EXHIBIT 10.21
-------------
EMPLOYMENT AGREEMENT
--------------------
This Agreement, made this 30th day of November, 2001, but effective as of
October 1, 2001, by and between Daleco Resources Corporation, a Delaware
corporation together with any and all of its wholly owned subsidiaries with its
principal place of business at 000 Xxxxx Xxxxxx Xxxxxx, Xxxx Xxxxxxx,
Xxxxxxxxxxxx 00000 ("Company") and Xxx Xxxx ("Employee").
WITNESSETH:
WHEREAS, the Company desires to employ Employee and Employee desires to be
employed by the Company upon the terms and conditions set forth herein; and
WHEREAS, the Employee is presently employed by the Company without the
benefit of a written contract; and
WHEREAS, the Employee and Company desire to reduce the terms of Employee's
employment with the Company into a written contract.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein and intending to be legally bound hereby, the parties hereto
agree as follows:
1. INCORPORATION BY REFERENCE. The parties hereto incorporate by reference
the Witnesseth section as though same were set forth at length herein.
2. Employment.
----------
(a) The Company hereby employs Employee as Chairman of the Board of
Directors ("Board") and Chief Executive Officer of the Company. Employee shall
report directly to the Board and shall perform such duties as are customarily
performed by a person holding the position of Chairman of the Board of Directors
and Chief Executive Officer in business is similar to those engaged by the
Company and shall, in addition, render such other reasonable services as may be
assigned to him from time to time by the Board within his scope of experience,
training and expertise.
(b) Employee hereby agrees to be employed as Chief Executive Officer
of the Company for the term hereof as defined before and to serve as a member of
the Board for so long as he shall be elected and qualified. Employee agrees that
he shall at all times faithfully and to the best of his ability, perform all of
the duties that may reasonably be requested of him within his scope of
experience, training and expertise pursuant to the terms of this Agreement.
(c) While the principal offices of the Company are located at 000
Xxxxx Xxxxxx Xxxxxx, Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000, [the Company shall
maintain corporate offices for Employee at 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx
000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, with appropriate secretarial support, at the
Company's expense.
(d) The Company represents and warrants to Employee that this
Agreement has been duly and validly authorized and executed by and on behalf of
-2-
the Company in accordance with its Certificate of Incorporation and Bylaws and
that it constitutes the lawful, valid and binding obligation of the Company.
(e) The Employee represents and warrants to the Company that he is
free to accept employment hereunder and that he has no prior or existing
obligations, commitments or restraints of any kind that would in anyway hinder
or interfere with his acceptance of, or the full performance of, his employment
by the Company. When executed, this Agreement will constitute the lawful, valid
and biding obligation of Employee.
3. Term.
----
(a) Unless earlier terminated in accordance with Paragraph 5 below,
this Agreement shall continue for an initial period commencing as of the
Effective Date and ending September 30. 2004 ("Initial Term"). After the
expiration of the Initial Term and subject to the termination provisions set
forth herein, this Agreement will automatically be extended for successive two
(2) year terms, provided that neither party has given written notice to the
other of his/its intent not to renew not less than 90 days prior to the
respective renewal date.
4. Compensation.
------------
(a) BASE SALARY. During the Employee's employment hereunder, the
Company shall pay to the employee an annual base salary of not less than One
Hundred Thousand Dollars ($100,000). It is understood and agreed that the
-3-
Company may, at the sole and exclusive discretion of the Board, increase from
time to time the Employee's base salary.
The base salary shall be paid in equal periodic installments in accordance
with the Company's salary practices. The base salary payment shall not in any
way limit or reduce any other obligation of the Company hereunder, and no other
compensation, benefit or payment hereunder shall in any way limit or reduce the
obligation of the Company to pay Employee's base salary hereunder.
(b) Performance Bonus. The Employee shall receive from the Company,
on or before June 30, 2002 ("Accrued Performance Bonus Date") a bonus for the
Employee's dedication and devotion to the Company over the past ten (10) years
in the amount of Fifty Thousand Dollars ($50,000)("Accrued Performance Bonus").
The Accrued Performance Bonus shall be payable fifty percent (50%) in cash by
the Company (less applicable deductions) with the remainder in common stock of
the Company ("Common Stock"), the number of shares of which to be determined
based upon the average closing price for the Common Stock at the close of
business for the five (5) trading days immediately preceding the Accrued
Performance Bonus Date ("Accrued Performance Stock Purchase Price"). The Common
Stock payable to the Employee pursuant to this paragraph shall be fully vested
shares without any restrictions on transferability except as otherwise required
by law, and provided further that Employee shall not be allowed to transfer the
shares received pursuant to this paragraph for a period of one year beginning on
-4-
the date of his receipt of such shares.
(c) STOCK OPTIONS. At the time of execution of this Agreement, the
Employee shall be granted options to purchase Five Hundred Thousand shares
(500,000) of Common Stock at a price equal to ninety percent (90%) of the
Accrued Performance Stock Purchase Price ("Options").
The options shall vest in equal installments over the initial term;
however, vesting shall be accelerated in the event of Employee's death,
disability, involuntary termination without cause (as defined below), or upon a
change in control, as defined as the acquisition of forty-one percent (41%) of
the issued and outstanding common stock of the Company by any party, without
giving effect to future dilution through the exercise of any outstanding
options, warrants or the conversion of preferred stock into Common Stock. The
Options granted hereunder shall not be exercisable after the earlier of: (i) the
expiration of three (3) years from the date the options become vested, or (ii)
two (2) years from the date the Employee ceases to be employed by the Company.
(d) EXPENSES. During the term of Employee's employment hereunder, the
Employee shall receive reimbursement from the Company for all reasonable
expenses incurred by the Employee in the performance of his duties hereunder,
including, by way of example and not limitation, travel and living expenses
while away from home on business at the request of or in the service of the
Company, provided that such expenses are incurred and accounted for in
-5-
accordance with the standard policies and procedures established, from time to
time, by the Company for reimbursement of expenses.
(e) VACATION. Employee shall be entitled to four (4) weeks of
vacation for each twelve (12) months of employment by the Company. It being
understood that as of the date hereof, Employee is presently entitled to the
full amount of vacation authorized hereunder pursuant to this paragraph. Any
such vacation shall be taken at such times and in such periods as shall not
substantially interfere with Employee's duties required to be rendered by the
Employee hereunder.
(f) OTHER BENEFITS. The Employee shall be entitled to participate in
the same manner as other officers and directors of the Company in such life
insurance, medical, dental, disability, pension, retirement plans and other
programs as may be established by the Company and/or the Board, from time to
time, for the benefit of its officers and directors, except as provided
elsewhere herein, nothing herein shall affect the Company's or Board's right to
amend, modify or terminate any retirement or other benefit plan at anytime for
any reason.
5. TERMINATION OF EMPLOYMENT. This Agreement and the Employee's employment
hereunder may be terminated only under the following circumstances during the
term of this Agreement.
(a) TERMINATION BY EMPLOYEE. Employee may terminate his employment
with the Company for any reason after September 30, 2002 by giving the Company
not less than 90 days notice of his intent to terminate his employment. In the
-6-
event of the termination of this Agreement by the Employee, the Company shall be
required to pay Employee only the amounts due and owing to employee pursuant to
this Agreement prorated to the date of Employee's voluntary termination and
Employee shall not be entitled to the payments set forth in Paragraph 6(c)
below. Notwithstanding the foregoing to the contrary, should the Employee's
notice of voluntary termination result from the imposition of additional duties
and/or requirements outside the normal course, of Employee's duties, expertise
or training experience, of a person holding Employee's position or the Company's
or Board's refusal to allow Employee to take reasonable vacation time, then
Employee shall be entitled to those benefits to which he would be entitled had
his termination been an involuntary termination without cause ("Forced
Resignation").
(b) DEATH. The Employee's employment hereunder shall terminate upon
his death.
(c) DISABILITY. If (i) as a result of the Employee's incapacity due
to physical or mental illness, the employee shall have been unable to perform
his duties hereunder for a period of two (2) consecutive months during the term
hereof, and (ii) within 90 days after written notice of termination is given by
the Company to the Employee (which may occur at or after the end of such two (2)
month period) the Employee shall not have returned to the performance of his
duties hereunder on a full time basis; then the Company may terminate the
Employee's employment hereunder.
-7-
(d) CAUSE. The Company may, at any time during the term hereof,
terminate the Employee's employment for cause. For the purpose of this
Agreement, "Cause" shall be defined to mean: (i) any material failure by the
Employee to observe or perform any of his agreements contained herein; (ii) his
conviction or pleas of guilty or nolo contendere to a filing or other crime of
moral turpitude or misappropriation of funds; or (iii) the Employee's substance
abuse.
(e) Effect of Termination. Any termination of this Agreement pursuant
to paragraphs 5(b), (c) or (d) will automatically act as the Employee's
resignation from the Board effective as of the date of Employee's termination.
6. COMPENSATION UPON TERMINATION OF EMPLOYMENT.
(a) During any period that Employee fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness
("disability period"), the Employee shall continue to receive his full base
salary together with all benefits, then in effect and which have been granted to
Employee; provided, however, that any payments made to the Employee during the
disability period shall be reduced by the sum of the amount; if any, payable to
the Employee under any disability benefit plans of the Company.
(b) If the Employee's employment is terminated for cause under
paragraph 5(d) above, the Company shall pay the Employee his full base salary
through the termination date plus all accrued and unpaid benefits (including all
expense reimbursements outstanding, if any) and the Company shall have no
-8-
further obligations whatsoever to the Employee under this Agreement, except as
may be expressly provided elsewhere herein.
(c) If the Employee's employment is terminated by the Company prior
to the scheduled expiration of the Initial Term or any extension thereof, or if
by Forced Resignation, other than for cause, then Employee shall be entitled to
receive payments of his base salary and a performance bonus for the balance of
the Initial Term under the terms set forth in this Agreement, plus all accrued
and unpaid benefits (including all health and welfare benefits to which Employee
was a participant in accordance with their terms). Additionally, all Options
shall become fully vested in Employee and Employee shall have a period of three
(3) years of the date of his involuntary termination in which to exercise said
Options. Finally, Employee shall be paid a severance payment equal to three (3)
times the Employee's base salary then in effect.
7. CORPORATE BOARDS AND OTHER MEMBERSHIPS. The Employee shall
continue to serve on the boards of the Company's subsidiary corporations and
shall have the right to become a member of boards of directors of other
corporations to the extent that such entities are not in competition with the
Company and such other board memberships do not directly or indirectly interfere
with Employee's duties to the Company.
8. RESTRICTIONS ON COMPETITION AND NON-DISCLOSURE
(a) Non-Disclosure of Information.
(1) Employee shall not, directly or indirectly, disclose to any
person or entity for any reason, or use for his own personal benefit, any
Confidential Information (as
-9-
defined below) either during his employment with the Company or following
termination of that employment for Cause for a period of three years after
termination of this Agreement;
(2) Employee shall, at all times take all precautions necessary
to protect from loss or disclosure by him of any and all documents or other
information containing, referring to or relating to such Confidential
Information. Upon termination of his employment with the Company for Cause or if
Employee terminates the Agreement prior to expiration of the Initial Term, the
Employee shall promptly return to the Company any and all documents or other
tangible property containing, referring to or relating to such Confidential
Information, whether prepared by him or others.
(3) Notwithstanding any provision to the contrary in this
Paragraph 8, this paragraph shall not apply to information which the Employee is
legally required to disclose or to information which has become part of the
public domain or is otherwise publicly disclosed through no fault or action of
the Employee. If Employee has reason to believe that he may be legally required
to disclose Confidential Information, he shall give the Company reasonable
notice prior to disclosure so that it may seek to protect the confidentiality of
such information.
(4) For purposes of this Agreement "Confidential Information"
means any information relating in any way to the business of the Company
disclosed to or known to the Employee as a consequence of, result of, or through
the Employee's employment by the Company which consists of technical and
-10-
non-technical information about the Company's products, processes, programs,
concepts, forms, business methods, data, any and all financial and accounting
data, marketing, customers, customer lists, and services and information
corresponding thereto acquired by the Employee during the term of the Employee's
employment by the Company. Confidential Information shall not include any of
such items which are published or are otherwise part of the public domain, or
freely available from trade sources or otherwise.
(b) DISCLOSURE OF WORKS AND INVENTIONS/ASSIGNMENT OF PATENTS.
(1) Employee shall maintain such records of his work as the
Company may direct from time to time. Employee shall promptly disclose to the
Company, in writing, any and all copyrightable works, including software, and
any and all discoveries, inventions, technological innovations and improvements,
whether patentable or not (whether it be a machine, process, apparatus, article,
composition, design, software, writing or other thing) conceived or made by
Employee, solely or jointly, during the period of his employment with the
Company, whether or not authorized, conceived or made during working hours or
with the Company's equipment or facilities, which relates in any manner to the
existing or contemplated business of the Company. Unless otherwise waived in
writing by the Company, all such copyrightable works (including software),
discoveries, inventions, technological innovations and improvements shall be the
exclusive property of the Company with respect to any and all countries in the
-11-
world and Employee shall assign and hereby does assign all right, title and
interest thereto the Company or its nominee.
(2) Employee, both during his employment and thereafter, shall
cooperate fully with the Company in taking all actions and measures necessary
for the Company to acquire and perfect its ownership of all such property.
Whenever required to do so by the Company, Employee shall execute any and all
applications, assignments or other instruments which the Company shall deem
necessary to apply for and obtain Letters Patent or copyrights of the United
States or any foreign country or to otherwise protect the Company's interest
therein. Such obligations shall continue beyond the termination of employment
with respect to works, inventions, discoveries and improvements authorized,
conceived, made or reduced to practice by Employee during the period of
employment, and shall be binding upon Employee's assigns, executors,
administrators and other legal representatives. In conformance with Company
policy from time to time, Employee shall be reimbursed by the Company for
reasonable expenses incurred by Employee in connection with his obligations
under this Section 8(b), subject to Employee furnishing adequate documentary
evidence to substantiate such expenses.
(3) Employee agrees that in the event of publication by Employee
of written or graphic materials, the Company will retain and own all rights in
said materials, including right of copyright.
-12-
(c) Restrictions on Competition.
(1) Employee covenants and agrees that during the period of
Employee's employment hereunder and for a period of two (2) years following the
termination of Employee's employment, Employee shall not, directly or indirectly
engage in, participate in or assist, as principal or agent, officers, director,
employee, franchisee, consultant, shareholder, or otherwise, alone or in
association with any other person, corporation or other entity, any business
whose activities, services or products are directly or indirectly competitive
with the subsidiaries or affiliates anywhere in the United States; provided,
however, that the foregoing restriction shall not apply in the case of a company
the stock of which is traded either on a national or a regional stock exchange
or over-the-counter, where Employee owns less than 5% of the stock of such
company, or in the oil and gas exploration and production industry.
(2) Employee agrees that during his employment with the Company
he shall not, directly or indirectly, solicit the trade of or trade with, or
otherwise do business with, any customer or prospective customer of the Company
for any direct or indirect competitor of the Company. Employee further agrees
that for two (2) years following the termination of his employment with the
Company, Employee shall not, directly or indirectly, solicit the trade of or
trade with, any customer or prospective customer of the Company on behalf or for
the benefit of any direct or indirect competitor of the Company, other than in
the oil and gas exploration and production industry.
-13-
(3) Employee agrees that during his employment with the Company
and for a period of two (2) years following the termination of Employees'
employment with the Company, Employee shall not, directly or indirectly, solicit
or induce, or attempt to solicit or induce, any employee of the Company to leave
the Company for any reason whatsoever or hire any employee of the Company.
(4) During his employment with the Company, Employee shall not
take any action which might divert from the Company any opportunity which would
be within the scope of any present or contemplated future business of the
Company.
(5) In the event of the sale or other disposition of all or
substantially all of the Company's assets or capital stock, Employee agrees to
use his best efforts, in good faith, to assist the purchaser during the
transition phase for a period of 12 months at Employee's then current
compensation level plus fifty percent. Employee acknowledges, however, that
nothing contained herein shall be binding upon or otherwise require the
purchaser of the Company's assets or capital stock to continue the employment of
Employee after such purchase and sale.
(6) The provisions set forth in Section 8 of this Agreement
shall survive the termination of Employee's employment with the Company, or the
expiration of this Agreement, as the case may be, and shall continue to be
binding upon Employee and Employer in accordance with their respective terms.
-14-
(7) Employee recognizes and acknowledges that the services to be
rendered by him hereunder are of a special and unique character and that the
restrictions on Employee's activities contained in this Agreement are required
for the Company's reasonable protection. Employee agrees that if he shall breach
paragraph 8 of this Agreement, the Company will be entitled, if it so elects, to
institute and prosecute proceedings at law or in equity to obtain damages with
respect to such breach or to enforce the specific performance of this Agreement
by Employee or to enjoin Employee from engaging in any activity in violation
hereof.
9. MISCELLANEOUS.
(a) NOTICES. Any notice required hereby shall be in writing, shall be
effective upon receipt, may be sent by facsimile transmission, or original
document by hand delivery, overnight courier or certified mail, return receipt
requested, postage prepaid to the address set forth below. The original of any
notice sent by facsimile transmission shall be delivered to the addressee by the
close of the business day next following the date of the facsimile transmission.
All notices shall be sent to: If to the Company:
Daleco Resources Corporation
000 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
FAX NO: 000-000-0000
ATTN: Xxxx X. Xxxxxxxxx
With a copy to:
-15-
Xxxxxx, Van Denbergh & Xxxxxxx, P.C.
Xxx Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
FAX NO: 000-000-0000
ATTN: C. Xxxxxx Xxxxxxx
-16-
If to Employee:
Xxx Xxxx
000 Xxxxx Xxxx, #000
Xxxxxxx Xxxxx, XX 00000
Any party may change its address for notice by giving the other party ten
(10) days notice of such change.
(b) VALIDITY. Any term or provisions of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any terms or provisions
thereof.
(c) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute the same Agreement.
(d) MODIFICATION. This Agreement sets forth the entire agreement and
understanding of the parties concerning the subject matter hereof and supersedes
all prior agreements and understandings between the parties hereto. This
Agreement may not be amended or modified except by written instrument executed
by the parties hereto.
(e) DISPUTE RESOLUTION. Any dispute between Company and Employee
arising out of or in connection with this Agreement which cannot be amicably
resolved shall be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association in Philadelphia,
-17-
Pennsylvania. Each party shall appoint one arbitrator and they shall select a
third arbitrator. The decision of the arbitrators shall be by majority vote and
shall be without appeal therefrom except as allowed by law, and judgment upon
the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. Costs of the arbitration shall be borne by the
non-prevailing party.
(f) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania without giving
effect to conflict of laws provisions.
(g) BINDING EFFECT. The terms and provisions of this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto, their
heirs, successors and assigns. Neither party may assign, convey or transfer the
rights or obligations contained herein unless such obligations, assignment,
conveyance or transfer is consented to by the other, which consent shall not be
unreasonably denied, or such assignment, transfer or conveyance is pursuant to a
testimony transfer or otherwise by operation of law.
(h) HEADINGS. Headings in this Agreement are included herein for
convenience only and shall not constitute a part of this Agreement for any other
purpose or be given any substance effect.
-18-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Attest: Daleco Resources Corporation
/s/ By:/s/
--------------------------------- -----------------------------------
Asst. Secretary Xxxx X. Xxxxxxxxx
Employee
/s/
-------------------------------------
Xxx Xxxx
-19-
