Exhibit 10.3
EMPLOYMENT and CONSULTING AGREEMENT
THIS EMPLOYMENT AND CONSULTING AGREEMENT ("Agreement") is made this
1st day of July, 1998 by and between Innovative Coatings Corporation, a
Georgia corporation having its principal office at 0000 Xxxx Xxxx Xxxxx
Xxxxx, Xxxxxxxx, Xxxxxxx 00000 (the "Company"); and C. Xxxxx Xxxx, an
individual residing at 0000 Xxxx Xxxxx Xxx, Xxxxxxxx, Xxxxxxx 00000,
("Bean" or "Employee").
FOR AND IN CONSIDERATION of the mutual promises, agreements and
covenants contained herein, the parties hereto, intending to be legally
bound, do hereby agree as follows:
1. Employment: Position and Duties. The Company hereby agrees to employ
Bean to act as, and to exercise all of the powers and functions of, its
Senior Chemist and Vice President during the term hereof (as set forth in
paragraph 4 herein) and to perform such acts and duties and to generally
furnish such services to the Company and its subsidiaries (if any) as is
customary for a senior management person with a similar position in like
companies; and he shall have such specific powers, duties and
responsibilities as the Board of Directors of the Company shall from time
to time reasonably prescribe, provided that such duties and
responsibilities are consistent with Bean 's senior management position.
Bean hereby agrees to accept such employment and shall perform and
discharge faithfully, diligently, and to the best of his abilities such
duties and responsibilities and shall devote most of his working time and
efforts to the business and affairs of the Company and its subsidiaries;
provided however, that, to the extent consistent with the needs of the
Company, Bean shall be entitled to expend a reasonable amount of time on
civic, public, industry, and philanthropic activities and on the
management of his own investments and assets. Bean recognizes that as a
matter of law the election of a person to a board of directors is
performed by the shareholders of a corporation and that such election
cannot generally be the subject of a contractual agreement, however, as
long as Bean is elected to the board as a director, Bean shall perform
all those duties of a Director.
2. Place of Employment. During his employment hereunder, Bean's principal
place of employment shall be located at the Company's principal place of
business or principal executive office, wherever located as designated
from time to time by the Board of Directors of the Company; provided
however, notwithstanding the foregoing, Bean shall be required to conduct
his duties and responsibilities hereunder (except for routine and
customary business travel) only from executive offices located in
Georgia.
3. Compensation.
(a) Base Salary. The Company shall pay to Bean an annual base salary
("Base Salary") of $80,000, payable in accordance with the Company's
customary payroll policy for its executives, and subject to applicable
tax and payroll deductions. Bean's Base Salary shall be reviewed annually
by the Company's Board of Directors which may make upward adjustments as
within its discretion and it deems appropriate.
(b) Incentive Compensation. Bean's incentive compensation, if any,
shall be determined annually by the Company's Board of Directors.
(c) Certain Other Benefits. During the term of this Agreement, Bean
shall be entitled to equity participate in any and all Bean benefit plans
and arrangements which are available to senior executive officers of the
Company, including without limitation, group medical and life insurance
plans, accidental death benefit plans, disability insurance plans,
pension plans, and automobile expense reimbursement allowances or
Company-provided automobiles.
4. Term. The term of Bean's employment with the Company shall be for a
one-year period commencing July 1, 1998 or earlier and continuing through
June 30, 1999 (the "initial term"); provided, however, that this
Agreement shall be automatically renewed for successive one-year periods
(each a "successor term"; and together with the initial term, generally
'the term') unless either party hereto gives written notice of
termination to the other party at least twelve months prior to the
expiration of the initial term or of any successor term. By way of
illustration, if neither party gives to the other party a written notice
of termination by June 30, 1999 this Agreement shall be automatically
renewed for a one-year period ending on June 30, 2000.
5. Stock Options. Periodic stock and incentive stock option grants to
Bean, if any, shall be determined by the Board of Directors.
6. Unauthorized Disclosure and Bean's Right of Ownership. For a period of
two years after termination of employment, Bean shall not without the
written consent of the Company, disclose to any person, other than person
to whom disclosure is reasonably necessary or appropriate in connection
with the performance by Bean of his duties as an executive officer of the
Company, any material confidential information obtained by Bean while in
the employ of the Company with respect to the businesses of the Company
or any of its subsidiaries, including by not limited to, operations,
pricing, contractual or personnel date, products, discoveries,
improvements, trade secrets, license agreements, marketing information,
suppliers, dealers, principals, customers, or methods of distribution, or
any other confidential information the disclosure of which Bean knows or
in the exercise of reasonable care should know will be damaging to the
Company; provided, however, that confidential information shall not
include any information known generally to the public (other than as a
result of unauthorized disclosure by Employee) or any information not
otherwise considered by the Company to be confidential. Furthermore, all
inventions conceived or developed by Bean in which the equipment,
supplies, facilities, or trade secret information of the Company was
used, or that relate to the business of the Company or to the Company's
actual or demonstrably anticipated research and development, or that
result from any work performed by Bean for the Company will remain the
property of the Company. All other inventions conceived or developed by
Bean during the term of this Agreement will remain the property of
Employee.
7. Indemnification of Employee. The Company shall indemnify Bean if Bean
is made a party, or threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, or investigative, because Bean is or was an officer or
director of the Company or any of its subsidiaries, affiliates, or
successors, against expenses (including reasonable attorneys fees and
disbursements), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding to the fullest extent and in the manner set forth in and
permitted by the General Corporation Law of the State of Georgia and any
other applicable law in effort from time to time.
8. Termination.
(a) Termination Upon Death. If Bean dies during the term of this
Agreement, Bean' legal representatives shall be entitled to receive the
Base Salary through the last day of the first month following the month
in which Bean' death occurred. If in respect of the fiscal year in which
Bean dies he would otherwise have been entitled to receive incentive
compensation under paragraph 3(c) by reason of the operations of the
Company during such fiscal year, Bean' legal representatives shall be
entitled to receive a pro rata portion of such incentive compensation
determined by multiplying the dollar amount of the incentive compensation
involved by a fraction, the numerator of which shall be the number of
complete calendar months that elapsed during the fisc4d year through the
end of the month in which Bean died and denominator of which shall be
twelve.
(b) Termination Upon Disability or Incapacity. The Company may
terminate Bean's employment hereunder at the end of any calendar month by
giving written notice of termination to Bean in the event of Bean'
incapacity due to physical or mental illness which prevents the proper
performance of the duties of Bean set forth herein or established
pursuant hereto for a substantial portion of any six-month period of
Bean's term of employment hereunder. Any questions as to the existence or
extent of illness or incapacity of Bean upon which the Company and Bean
cannot agree shall be determined by a qualified independent physician
selected by the Company and approved by Bean (or, if Bean is unable to
give such approval, by any adult member of the immediate family or the
duly appointed guardian of Employee). The determination of such physician
certified in writing to the Company and to Bean shall be final and
conclusive for all purposes of this Agreement. In the event of any such
termination pursuant to this subparagraph 8(b), Bean shall be entitled to
receive his Base Salary through the last day of the month in which this
Agreement is terminated. If in respect of the fiscal year in which Bean'
employment terminates pursuant to this subparagraph 8(b) he would
otherwise have been entitled to receive incentive compensation under
paragraph 3(c) by reason of the operations of the Company during such
fiscal year, Bean shall be entitled to receive a pro rata portion of such
incentive compensation determined by multiplying the dollar amount of the
incentive compensation by a fraction, the numerator of which shall be the
number of complete calendar months that elapsed during the fiscal year
through the end of the month in which Bean 's employment terminated
pursuant to subparagraph 8(b) and the denominator of which shall be
twelve.
(c)Termination for Cause. The Company may terminate Bean's
employment hereunder for "cause" (as hereinafter defined) by giving
written notice of termination of this Agreement to Employee. For the
purpose of this Agreement, the Company shall have "cause" to terminate
Bean' employment hereunder upon Bean' (l) habitual drunkenness or drug
addiction or willful failure materially to perform and discharge his
duties and responsibilities hereunder, or (ii) misconduct that is
materially and significantly injurious to the Company, or (iii)
conviction of a felony involving the personal dishonesty of Bean or moral
turpitude, or (iv) conviction of Bean of any crime or offense involving
the property of the Company. Upon any such termination for cause under
this subparagraph 8(c), the Company shall pay Bean his Base Salary
through the date of termination, and the Company shall have no further
obligations under this Agreement.
(d) Termination Without Cause. The Company shall have the right to
terminate Bean's employment under this Agreement at any time, without
cause, by giving Bean not less than sixty (60) days prior written notice
of such termination. Until the effective date of any such termination,
the Company shall continue to pay to Bean the full compensation specified
in this Agreement. In addition, on the effective date of termination the
Company shad pay to Bean the full amount of all Base Salary to which Bean
would otherwise have been paid throughout the remaining term (including
any successor term, if applicable) of this Agreement.
9. Reimbursement of Legal Fees. The Company agrees to reimburse Bean for
reasonable attorneys fees, if any, incurred in connection with the
negotiation, preparation, and execution of this Agreement.
10. Application for Insurance. The Company at its option has the right to
obtain a "key-man" life insurance policy, at the Company's expense, with
the Company being the sole beneficiary of such policy. Bean hereby agrees
to undergo the necessary physical examinations and disclose any pertinent
disclaimers and information to obtain said policy.
11. Miscellaneous.
(a) Assignment and Binding Effect. The respective rights and
obligations of the parties under this Agreement shall be binding upon the
parties hereto and their heirs, executors, administrators, successors,
and assigns, including, in the case of the Company, any other corporation
or entity with which the Company may be merged or otherwise combined or
which may acquire all or substantially all of the Company's assets and,
in the case of Employee, his estate or other legal representatives;
provided that Bean may not assign his rights hereunder without the prior
written consent of the Company.
(b) Governing Law. This Agreement shall be governed as to its
validity, interpretation and effect by the laws of the State of Georgia.
(c) Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid, illegal, or unenforceable
for any reason, the remaining provisions and portions of this Agreement
shall remain in full force and effect to the fullest extent permitted by
law. Such invalid, illegal, or unenforceable provision(s) shall be deemed
modified to the extent necessary to make it (them) valid, legal and
enforceable.
(d) Entire Agreement; Amendments. This Agreement constitutes the
entire agreement and understanding of the Company and Bean with respect
to the terms of Bean 's employment with the Company and supersedes all
prior discussions, understandings, and agreements with respect thereto.
(e) Captions. All captions and headings used herein are for
convenient reference only and do not form part of this Agreement.
(f) Waiver. The waiver of a breach of any term or provision of this
Agreement shall not operate as or be construed to be a waiver of any
other or subsequent breach or this Agreement.
(g) Notice. Any notice or communication required or permitted under
this Agreement shall be made in writing and shall be delivered by hand,
or mailed by registered or certified mail, return receipt requested,
first class postage prepaid, addressed as follows:
If to Bean:
C. Xxxxx Xxxx
0000 Xxxx Xxxxx Xxx
Xxxxxxxx, Xxxxxxx 00000
If to the Company:
Innovative Coatings Corporation
Suite 200
0000 Xxxx Xxxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attn: Chairman of the Board of Directors
(h) Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
Employee Innovative Coatings Corporation
/s/ C. Xxxxx Xxxx By: /s/ Xxxxx X. Xxxxxxxx
C. Xxxxx Xxxx Xxxxx X. Xxxxxxxx
Its: President and CEO
