Exhibit 10.1
EMPLOYMENT and CONSULTING AGREEMENT
THIS EMPLOYMENT AND CONSULTING AGREEMENT ("Agreement") is made this
1st day of July, 1998 by and between Innovative Coatings Corporation, a
Georgia corporation having its principal office at 0000 Xxxx Xxxx Xxxxx
Xxxxx, Xxxxxxxx, Xxxxxxx 00000 (the "Company"); and Xxxxxx X. Xxxxxx,
Xx., an individual residing at 0000 Xxxx Xxxx Xxxxx, Xxxxxxxxx, XX 00000,
("Xxxxxx" or "Employee").
FOR AND IN CONSIDERATION of the mutual promises, agreements and
covenants contained herein, the parties hereto, intending to be legally
bound, do hereby agree as follows:
1. Employment: Position and Duties. The Company hereby agrees
to employ Xxxxxx to act as, and to exercise all of the powers and
functions of, its Chairman of the Board and Financial Consultant during
the term hereof (as set forth in paragraph 4 herein) and to perform such
acts and duties and to generally furnish such services to the Company and
its subsidiaries (if any) as is customary for a senior management person
with a similar position in like companies; and he shall have such
specific powers, duties and responsibilities as the Board of Directors
of the Company shall from time to time reasonably prescribe, provided
that such duties and responsibilities are consistent with Xxxxxx'x senior
management position. Xxxxxx hereby agrees to accept such employment and
shall perform and discharge faithfully, diligently, and to the best of
his abilities such duties and responsibilities and shall devote most of
his working time and efforts to the business and affairs of the Company
and its subsidiaries; provided however, that, to the extent consistent
with the needs of the Company, Xxxxxx shall be entitled to expend a
reasonable amount of time on civic, public, industry, and philanthropic
activities and on the management of his own investments and assets.
Xxxxxx recognizes that as a matter of law the election of a person to a
board of directors is performed by the shareholders of a corporation and
that such election cannot generally be the subject of a contractual
agreement, however, as long as Xxxxxx is elected to the board as a
director, Xxxxxx shall perform all those duties of a Director.
2. Place of Employment. During his employment hereunder, Xxxxxx'x
principal place of employment shall be located at the Company's principal
place of business or principal executive office, wherever located as
designated from time to time by the Board of Directors of the Company;
provided however, notwithstanding the foregoing, Xxxxxx shall be required
to conduct his duties and responsibilities hereunder (except for routine
and customary business travel) only from executive offices located in
Georgia.
3. Compensation.
(a) Base Salary. The Company shall pay to Xxxxxx an annual base
salary ("Base Salary") of $70,000, payable in accordance with the
Company's customary payroll policy for its executives, and subject to
applicable tax and payroll deductions; and an annual non-accountable
expense allowance of $20,000 payable monthly. Xxxxxx'x Base Salary shall
be reviewed annually by the Company's Board of Directors which may make
upward adjustments as within its discretion and it deems appropriate.
(b) Incentive Compensation. Xxxxxx'x incentive compensation, if any,
shall be determined annually by the Company's Board of Directors.
(c) Certain Other Benefits. During the term of this Agreement,
Xxxxxx shall be entitled to equity participate in any and all Xxxxxx
benefit plans and arrangements which are available to senior executive
officers of the Company, including without limitation, group medical and
life insurance plans, accidental death benefit plans, disability
insurance plans, pension plans, and automobile expense reimbursement
allowances or Company-provided automobiles.
4. Term. The term of Xxxxxx'x employment with the Company shall be for a
one-year period commencing July 1, 1998 or earlier and continuing through
June 30, 1999 (the "initial term"); provided, however, that this
Agreement shall be automatically renewed for successive one-year periods
(each a "successor term"; and together with the initial term, generally
'the term') unless either party hereto gives written notice of
termination to the other party at least twelve months prior to the
expiration of the initial term or of any successor term. By way of
illustration, if neither party gives to the other party a written notice
of termination by June 30, 1999 this Agreement shall be automatically
renewed for a one-year period ending on June 30, 2000.
5. Stock Options. Periodic stock and incentive stock option grants to
Xxxxxx, if any, shall be determined by the Board of Directors.
6. Unauthorized Disclosure and Xxxxxx'x Right of Ownership. For a period
of two years after termination of employment, Xxxxxx shall not without
the written consent of the Company, disclose to any person, other than
person to whom disclosure is reasonably necessary or appropriate in
connection with the performance by Xxxxxx of his duties as an executive
officer of the Company, any material confidential information obtained by
Xxxxxx while in the employ of the Company with respect to the businesses
of the Company or any of its subsidiaries, including by not limited to,
operations, pricing, contractual or personnel date, products,
discoveries, improvements, trade secrets, license agreements, marketing
information, suppliers, dealers, principals, customers, or methods of
distribution, or any other confidential information the disclosure of
which Xxxxxx knows or in the exercise of reasonable care should know will
be damaging to the Company; provided, however, that confidential
information shall not include any information known generally to the
public (other than as a result of unauthorized disclosure by Employee)
or any information not otherwise considered by the Company to be
confidential. Furthermore, all inventions conceived or developed by
Xxxxxx in which the equipment, supplies, facilities, or trade secret
information of the Company was used, or that relate to the business of
the Company or to the Company's actual or demonstrably anticipated
research and development, or that result from any work performed by
Xxxxxx for the Company will remain the property of the Company. All other
inventions conceived or developed by Xxxxxx during the term of this
Agreement will remain the property of Employee.
7. Indemnification of Employee. The Company shall indemnify Xxxxxx if
Xxxxxx is made a party, or threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative, or investigative, because Xxxxxx is
or was an officer or director of the Company or any of its subsidiaries,
affiliates, or successors, against expenses (including reasonable
attorneys fees and disbursements), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding to the fullest extent and in the manner
set forth in and permitted by the General Corporation Law of the State
of Georgia and any other applicable law in effort from time to time.
8. Termination.
(a) Termination Upon Death. If Xxxxxx dies during the term of this
Agreement, Xxxxxx'x legal representatives shall be entitled to receive
the Base Salary through the last day of the first month following the
month in which Xxxxxx'x death occurred. If in respect of the fiscal year
in which Xxxxxx dies he would otherwise have been entitled to receive
incentive compensation under paragraph 3(c) by reason of the operations
of the Company during such fiscal year, Xxxxxx'x legal representatives
shall be entitled to receive a pro rata portion of such incentive
compensation determined by multiplying the dollar amount of the incentive
compensation involved by a fraction, the numerator of which shall be the
number of complete calendar months that elapsed during the fiscal year
through the end of the month in which Xxxxxx died and denominator of
which shall be twelve.
(b) Termination Upon Disability or Incapacity. The Company may
terminate Xxxxxx'x employment hereunder at the end of any calendar month
by giving written notice of termination to Xxxxxx in the event of
Xxxxxx'x incapacity due to physical or mental illness which prevents the
proper performance of the duties of Xxxxxx set forth herein or
established pursuant hereto for a substantial portion of any six-month
period of Xxxxxx'x term of employment hereunder. Any questions as to the
existence or extent of illness or incapacity of Xxxxxx upon which the
Company and Xxxxxx cannot agree shall be determined by a qualified
independent physician selected by the Company and approved by Xxxxxx (or,
if Xxxxxx is unable to give such approval, by any adult member of the
immediate family or the duly appointed guardian of Employee). The
determination of such physician certified in writing to the Company and
to Xxxxxx shall be final and conclusive for all purposes of this
Agreement. In the event of any such termination pursuant to this
subparagraph 8(b), Xxxxxx shall be entitled to receive his Base Salary
through the last day of the month in which this Agreement is terminated.
If in respect of the fiscal year in which Xxxxxx'x employment terminates
pursuant to this subparagraph 8(b) he would otherwise have been entitled
to receive incentive compensation under paragraph 3(c) by reason of the
operations of the Company during such fiscal year, Xxxxxx shall be
entitled to receive a pro rata portion of such incentive compensation
determined by multiplying the dollar amount of the incentive compensation
by a fraction, the numerator of which shall be the number of complete
calendar months that elapsed during the fiscal year through the end of
the month in which Xxxxxx'x employment terminated pursuant to
subparagraph 8(b) and the denominator of which shall be twelve.
(c)Termination for Cause. The Company may terminate Xxxxxx'x
employment hereunder for "cause" (as hereinafter defined) by giving
written notice of termination of this Agreement to Employee. For the
purpose of this Agreement, the Company shall have "cause" to terminate
Xxxxxx'x employment hereunder upon Xxxxxx'x (l) habitual drunkenness or
drug addiction or willful failure materially to perform and discharge his
duties and responsibilities hereunder, or (ii) misconduct that is
materially and significantly injurious to the Company, or (iii)
conviction of a felony involving the personal dishonesty of Xxxxxx or
moral turpitude, or (iv) conviction of Xxxxxx of any crime or offense
involving the property of the Company. Upon any such termination for
cause under this subparagraph 8(c), the Company shall pay Xxxxxx his Base
Salary through the date of termination, and the Company shall have no
further obligations under this Agreement.
(d) Termination Without Cause. The Company shall have the right to
terminate Xxxxxx'x employment under this Agreement at any time, without
cause, by giving Xxxxxx not less than sixty (60) days prior written
notice of such termination. Until the effective date of any such
termination, the Company shall continue to pay to Xxxxxx the full
compensation specified in this Agreement. In addition, on the effective
date of termination the Company shad pay to Xxxxxx the full amount of all
Base Salary to which Xxxxxx would otherwise have been paid throughout the
remaining term (including any successor term, if applicable) of this
Agreement.
9. Reimbursement of Legal Fees. The Company agrees to reimburse Xxxxxx
for reasonable attorneys fees, if any, incurred in connection with the
negotiation, preparation, and execution of this Agreement.
10. Application for Insurance. The Company at its option has the right to
obtain a "key-man" life insurance policy, at the Company's expense, with
the Company being the sole beneficiary of such policy. Xxxxxx hereby
agrees to undergo the necessary physical examinations and disclose any
pertinent disclaimers and information to obtain said policy.
11. Miscellaneous.
(a) Assignment and Binding Effect. The respective rights and
obligations of the parties under this Agreement shall be binding upon
the parties hereto and their heirs, executors, administrators,
successors, and assigns, including, in the case of the Company, any
other corporation or entity with which the Company may be merged or
otherwise combined or which may acquire all or substantially all of the
Company's assets and, in the case of Employee, his estate or other
legal representatives; provided that Xxxxxx may not assign his rights
hereunder without the prior written consent of the Company.
(b) Governing Law. This Agreement shall be governed as to its
validity, interpretation and effect by the laws of the State of Georgia.
(c) Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid, illegal, or unenforceable
for any reason, the remaining provisions and portions of this Agreement
shall remain in full force and effect to the fullest extent permitted by
law. Such invalid, illegal, or unenforceable provision(s) shall be deemed
modified to the extent necessary to make it (them) valid, legal and
enforceable.
(d) Entire Agreement; Amendments. This Agreement constitutes the
entire agreement and understanding of the Company and Xxxxxx with respect
to the terms of Xxxxxx'x employment with the Company and supersedes all
prior discussions, understandings, and agreements with respect thereto.
(e) Captions. All captions and headings used herein are for
convenient reference only and do not form part of this Agreement.
(f) Waiver. The waiver of a breach of any term or provision of this
Agreement shall not operate as or be construed to be a waiver of any
other or subsequent breach or this Agreement.
(g) Notice. Any notice or communication required or permitted under
this Agreement shall be made in writing and shall be delivered by hand,
or mailed by registered or certified mail, return receipt requested,
first class postage prepaid, addressed as follows:
If to Xxxxxx:
Xxxxxx X. Xxxxxx, Xx.
0000 Xxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
If to the Company:
Innovative Coatings Corporation
Suite 200
0000 Xxxx Xxxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attn: Chief Executive Officer
(h) Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
Employee Innovative Coatings Corporation
/s/ Xxxxxx X.Xxxxxx, Xx. By: /s/ Xxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxx,Xx. Xxxxx X. Xxxxxxxx
Its: President and CEO
