EMPLOYMENT AGREEMENT
THIS AGREEMENT has been entered into as of this 1st day of January 1997, by
and between ENVIROMETRICS Inc. (EVRM, referred to herein as "Employer") and
Xxxxxxx X. Xxxxxxx ("Employee").
WHEREAS, Employer is engaged in the business of health/safety/environmental
consulting and laboratory services, and sales of related products and Employee
is presently employed by EVRM; and
WHEREAS, Employer recognizes and values Employee's service, loyalty and
capabilities, and continued employment of Employee is desired by the parties
hereto on the terms set forth herein; and
WHEREAS, Employer desires that additional benefits on the terms set forth
herein be provided to Employee under certain circumstances.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this agreement and for other good and valuable consideration, the
parties agree as follows:
1. Employment, Title and Duties. Employee will have the title of Senior
Vice President of EVRM and President of Azimuth Inc. of the Laboratory and
Consultative Group Operations and will report directly to the President & CEO.
Laboratory Operations - Employee will be responsible and accountable for
the overall management of the laboratory operations, which include profit/loss
responsibility, marketing/sales program to increase revenues, QA/QC program,
Health & Safety program, and maintaining all required regulatory certifications.
Consultative Group - Employee will be responsible and accountable for the
overall management of the Health & Safety Group of EVRM, including profit/loss
responsibility, marketing/sales program, technical and regulatory requirements.
Special Projects - Employee will be assigned from time to time to lead
special projects for the company. Examples include promoting the services of the
company to institutions such as hospital conglomerates, establishing joint
ventures with other companies, promoting EVRM's technologies. These and other
opportunities will be assigned by the President & CEO and it will be the
Employee's responsibility to prepare a plan for each of the assigned program,
which will be presented to the President & CEO and/or the Board of Directors for
review and approval.
While employed by Employer, Employee shall use his best efforts on
Employer's behalf and shall comply with all policies and guidelines issued by
Employer. While an employee of Employer and without the express written consent
of the President and CEO of EVRM, no employment shall be undertaken by Employee
in addition to employment with Employer nor shall Employee receive any
compensation for activities related to the business of the company in any form
from anyone other than Employer. Employee fully and completely understands and
accepts the obligation under this agreement.
2. Term. The term of this agreement shall be from January 1, 1997 to
December 31, 1997. The Employment Agreement will be renewed on a annual basis
with the agreement of both parties.
3. Compensation. (A) For all services rendered by Employee under this
agreement, Employee shall receive such compensation as may be determined from
time to time by Employer's Board of Directors or a designated representative
thereof. Employee's initial gross base salary under the agreement shall be paid
at the annual rate of $65,000.00 or $5,416.67 per month.
(B) An incentive performance bonus program shall also be awarded to
Employee for sales generated for the laboratory operations, the consultative
group, and other special projects. For details on the awards under the incentive
performance bonus program see Addendum I. In addition the stock compensation
program offered to current EVRM employees in consideration of salary cut will be
also extended to Employee based on the then current position with the Company.
(C) Employee shall be entitled to vacation and sick leave time as
determined by Employer's SOP. In addition, Employee shall be entitled to
participate in all other present or future benefit plans provided by Employer to
its employees and for which Employee may qualify.
4. Reconciliation of Wages and Past Expenses. All deferred compensation
that is still outstanding will be reconciled and compensated to Employee on a
timely manner and in line with the schedule used for the other Officers of
Employer. In addition all reimbursable expenses incurred for the company will be
reconciled and reimbursed to the Employee on a timely basis and according to the
schedule of all other Officers and Directors.
5. Outstanding Commitments for the Company. All outstanding personal
financial commitments made by the Employee for the company are listed hereafter:
(A) Stock Pledged by Employee for the "Xxxx" Loan - The company will try
its best efforts to repay the loan in order to see that the personal stocks (a
total of 75,000 EVRM registered shares) that were pledged by the Employee be
released according to the signed loan agreement. In the event that the company
is in default of the current loan agreement and the collateral is retained
against the outstanding balance of the loan, a number of stocks equal to the
number of original stocks not returned to him will be issued by the company in
the name of the Employee, as per resolution passed by the EVRM Board of
Directors. The expenses for the registration of these shares will be paid by
EVRM. In the event a new company becomes the majority shareholder of EVRM, the
company will negotiate the repayment of this loan in full or the indemnification
of the personal collateral.
(B) Small Business Administration (SBA) Loan - Employee is a co-guarantor
to a loan to the SBA. Azimuth's outstanding accounts receivable were pledged as
a collateral to the loan. In addition, the company will continue its best
efforts to repay the loan to the SBA according to the agreement schedule. In the
event a new company becomes the majority shareholder of EVRM, the company will
negotiate the repayment of this loan in full or the indemnification of the
personal guaranty by the Employee.
(C) Personal Loan to the Company - As of April 2, 1997 the outstanding
balance of this loan is $45,000.00. Employee is presently receiving the
scheduled payments for interest and principal on this loan from the company. In
addition, Employee has received from the company 50,000 common shares of the
company as a compensation for his personal commitment for this loan. The company
will exercise its best efforts to continue to repay this loan according to the
mutually agreed schedule. Furthermore, the company will negotiate the repayment
of this loan in full or at an agreed accelerated schedule in the event a new
company will become the majority shareholder of EVRM.
(D) Keyman Life Insurance - The company will maintain a keyman life
insurance coverage for the Employee by paying the required premium for a
coverage of at least $500,000. The company will use the proceeds from this
insurance, in the event it becomes collectible, to pay off the above outstanding
Employee's commitments so that these commitments will not be a burden on his
estate or successors.
6. Acknowledgments. Employer is in the business of
health/safety/environmental consulting and laboratory services, and sales of
related products. Employee acknowledges that Employer has a proprietary interest
in the identity of its customers and customer lists and its inventory of
marketing personnel; and documents and information regarding Employer's
suppliers, methods of sales, costs, and the specialized requirements of
Employer's customers are highly confidential and constitute trade secrets.
Should Azimuth Inc. and/or Azimuth Laboratories be sold, whether by virtue of
sale of assets, sale of contracts, assignment of clients, the Employee shall be
released from the non-competition requirements of this agreement. The Employee
would be free to negotiate an employment agreement with the new owners.
7. Trade Secrets and Confidential Information. During the term of this
agreement, Employee will have access to and become familiar with various trade
secrets and confidential information of Employer, including but not necessarily
limited to the documents and information referred to in Sections 5(1) and 5(2)
above. Employee acknowledges that such confidential information and trade
secrets are owned and shall continue to be owned solely by Employer. During the
term of his employment and for twelve (12) months after such employment ceases,
Employee agrees not to use such information for any purpose whatsoever or to
divulge such information to any person other than Employer or persons to whom
Employer has given its written consent.
8. Documents. Under no circumstances shall Employee remove from the
Employer's office with intention to retain any of Employer's books, records,
documents, customer lists, personnel inventory lists, or any copies of such
documents without the written permission of Employer; nor shall Employee make
any copies of such books, records, documents, or lists for use and retention
outside of Employer's office except as specifically authorized in writing by
Employer.
9. Non-Competition. A. The employment contract may be terminated by either
party with three months (90 days) notice. Employee agrees that during this
period he will not contact directly or indirectly any client, employee, vendor,
outside professional consultant, contractor/subcontractor, lender/lessor,
stockholder, stockbroker/investment banker related to the Employer without the
express permission in writing of the President & CEO of the company and/or its
Board of Directors. During the same period of time Employee agrees that he will
not directly or indirectly, either as principal, agent, manager, employee,
partner, shareholder, director, officer, consultant or otherwise, become
associated with, employed by, or otherwise interested in any business operation,
whether financially or in any other capacity, if such operation competes with
Employer. This restriction shall not preclude Employee from becoming the holder
of any publicly traded stock provided Employee does not acquire stock interest
in excess of ten percent (10%).
B. In the event that Employee's employment ceases for Cause prior to
December 31, 1997, Employee agrees that for a period of three(3) months, he will
not directly or indirectly, either as principal, agent, manager, employee,
partner, shareholder, director, officer, consultant or otherwise, become
associated with, employed by, or otherwise interested in any business operation,
whether financially or in any other capacity, if such operation competes with
Employer. This restriction shall not preclude Employee from becoming the holder
of any publicly traded stock provided Employee does not acquire stock interest
in excess of ten percent (10%).
C. For a period of six (6) months after Employee's employment has
terminated for any reason (1) Employee will not directly or indirectly solicit
or sell any of Employer's services or products to those persons, companies,
firms, corporations or entities who are or were customers of Employer and for
whose accounts Employee was responsible to any degree while an employee of
Employer. (2) Employee will not solicit such accounts on behalf of himself or
any other person, firm, company, or corporation.
D. For a period of six (6) months after Employee's employment has
terminated for any reason, Employee will not in any way, directly or indirectly
through a third party, induce or attempt to induce any existing or future
employee of Employer to leave his/her position with Employer to become
associated with a business competing in any way with Employer.
10. Judicial Modification. The parties have attempted to limit Employee's
right to compete only to the extent necessary to protect Employer from unfair
competition. The parties recognize, however, that reasonable people may differ
in making such a determination. Consequently, the parties hereby agree that, if
the scope or enforceability of a restrictive covenant set forth in Sections 6,
7, 8 and 9 is in any way disputed at any time, a court or other tryer of fact
may modify and reform such provision to substitute such other terms as are
reasonable to protect the Employer's and Employee's legitimate business
interests.
11. Ability to Earn Livelihood. Employee further acknowledges that (1) in
the event his employment with Employer ceases for any reason, he will be able to
earn a livelihood without violating the foregoing restrictions; and (2) that his
ability to earn a livelihood without violating such restrictions is a material
condition to his employment with Employer.
12. Remedies. Employee acknowledges (1) that compliance with Sections 6, 7,
8 and 9 is necessary to protect the business and good-will of Employer and (2)
that a breach of those sections will irreparably and continually damage
Employer, for which money damages may not be adequate. Therefore, the parties
agree that in the event of such breach, Employer may seek any and all legal or
equitable relief available to it, specifically including but not limited to
injunctive relief, without the necessity of bond, and may hold the Employee
liable for all damages, including actual and consequential damages, costs and
expenses, as well as legal costs and reasonable attorney's fees incurred by the
Employer as a result of such breach.
13. Duration of Injunction. If the employee violates any of the terms of
Sections 6, 7, 8 or 9 and the Employer consequently seeks injunctive relief from
a court, such injunctive relief may be applied prospectively to include the
duration of the covenant unexpired at the time of the first breach,
notwithstanding that the covenant may have otherwise expired at the time a
lawsuit is filed and/or at the time relief is granted.
14. Waiver of Rights. If in one or more instances either party fails to
insist that the other party perform any of the terms of this agreement, such
failure shall not be construed as waiver by such party of any past, present, or
future right granted under this conditions of employment, all prior
representations or agreements having been superseded.
15. Survival. The obligations contained in Sections 6, 7, 8 and 9 shall
survive the cessation of Employee's employment. In addition, the cessation of
employment shall not affect any of the rights or obligations of either party
arising prior to or at the time of the cessation of this employment, or which
may arise by any event causing the cessation of this employment.
16. Severability. If any provision, paragraph, or sub-paragraph of this
agreement is adjudged by any court to be void or un-enforceable in whole or in
part, this adjudication shall not affect the validity of the remainder of the
agreement, including any other provision, paragraph, or sub-paragraph. Each
provision, paragraph, and sub-paragraph of the agreement is separable from every
other provision, paragraph, and sub-paragraph, and constitutes a separate and
distinct covenant.
17. Successors. This agreement shall be binding upon and shall inure to the
benefit of Employee, and, to the extent applicable, Employee's heirs, assigns,
executors, and personal representative, and upon Employer, its successors and
assigns, including without limitation, any person, partnership or corporation
that may require all or substantially all of Employer's assets and business, or
with or into which Employer may be consolidated or merged.
18. Complete Understanding. This agreement constitutes the complete
understanding between the parties regarding terms and conditions of employment,
all prior representations or agreements having been superseded.
19. Attorney's Fees. If any party to this agreement breaches any of the
terms of this agreement, that party shall pay to the non-defaulting party all of
the non-defaulting party's costs and expenses, including reasonable attorneys
fees, incurred by that party in enforcing the terms of this agreement, in
addition to any other remedies which may be imposed by a tryer of fact.
20. Modification. No alteration or modification to any of the provisions of
this agreement shall be valid unless made in writing and signed by both parties.
21. Headings. The headings have been inserted for convenience only and not
considered when construing the provisions of this agreement.
22. Governing Law. This agreement shall be subject to and governed by the
laws of the State of South Carolina. The parties agree that any cause of action
arising from the terms of this agreement shall be brought only in the Court of
the County of Charleston, South Carolina. The parties agree that such court
shall be the exclusive and sole venue for the adjudication of any disputes
hereunder.
ENVIROMETRICS Inc.: By: _____________________________
Xxxxxx "Skip" Xxxxxxx,
President & CEO
EMPLOYEE: _________________________________
Xxxxxxx X. Xxxxxxx
_________________________________
Date
ADDENDUM I TO EMPLOYMENT AGREEMENT
This Addendum dated January 1, 1997 is an amendment to that certain
Employment Agreement ("Agreement") dated January 1, 1997 by and between
Envirometrics Inc. (EVRM referred to herein as "Employe") and Xxxxxxx X.
Xxxxxxx ("Employee"); Section 3.B. ("Compensation") of the Agreement is hereby
amended by adding a Performance Bonus Plan based on the following formula:
First $100,000 in annual revenues from "New Clients" - 3% of Net Revenues*
Second $100,000 in annual revenues from "New Clients" - 4% of Net Revenues*
Third $100,000 in annual revenues from "New Client" - 5% of Net Revenues* The
above formula is applied for new clients and for the first year. The performance
bonus for the second and third years for these accounts will be compensated at
2.5% of Net Revenues. After the third year no performance bonus will be provided
on these accounts.
*Net Revenues = Gross Revenues minus any Subcontracted Expenses.
Envirometrics Inc.: By: ________________________________
Xxxxxx "Skip" Xxxxxxx,
President & CEO
EMPLOYEE: ____________________________________
Xxxxxxx X. Xxxxxxx
____________________________________
Date
