Corporation, desires to employ Xxxx X. Xxxxx in accordance
with the terms and conditions of this Agreement and to ensure the availability
of her services to the Corporation; WHEREAS, Xxxx X. Xxxxx desires to accept
such employment and render her services in accordance with the terms and
conditions contained in this Agreement;
WHEREAS, Xxxx X. Xxxxx, (hereafter "Rose" or "Executive") and the
Corporation desire to enter into this agreement, which will fully recognize the
contributions of Rose and assure competent management of the Corporation's
affairs.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants set forth in this agreement, and intending to be legally bound, the
Corporation and Rose agree as follows:
1. Term of Employment
(a) Offer/Acceptance/Effective Date. The Corporation
hereby offers employment to the Executive and the
Executive hereby accepts employment subject to the
terms and conditions set forth under this agreement.
(b) Term. The term (the "Term") of this agreement shall
commence on June 30, 1997 and shall continue to serve
in that position, with duties and responsibilities
that are customary for such executives for a period
of five (5) years.
2. Duties.
(a) General Duties. The Executive shall serve as
President and Chief Executive Officer of the
Corporation and shall continue to serve in that
position, with duties and responsibilities that are
customary for such executives.
(b) Best Efforts. The Executive convents to use her best
efforts to perform her duties and discharge her
responsibilities pursuant to this Agreement in a
competent, careful and faithful manner.
(c) Devotion of Time. The Executive will devote
substantially all of her time, attention and energies
during normal business hours (exclusive of periods of
sickness and disability and of such normal holiday
and vacation periods as have been established by the
Corporation) to the Corporation's affairs.
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3. Compensation and Expenses.
(a) Compensation. Compensation to Xxxx X. Xxxxx will be
in a combination of salary and commission payments as
follows: $150,000 per year minimum salary, plus 2% of
Net Sales, adjusted by the annual gross margin
achieved.
The commission payment is based upon a minimum
annualized 32% gross margin to the corporation.
Should the margin fall below 32%, the commission rate
of 2% of Net Sales will be reduced by one-tenth of
one percent (0.1%) for each one percentage point (1)
under 32%. (Example at 31% annualized gross margin
the 2% commission would be reduced to 1.9%.)
However, should the gross margin exceed 44%, and
additional one-tenth of one percent (0.1%) will be
added to the 2% commission for each one percentage
point (1%) over a 44% annualized gross margin on all
sales over the first $ three million ($3,000,000).
The Executive may elect to take the commissions
earned quarterly, or to accrue as desired, including
to a December 31st or January 1st date. Annual
payment adjustments under the terms of this agreement
will be made as of June 30th, each year.
Commissions may also be deferred, as may be directed
by the executive, for a period up to five years. If
compensation is deferred for more than one year, at
the choice of the executive, interest would be earned
and accrue each year at prime rate.
(b) Expenses. In addition to any compensation received
pursuant to Section 3(a), the Corporation will
reimburse the Executive for all reasonable, ordinary
and necessary travel, educational, seminar, trade
shows, entertainment and miscellaneous expenses
incurred in connection with the performance of her
duties under this Agreement, provided that the
Executive properly accounts for such expenses to the
Corporation in accordance with the Corporation's
practices. In addition, a corporate telephone will be
installed in New York, and cellular service arranged
to permit ready access between parties.
4. Benefits.
(a) Vacation. For each fiscal year during the Term
during which the Executive is employed, the Executive
shall be entitled to vacation (which shall accrue and
vest, except as may be hereafter provided to the
contrary, on each June 30th thereof) in the amount of
thirty (30) work days.
The Executive shall take her vacation at such times
as the Executive may select and the affairs of the
Corporation may permit.
(b) Employee Benefit Programs. In addition to the
compensation to which the Executive is entitled
pursuant to the provisions of Section 3 hereof,
during the Term, the Executive will be entitled to
participate in any stock option plan, stock purchase
plan, pension or retirement plan, insurance or other
employee benefit plan that is maintained at that time
by the Corporation for its
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employees, Including programs of life, disability, basic
medical and dental, supplemental medical and dental insurance
should such policies be offered to the staff.
Notwithstanding the foregoing, the Corporation shall provide
the following benefits:
(i) Health insurance to the Executive and Executive's
immediate family, if such insurance is not otherwise
available.
(ii) Split dollar life insurance policy in the amount of
$500,000 payable to the Executive's beneficiary or
beneficiaries ("Life Insurance Policy"). The
Corporation shall make the premium payments on the
Life Insurance Policy through five (5) years after
the termination of the employment of the Executive.
At the termination of the company's responsibility
for payment of the premium, the employee may assume
the policy and responsibility for the continuing
payment of the policy premium.
Notwithstanding any provision of this Agreement to the
contrary, the Corporation shall not be obligated to provide
the Executive with any of the foregoing benefits contained in
this Section 4 (b) if the Executive, for whatever reason, is
or becomes uninsurable with respect to coverage relating to
any such benefit(s).
5. Termination
(a) Termination for Cause. The Corporation may terminate the
Executive's employment pursuant to this Agreement at any time
for cause upon written notice. Such termination will become
effective upon the giving of such notice. Upon any such
termination for cause, the Executive shall have no right to
compensation, or reimbursement under Section 3 or to
participate in any employee benefit programs or other
benefits to which she may be entitled under Section 4 for any
period subsequent to the effective date of termination. For
purposes of this Agreement, the term "cause" shall mean:
(i) the Executive's conviction for a felony charge;
(ii) the Executive's misappropriation of assets or otherwise
defrauding the Corporation or any of its
subsidiaries or affiliates;
(iii) material breach by the Executive of any provision of
this Agreement.
(b) Death or Disability. This agreement and the Corporation's
obligations hereunder will terminate upon the death or
disability of the Executive. For purposes of this Section
5(b), "disability" shall mean that for a period of six (6)
months in any twelve month period the Executive is incapable
of substantially fulfilling the duties set forth in this
agreement because of physical, mental or emotional incapacity
resulting from injury, sickness or disease as determined by an
independent physician mutually acceptable to the Corporation
and the Executive. Upon any such termination upon death or
disability, the Corporation will pay the Executive or her
legal representative, as the case
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may be, her commission (which may include any
accrued, but unused vacation time) at such time
pursuant to Section 3(a) through the date of such
termination of employment (or, if terminated as a
result of a disability, until the date upon which the
disability policy maintained pursuant to Section
4(b)(ii) begins payment of benefits) plus any other
compensation that may be due and unpaid.
(c) Voluntary Termination by Executive. Prior to the
termination of this Agreement, the Executive may, on
sixty (60) days prior written notice to the
Corporation, at any time terminate her employment.
Upon any such termination, the Corporation shall pay
the Executive the greater of either commissions
accrued through such date pursuant to Section 3(a)
(which shall include any vested and accrued, but
unused vacation time) or the expended (days worked)
percentage of her salary.
(d) Lump Sum Payment. Upon Termination Without Cause. The
Corporation may terminate Executive's employment
pursuant to this agreement, without cause upon thirty
(30) days written notice to Executive. Upon any such
termination, the Corporation shall Executive a lump
sum payment equal to the Executive's compensation set
for in Section 3 of this Agreement for the remainder
of the Term of Executive's employment as set forth in
Section 1(b) of this Agreement, in addition to any
other compensation that may be due and unpaid. Under
no circumstance shall such payment be less than
$250,000.
For the purpose of calculation, if involuntarily
terminated either the multiple of the annual salary
plus 2% of Net Sales, the total of which will not be
less than $250,000.
(a) Disability insurance will be provided for the
executive in the amount of $50,000 per year, which
shall remain in place for the length of
incapacitation, commencing six months following the
onset of the disability. A recognized disability
would be one supported by medical reports which would
show Rose to be unable to fulfill her duties as
Corporate President as a result of illness or
accident. During the first six months, normal
compensation shall be paid per this agreement.
6. Restrictive Covenants.
(a) Competition with the Corporation. The Executive
covenants and agrees that, during the Term of this
Agreement, and for a period of five (5) years after
the termination of this Agreement unless terminated
without cause, the Executive will not, without the
prior written consent of the Corporation, directly or
indirectly (whether as a sole proprietor, partner,
stockholder, director, officer, employee or in any
other capacity as principal or agent), compete with
the Corporation. Not withstanding this restriction,
Executive shall be entitled to Invest in stock of
other competing public companies so long as her
ownership is less than 5% of such company's
outstanding shares.
(b) Disclosure of Confidential Information. The Executive
acknowledges that during her employment, she will
gain and have access to confidential information
regarding the Corporation and its Alliance partners.
All records, files, materials and confidential
information (the "Trade Secrets") obtained by
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the Executive in the course of her employment with
the Corporation shall be hereby deemed confidential
and proprietary and shall remain the exclusive
property of the Corporation. The Executive will not,
except in connection with and as required by her
performance of her duties under this agreement, for
any reason use for her own benefit or the benefit of
any person or entity for any reason or purpose
whatsoever without the prior written consent of the
Board of Directors of the Corporation, unless such
information previously shall have become public
knowledge through no action by or omission of the
Executive.
(c) Subversion, Disruption or Interference. At no time
during the term hereof and for a period of five (5)
years beyond the termination of this agreement, shall
Executive, directly or indirectly, interfere, induce,
influence, combine or conspire with, or attempt to
induce or influence, combine or conspire with, any of
the employees or sponsors of, or consultants to, the
Corporation to terminate their relationship with or
compete or ally against the Corporation or any of its
subsidiaries or affiliates of the Corporation in the
business in which the Corporation or any one of its
subsidiaries or affiliates is presently engaged or in
which the Corporation or any one of its subsidiaries
or affiliates desires to engage in the future.
(d) Enforcement of Restrictions. The parties hereby agree
that any violation by Executive of the covenants
contained in Section 6 will cause irreparable damage
to the Corporation or any of its subsidiaries and
affiliates and may, as a matter of course, be
restrained by process issued out of a court of
competent jurisdiction, in addition to any other
remedies provided by law.
7. Chance of Control.
(a) For the purposes of this Agreement, a "Change of
Control" shall mean:
(i) The acquisition by an individual, entity, or
group (within the meaning of Section
13(d)(3) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended ("Exchange
Act") (a "Person") of beneficial ownership
(within the meaning of Rule 1 3(d)(3)
promulgated under the Exchange Act) of fifty
percent (50%) or more of either (i) the then
outstanding shares of common stock of the
Corporation, or (ii) the combined voting
power of the then outstanding voting
securities of the Corporation entitled to
vote generally in the election of directors,
which acquisition is effected without the
consent of at least a majority in interest
of the shareholders so the Corporation as of
the date hereof.
(ii) Any capitalization of the Corporation, which
carries with it a prerequisite that
Executive's responsibilities and authority
shall be substantially diminished, limited
or obviated. (b)The Corporation and
Executive hereby agree that, if Executive is
in the employ of the Corporation on the date
on which a Change of Control occurs (the
"Change of Control Date"), the Corporation
shall continue to employ the Executive and
the Executive will remain in the employ of
the Corporation for the period commencing on
the Change of Control Date and ending on the
expiration of the Term, to exercise such
authority and perform such executive
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duties as are commensurate with the authority being
exercised and duties being performed by the Executive
immediately prior to the Change of Control Date. If
after a Change Control, the Executive is requested,
and, in her sole and absolute discretion, consents to
change her principal business location, the
Corporation will reimburse the Executive for her
relocation expenses, including without limitation,
moving expenses, temporary living and travel expenses
for a time while arranging to move her residence to
the changed location, closing costs, if any,
associated with the sale of her existing residence
and the purchase of a replacement residence at the
changed location, plus an additional amount
represented a gross up of any state or federal taxes
payable by Executive as a result of any such
reimbursements. If the Executive shall not consent to
change her business location, the Executive may
continue to provide the services required of her
hereunder in Clearwater, Florida to New York, New
York and the Corporation shall continue to maintain
an office for the Executive at that location
commensurate with the Corporation's office prior to
the Change of Control Date.
(c) During the remaining Term after the Change of
Control, the Corporation will (i) continue to honor
the terms of this agreement, including as to
commissions and other compensation set forth in
Section 3 hereof, and (ii) continue employee benefits
as set forth in Section 4 hereof at levels in effect
on the Change of Control Date (but subject to such
reductions as may be required to maintain such plans
in compliance with applicable federal law regulating
employee benefits).
(d) If during the remaining Term on or after the Change
of Control Date (i) the Executive's employment is
terminated by the Corporation, or (ii) there shall
have occurred a material reduction in Executive's
compensation or employment related benefits, or a
material change in Executive's status, working
conditions or management responsibilities, or a
material change in the business objectives or
policies of the Corporation and the Executive
voluntarily terminates employment within sixty (60)
days of any such occurrence, or the last in a series
of occurrences, then the Executive shall be entitled
to receive, subject to the provisions of
subparagraphs (e) and (I) below, a lump sum payment
equal to 200% of Executive's current minimum annual
compensation (the "Lump Sum Payment") in addition to
any other compensation that may be due and owing to
the Executive under Section 3 hereof. The Lump Sum
payment shall be in addition to any stock options
that the Executive may have the right to exercise.
(e) The amounts payable to the Executive under any other
compensation agreement maintained by the Corporation
which became payable, after payment of the lump sum
provided for in paragraph (d), upon or as a result of
the exercise by Executive of rights which are
contingent on a Change of Control (and would be
considered a "parachute payment" under Internal
Revenue Code 280G and regulations thereunder), shall
be reduced to the extent necessary so that such
amounts when added to such lump sum, do not exceed
200% of the Executive's Salary (as computed in
accordance with provisions of the Internal Revenue
Code of 1986), as amended and any regulations
promulgated thereunder) for determining whether the
Executive has received an excess parachute payment.
Any such excess amount shall be deferred and paid in
the next tax year.
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(f) The Corporation will allow the Executive to
participate in all meetings and negotiations related
thereto.
Section 7 shall survive termination/expiration of this
Agreement.
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8. Assignability, The rights and obligations of the Corporation
under this agreement shall inure to the benefit and be binding
upon the successors and assigns of the Corporation, provided
that such successor or assign shall acquire all or
substantially all of the assets and business of the
Corporation. The Executive's rights and obligations hereunder
may not be assigned or alienated and any attempt to do so by
the Executive will be void and constitute a material breach
hereunder.
9. Severability. If any provision of this agreement is otherwise
deemed to be invalid or unenforceable or is prohibited by the
laws of the state or jurisdiction where it is to be performed,
this agreement shall be considered divisible as to such
provision and such provision shall be inoperative in such
state or jurisdiction and shall not be part of the
consideration moving from either of the parties to the other.
The remaining provisions of this agreement shall be valid and
binding and/or like effect as though such provision were not
included.
10. Notice. Notices given pursuant to the provisions of this
agreement shall be sent by certified mail, postage prepaid, or
by overnight courier, or telecopier to the following
addresses:
To Company: Chairman
Innova/Pure Water, Inc.
00000 00xx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
With Copy to: Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxx, xx.xx.
Fax 000-000 0000
To Executive: Xxxx X. Xxxxx
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With Copy to:
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Either party may, from time to time, designate any other address to
which any such notice to it or him shall be sent. Any such notice shall
be deemed to have been delivered upon the earlier of actual receipt or
four days after deposit in the mail, if by certified mail.
11. Miscellaneous.
(a) Governing Law. The waiver shall be governed by and
construed and enforced in accordance with the
internal, substantive laws of the State of Florida
without giving effect to the conflict of law rules
thereof.
(b) Waiver/Amendment. The waiver by any party of this
agreement of a breach of any provision hereof by any
other party shall not be construed as a waiver of any
subsequent breach by any parry No provision of this
agreement may
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be terminated, amended, supplemented, waived or
modified other than by an instrument in writing
signed by the party against whom the enforcement of
the termination, amendment, supplement, waiver or
modification is sought.
(c) Attorney's Fees. In the event any such action is
commenced, the prevailing party shall be entitled to
a reasonable attorney fee, costs and expenses.
(d) Entire Agreement. This agreement represents the
entire agreement between the parties.
(e) Counterparts. This Agreement may be executed in
counterparts, all of which shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the Corporation and the Executive have executed this
Agreement as of the day and year first above written.
WlTNESSES:
/s/ Xxxxxx X. Xxxxx
------------------------------ EXECUTIVE: /s/ Xxxx X. Xxxxx
Print Name: ------------------------
----------------------- Xxxx X. Xxxxx Dec 3 1997
------------------------------
Print Name:
-----------------------
WlTNESSES: CORPORATION:
Print Name: INNOVA PURE WATER, INC.
----------------------- a Florida Corporation
------------------------------ By: /s/ Xxxx X. Tohren, Jr.
Print Name: -------------------------------
-----------------------
Title: Chairman
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[STATE OF
FLORIDA
SEAL]
/s/ Xxxxxxx X. Xxxxxxx
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XXXXXXX X. XXXXXXX 12/5/97
My Comm Exp. 9/18/99
Bonded By Service In
No. CC496491
[x] Personally Known Other I. D.
Original
:smt
XxxxXxx.XX
