EMPLOYMENT CONTRACT
This Employment Contract (the "Agreement"), dated as of July
19, 2002, between Temtex Industries, Inc., a Delaware corporation
with offices at One Lincoln Centre, 0000 XXX Xxxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxx 00000 (the "Company"), and Xxxxxxx Xxxxxxxx,
residing at 00 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 (the
"Executive").
Recitals
WHEREAS, the Company desires to employ Executive as an
executive officer of the Company.
WHEREAS, Executive has agreed to his employment with the
Company pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises
and other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the Company and Executive hereby
agree as follows:
1. TERM.
The Company agrees to employ Executive, and the Executive
agrees to serve, on the terms and conditions of this Agreement
for a period commencing on July 19, 2002 and ending July 19, 2005
(the "Reference Date"), or such shorter period as may be provided
for herein. The period during which Executive is employed
hereunder is hereafter referred to as the "Employment Period."
2. DUTIES AND SERVICES.
During the Employment Period, Executive shall be employed as
the President and Chief Executive Officer of the Company and
shall be responsible for the day-to-day management of the
Company, and shall also perform services in a responsible
executive or managerial capacity for any of the Company's
subsidiary corporations when and as appropriate to further the
interests of the Company. In performance of his duties, Executive
shall be subject to the direction of the Board of Directors of
the Company substantially. Executive agrees to his employment as
described in this Section 2 and agrees to devote all of his
business time and efforts to the performance of his duties under
this Agreement. Executive shall be available to travel as the
needs of the business require.
3. COMPENSATION.
As compensation for his services hereunder, the Company
shall pay Executive, during the Employment Period, a base salary
payable in equal monthly installments at the annual rate of
$240,000. Executive shall also be eligible for a bonus up to 50%
of his base salary, as determined in the discretion of the Board
of Directors. During the Employment Period, the Company may
increase the base salary payable to the Executive, but cannot
reduce the base amount of Executive's salary. Executive will also
be eligible to participate in the regular employee benefit
programs now or hereafter established by the Company and in any
special executive benefits and perquisites established by the
Company's Board of Directors.
4. EXPENSES.
Executive shall be entitled to reimbursement for travel and
other out-of-pocket expenses incurred by Executive in the
performance of his duties hereunder, upon submission and approval
of written statements and bills in accordance with the then
regular procedures of the Company. Executive shall be entitled to
four weeks paid vacation each year, with no minimum employment
period being required before Executive may take vacation during
the initial year of Executive's employment. The Company
acknowledges that Executive currently resides in Lexington,
Massachusetts, that he may reside there during part or all of the
term hereof and that travel costs and related hotel and other
incidental expenses resulting from his travels from his place of
residence to the Company's facilities shall be reimbursed as
expenses hereunder.
5. NONCOMPETITION.
Executive agrees that (a) he will not during the Employment
Period engage in, or otherwise directly or indirectly be employed
by, or act as a consultant or lender to, or be a director,
officer, employee, owner or partner of, any other business or
organization that directly or indirectly competes with the
business of the Company or any of its subsidiaries and (b) for a
period of two (2) years after he voluntarily terminates this
Agreement, Executive shall not directly or indirectly compete
with or be engaged in the same business as the Company or any of
its subsidiaries or be employed by, or act as consultant or
lender to, or be a director, officer, employee, owner, or partner
of, any business or organization which, at the time of such
cessation, directly or indirectly competes with or is engaged in
the same business as the Company or any of its subsidiaries;
provided, however, that notwithstanding the foregoing, the
provisions of this Section 5 will not be deemed breached merely
because Executive owns not more than 1 percent of the outstanding
equity securities of an entity, if, at the time of its
acquisition by Executive, such securities are listed on a
national securities exchange, is reported on NASDAQ, or is
regularly traded in the over-the-counter market by a member of a
national securities exchange. The provisions of this Section 5
shall survive the termination of this Agreement by either party.
6. CONFIDENTIAL INFORMATION.
All confidential information which Executive may now
possess, may obtain from the Company or its subsidiaries during
or after the Employment Period, or may create prior to the end of
the Employment Period or otherwise relating to the financial
condition, results of operations, business, properties, assets,
liabilities, or future prospects of the Company or of any
customer or supplier of any of them shall not be published,
disclosed, or made accessible by him to any other person or
entity either during or after the termination of his employment
or used by him except during the Employment Period in the
business and for the benefit of the Company and its subsidiaries,
in each case without prior written permission of the Company.
Executive shall deliver to the Company all tangible evidence of
such confidential information prior to or at the termination of
his employment. The provisions of this Section 6 shall survive
the termination of this Agreement by either party.
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7. TERMINATION.
(a) Executive's Death. If Executive shall die during the
Employment Period, this Agreement shall terminate, except that
Executive's estate shall be entitled to receive the base salary
payable to Executive, accrued to the last day of the month in
which his death occurs, together with any death benefits provided
under employee benefit plans maintained by the Company.
(b) Executive's Disability. If, during the Employment Period,
Executive shall become physically or mentally disabled, whether
totally or partially, so that he is prevented from performing his
usual duties and services hereunder for a period of six (6)
consecutive or nonconsecutive months during any twelve (12) month
period, this Agreement shall terminate effective on such
incapacity, and Executive (or his legal representatives) shall be
entitled only to the base compensation earned pro rata to the
date of termination with no entitlement to any base salary after
the date of termination; provided, however, that Executive shall
be entitled to receive all benefits to which he may be entitled
pursuant to the Company's employee benefit plans.
(c) Termination by the Company Without Cause. This Agreement may
be terminated by the Company without cause upon thirty (30) days'
prior written notice thereof given to Executive. In the event of
termination without cause, the Company shall, until the Reference
Date, continue to pay Executive the base salary effective at the
time of termination in accordance with the Company's regular
payroll cycle. Additionally, following termination without cause,
Executive shall be entitled to continue to participate in all
regular employee benefit plans of the Company until the Reference
Date.
(d) Termination by the Company for Cause. This Agreement may be
terminated by the Company "for cause", as defined below, by
delivering to Executive written notice describing the cause and
granting Executive fifteen (15) days to respond to the Board of
Directors. If this Agreement is terminated by the Company for
cause, Executive shall only be entitled to the base salary earned
by him to the date of termination with no entitlement to any base
salary continuation payments or benefits continuation (except as
otherwise provided by the terms of an employee benefit plan of
the Company). The determination as to whether termination shall
be for cause shall be made by the Board of Directors of the
Company in the exercise of its business judgment. Termination of
this Agreement by the Company for cause shall be deemed to have
occurred only if:
(i) termination shall have been the result of an act or
acts of dishonesty on the Executive's part constituting a felony or
intended to result directly or indirectly in substantial gain or
personal enrichment to him at the expense of the Company; or
(ii) termination shall have been the result of the Executive's
willful and continued failure substantially to perform his duties
and responsibilities as an officer of the Company (other than
such failure resulting from his incapacity due to physical or
mental illness) after a demand for substantial performance is
delivered to the Executive by the Board of Directors of the
Company which specifically identifies the manner in which such
Board believes that the Executive has not substantially performed
his duties and the Executive is given a reasonable time after
such demand substantially to perform his duties; or
(iii) termination shall have been the result of a material
breach of this Agreement.
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Executive's employment shall in no event be considered to
have been terminated by the Company for cause if the act or
failure to act upon which the termination is based (A) was done
or omitted to be done without intent of gaining therefrom
directly or indirectly a profit to which the Executive was not
legally entitled and as a result of his good faith belief that
such act or failure to act was in or was not opposed to the
interests of the Company, or (B) is an act or failure to act in
respect of which the Executive meets the applicable standard of
conduct prescribed for indemnification or reimbursement of
expenses under the Bylaws of the Company or the laws of its state
of incorporation.
(e) Voluntary Termination by Executive. Executive may terminate
this Agreement at any time upon delivering thirty (30) days'
written notice to the Company. In the event of such voluntary
termination other than for "good reason", as hereinafter defined,
Executive shall be entitled to his base salary earned to the date
of his resignation, but no base salary continuation payment or
benefits continuation (except as provided by the terms of the
Company's employee benefit plans). On or after the date the
Company receives notice of Executive's resignation (other than
resignation for good reason), the Company may, at its option, pay
Executive his base salary through the effective date of his
resignation and terminate his employment immediately.
(f) Termination by Executive For Good Reason. Executive may at
any time voluntarily terminate his employment for "good reason",
as defined below, upon thirty (30) days written notice thereof to
the Company. In the event of such voluntary termination for "good
reason", Executive shall be deemed to have been terminated
without cause with the same payments and benefits set forth in
Section 7(c) being applicable to Executive's termination under
this Section 7(f).
For purposes of this Agreement, "good reason" shall
mean the occurrence of any of the following events:
(i) removal from the offices Executive holds on the date of
this Agreement or a material reduction in Executive's authority or
responsibility, but not including termination of Executive "for
cause";
(ii) reduction in the base salary payable to Executive; or
(iii) the Company otherwise commits a material breach of this
Agreement.
8. SURVIVAL.
The covenants, agreements, representations, and warranties
contained in or made pursuant to this Agreement shall survive
Executive's termination of employment.
9. MODIFICATION.
This Agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof, supersedes all
existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by
each party.
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10. NOTICES.
Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested, or by Federal Express,
Express Mail, or similar overnight delivery or courier service or
delivered (in person or by telecopy, telex, or similar
telecommunications equipment) against receipt to the party to
whom it is to be given at the address of such party set forth in
the preamble to this Agreement (or to such other address as the
party shall have furnished in writing in accordance with the
provisions of this Section 10). Any notice given to the Company
shall be addressed to the attention of the Corporate Secretary.
Notice to the estate of Executive shall be sufficient if
addressed to Executive as provided in this Section 10. Any notice
or other communication given by certified mail shall be deemed
given at the time of certification thereof, except for a notice
changing a party's address which shall be deemed given at the
time of receipt thereof. Any notice given by other means
permitted by this Section 10 shall be deemed given at the time of
receipt thereof.
11. WAIVER.
Any waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed to be a
waiver of any other breach of that provision or of any breach of
any other provision of this Agreement. The failure of a party to
insist upon strict adherence to any term of this Agreement on one
or more occasions shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any
waiver must be in writing.
12. BINDING EFFECT.
Executive's rights and obligations under this Agreement
shall not be transferable by assignment or otherwise, such rights
shall not be subject to commutation, encumbrance, or the claims
of Executive's creditors, and any attempt to do any of the
foregoing shall be void. The provisions of this Agreement shall
be binding upon and inure to the benefit of Executive and his
heirs and personal representatives, shall be binding upon and
inure to the benefit of the Company and its successors and
assigns.
13. HEADINGS.
The headings of this Agreement are solely for the
convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
14. COUNTERPARTS; GOVERNING LAW.
This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
It shall be governed by and construed in accordance with the laws
of the State of Delaware, without giving effect to the conflict
of laws rules.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
COMPANY:
TEMTEX INDUSTRIES, INC.
By:________________________________
Name:______________________________
Title:_____________________________
EXECUTIVE:
___________________________________
Xxxxxxx Xxxxxxxx
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