EXECUTIVE EMPLOYMENT AGREEMENT
THIS
AGREEMENT (“Agreement”),
made as of the 9th day of September, 2005, effective on the Effective Date
(as
defined herein), between Greens Worldwide Incorporated, (the “Company”), an
Arizona corporation , having its principal place of business at Hertford,
NC and
R. Xxxxxx Xxxx (the “Executive”).
WITNESSETH
WHEREAS,
Executive has agreed to serve as the President and Chief Executive Officer
of
the Company.
WHEREAS,
the
Company desires to secure the services of Executive, upon the terms and subject
to the conditions set forth in this Agreement;
WHEREAS,
Executive possesses knowledge and skills that will contribute to the continued
success of the Company’s business, and,
WHEREAS,
the
Company believes that Executive’s knowledge and skills will prove to be crucial
in executing the business plan of the Company;
WHEREAS,
the
Company is prepared to commit to the terms and conditions of employment as
forth
herein currently applicable to Executive; and
WHEREAS,
the
recitals set forth above are hereby incorporated into and made a part of
this
Agreement.
NOW,
THEREFORE,
intending to be legally bound, the Company agrees to employ Executive, and
Executive hereby agrees to be employed by the Company, upon the following
terms
and conditions:
ARTICLE
I
EMPLOYMENT
1.01. Position
and Duties.
Executive is hereby employed as the President and Chief Executive Officer
of the
Company, and will use his energies and abilities in the performance of his
duties, related to and consistent with his position, as may be assigned to
him from
time
to time by the Board of Directors of the Company (the “Board”). Executive shall
perform such services as directed by Board of Directors of the Company.
1.02. Location.
Executive’s place of work shall be in Virginia, subject to Executive traveling
outside of such location from time to time as business needs may require.
1.03. Term.
This
Agreement shall be effective as of the date of this agreement (the “Effective
Date”), and shall continue for an initial term (the “Initial Term”) of five
years from the Effective Date. The Effective Date of this agreement will
be the
date of closing of new financing for the Company, which is anticipated to
occur
on or before September 16, 2005. The Initial Term will extend automatically
for
consecutive one-year periods (each, an “Extension Term”) unless either Executive
or the Company provides at least 90 days’
advance written notice prior to the expiration of the Initial Term or an
Extension Term, as applicable, to the other that the term will not be extended.
1.04. Compensation.
1.04.1. Salary.
Executive shall receive an annual base salary in the gross amount of $180,000
USD until January 1, 2006, at which time the annual base salary amount shall
increase to $240,000, subject to applicable tax and payroll withholding.
Executive’s base salary will be increased ten percent per annum during the term
of this agreement, beginning January 1, 2007. The base salary shall be payable
in accordance with the Company’s generally applicable payroll practices and
policies, but no less frequently than twice per month.
1.04.2. Bonus
Opportunity.
Executive shall be eligible to receive a bonus from the Company, and to
participate in any Company’s bonus plan or plans that may be adopted for the
benefit of executives of the Company, as the same may be amended or adopted
from
time to time, pursuant to the terms of which Executive shall be eligible
to earn
a cash bonus for each calendar year during which Executive is employed by
the
Company. The award of any discretionary bonus under this section shall be
determined by the Board of Directors of the Company. In addition, Company
shall
pay a signing bonus to Executive in the amount of $240,000 payable in two
equal
installments of $120,000 on or about September 16, 2005, and the second
installment upon the receipt of funds from the new financing on or about
September 30, 2005.
1.04.3. Equity
Compensation
Executive shall also receive
such
stock options as may be granted to other executives of the Company as adopted
by
the Board of Directors from time to time.
1.04.4. Car
Allowance.
Executive shall receive a monthly car allowance in the amount of $ 700.00
payable on the first of each month beginning October 1, 2005.
1.05. Benefits
and Expenses.
1.05.1. Benefits.
Executive will be covered by such health insurance, group insurance and other
benefit plans and shall be eligible for such paid vacation and holidays as
are
available generally to other executives of the Company. Such benefit plans
may
be amended from time to time by the Company to increase or add benefits,
or to
comply with any legal requirements applicable to such benefit plans, or
necessary to maintain the deductibility for tax purposes of amounts paid
by the
Company to provide or maintain such benefits. The Company shall not terminate
or
eliminate any such benefit plans or reduce benefits provided under such plans,
unless a change in the law applicable to such benefits or benefit plans shall
cause the continued provision of such benefits to be contrary to applicable
law,
or shall cause the amounts paid by the Company to provide or maintain such
benefits, which amounts formerly were deductible for tax purposes by the
Company, to no longer be deductible for such purposes under applicable law.
1.05.2. Business
Expenses.
The
Company shall pay or reimburse Executive for all reasonable expenses incurred
or
paid by Executive in the performance of Executive’s duties hereunder, upon
presentation of expense statements or vouchers and such other information
as the
Company may require in accordance with the generally applicable and reasonable
policies and procedures of the Company. Company shall provide Executive with
a
Visa debit card for expenses incurred by Executive during the term of this
agreement and a Bank Credit Card for use by Executive in meeting business
expenses in carrying out his responsibilities.
ARTICLE
II
TERMINATION
2.01. Incapacity.
If
during the term of Executive’s employment, Executive is prevented from
effectively performing the essential functions of his job, with reasonable
accommodation (if such reasonable accommodation can be provided by Company),
for
a period of 180 days within any twelve month period by reason of illness
or
Disability, the Company, by written notice to Executive, may terminate
Executive’s employment. Upon delivery to Executive of such notice, together with
payment of any salary accrued under Section 1.04.1 and any
other
amounts as may be due and/or accrued (which amounts shall be pro-rated up
to the
date of termination) under Sections 1.04 and 1.05
up
to
the
date
of
termination, Executive’s employment and all obligations of the Company will
terminate and this Agreement shall end. For purposes of this Agreement,
“Disability” is defined as the Executive being eligible for disability insurance
benefits under the Company’s long term disability insurance policy, or in the
absence of such disability insurance coverage, Disability shall be defined
as
provided under applicable disability discrimination law.
2.02. Retirement.
This
Agreement shall end, without notice to terminate being required, upon
Executive’s voluntary election to retire at any time after Executive reaches age
65. Upon retirement, Executive’s employment shall terminate and Executive shall
be entitled to payment of any salary accrued under Section 1.04.1, any awarded
but unpaid bonuses applicable to any prior period, together with any other
amounts as may be due and/or accrued (which amounts shall be pro-rated up
to the
date of termination) under Sections 1.04 and 1.05 up to
the
date of
termination, following which all obligations of the Company will
terminate.
2.03. Death.
If
Executive dies during the term of his employment, Executive’s
employment will
terminate, the Agreement shall end, and all Company’s obligations, other than
any obligations with respect to the payment of accrued but unpaid salary
under
Section 1.04.1, twelve additional months salary to be paid to Executive’s estate
immediately following the date of death, and any awarded but unpaid bonuses
applicable to any prior period, together with any other amounts as may be
due
and/or accrued (which amounts shall be pro-rated up to the date of termination)
under Sections 1.04 and 1.05
up
to the date
of
death, will cease.
2.04. Termination
For Cause.
If the
Company terminates Executive for Cause, this Agreement and all obligations
of
the Company shall terminate effective upon notice of termination for Cause,
other than any obligations with respect to the payment of accrued but unpaid
salary under Section 1.04.1, together with any other amounts as may be due
and/or accrued under Section 1.05 up to the date
of
termination. For purposes of this Agreement, “Cause” shall mean:
(i) Executive’s
failure to perform duties (other than as a result of incapacity as described
in
Section 2.01) in any material respect that remains uncured for 30
days
after written notice thereof is given to Executive;
(ii) Executive’s
willful misconduct or gross negligence;
(iii) Executive’s
willful failure to conduct the business of the Company in accordance with
the
lawful directives of the Board, which failure causes material harm to the
Company or would be likely to cause material harm to the Company;
(iv) any
material breach by Executive of any of the covenants, terms or conditions
of
this Agreement that remains uncured for 30 days after written notice thereof
is
given to Executive;
(v) Executive’s
engagement in conduct during the term of this agreement, which is dishonest
or
disloyal, which has injured
or would injure the business or reputation of the Company or otherwise adversely
affects its interests in any material respect; or
(vi) Executive’s
engagement in fraud or embezzlement or
Executive’s conviction or plea of nolo contendre to a felony.
This
provision shall not apply to any conviction or plea of nolo contendre to
any
traffic (driving) offenses.
2.04.1.
Any notice given by the Company under the subsections shall specifically
state
the manner in which the Executive has not performed his duties, or has breached
any of the covenants, terms or conditions of this Agreement, that the notice
is
given under this Section 2.04, and that failure to correct such breach will
result in termination of employment under this Agreement. For the purpose
of the
above definition of Cause, no act, or failure to act, on Executive’s part shall
be deemed “willful” unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that his action or omission was
in the
best interest of the Company. Failure of the Company or the Executive to
achieve
or satisfy any target, milestone or other performance goal or hurdle shall
not
be deemed a failure by the Executive to perform his duties or to comply with
any
of the directives of the Board of Directors.
2.04.2.
Notwithstanding the foregoing, termination by the Company for Cause shall
not be
effective until and unless (i) notice of intention to terminate for Cause
has
been given by the Company within 60 days after the Company learns of the
act,
failure or event constituting “Cause” under this Section 2.04 (which is not
cured by the Executive within any time period permitted for such cure above),
and (ii) the Board of Directors has voted (at a meeting of the Board duly
called
and held as to which termination of Executive is an agenda item) to terminate
Executive for Cause, and (iii) if Executive has commenced arbitration in
the
manner prescribed in this Agreement within 15 days after receipt of such
notice
of termination, disputing the Company’s right under this Agreement to terminate
for Cause, the Arbitrator shall thereafter have determined that the Executive
was terminated for Cause. If the Arbitrator declines to rule that the Executive
was terminated for Cause, the Executive shall be treated as having been
terminated without cause and the Executive shall be entitled to receive the
Severance Benefits pursuant to Section 3.
2.05. Termination
Without Cause.
Executive’s employment is at-will, and this Agreement may be terminated at any
time by the Company without Cause upon 30 days’ notice to Executive. If the
Company terminates Executive without Cause hereunder, the Company shall pay
to
Executive accrued but unpaid salary under Section 1.04.1, together with any
other amounts as may be due and/or accrued under Sections 1.04 and
1.05
up
to
the
date of
termination (which amounts shall be pro-rated up to the date of termination),
and any awarded but unpaid bonuses applicable to any prior period, together
with
Severance Benefits in accordance with Article III. The Company’s provision of
written notice not to extend either the Initial Term or any Extension Term
of
this Agreement pursuant to Section 1.03 shall be deemed to be a termination
of the Executive by the Company without Cause hereunder.
2.06. Executive
Termination for Good Reason.
If
Executive terminates his employment for Good Reason, this Agreement and all
obligations of the Company shall terminate effective upon Executive’s provision
of notice of termination, and Executive shall receive the same salary, benefits
and Severance Benefits as would be provided or payable to him in connection
with
a termination without Cause under Section 2.05 hereof.
For
purposes of this Agreement “Good Reason”
shall
mean:
| (i) |
an
assignment to Executive of any duties or responsibilities inconsistent
with, or a significant reduction or change by the Company (or its
successor) in the nature or scope of the authority of, such duties
or
responsibilities assigned to or held by Executive hereunder or
as of the
Effective Date;
|
| (ii) |
any
removal of Executive from the position of President & Chief Executive
Officer with the Company (or its successor);
|
| (iii) |
a
reduction by the Company (or its successor) and its subsidiaries
in
Executive’s base salary under this Agreement or as it may be increased at
any time thereafter;
|
| (iv) |
a
transfer or relocation of the site of employment of Executive,
without his
express written consent, to a location more than 35 miles
from the
location of his principal place of business as set forth in this
Agreement; or
|
| (v) |
any
failure of the Company to comply with and satisfy its material
obligations
under this Agreement (other than those specified in clauses (i)
through
(iv) above,
as to which no notice and opportunity to cure shall be
provided)
that remains uncured for 30 days after written notice thereof
is
given to the Company.
|
ARTICLE
III
SEVERANCE
BENEFITS
3.01. Benefits
Payable Upon Termination without Cause, Non-Renewal or Termination for Good
Reason.
If,
during the Initial Term or any Extension Term, the Company terminates Executive
without Cause or gives notice of non-renewal of this Agreement, or Executive
terminates his employment for Good Reason, Executive shall be paid Severance
Benefits, as hereafter defined, in addition to all other amounts payable
to
Executive as referenced in Section 2.05.
3.02. Severance
Benefits.
“Severance
Benefits” means an amount equal to the sum of:
(i) one
times
either Executive’s annual base salary set forth in Section 1.04.1 or, if
greater, the annual base salary as in effect immediately prior to Executive’s
termination of employment, to be paid within 5 days of the date of termination;
(ii) the
pro-rated amount of any cash bonus
which
Executive otherwise would have been eligible to receive under any Company
bonus
plan, as set forth in Section 1.04.2, for each whole or partial calendar
quarter of employment during the partial year in which Executive’s employment is
terminated,
to be
paid within ten (10) days of the date of termination;
(iii) the
pro-rated amount of any equity compensation award which Executive would have
been eligible to receive, as set forth in Section 1.04.3, for each
whole or
partial calendar quarter of employment during the partial year in which
Executive’s employment is terminated, provided that any Company performance
goals under such plan are achieved for the year in which termination of
employment occurs; and
(iv) provision
of twelve (12) months of Executive’s then current medical, dental and other
benefits, or the cash equivalent payment thereof.
ARTICLE
IV
EXECUTIVE’S
REPRESENTATIONS AND WARRANTIES
4.01. Duties.
Executive agrees that, in addition to all other obligations commensurate
with
his employment with the Company, he shall comply with each of the Company’s
corporate governance and ethics guidelines, conflict of interests policies
and
code of conduct applicable to all Company employees or senior Executives
as
adopted by the Board from time-to-time. Executive first shall obtain the
consent
of the Board in writing before engaging in any other business or commercial
activities, duties or pursuits; provided however that nothing shall preclude
Executive from (i) engaging in charitable activities and community
affairs,
(ii) acting as a member, director or officer of any industry trade association
or group, (iii) serving as a trustee, director or advisor to any family
companies or trusts, (iv) managing his personal investments and affairs,
and (v) acting as a director of any other companies, provided that in the
case
of clause (v), such service is not to any company which competes with the
Company, and further provided that such activities under clause (v) do not,
in
the reasonable judgment of the Board, materially interfere with the proper
performance of his duties and responsibilities hereunder.
4.02. Executive
Nonsolicitation.
Should
Executive’s employment with the Company be terminated with Cause or by
Executive’s voluntary resignation without Good Reason, for a period of twelve
(12) months following such termination, Executive shall not solicit or induce,
or attempt to solicit or induce, any employee of the Company or its affiliates,
other than any administrative assistant, to terminate such employment for
any
reason whatsoever or hire any employee of the Company or its affiliates,
other
than any administrative assistant.
4.03. Non-Disclosure.
Executive shall not, during or after his employment with the Company, (i)
disclose, in whole or in part, any Company Confidential Information, as
hereinafter defined, to any person, firm, corporation, association or other
entity for any reason or purpose whatsoever unless authorized in writing
to do
so by the Company or required by law, order of any court or court process,
or
(ii) use any Company Confidential Information for Executive’s own purpose or for
the benefit of any person, firm, corporation, association or other entity
other
than the Company; except in the proper performance of Executive’s duties as
instructed by the Company. Company Confidential Information shall not include
(i) information in the public domain or generally known in the industry (unless
Executive is responsible, directly or indirectly, for such Company Confidential
Information entering the public domain or becoming known in the industry
without
the Company’s consent), (ii) information and know-how derived or known by
Executive from experience in the industry generally and not specific to Company,
and (iii) information disclosed by the Company to third parties without any
duty
or obligation of confidentiality or non-disclosure. .
4.03.1. Confidential
Information.
For
purposes of this Agreement, Company Confidential Information shall mean the
knowledge and information acquired by Executive concerning the Company’s
confidential and proprietary information regarding its business plans, programs,
client prospects, client lists, supplier and vendor information, client
contacts, client information and data, marketing plans, data processing systems
and information contained therein, products, proposals to clients and potential
clients, account reports, plans, studies, price lists, financial statements
and
records, files and other trade secrets, know-how, or other private, confidential
or proprietary information of or about the Company which is not already
available to the public or known generally in the industry.
4.04. Acknowledgment.
Executive acknowledges and agrees that the terms of this Article IV:
(i) are reasonable in light of all of the circumstances; (ii) are
sufficiently limited to protect the legitimate interests of the Company and
its
subsidiaries; (iii) impose no undue hardship on Executive; and
(iv) are not injurious to the public. Executive further acknowledges
and
agrees that (x) Executive’s breach of the provisions of this Article IV
will cause the Company irreparable harm, which cannot be adequately compensated
by money damages, and (y) if the Company elects to prevent Executive
from
breaching such provisions by obtaining an injunction against Executive, there
is
a reasonable probability of the Company’s eventual success on the merits.
Executive consents and agrees that if Executive commits any such breach or
threatens to comment any breach, the Company shall (at its election and
notwithstanding Section 5.010 hereof) be entitled to temporary and permanent
injunctive relief from a court of competent jurisdiction, without posting
any
bond or other security and without the necessity of proof of actual damage,
in
addition to, and not in lieu of, such other remedies as may be available
to the
Company for such breach, including the recovery of money damages.
ARTICLE
V
GENERAL
PROVISIONS
5.01. Authorization
to Modify Restrictions.
The
provisions of this Agreement will be enforceable to the fullest extent
permissible under applicable law, and the unenforceability (or modification
to
conform to law) of any provision will not render unenforceable, or impair,
the
remainder of this Agreement. If any provision will be found invalid or
unenforceable, in whole or in part, this Agreement will be considered amended
to
delete or modify, as necessary, the offending provision or provisions and
to
alter its bounds to render it valid and enforceable.
5.02. No
Waiver.
The
failure of either the Company or Executive to insist upon the performance
of any
term in this Agreement, or the waiver of any breach of any such term, shall
not
waive any such term or any other term of this Agreement. Instead, this Agreement
shall remain in full force and effect as if no such forbearance or waiver
had
occurred.
5.03. Entire
Agreement.
This
Agreement represents the entire agreement of the parties with respect to
the
subject matter hereof
and
supersedes any prior agreement between Executive and the Company (or any
of its
predecessors or affiliates).
This
Agreement may be amended only by a writing signed by each of the parties.
This
Agreement may be assigned by the Company to any successor. This Agreement
may
not be assigned by Executive.
5.04. Governing
Law.
This
Agreement will be governed by and construed in accordance with the law of
the
State of Virginia.
5.05. Consent
to Jurisdiction.
Executive and Company hereby irrevocably submits to the personal jurisdiction
of
the federal and state courts in the State of Virginia with jurisdiction in
any
action or proceeding seeking to enforce or interpret this Agreement.
5.06. Service
of Process.
Executive irrevocably consents to the service of any summons and complaint
and
any other process which may be served in any action or proceeding arising
out of
or related to this Agreement brought in the federal or state courts of Virginia
with jurisdiction by the mailing by certified or registered mail of copies
of
such process to Executive at his address as set forth on the signature page
of
this Agreement.
5.07. Venue.
Executive irrevocably waives any objection which he now or hereafter may
have to
the laying of venue of any action or proceeding arising out of or relating
to
this Agreement brought in the federal or state courts of Virginia and any
objection on the ground that any such action or proceeding in such courts
has
been brought in an inconvenient forum.
5.08. Agreement
Binding.
The
obligations of the parties under this Agreement will be binding on their
respective heirs, executors, legal representatives, successors and assigns.
In
the event of any change of control or acquisition of the Company by any other
company or entity, such company or entity shall be deemed a successor or
assign
of the Company under the terms of this Agreement, and shall be required to
assume or guaranty the obligations of the Company under this Agreement. Such
assumption or guaranty shall not affect or diminish the liability or obligations
of the Company to Executive under this Agreement.
5.09. Counterparts,
Section Headings.
This
Agreement may be executed in any number of counterparts. Each will be considered
an original, but all will constitute one and the same instrument. The section
headings of this Agreement are for convenience of reference only and will
not
affect the construction or interpretation of any of its provisions.
5.010. Arbitration.
In the
event that any disagreement or dispute whatsoever shall arise between the
parties concerning this Agreement, such disagreement or dispute shall be
submitted to the Judicial Arbitration and Mediation Services, Inc (“JAMS”) for
resolution in a confidential private arbitration in accordance with the
comprehensive rules and procedures of JAMS, including the internal appeal
process provided for in Rule 34 of the JAMS rules with respect to any initial
judgment rendered in an arbitration. Any such arbitration proceeding shall
take
place in Norfolk, Virginia, before a single arbitrator (rather than a panel
of
arbitrators). The parties agree that the arbitrator shall have no authority
to
award any punitive or exemplary damages and waive, to the full extent permitted
by law, any right to recover such damages in such arbitration. The costs
and
expenses of such arbitration shall be borne by the Company. The Company shall
pay or reimburse Executive for all reasonable attorneys’ fees and costs incurred
by Executive in prosecuting or defending any claim under this Agreement and
any
such arbitration proceeding, unless the arbitrator(s) shall determine in
their
award that Executive’s defense or claim with respect to any material matter in
such arbitration proceeding was frivolous and without merit. Nothing herein
shall prevent the Company from seeking injunctive relief as provided for
in
Article 4 of this Agreement. Judgment upon the final award rendered by such
arbitrator, after giving effect to the JAMS internal appeal process, may
be
entered in any court having jurisdiction thereof. If JAMS is not in business
or
is no longer providing arbitration services, then the American Arbitration
Association shall be substituted for JAMS for the purposes of the foregoing
provisions.
5.011. Notice.
For the
purposes of this Agreement, notices and all other communications provided
for in
the Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by United States certified mail, return receipt
requested, postage prepaid, addressed as follows:
If
to
Executive:
R.
Xxxxxx
Xxxx
XX
Xxx
0000
Xxxxxxxxxx,
XX 00000
If
to the
Company:
Greens
Worldwide Incorporated
XX
Xxx
000
Xxxxxxxx,
XX 00000
or
to
such other address as any party may have furnished to the others in writing
in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
5.012. Employee
Manuals and Handbooks.
Executive acknowledges that from time to time the Company or its affiliates
may
establish, maintain and distribute employee manuals or handbooks or personnel
policy manuals, and officers or other representatives of the Company may
make
written or oral statements relating to personnel policies and procedures.
Such
manuals, handbooks and statements are intended only for general guidance.
No
policies, procedures or statements of any nature by or on behalf of the Company
(whether written or oral, and whether or not contained in any employee manual
or
handbook, as the same may exist from time to time, or personnel policy manual),
and no acts or practices of any nature, shall be construed to modify this
Agreement or to create express or implied obligations of any nature to the
Executive or to impose any such obligations on the Executive in conflict
with or
in any manner inconsistent with the provisions of this Agreement.
5.013.
Insurance
and Indemnity.
The
Company shall, to the fullest extent permitted by law, indemnify the Executive.
The Company shall also provide the Executive with coverage as a named insured
under a directors and officers liability insurance policy to be maintained
for
the Company’s directors and officers. The Company shall continue to maintain
directors and officers liability insurance for the benefit of Executive during
the term of this Agreement and for at least three (3) years following the
termination of Executive’s employment with the Company, provided that such
insurance is available on commercially reasonable terms. This obligation
to
provide insurance and indemnify the Executive shall survive expiration or
termination of this Agreement with respect to proceedings or threatened
proceedings based on acts or omissions of the Executive occurring during
the
Executive’s employment with the Company or with any affiliated company. Such
obligations shall be binding upon the Company’s successors and assigns and shall
inure to the benefit of the Executive’s heirs and personal
representatives.
EXECUTIVE
ACKNOWLEDGES THAT HE HAS READ AND UNDERSTANDS THE FOREGOING PROVISIONS AND
THAT
SUCH PROVISIONS ARE REASONABLE AND ENFORCEABLE.
IN
WITNESS WHEREOF,
the
parties have caused this Agreement to be executed this 9th day of September,
2005 .
| EXECUTIVE | GREENS WORLDWIDE INCORPORATED | |
| ___________________________________ | By:_____________________ | |
|
R.
Xxxxxx Xxxx
|
Xxxxxx X. Xxxxxxxxx, Director | |
| By:_____________________ | ||
| Xxxx X. Xxxxxxx, Director |
