Exhibit 10a.
EMPLOYMENT CONTRACT FOR CHIEF EXECUTIVE
Naturally Safe Technologies, Inc. ("Employer"), a Nevada
corporation, located at 0000 Xxxxxxx Xxxxxx Xxxxx, # 000, Xxx
Xxxxx, Xxxxxxxxxx 00000, and Xxxxxx X. Xxxxxxx ("Employee"), of 000
Xxxxxx Xxxxxx Xxxxx, Xxx Xxxxxx, Xxxxxxxxxx 00000, in consideration
of the mutual promises made herein, agree as follows:
ARTICLE 1. TERM OF EMPLOYMENT
Specified Period
Section 1.01. Employer employs Employee and Employee accepts
employment with Employer for a period of three years beginning on
April 20, 2000 and terminating on April 20, 2003.
Automatic Renewal
Section 1.03. "Employment term" refers to the entire period of
employment of Employee by Employer, whether for the periods
provided above, or whether terminated earlier as hereinafter
provided or extended by mutual agreement between Employer and
Employee.
ARTICLE 2. DUTIES AND OBLIGATIONS OF EMPLOYEE
General Duties
Section 2.01. Employee shall serve as the Chief Executive Officer
of Naturally Safe Technologies, Inc. In his capacity as Chief
Executive Officer of Naturally Safe Technologies, Inc., Employee
shall do and perform all services, acts, or things necessary or
advisable to manage and conduct the business of Employer, including
the hiring and firing of all employees other than the officers of
Employer, subject at all times to the policies set by Employer's
Board of Directors, and to the consent of the Board when required
by the teams of this contract.
Matters Requiring Consent of Board of Directors
Section 2.02. Employee shall not, without specific approval of
Employer's Board of Directors, do or contract to do any of the
following:
(1) Borrow on behalf of Employer during any one fiscal year an
amount in excess of $1,000.00.
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(2) Permit any customer of Employer to become indebted to Employer
in an amount in excess of $20,000.00.
(3) Purchase capital equipment for amounts in excess of the amounts
budgeted for expenditure by the Board of Directors.
(4) Sell any single capital asset of Employer having a market value
in excess of $1,000.00 or a total of capital assets during a fiscal
year having a market value in excess of $5,000.00.
(5) Terminate the services of any other officer of Employer or hire
any replacement of any officer whose services have been terminated.
(6) Commit Employer to the expenditure of more than $5,000.00 in
the development and sale of new products or services.
Devotion to Employer's Business
Section 2.03. (a) Employee shall devote his entire productive
time, ability, and attention to the business of Employer during the
term of this contract.
(b) Employee shall not engage in any other business duties or
pursuits whatsoever, or directly or indirectly render any services
of a business, commercial, or professional nature to any other
person or organization, whether for compensation or otherwise,
without the prior written consent of Employer's Board of Directors.
However, the expenditure of reasonable amounts of time for
educational, charitable, or professional activities shall not be
deemed a breach of this agreement if those activities do not
materially interfere with the services required under this
agreement and shall not require the prior written consent of
Employer's Board of Directors).
(c) This agreement shall not prohibit Employee from making passive
personal investments or conducting private business affairs if
those activities do not materially interfere with the services
required under this agreement. However, Employee shall not
directly or indirectly acquire, hold, or retain any interest in any
business competing with or similar in nature to the business of
Employer.
Competitive Activities
Section 2.04. (a) During the term of this contract Employee shall
not, directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate
officer, director, or in any other individual or representative
capacity, engage or participate in any business that is in
competition in any manner whatsoever with the business of Employer.
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(b) Employee agrees that during the term of this contract and for a
period of one year after termination of this agreement, Employee
shall not directly or indirectly solicit, hire, recruit, or
encourage any other employee of Employer to leave Employer.
Uniqueness of Employee's Services
Section 2.05. Employee represents and agrees that the services to
be performed under the terms of this contract are of a special,
unique, unusual, extraordinary, and intellectual character that
gives them a peculiar value, the loss of which cannot be reasonably
or adequately compensated in damages in an action at law. Employee
therefore expressly agrees that Employer, in addition to any other
rights or remedies that Employer may possess, shall be entitled to
injunctive and other equitable relief to prevent or remedy a breach
of this contract by Employee.
Indemnification for Negligence or Misconduct
Section 2.06. Employee shall indemnify and hold Employer harmless
from all liability for loss, damage, or injury to persons or
property resulting from the negligence or misconduct of Employee.
Trade Secrets
Section 2.07. (a) The parties acknowledge and agree that during
the term of this agreement and in the course of the discharge of
his duties hereunder, Employee shall have access to and become
acquainted with financial, personnel, sales, scientific, technical
and other information regarding formulas, patterns, compilations,
programs, devices, methods, techniques, operations, plans and
processes that are owned by Employer, actually or potentially used
in the operation of Employer's business, or obtained from third
parties under an agreement of confidentiality, and that such
information constitutes Employer's "trade secrets."
(b) Employee specifically agrees that he shall not misuse,
misappropriate, or disclose in writing, orally or by electronic
means, any trade secrets, directly or indirectly, to any other
person or use them in any way, either during the term of this
agreement or at any other time thereafter, except as is required in
the course of his employment.
(c) Employee acknowledges and agrees that the sale or unauthorized
use or disclosure in writing, orally or by electronic means, of any
of Employer's trade secrets obtained by Employee during the course
of his employment under this agreement, including information
concerning Employer's actual or potential work, services, or
products, the facts that any such work, services, or products are
planned, under consideration, or in production, as well as any
descriptions thereof, constitute unfair competition.
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Employee promises and agrees not to engage in any unfair
competition with Employer, either during the term of this agreement
or at any other time thereafter.
(d) Employee further agrees that all files, records, documents,
drawings, specifications, equipment, software, and similar items
whether maintained in hard copy or on line relating to Employer's
business, whether prepared by Employee or others, are and shall
remain exclusively the property of Employer and that they shall be
removed from the premises or, if kept on-line, from the computer
systems of Employer, only with the express prior written consent of
Employer's Board of Directors.
Services as Consultant
Section 2.08. Following the employment term or Employee's
retirement, and if the employment term has not been terminated for
cause, Employee shall make his advice and counsel available to
Employer for such a period as Employer may desire. The parties
agree that this advice and counsel shall not entail full time
service and shall be consistent with Employee's retirement status.
Use of Employee's Name
Section 2.09. (a) Employer shall have the right to use the name of
Employee as part of the trade name or trademark of Employer if it
should be deemed advisable to do so. Any trade name or trademark,
of which the name of Employee is a part, which is adopted by
Employer during the employment of Employee, may be used thereafter
by Employer for as long as Employer deems advisable.
(b) Employee shall not, either during the term of this agreement or
at any time thereafter, use or permit the use of his name in the
trade name or trademark of any other enterprise if that other
enterprise is engaged in a business similar in any respect to that
conducted by Employer, unless that trade name or trademark clearly
indicates that the other enterprise is a separate entity entirely
distinct from and not to be confused with Employer and unless that
trade name or trademark excludes any words or symbols stating or
suggesting prior or current affiliation or connection by that other
enterprise or its employees with Employer.
Maintenance of home Office
Section 2.10. (a) Employee, for the convenience of the Company,
shall maintain an office in his home. However, the Company shall
only be responsible for those expenses approved in advance by the
Board of Directors of the Company. The home office shall be
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maintained in consideration for the wages, covenants and conditions
set forth herein.
ARTICLE 3. OBLIGATIONS OF EMPLOYER
General Description
Section 3.01. Employer shall provide Employee with the
compensation, incentives, benefits, and business expense
reimbursement specified elsewhere in this agreement.
Office and Staff
Section 3.03. Employer shall indemnify Employee for all losses
sustained by Employee in direct consequence of the discharge of his
duties on Employer's behalf.
ARTICLE 4. COMPENSATION OF EMPLOYEE
Annual Salary
Section 4.01. (a) As compensation for the services to be performed
hereunder, Employee shall receive a salary as follows:
(1) For the first year, at the rate of $72,000.00 per annum,
payable not less than once each month, on or before the
15th day of each month during the employment term.
(2) For subsequent years, at the rate of $150,000.00 per
annum, payable not less than once each month, on or
before the 15th day of each month during the employment
term.
(b) Employee shall receive such annual increases in salary as may
be determined by Employer's Board of Directors in its sole
discretion at its last regularly scheduled meeting prior to each
yearly anniversary of the employment term.
Deferred Compensation
Section 4.02. In the event that any portion of the compensation
paid by Employer to Employee is disallowed as an income tax
deduction on an income tax return of Employer, Employee agrees to
immediately repay to Employer the full amount of that portion.
ARTICLE 5. EMPLOYEE INCENTIVES
Profit-Sharing Based on Performance
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Section 5.01. (a) For each fiscal year of Employer in which the
net profits of Employer exceed $500,000.00 and the net profits of
Employer for that fiscal year exceed the net profits of Employer
for the previous fiscal year by twenty-five percent (25%), Employer
agrees to pay Employee, within two and one-half months after the
close of that fiscal year, an annual profit-sharing payment equal
to ten percent of that excess, provided, however, that the total
amount of this payment shall not exceed $100,000.00.
(b) If the employment term is terminated by Employer for cause,
Employee shall not be entitled to any portion of the annual profit-
sharing payment for the fiscal year in which that termination
occurs. However, if this contract should expire or be terminated
for reasons other than cause, Employee shall be entitled to a
percentage of the annual profit-sharing payment equal to the
percentage of the fiscal year worked.
(c) For the purpose of determining the amount of the annual profit
sharing bonus, the net profits of Employer shall be determined by
the firm of independent certified accountants then employed by
Employer.
Stock Bonus
Section 5.02. (a) If the employment term is not terminated by
Employer for cause, Employer agrees to transfer to Employee on
April 20, 2001, 400,000.00 shares of Employer's stock.
Stock Option
Section 5.03. (a) If the employment term is not terminated by
Employer for cause, Employer agrees to transfer to Employee on
April 20, 2001, an option to purchase 100,000 shares of Employer's
common stock at a purchase price of $1.50 per share. This option
may be exercised in whole or in part, but may only be exercised in
lots of 50,000 shares or more. Employee shall not have any of the
rights of, nor be treated as, a shareholder with respect to the
shares subject to this option until he has exercised the option and
has become the shareholder of record of those shares. This option
shall expire on April 20, 2002.
(a) If the employment term is not terminated by Employer for cause,
Employer agrees to transfer to Employee on April 20, 2001, an
option to purchase 100,000 shares of Employer's common stock at a
purchase price of $2.50 per share. This option may be exercised in
whole or in part, but may only be exercised in lots of 50,000
shares or more. Employee shall not have any of the rights of, nor
be treated as, a shareholder with respect to the shares subject to
this option until he has exercised the option and has become the
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shareholder of record of those shares. This option shall expire on
April 20, 2003.
(b) These options are not assignable.
(c) These options may only be exercised by Employee during the term
of his employment hereunder. However, in the event that the
employment term is terminated after April 20, 2001 by Employer for
reasons other than cause, Employee shall retain the right to
exercise any unused portion of the option until April 20, 2003.
ARTICLE 6. EMPLOYEE BENEFITS
Annual Vacation
Section 6.01. Employee shall be entitled to fifteen days vacation
time each year with full pay. Employee may be absent from his
employment for vacation only at such times as Employer's Board of
Directors shall determine from time to tame. If Employee is unable
for any reason to take the total amount of authorized vacation time
during any year, he may accrue that time and add it to vacation
time for any following year, with the maximum number of days to be
taken in any one year not to exceed twenty, without the prior
consent of the Board of Directors.
Illness
Section 6.02. Employee shall be entitled to five days per year as
sick leave with full pay. Sick leave may be accumulated up to a
total of ten days.
Medical Coverage
Section 6.03. Employer agrees to include Employee in the coverage
of its medical insurance.
ARTICLE 7. BUSINESS EXPENSES
Reimbursement of Business Expenses
Section 7.01. (a) Employer shall promptly reimburse Employee for
all reasonable business expenses incurred by Employee in connection
with the business of Employer.
(b) Each such expenditure shall be reimbursable only if it is of a
nature qualifying it as a proper deduction on the federal and state
income tax return of Employer.
(c) Each such expenditure shall be reimbursable only if Employee
furnishes to Employer adequate records and other documentary
evidence required by federal and state statutes and regulations
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issued by the appropriate taxing authorities for the substantiation
of each such expenditure as an income tax deduction.
Repayment of Disallowed Expenses
Section 7.02. In the event that any expenses paid for Employee or
any reimbursement of expenses paid to Employee shall, on audit or
other examination of Employer's income tax returns, be determined
not to be allowable deductions from Employer's gross income, and in
the further event that this determination shall be acceded to by
the Employer or made final by the appropriate federal or state
taxing authority or a final judgment of a court of competent
jurisdiction, and no appeal is taken from the judgment or the
applicable period for filing notice of appeal has expired, Employee
shall repay to Employer the full amount of the disallowed expenses.
ARTICLE 8. TERMINATION OF EMPLOYMENT
Termination for Cause
Section 8.01. (a) Employer reserves the right to terminate this
agreement if Employee willfully breaches or habitually neglects the
duties which he is required to perform under the terms of this
agreement; or commits such acts of dishonesty, fraud,
misrepresentation or other acts of moral turpitude as would prevent
the effective performance of his duties.
(b) Employer may at its option terminate this agreement for the
reasons stated in this Section by giving written notice of
termination to Employee without prejudice to any other remedy to
which Employer may be entitled either at law, in equity, or under
this agreement.
(c) The notice of termination required by this section shall
specify the ground for the termination and shall be supported by a
statement of [all] relevant facts.
(d) Termination under this section shall be considered "for cause"
for the purposes of this agreement.
Termination Without Cause
Section 8.02. (a) This agreement shall be terminated upon the
death of Employee.
(b) Employer reserves the right to terminate this agreement within
three months after Employee suffers any physical or mental
disability that would prevent the performance of his essential job
duties under this agreement, unless reasonable accommodation can
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be made to allow Employee to continue working. Such a termination
shall be effected by giving 10 days' written notice of termination
to Employee.
(c) Termination under this section shall not be considered "for
cause" for the purposes of this agreement.
Effect of Merger, Transfer of Assets, or Dissolution
Section 8.04. (a) This agreement shall not be terminated by any
voluntary or involuntary dissolution of Employer resulting from
either a merger or consolidation in which Employer is not the
consolidated or surviving corporation, or a transfer of all or
substantially all of the assets of Employer.
(b) In the event of any such merger or consolidation or transfer of
assets, Employer's rights, benefits, and obligations hereunder may
be assigned to the surviving or resulting corporation or the
transferee of Employer's assets.
Section 8.05. Notwithstanding any provision of this agreement, if
Employer terminates this agreement, it shall pay Employee an amount
equal to six months salary at the then current rate of
compensation.
Termination by Employee
Section 8.06. Employee may terminate his obligations under this
agreement by giving Employer at least three months notice in
advance.
ARTICLE 9. GENERAL PROVISIONS
Notices
Section 9.01. Any notices to be given hereunder by either party to
the other shall be in writing and may be transmitted by personal
delivery or by mail, registered or certified, postage prepaid with
return receipt requested. Mailed notices shall be addressed to the
parties at the addresses appearing in the introductory paragraph of
this agreement, but each party may change that address by written
notice in accordance with this section. Notices delivered
personally shall be deemed communicated as of the date of actual
receipt; mailed notices shall be deemed communicated as of the date
of mailing.
Arbitration
Section 9.02. (a) Any controversy between Employer and Employee
involving the construction or application of any of the terms,
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provisions, or conditions of this agreement shall on the written
request of either party served on the other be submitted to
arbitration. Arbitration shall comply with and be governed by the
provisions of the California Arbitration Act.
(b) Employer and Employee shall each appoint one person to hear and
determine the dispute. If the two persons so appointed are unable
to agree, then those persons shall select a third impartial
arbitrator whose decision shall be final and conclusive upon both
parties.
(c) The cost of arbitration shall be borne by the losing party or
in such proportions as the arbitrators decide.
Attorneys' Fees and Costs
Section 9.03. If any legal action is necessary to enforce or
interpret the terms of this agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, costs, and necessary
disbursements in addition to any other relief to which that party
may be entitled. This provision shall be construed as applicable
to the entire contract.
Entire Agreement
Section 9.04. This agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto
with respect to the employment of Employee by Employer and contains
all of the covenants and agreements between the parties with
respect to that employment in any manner whatsoever. Each party to
this agreement acknowledges that no representation, inducements,
promises, or agreements, orally or otherwise, have been made by any
party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise
not contained in this agreement shall be valid or binding on either
party.
Modifications
Section 9.05. Any modification of this agreement will be effective
only if it is in writing and signed by the party to be charged.
Effect of Waiver
Section 9.06. The failure of either party to insist on strict
compliance with any of the terms, covenants, or conditions of this
agreement by the other party shall not be deemed a waiver of that
term, covenant, or condition, nor shall any waiver or
relinquishment of any right or power at any one time or times be
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deemed a waiver or relinquishment of that right or power for all or
any other times.
Partial Invalidity
Section 9.07. If any provision in this agreement is held by a
court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining provisions shall nevertheless continue
in full force without beeing impaired or invalidated in any way.
Lap Governing Agreement
Section 9.08. This agreement shall be governed by and construed in
accordance with the laws of the State of California.
Sums Due Deceased Employee
Section 9.09. If Employee dies prior to the expiration of the term
of his employment, any sums that may be due him from Employer under
this agreement as of the date of death shall be paid to Employee's
executors, administrators, heirs, personal representatives,
successors, and assigns.
Counterparts
Section 9.10. This agreement may be executed in counterparts.
Executed on June 20, 2000 at Vista, California.
EMPLOYER Naturally Safe Technologies, Inc.
/s/ Xxxxxx X. Xxxxxxxx
By: Xxxxxx X. Xxxxxxxx
Chairman, Board of Directors
EMPLOYEE
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
