Exhibit 10.3
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EMPLOYMENT AGREEMENT
This Employment Agreement (the "Employment Agreement" or "Agreement") is
made and entered into as of the 17th day of March, 2010 (the "Execution Date"),
by and between N-Viro International Corporation, a Delaware corporation (the
"Company"), and Xxxxx X. XxXxxx, an individual ("Employee").N-Viro
W I T N E S S E T H:
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WHEREAS, the Company owns, operates and licenses the N-Viro Process, a
multiple patent technology to treat and recycle wastewater sludge and other
bio-organic wastes, utilizing certain alkaline and/or mineral by-products
produced by cement, lime, electric utilities and other industries (such
activities, together with all other activities of the Company, as conducted at
or prior to the termination of this Employment Agreement, and any future
activities reasonably related thereto that are contemplated by the Company at
the termination of this Employment Agreement identified in writing by the
Company to Employee at the date of such termination, are hereinafter
collectively referred to as the "Business Activities");
WHEREAS, the Company and Employee have agreed that Employee shall
perform the duties of Chief Financial Officer subject to the terms and
conditions set forth in this Employment Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual promises,
covenants and conditions herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto intending to be legally bound hereby agree as follows:
Section 1. Employment. During the Employment Period (as
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hereinafter defined), the Company shall employ Employee, and Employee shall
accept employment with the Company, all upon the terms and subject to the
conditions set forth in this Employment Agreement.
Section 2. Capacity and Duties. Employee shall be employed in the
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capacity of Chief Financial Officer ("CFO") of the Company and shall have such
other duties, responsibilities and authorities as are assigned to him by the
Board of Directors of the Company (the "Board") and the President/CEO so long as
such additional duties, responsibilities and authorities are consistent with
Employee's position and level of authority as CFO. Employee shall report
directly to the President/CEO and the Board of the Company. Subject to the
control and general directions of the President/CEO and the Board and except as
otherwise herein provided, Employee shall devote all necessary business time,
best efforts and attention to promote and advance the business of the Company
and its subsidiaries and affiliates and to perform diligently and faithfully all
the duties, responsibilities and obligations of Employee to be performed by him
under this Employment Agreement. Employee's duties shall include the ongoing
management of all financial aspects and oversight of the general business
affairs and operations of the Company and its subsidiaries and affiliates and
shall include, but not be limited to, oversight on all Company accounting
practices and the accounting department, preparing budgets, financial reports,
tax and audit functions and other related matters customarily performed by a
chief financial officer. It is expressly understood that Employee also is
and/or may become engaged in other limited business activities not involving the
Company. Any such independent activity shall be disclosed to the Audit
Committee of the Company's Board in advance, and any such other business
activities shall not unreasonably interfere with Employee's performance of his
obligations under this Employment Agreement.
Section 3. Term of Employment. The term of employment of Employee by
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the Company pursuant to this Employment Agreement, which supersedes any prior
agreement between Company and Employee, shall be for the period (the "Employment
Period") commencing on February 26, 2010 (the "Commencement Date") and ending on
February 25, 2015 or later date that Employee's employment is extended in
accordance with the provisions of this Employment Agreement (the "Termination
Date"). So long as Employee is in full compliance with all of the terms and
conditions of this Employment Agreement, Employee is not in default under or in
breach of any of the covenants, agreements, representations or warranties set
forth in this Employment Agreement and neither Employee nor the Company has
delivered a Notice of Termination (as hereinafter defined) to the other at least
ninety (90) days prior to expiration of the then-current Employment Period that
the Employment Period shall not be extended, then this Employment Agreement and
the Employment Period shall automatically be extended for additional successive
one (1) year periods.
Section 4. Place of Employment. Employee's principal place of work
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shall be deemed to be at the principal offices of the Company in the Toledo,
Ohio area or such other locations as may be reasonably designated by the Board
or assigned by management; provided, however, that the Board may not require
that Employee permanently relocate to a place that is more than 100 miles from
Toledo measured as the radius in any direction from the Toledo center. The
Company and Employee acknowledge that Employee's principal place of work is
consistent with the extensive national and international business travel which
may be required of Employee in connection with the performance of his duties,
responsibilities and authorities under this Agreement.
Section 5. Compensation. During the Employment Period, subject to all
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the terms and conditions of this Employment Agreement and, except as otherwise
provided in Sections 9 or 10, as the case may be, as compensation for all
services to be rendered by Employee under this Employment Agreement, the Company
shall pay to or provide Employee with the following:
5.01 Base Salary. The Company shall pay to Employee a base annual
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salary (the "Base Salary") at the rate of at least One Hundred Twenty-Five
Thousand Dollars ($125,000) per year, payable at such intervals (at least
monthly) as salaries are paid generally to other executive officers of the
Company. At least once each year on or before each January 1 during the
Employment Period, Employee's Base Salary shall be reviewed by the Board and, at
the discretion of the Board, may be increased to an amount determined in good
faith based upon a complete review of Employee's performance under this
Employment Agreement during the prior year and the growth and profitability of
the Company and Employee's contributions thereto, which review shall be
communicated in writing to Employee.
5.02 Cash Bonus. At the sole and exclusive discretion of the
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Board, the Company may pay to Employee an annual cash bonus (the "Cash Bonus")
in an amount determined in good faith by the Board based upon a complete review
of Employee's performance under this Employment Agreement during the current
calendar year and the growth and profitability of the Company and Employee's
contribution thereto. Any Cash Bonus payable to Employee pursuant to this
Section 5.02 shall be payable, if at all, on or before January 31, of each year
during the Employment Period immediately following the prior calendar year then
ended, based upon Employee's performance for the immediate prior calendar year.
5.03 Stock Option Grant. The Company hereby grants to the Employee
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ten-year stock options to purchase One Hundred Thousand (100,000) shares of its
common stock which shall vest in equal installments on the Execution Date and on
each successive anniversary of this Employment Agreement; PROVIDED, HOWEVER,
that all remaining options shall vest immediately upon the termination with
cause of this Employment Agreement by Employee under Section 10A hereof. The
exercise price of these options shall be the "fair market value" as defined in
the N-Viro International Corporation Second Amended and Restated Stock Option
Plan for the options to purchase shares, and are intended to be Incentive Stock
Options or "ISOs" as further defined by the Company 2004 Plan. Such options are
being granted under, and are otherwise subject to the terms and conditions of
the Company's 2004 Stock Option Plan as amended (the "Company 2004 Plan"). The
Employee acknowledges that the Company has delivered a copy of the Company 2004
Plan to him.
Section 6. Adherence to Standards. Employee shall institute and comply
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with the written policies, standards, rules and regulations of the Company from
time to time established for all executive officers of the Company.
Section 7. Review of Performance. The President/CEO and Board shall
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periodically review and evaluate the performance of Employee under this
Employment Agreement with Employee.
Section 8. Expenses. The Company shall reimburse Employee for all
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reasonable, ordinary and necessary expenses (including, but not limited to,
automobile and other business travel and customer entertainment expenses)
incurred by him in connection with his employment hereunder; provided, however,
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Employee shall render to the Company a complete and accurate accounting of all
such expenses in accordance with the substantiation requirements of Section 274
of the Internal Revenue Code of 1986, as amended (the "Code"), as a condition
precedent to such reimbursement. Employee will also follow all established
guidelines relating to reimbursement of expenses as may be promulgated by the
Board.
Section 9. Termination with Cause by the Company. This Employment
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Agreement may be terminated with Cause (as hereinafter defined) by the Company
provided that the Company shall (i) give Employee the Notice of Termination and
(ii) pay Employee his annual base salary through the Termination Date at the
rate in effect at the time the Notice of Termination is given plus any bonus or
incentive compensation which have been earned or have become payable pursuant to
the terms of this Employment Agreement or any compensation or benefit plan as of
the Termination Date, but which have not yet been paid. In addition, Employee
shall have the right to exercise all options that have vested through and
including the Termination Date.
Section 10. Termination without Cause by the Company or by Employee.
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This Employment Agreement may be terminated by (i) the Company by reason of the
death or Disability (as hereinafter defined) of Employee, (ii) the Company by
giving Employee the Notice of Termination, (iii) Employee after giving the
Company the Notice of Termination at least thirty (30) days prior to such
termination. In the event of termination of this Employment Agreement under
this Section 10, the Company shall pay Employee his Base Salary through the
Termination Date at the rate in effect at the time the Notice of Termination is
given plus any bonus or incentive compensation which are due or have become
payable pursuant to the terms of this Employment Agreement or any compensation
or benefit plan as of the Termination Date, but which have not yet been paid.
In addition, Employee shall have the right to exercise all options that have
vested through and including the Termination Date. In the event of termination
of this Employment Agreement under this Section 10 by the Company (other than by
reason of the death or Disability of Employee) and such termination is on or
prior to the Termination Date that would be in effect if such employment had not
been terminated under this Section 10, the Company shall pay to Employee, in
addition to the other benefits specifically provided for in this Section, his
Base Salary for the period between the Termination Date and the natural
expiration of this Employment Agreement or the expiration of any extension
period thereof in effect as of the Termination Date. In addition, Employee
shall have the right to exercise all options that have vested through and
including the Termination Date. This Section 10 shall not be interpreted so as
to limit any benefits to which Employee, as a terminated employee of the
Company, or his family may be entitled under the Company's life insurance,
medical, hospitalization or disability plans following the Termination Date or
under applicable law.
Section 10A. Termination with Cause by Employee. Employee may elect,
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by written Notice of Termination to the Company, said Notice to be effective
immediately upon receipt by the Company, to terminate his employment hereunder
if:
(1) The Company sells all or substantially all of its assets;
(2) The Company merges or consolidates with, or undergoes a share
exchange or other form of recapitalization with another business entity in a
transaction immediately following which the holders of all of the outstanding
shares of the voting capital stock of the Company own less than a majority of
the outstanding shares of the voting capital stock of the resulting entity
(whether or not the resulting entity is the Company);
(3) More than Fifty (50%) percent of the outstanding shares of the
voting capital stock of the Company are acquired by a person or group (as such
terms are used in Section 13(d) of the Securities Exchange Act of 1934, as
amended), which person or group includes neither Employee nor the holders of the
majority of the outstanding shares of the voting capital stock of the Company on
the date hereof;
(4) The Company assigns to Employee duties which would require him, as
a practical matter, to permanently relocate to a place that is more than 100
miles from Toledo measured as the radius in any direction from the Toledo center
;
(5) The Company shall have engaged in a material breach of this
Agreement which for this purpose is defined as the occurrence of one or more of
the following events without Employee's prior written consent:
(i) Employee is otherwise removed from the position(s) provided for in this
Agreement, for any reason other than the legal termination of his employment;
(ii) Employee is assigned any duties or responsibilities that are
inconsistent, in any significant respect, with the scope of duties and
responsibilities associated with Employee's position;
(iii) Employee suffers a reduction in the authority, duties or
responsibilities associated with his position, on the basis of which he makes a
determination in good faith that he can no longer carry out such position in the
manner contemplated at the time this Agreement was entered into;
(iv) Employee's Base Salary is decreased by the Company, or his benefits or
opportunities under any employee benefit or incentive plan or program of the
Company or any other material benefit specifically promised to Employee herein
is or are materially reduced unless such benefit, plan, or program (but
excluding Annual Base Salary) is reduced or eliminated for all eligible
employees of the Company on an equal basis;
(v) the Company fails to pay Employee any payments under any bonus or incentive
plans when such payments are due or issue shares to Employee upon his exercise
of his options under the 2004 Plan;
(vi) the Company fails to reimburse Employee for business expenses in accordance
with the Company's policies, procedures or practices;
(vii) the Company fails to agree to or actually indemnify Employee for his
actions and/or inactions, as either an employee, director or officer of the
Company, to the fullest extent permitted by applicable law;
(viii) the Company fails to obtain a written agreement satisfactory to the
Executive from any successor or assignee of the Company to assume and perform
this Agreement;
(ix) the Company's breach or failure to perform any of the indemnification
obligations described in Section 13 of this Agreement including the failure to
reimburse Employee promptly for his expenses and the failure to maintain
directors' and officers' liability insurance; or
(x) the Company purports to terminate the Employee's employment for cause and
such purported termination of employment is not effected in accordance with the
procedures required by this Agreement, and for purposes of this Agreement, such
purported termination of employment shall be invalid and of no force and effect.
If Employee elects to terminate his employment hereunder pursuant to this
Section 10A, (1) the Company shall continue to pay to Employee his base salary
as provided in Section 5.01 hereof through the end of the Term or any extensions
thereof; (2) the Company shall pay to Employee the Bonus specified in Section
5.02 hereof; (3) the Company shall continue to provide to Employee through the
end of the Term the benefits provided at the Execution Date of this Employment
Agreement as amended or supplemented by the Board through the date of
termination; and (4) all of the options granted to the Employee under Section
5.03 hereof to purchase shares of the common stock of the Company shall vest
immediately.
(6) XxXxxxxxxxxx.Xx the event of the termination of this Employment
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Agreement by Employee as a result of a material breach by the Company of any of
its obligations hereunder, or in the event of the termination of Employee's
employment by the Company in breach of this Employment Agreement, Employee shall
not be required to seek other employment in order to mitigate his damages
hereunder.
Section 11. Definitions. In addition to the words and terms elsewhere
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defined in this Employment Agreement, certain capitalized words and terms used
in this Employment Agreement shall have the meanings given to them by the
definitions and descriptions in this Section 11 unless the context or use
indicates another or different meaning or intent, and such definition shall be
equally applicable to both the singular and plural forms of any of the
capitalized words and terms herein defined. The following words and terms are
defined terms under this Employment Agreement:
11.01 "Disability" shall mean a physical or mental illness which,
in the judgment of the Company after consultation with the licensed physician
attending Employee, impairs Employee's ability to substantially perform his
duties under this Employment Agreement as an employee with or without reasonable
accommodation and as a result of which he shall have been absent from his duties
with the Company on a full-time basis for three (3) consecutive months.
11.02 A termination with "Cause" shall mean a termination of
this Employment Agreement by reason of (a) a good faith determination by the
Board that Employee (i) failed to substantially perform his duties with the
Company (other than a failure resulting from his incapacity due to physical or
mental illness) after a written demand for substantial performance has been
delivered to him by the Board, which demand specifically identifies the manner
in which the Board believes he has not substantially performed his duties and
Employee has failed to substantially perform as requested within a reasonable
time, (ii) has engaged in conduct the consequences of which are materially
adverse to the Company, monetarily or otherwise, (iii) is found guilty of fraud,
dishonesty or other acts of gross misconduct or misfeasance in the performance
of his duties under this Employment Agreement by a court of competent
jurisdiction whose decision is final and non-appealable (provided, however, that
Employee's Base Salary shall continue to be paid until such decision is final
and non-appealable), (iv) is found to be under the influence of illegal drugs or
other similar substance while performing his duties under this Employment
Agreement or (v) is convicted of a felony (provided, however, that Employee's
Base Salary shall continue to be paid until such conviction is final and
non-appealable). No act, or failure to act, on Employee's part shall be grounds
for termination with Cause unless he has acted or failed to act with an absence
of good faith or without a reasonable belief that his action or failure to act
was in or at least not opposed to the best interests of the Company. Not less
than ten (10) business days before the Board's consideration and adoption of a
resolution determining that Employee engaged in conduct specified in the first
sentence of this Section 11.02, Employee may, by written notice to the Board,
cause the matter of the termination of his employment by the Company to be
discussed at the next regularly scheduled meeting of the Board or at a special
meeting of the Board. The Board shall give Employee sufficient written notice
of its intention to schedule a meeting to discuss such termination so as to
permit Employee time to prepare for said meeting. Employee shall be entitled
to be present and to be represented by counsel at such meeting which shall be
conducted according to a procedure deemed equitable by a majority of the
directors present. If, at the conclusion of such meeting, it shall be
determined by a majority of the entire membership of the Board (exclusive of
Employee) that Employee engaged in conduct specified in the first sentence of
Section 11.02, then the Board shall deliver the resolution specified in the next
succeeding sentence. Notwithstanding the foregoing, Employee shall not be deemed
to have been terminated with Cause unless there shall have been delivered to him
a copy of a resolution duly adopted by the affirmative vote of not less than a
majority of the entire membership of the Board (exclusive of Employee) at a
meeting of the Board called at least in part for that purpose finding that in
the good faith opinion of the Board, Employee engaged in conduct in the manner
or of the type set forth above in the first sentence of this Section 11.02 and
specifying the particulars thereof in detail.
11.03 Notice of Termination. "Notice of Termination" shall mean
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a written notice which shall indicate the specific termination provision in this
Employment Agreement relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of Employee's
employment under the provision so indicated; provided, however, no such
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purported termination shall be effective without such Notice of Termination;
provided further, however, any purported termination by the Company or by
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Employee shall be communicated by a Notice of Termination to the other party
hereto in accordance with Section 3 of this Employment Agreement.
Section 12. Fees and Expenses. The Company shall pay all legal fees
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and related expenses (including the costs of experts, evidence and counsel)
incurred by Employee as a result of a contest or dispute over Employee's
termination of employment if such contest or dispute is resolved in Employee's
favor.
Section 13. Indemnification. (a) In addition to any rights of Employee
under the Company's certificate of incorporation and by-laws, any agreement, or
any applicable State law, the Company hereby agrees to hold harmless and
indemnify Employee:
(i) Against any and all expenses (including attorney's fees and costs),
judgments, fines and amounts paid in settlement actually and reasonable incurred
by Employee in connection with any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative
(including an action by or in the name of Company) to which Employee is, was or
at any time becomes a party, or is threatened to be made a party, by reason of
the fact that Employee is, was or at any time becomes a director, officer,
employee, consultant, or agent of the Company, or is or was serving or at any
time serves at the request of the Company as a Director, officer, employee,
consultant, partner, trustee or agent regardless of his subsequent title or
position at another corporation, partnership, joint venture, trust or other
enterprise;
(ii) Otherwise to the fullest extent as may be provided to Employee by the
Company under the by-laws of the Company and Delaware General Corporation Law
("GCL").
(b) No indemnity pursuant to this Section 13 shall be paid by Company:
(i) In respect to remuneration paid to Employee if it shall be determined by a
final judgment or other final adjudication which is non-appealable that such
remuneration was in violation of law;
(ii) On account of conduct which is finally adjudged and non-appealable to
have been willful misconduct by Employee; and
(iii) If a final decision by a Court having jurisdiction in the matter shall
determine that such indemnification to Employee is not lawful, and such decision
is non-appealable.
(c) All agreements and obligations of the Company contained herein shall
continue during the period Employee is a director, employee, officer, consultant
or agent of Company (or is or was serving at the request of the Company as a
director, officer, employee, partner, consultant or agent of another
corporation, partnership, joint venture, trust or other enterprise) and shall
continue thereafter so long as Employee shall be subject to any possible claim
or threatened, pending or completed action, suit or proceeding, whether civil,
criminal, or investigative, by reason of the fact that Employee was an officer
or director of Company or serving in any other capacity referred to herein.
(d) The Company shall not be liable to indemnify Employee under this Employment
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent. The Company shall not settle any action or claim
in any manner, which would impose any penalty or limitation on Employee without
Employee's written consent or contain as part of the settlement any statement,
description or assertion of wrongdoing by Employee. Neither the Company nor
Employee will unreasonably withhold their consent to any proposed settlement.
(e) The Company will pay all Employee fees, costs and expenses incurred under,
or related to, Employee's indemnification under this Section 13, including all
legal and accounting bills, immediately upon the presentment of bills for such
expenses. Employee agrees that Employee will reimburse Company for all
reasonable expenses paid by Company in defending any civil or criminal action,
suit or proceeding against Employee in the event and only to the extent that it
shall be ultimately determined without right of further appeal that Employee is
not entitled to be indemnified by Company for such expenses. This Employment
Agreement shall not affect any rights of Employee against Company, any insurer,
or any other person to seek indemnification or contribution.
(f) If Company fails to pay any expenses (including without limiting the
generality of the foregoing, legal fees and expenses incurred in defending any
action, suit or proceeding), Employee shall be entitled to institute suit
against Company to compel such payment and Company shall pay Employee all costs
and legal fees incurred in enforcing such right to prompt payment.
(g) To the extent allowable under Delaware law, the burden of proof with
respect to any proceeding or determination with respect to Employee's
entitlement to indemnification under this Agreement shall be on Company.
(h) If any provision of this Section 13 shall be determined as conflicting with
any provision of (1) Company's certificate of incorporation and by-laws, (2)
Delaware law, or (3) the provisions of any other agreement between the parties
as to indemnification, and such other document or law would provide Employee
with greater rights to benefits of indemnification, then such other document or
law shall prevail; it being the intention of the parties hereto to provide
maximum indemnification to Employee. Otherwise, unless prohibited by law, any
document or law which affords Employee with greater rights of indemnification by
Company than do the provisions of this Employment Agreement shall have
superiority over the provisions of this Employment Agreement.
(i) In support of its obligations hereunder, the Company agrees to maintain a
director's and officer's liability and other insurance policies covering the
Employee and further agrees that these policies shall be maintained both during
and after the end of the Term of employment so as to provide as broad and as
complete coverage as is reasonably available in relation both to the Employee's
position during the Term of Employment and to any claims arising thereafter but
related to said Term of Employment.
Section 14. Notices. For the purposes of this Employment Agreement,
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notices and all other communications provided for in the Employment Agreement
shall be in writing and shall be deemed to have been duly given when personally
delivered or sent by certified mail, return receipt requested, postage prepaid,
or by expedited (overnight) courier with established national reputation,
shipping prepaid or billed to sender, in either case addressed to the respective
addresses last given by each party to the other (provided that all notices to
the Company shall be directed to the attention of the Board with a copy to the
Secretary of the Company) or to such other address as either party may have
furnished to the other in writing in accordance herewith. All notices and
communication shall be deemed to have been received on the date of delivery
thereof, on the third business day after the mailing thereof, or on the second
day after deposit thereof with an expedited courier service, except that notice
of change of address shall be effective only upon receipt.
Section 15. Life Insurance. The Company may, at any time after the
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execution of this Employment Agreement, apply for and procure as owner and for
its own benefit, life insurance on Employee, in such amounts and in such form or
forms as the Company may determine. Employee shall, at the request of the
Company, submit to such medical examinations, supply such information, and
execute such documents as may be required by the insurance company or companies
to whom the Company has applied for such insurance. Employee hereby represents
that to his knowledge he is in good physical and mental condition and is not
under the influence of illegal drugs or similar substance.
Section 16. Proprietary Information and Inventions. Employee
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understands and acknowledges that:
16.01 Trust. Employee's employment creates a relationship of
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confidence and trust between Employee and the Company with respect to certain
information applicable to the business of the Company and its subsidiaries and
affiliates (collectively, the "Group") or applicable to the business of any
licensee, vendor or customer of any of the Group, which may be made known to
Employee by the Group or by any licensee, vendor or customer of any of the Group
or learned by Employee during the Employment Period.
16.02 Proprietary Information. The Group possesses and will
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continue to possess information that has been created, discovered, or developed
by, or otherwise become known to, the Group (including, without limitation,
information created, discovered, developed or made known to by Employee during
the period of or arising out of his employment by the Company) or in which
property rights have been or may be assigned or otherwise conveyed to the Group,
which information has commercial value in the business in which the Group is
engaged and is treated by the Group as confidential. Except as otherwise herein
provided, all such information is hereinafter called "Proprietary Information",
which term, as used herein, shall also include, but shall not be limited to,
data, functional specifications, computer programs, know-how, research, patents,
inventions, discoveries, processes, procedures, formulae, technology,
improvements, developments, designs, marketing plans, strategies, forecasts, new
products, unpublished financial statements, budgets, projections, licenses,
prices, costs, and customer, supplier and potential acquisition candidates
lists. Notwithstanding anything contained in this Employment Agreement to the
contrary, the term "Proprietary Information" shall not include (i) information
which is in the public domain, (ii) information which is published or otherwise
becomes part of the public domain through no fault of Employee, (iii)
information which Employee can demonstrate was in Employee's possession at the
time of disclosure and was not acquired by Employee directly or indirectly from
any of the Group on a confidential basis, (iv) information which becomes
available to Employee on a non-confidential basis from a source other than any
of the Group and which source, to the best of Employee's knowledge, did not
acquire the information on a confidential basis, or (v) information required to
be disclosed by any federal or state law, rule or regulation or by any
applicable judgment, order or decree or any court or governmental body or agency
having jurisdiction in the premises.
All Proprietary Information shall be the sole property of the Group and their
respective assigns. Employee assigns to the Company any rights Employee may
have or acquire in such Proprietary Information. At all times, both during
Employee's employment by the Company and after its termination, Employee shall
keep in strictest confidence and trust all Proprietary Information, and Employee
shall not use or disclose any Proprietary Information without the written
consent of the Group, except as may be necessary in the ordinary course of
performing Employee's duties as an employee of the Company. Notwithstanding the
foregoing, Employee agrees that all Proprietary Information shall be kept in
confidence by Employee for a period of at least three (3) years after the
Termination Date of this Employment Agreement.
Section 17. Inventions. Any and all inventions, conceptions,
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processes, discoveries, improvements, patent rights, letter patents, programs,
copyrights, trademarks, trade names and applications therefore relating to
technology used by the Company to treat and recycle wastewater sludge and other
bio-organic wastes, utilizing certain alkaline and mineral by-products produced
by cement, lime, electric utilities and other industries, in the United States
and other countries, and any and all rights and interest in, to and under the
same, that are conceived, made, acquired, or possessed by Employee, alone or
with other employees, during the term of this Employment Agreement shall become
the exclusive property of the Company and shall at all times and for all
purposes be regarded as acquired and held by Employee in a fiduciary capacity
for the sole benefit of the Company, and the Employee hereby assigns and agrees
to assign the same to the Company without further compensation. Employee agrees
that, upon request, he will promptly make all disclosures, execute all
applications, assignments or other instruments and perform all acts whatsoever
necessary or desired by the Company to vest and confirm in it, its successors,
assigns and nominees, fully and completely, all rights and interests created or
contemplated by this Section.
Section 18. Surrender of Documents. Employee shall, at the request of
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the Company, promptly surrender to the Company or its nominee any Proprietary
Information or document, memorandum, record, letter or other paper in his
possession or under his control relating to the operation, business or affairs
of the Group.
Section 19. Prior Employment Agreements. Employee represents and
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warrants that Employee's performance of all the terms of this Employment
Agreement and as an employee of the Company does not, and will not, breach any
agreement to keep in confidence proprietary information acquired by Employee in
confidence or in trust prior to Employee's employment by the Company. Employee
has not entered into, and shall not enter into, any agreement, either written or
oral, which is in conflict with this Employment Agreement or which would be
violated by Employee entering into, or carrying out his obligations under, this
Employment Agreement.
Section 20. Restrictive Covenant. Except as provided herein
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and/or as agreed by the Board of the Company, Employee acknowledges and
recognizes Employee's possession of Proprietary Information and the highly
competitive nature of the business of the Group and, accordingly, agrees that in
consideration of the covenants and conditions contained herein Employee shall
not, during the Employment Period, (i) directly or indirectly engage in any new
Business Activities that do not involve the Company that relate to the treatment
of biosolids, whether such engagement shall be as an employer, officer,
director, owner, employee, consultant, stockholder, partner or other
participant, (ii) assist others in engaging in any Business Activities in the
manner described in the foregoing clause (i), or (iii) induce employees of the
Company to terminate their employment with the Company or engage in any Business
Activities in the world. Employee shall not for a period of one (1) year
following the termination of this Agreement, for any customer and/or active
potential customer of the Company that was such a customer or potential customer
as of the date of termination, attempt to contact or solicit said customer or
potential customer to provide like services and/or performance as had been or
was proposed to be provided by the Company.
Section 21. Remedies. The parties hereto acknowledge and agree
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that the a remedy at law for a breach or a threatened breach of the provisions
of Sections 16, 17, 18 and 20 herein would be inadequate, and in recognition of
this fact, in the event of a breach or threatened breach of any of such
provisions, it is agreed that the parties shall be entitled to equitable relief
in the form of specific performance, a temporary restraining order, a temporary
or permanent injunction or any other equitable remedy which may then be
available, without posting bond or other security. No remedy herein conferred
is intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to any other remedy given hereunder
now or hereinafter existing at law or in equity or by statute or otherwise.
Section 22. Successive Employment Notice. In the event this
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Employment Agreement is terminated by Employee pursuant to Section 10, within
five (5) business days after the Termination Date, Employee shall provide notice
to the Company of Employee's next intended employment. If such employment is
not known by Employee at such date, Employee shall notify the Company
immediately upon determination of such information. Employee shall continue to
provide the Company with notice of Employee's place and nature of employment and
any change in place or nature of employment during the period ending one (1)
year after the Termination Date.
Section 23. Successors. This Employment Agreement shall be
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binding on the Company and any successor to any of its businesses or assets.
Without limiting the effect of the prior sentence, the Company shall require any
successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Employment
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place. The
Company's failure to obtain said assumption shall be a breach of this Employment
Agreement under Section 10A hereof. As used in this Employment Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor or
assign to its business and/or assets as aforesaid which assumes and agrees to
perform this Employment Agreement or which is otherwise obligated under this
Agreement by the first sentence of this Section 23, by operation of law or
otherwise.
Section 24. Binding Effect. This Employment Agreement shall inure to
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the benefit of and be enforceable by Employee's personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Employee should die while any amounts would still be
payable to him hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Employment Agreement to Employee's estate.
Section 25. Modification and Waiver. No provision of this Employment
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Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing and signed by Employee and such officer as
may be specifically designated by the Board. No waiver by either party hereto
at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Employment Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
Section 26. Headings. Headings used in this Employment Agreement are
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for convenience only and shall not be used to interpret or construe its
provisions.
Section 27. Waiver of Breach. The waiver of either the Company or
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Employee of a breach of any provision of this Employment Agreement shall not
operate or be construed as a waiver of any subsequent breach by either the
Company or Employee. Any such waiver must be in writing signed by the party
against whom the waiver is sought to be enforced or asserted.
Section 28. Amendments. No amendments or variations of the terms and
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conditions of this Employment Agreement shall be valid unless the same is in
writing and signed by all of the parties hereto.
Section 29. Severability. The invalidity or unenforceability of any
------------
provision of this Employment Agreement, whether in whole or in part, shall not
in any way affect the validity and/or enforceability of any other provision
herein contained. Any invalid or unenforceable provision shall be deemed
severable to the extent of any such invalidity or unenforceability.
Section 30. Governing Law; Arbitration.
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(a) Governing Law. This Employment Agreement shall be construed and
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enforced pursuant to the laws of the State of Ohio.
(b) Arbitration.(1) Any unresolved controversy or claim arising out of, in
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connection with, under or relating to this Employment Agreement, shall be
submitted to arbitration (the "Arbitration") before the American Arbitration
Association ("AAA") using the Commercial Arbitration Rules then in effect. The
Arbitration shall be conducted by one (1) arbitrator mutually agreed upon by the
parties. The arbitration shall take place in Toledo, Ohio. Judgment upon any
award rendered in such arbitration will be binding and may be entered in any
court having jurisdiction thereof. Both parties agree and consent to the
personal jurisdiction of the United States District Court for the Northern
District of Ohio (located in Toledo), or the State Courts of the State of Ohio,
for all purposes relating to the arbitration including any equitable relief, and
the entry of judgment upon, and enforcement of, any award.
(b)(2) There shall be limited discovery prior to the Arbitration
hearing as follows: (i) exchange of witness lists and copies of documentary
evidence and documents relating to or arising out of the issues to be
arbitrated, (ii) depositions of all party witnesses and (iii) such other
depositions as may be allowed by the arbitrator only upon a showing of good
cause. Depositions shall be conducted in accordance with the Federal Rules of
Civil Procedure.
(b)(3) A court reporter shall record all hearings, with such record
constituting the official transcript of such proceedings. The arbitrator shall
be required to provide in writing to the parties the basis for the award or
order of such arbitrator. The arbitrator shall have no power and authority to
award punitive, exemplary, incidental and consequential (including without
limitation lost profits) damages in favor of one party against the other party
in the Arbitration. Each party shall bear its own legal costs and expenses in
connection with the Arbitration; PROVIDED, HOWEVER, THAT the arbitrator shall
make an award of legal fees, and all other costs and expenses of the Arbitration
to the prevailing party as part of any Arbitration award including (i) the
filing fees for the Arbitration and (ii) the stenographic costs of
transcription. The arbitrator's fees shall be divided equally between the
parties.
Section 31. Counterparts. This Employment Agreement may be executed in
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more than one (1) counterpart and each counterpart shall be considered an
original.
Section 32. Survival. The provisions of Sections 10, 10A, 12, 13, 16
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and 30 herein shall survive termination of this Employment Agreement for any
reason.
Section 33. Sections. Unless the context requires a different meaning,
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all references to "Sections" in this Agreement shall mean the Section of this
Agreement.
Section 34. Publicity. Press releases and other publicity materials
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relating to the transactions contemplated by this Employment Agreement shall be
released by the parties hereto only after review and with the consent of the
other party; provided, however, that if legal counsel for the Company advises
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the Company that disclosure of this Employment Agreement is required under
applicable federal or state securities laws, then the Company shall be permitted
to make such disclosure in the form recommended by such legal counsel without
the prior consent of Employee.
IN WITNESS WHEREOF, this Employment Agreement has been duly executed
by the Company and Employee as of the date first above written.
N-VIRO INTERNATIONAL CORPORATION
By /s/ Xxxxx X. Xxxxxxx
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Its Chairman of the Board
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/s/ Xxxxx X. XxXxxx
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Xxxxx X. XxXxxx
