Exhibit 6.4
EMPLOYMENT AGREEMENT
BETWEEN
PRECISION PLASTICS MOLDING, INC.
AND
XXXX XXXXXXX
AGREEMENT made this 15th day of June, 1998 to be effective June 15, 1998,
between Precision Plastics Molding, Inc., incorporated in the state of Nevada
and having principal place of business in Tempe, Arizona, hereinafter referred
to as the Employer, and Xxxx X. Xxxxxxx of Phoenix, AZ, hereinafter referred to
as the Employee.
ARTICLE 1
TERM OF EMPLOYMENT
1.01 The Employer hereby employs the Employee and the Employee hereby accepts
employment with the Employer for an initial term of three (3) years beginning on
the fifteenth day of June, 1998; with said term renewable for additional three
(3) year terms unless prior written notice to the contrary is given by one party
to the other at least ninety (90) days prior to the expiration of the initial
term or any renewal thereof, subject to prior termination as hereinafter
provided.
ARTICLE 2
DUTIES OF EMPLOYEE
2.01 DUTIES. The Employee is hereby employed as a Director and Chief Operations
Officer and shall work at Precision Plastics Molding, Inc. located at Tempe,
Arizona and at such other place or places as may be reasonably directed by the
Employer. The duties to be performed by the Employee are set forth on Schedule
A, attached hereto and made a part hereof.
2.02 CHANGE OF DUTIES-MUTUAL CONSENT. The duties and titles of the Employee may
be reasonably changed from time to time by the mutual consent of the Employer
and the Employee without resulting in the recission of this Agreement.
Notwithstanding any such change, the employment of the Employee shall be
construed as continuing under this Agreement as modified.
2.03 CHANGE OF DUTIES IF EMPLOYEE DISABLED. If the Employee at any time during
the term of this Agreement should be unable, because of personal injury,
illness, or any other cause to perform his duties under this Agreement, the
Employer, in its sole discretion, may assign the Employee to other duties which
are commensurate with the Employee's ability to perform. If the Employee is
unwilling to accept the modification in duties by the Employer, this Agreement
shall terminate ten (10) days thereafter, and such termination shall be
considered to be termination for good reason for purposes of Article 6 hereof.
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2.04 PLACE OF PERFORMANCE. At the commencement of his employment, the Employee
shall perform his duties at the office of the Employer, located at Tempe,
Arizona. However, at any time deemed necessary or advisable by the Employer for
business purposes, the Employee shall work at such other place or places as may
be reasonably determined by the Employer.
2.05 ENGAGING IN OTHER ACTIVITIES. During the term of this Agreement, the
Employee will devote his full business time and attention to the affairs of the
Employer provided, however, the Employee may serve as a director of other
corporations and may engage in other business and professional activities,
whether as an investor or otherwise, to the extent that they do not
substantially interfere with the performance of his duties.
ARTICLE 3
COMPENSATION
3.01 BASIC COMPENSATION. As compensation for services rendered under this
Agreement, the Employee shall be entitled to receive from the Employer a basic
salary with terms of payment described on Schedule B, attached hereto and made a
part hereof.
3.02 COST OF LIVING INCREASE. The basic salary provided herein shall be adjusted
annually to reflect the increase, if any, in the cost of living by adding to
such basic salary an amount obtained by multiplying the basic salary by the
percentage by which the level of the Consumer Price Index for the relevant or
nearest Metropolitan Area, as reported for the last day of such annual period by
the Bureau of Labor Statistics for the United States Department of Labor, has
increased over its level as of the commencement date of this Agreement.
Following the end of each year of this Agreement, and within thirty (30)
days after the release by the Bureau of Labor Statistics of the figure for such
year, the Employer shall pay to the Employee the amount of any additional
compensation to which he is entitled on account of adjustment herein above
provided.
ARTICLE 4
EMPLOYEE BENEFITS AND BONUSES
4.01 BONUS. For each fiscal year of the Employer in which the annual performance
requirements of the Employee and/or business, as set forth on Schedule C,
attached hereto and made a part hereof, are met, the Employee shall be entitled
to receive a bonus. This bonus shall be in addition to any other compensation to
which the Employee may be entitled under this Agreement, and shall be paid
within thirty (30) days following completion of the Employer's fiscal year
audit, review or compilation by its outside accountants or within one hundred
twenty (120) days after the end of the fiscal year, whichever is earlier.
4.02 VACATION PAY. The Employee shall be entitled to an annual vacation with pay
as set forth in Schedule D, attached hereto and made a part hereof. The time for
such vacation shall be selected by the Employee and approved by the Employer,
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and must be taken within one (1) year after it is accrued. In lieu of the
vacation leave hereinbefore specified, the Employee may elect to receive payment
of the whole or any portion of the vacation time to which he is entitled as of
the date of this Agreement, such vacation time to be valued at the amount of
salary valued under Schedule B, as adjusted for cost of living, earned by the
Employee during the equivalent period of time.
4.03 HOLIDAYS. The Employee shall be entitled to a holiday, with full pay, on
those days set forth on Schedule D, attached hereto and made a part hereof.
4.04 PAID SICK LEAVE. The Employee shall be entitled to sick leave with full pay
as set forth on Schedule D, attached hereto and made a part hereof.
ARTICLE 5
REIMBURSEMENT OF EMPLOYEE EXPENSES
5.01 BUSINESS EXPENSES. The Employer in accordance with the procedural rules and
regulations that it may issue from time to time shall reimburse the Employee for
all business expenses incurred in the performance of his duties.
5.02 MOVING EXPENSES. In the event that the Employee during the term of this
Agreement is transferred by the Employer to a new principal place of work, the
Employer shall be liable for all moving and traveling expenses.
ARTICLE 6
TERMINATION
6.01 DEATH. The Employee's employment hereunder shall terminate upon his death.
6.02 DISABILITY. If as a result of the Employee's incapacity due to physical or
mental illness or disability, the Employee shall have been absent from his
duties hereunder on a full-time basis for the entire period of three (3)
consecutive months, and within thirty (30) days after notice of termination is
given, (which may occur before or after the end of such three (3) month period)
shall not have returned to the performance of his duties hereunder on a
full-time basis, the Employer may terminate the Employee's employment hereunder.
6.03 TERMINATION FAR CAUSE. The Employer may terminate the Employee's employment
hereunder for Cause. For purposes of this Agreement, the Employer shall have
Cause to terminate the Employee's employment hereunder upon the willful and
continued failure by the Employee to substantially perform his duties hereunder
(other than any such failure resulting from Employee's incapacity due to
physical or mental illness or disability), after written demand for substantial
performance is delivered by the Employer that specifically identifies the manner
in which Employer believes the Employee has not substantially performed his
duties. For purposes of this paragraph, no act, or failure to act, on the
Employee's part shall be considered "willful" unless done, or omitted to be
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done, by him not in good faith and without reasonable belief that his action or
omission was in the best interest of the Employer. Notwithstanding the
foregoing, the Employee shall not be deemed to have been terminated for Cause
without (i) reasonable notice to the Employee setting forth the reasons for the
Employer's intent to terminate for Cause, (ii) an opportunity for the Employee,
together with his counsel, to be heard before the Chief Executive OFFICER OF the
Employer, or if the Employee is the Chief Executive Officer, at a meeting of the
Board of Directors (held upon reasonable notice to all directors), and (iii)
delivery to the Employee of a Notice of Termination as defined in Section 6.05
hereof from the Chief Executive OFFICER OF the Employer or from the Board of
Directors (upon vote of not less than a majority of the directors then in
office), as appropriate, finding in good faith that the Employee was guilty of
conduct constituting Cause as set forth above, and specifying the particulars
thereof in detail.
6.04 TERMINATION BY EMPLOYEE. This Agreement may be terminated by the Employee
for Good Reason by giving the Employer Notice of Termination in accordance with
Section 6.05 hereof. For purposes of this Section, Good Reason shall mean (i) a
failure by the Employer to comply with any material provision of this Agreement
which has not been cured within thirty (30) days after notice of such
non-compliance has been given by the Employee to the Employer, of (ii) any
purported termination of the Employee's employment which is not effected
pursuant to a Notice of Termination satisfying the requirements of Section 6.05
hereof (and for the purposes of this Agreement no such termination shall be
effective).
6.05 NOTICE OF TERMINATION. Any termination of the Employee's employment by the
Employer or by the Employee (other than termination by reason of the Employee's
death) shall be communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a Notice of Termination shall mean a
notice which shall indicate the specific termination provision in this Agreement
relied upon, which 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 and which shall state the Date of
Termination in accordance with Section 6.06 below.
6.06 DATE OF TERMINATION. For the purposes of this Agreement, Date of
Termination shall mean
(i) if the Employee's employment is terminated by his death, the date of his
death,
(ii) if the Employee's employment is terminated pursuant to Section 6.02 above,
thirty (30) days after Notice of Termination is given (provided that the
Employee shall not have returned to the performance of his duties on a full-time
basis during such thirty (30) day period,
(iii) if the Employee's employment is terminated pursuant to Section 6.03 above,
the date specified in the Notice of Termination, and
(iv) if the Employee's employment is terminated by the Employee pursuant to
Section 6.04 above, the date specified in the Notice of Termination is given;
provided however, that if within thirty (30) days after any Notice of
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Termination is given the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties, by a binding and final arbitration
award or by a final judgment, order or decree of a court of competent
jurisdiction (the time for appeal therefrom having expired and no appeal having
been perfected).
6.07 EFFECT OF TERMINATION OF COMPENSATION.
(A) During any period that the Employee fails to perform his duties hereunder as
a result of incapacity by reason
of physical or mental illness or disability, the Employee shall continue to
receive his full salary at the rate in effect for such period until his
employment is terminated pursuant to Section 6.02 hereof.
(B) If the Employee's employment is terminated by death, Employer shall pay to
the Employee's spouse, or if he leaves no spouse, to his estate, the amounts
which would have been payable to the Employee at the times payable had he
survived for three (3) months from the date of his death.
(C) If the Employee's employment shall be terminated for Cause, the Employer
shall pay Employee his full salary through the Date of Termination at the rate
in effect at the time Notice of Termination is given.
(D) If (a) in breach of this Agreement, the Employer shall terminate the
Employee's employment other than pursuant to Section 6.02 or 6.03 hereof (if
being understood that a purported termination pursuant to Section 6.02 or 6.03
hereof which is disputed and finally determined not to have been proper shall be
a termination by Employer in breach of this Agreement) or (b) the Employee shall
terminate his employment for Good Reason, then
(1) The Employer shall pay the Employee his full salary through the Date
of Termination at the rate in effect at the time Notice of Termination
is given; and
(2) In lieu of any further salary payments to the Employee for periods
subsequent to the Date of Termination, the Employer shall pay as
severance pay to the Employee an amount equal to one (1) times the
Employee's annual salary rate in effect at the Date of Termination in
substantially equal monthly installments on the last day of each month
commencing with the month in which the Date of Termination occurs and
continuing for twelve (12) months.
(E) The Employee shall not be required to mitigate the amount of any payment
provided for in the Section 6.07 by seeking other employment or otherwise, and,
if he obtains other employment following termination, amounts received in
connection therewith shall not reduce amounts to which he is entitled hereunder.
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6.08 EFFECT OF TERMINATION BY EMPLOYEE ON PARTICULAR COMPENSATION. In the event
of the termination of this Agreement by the Employee without Good Reason prior
to the term of employment specified herein, notwithstanding any bonus or
incentive plan requirement of employment at the time an award is made, the
Employee shall be entitled to an award if all other plan performance criteria
have been met.
ARTICLE 7
COUNSEL FEES AND INDEMNIFICATION
7.01 TERMINATION DISPUTES. Should (i) Employer terminate or seek to terminate
this Agreement for Cause, and Employee disputes such termination or attempted
termination ; or (ii) Employee elects to terminate his service hereunder, and
Employer . disputes said action and the amount of compensation owing; Employer
and Employee shall each pay their own costs incurred in said dispute, including
attorney fees and costs.
7.02 INDEMNIFICATION. Employer shall indemnify and hold Employee harmless to the
maximum extent permitted by law against judgments, fines, amounts paid in
settlement and reasonable expenses, including attorney fees incurred by
Employee, in connection with the defense of, or as a result of any action, or
proceeding (or any appeal from any action or proceeding) in which Employee is
made or threatened to be made a party by reason of fact Employee was or is an
officer of Employer, regardless of whether such action or proceeding is one
brought by or in the right of Employer, to procure judgment in its favor (or
other than by or in the right of the Employer).
7.03 AUTHORITY TO ACT. Employer warrants and represents that the undertakings of
payment and indemnification as set forth in Section 7.02 above is not in
conflict with the Employer's articles of incorporation, bylaws, or with any
validly existing agreement or other proper corporate action of Employer. The
Board of Directors of the Employer have taken whatever action is necessary to
approve/ratify the appointment of the Employee to the position described herein
and of this Agreement.
ARTICLE 8
GENERAL PROVISIONS
8.01 NOTICES. Any notices to be given hereunder by either party to the other may
be effected in writing by personal delivery, U. S. mail, registered or
certified, postage prepaid with return receipt requested. Mailed notices shall
be addressed to the parties at the addresses appearing on the signature page of
this Agreement, but each party may change his address by written notice in
accordance with this paragraph. Notices delivered personally or by mail shall be
deemed communicated as of actual receipt.
8.02 INCLUSION OF ENTIRE AGREEMENT HEREIN. This Agreement supersedes any and all
other agreements, either oral or in writing, between the parties hereto with
respect to the employment of the Employee by the Employer and contains all of
the covenants and agreements between the parties with respect to such employment
in any manner whatsoever.
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8.03 SUCCESSORS. This Agreement shall be binding upon and inure to the benefit
of any successor to the Employer.
8.04 LAW GOVERNING AGREEMENT. This Agreement shall be governed by and construed
in accordance with the laws of the State of Nevada.
8.05 PAYMENT OF MONEYS DUE DECEASED EMPLOYEE. Excepting as expressly directed
herein, if Employee dies prior to the expiration of the term of employment, any
moneys due him from the Employer under this Agreement as of the date of his
death shall be paid to his executors, administrators, heirs, personal
representatives, successors and assigns.
8.06 AMENDMENT. This Agreement and its Schedules may be amended from time to
time only by a writing signed by each of the parties hereto.
This Agreement is executed this 15th day of June, 1998 as shown by the
signatures of the parties below.
PRECISION PLASTICS MOLDING, INC.
/s/ Xxxxx X. Xxxxxxxx
---------------------------------------
By: Xxxxx X. Xxxxxxxx
Title: President and CEO
Address: 0000 X. Xxxxxxxxxx Xx., Xxx. 0
Xxxxx, XX 00000
EMPLOYEE
/s/ Xxxx Xxxxxxx
---------------------------------------
By: Xxxx Xxxxxxx
Address: 0000 X. Xxxxxx Xx., Xxx. 00
Xxxxx, XX 00000
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SCHEDULE A
TO
EMPLOYMENT AGREEMENT
Duties:
Necessary operation matters of Precision Plastics Molding, Inc. including
areas of sales, service, maintenance and operation of plastic injection molding
facilities.
PRECISION PLASTICS MOLDING, INC.
/s/ Xxxxx X. Xxxxxxxx
---------------------------------------
By: Xxxxx X. Xxxxxxxx
Title: President and CEO
EMPLOYEE
/s/ Xxxx Xxxxxxx
---------------------------------------
By: Xxxx Xxxxxxx
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SCHEDULE B
TO
EMPLOYMENT AGREEMENT
Basic Compensation
Basic Salary:
Salary: $65,000 for annual sales up to $2.5 million
$75,000 for annual sales from $2.5 million to $5 million
$85,000 for annual sales from $5 million to $7.5 million
$95,000 for annual sales from $7.5 million to $10 million
PRECISION PLASTICS MOLDING, INC.
/s/ Xxxxx X. Xxxxxxxx
---------------------------------------
By: Xxxxx X. Xxxxxxxx
Title: President and CEO
EMPLOYEE
/s/ Xxxx Xxxxxxx
---------------------------------------
By: Xxxx Xxxxxxx
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SCHEDULE C
TO
EMPLOYMENT AGREEMENT
PERFORMANCE REQUIREMENT AND BONUS PLAN
Performance Requirement:
Positive earnings before depreciation, interest and taxes (EBDIT).
Bonus Plan:
EBDIT at the following minimum threshold and bonus rate, to be applied as a
percent of EBDIT to determine bonus amount earned by Employee.
EBDIT Threshold Bonus Rate
--------------- ----------
$500,000 5%
PRECISION PLASTICS MOLDING, INC.
/s/ Xxxxx Xxxxxxxx
---------------------------------------
By: Xxxxx Xxxxxxxx
Title: President and CEO
EMPLOYEE
/s/ Xxxx Xxxxxxx
---------------------------------------
By: Xxxx Xxxxxxx
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SCHEDULE D
TO
EMPLOYMENT AGREEMENT
VACATION. HOLIDAYS AND SICK LEAVE
Vacation:
First year of agreement Three weeks
Subsequent years Four weeks
Holidays:
New Years Eve, New Years Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, Christmas Eve, and Christmas Day.
Paid Sick Leave:
5 days per year.
PRECISION PLASTICS MOLDING, INC.
/s/ Xxxxx X. Xxxxxxxx
---------------------------------------
By: Xxxxx X. Xxxxxxxx
Title: President and CEO
EMPLOYEE
/s/ Xxxx Xxxxxxx
---------------------------------------
By: Xxxx Xxxxxxx
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