Exhibit 10b.
EMPLOYMENT CONTRACT FOR CHIEF FINANCIAL OFFICER
Naturally Safe Technologies, Inc. ("Employer"), a Nevada
corporation, located at 0000 Xxxxxxx Xxxxxx Xxxxx, # 000, Xxx
Xxxxx, Xxxxxxxxxx 00000, and Xxxxx Xxxxxxxx ("Employee"), of 0000
Xxxxxx Xxxxxx, Xxx Xxxxx, 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 year beginning on
January 15, 2001 and terminating on December 31,2003.
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 Financial
Officer of Naturally Safe Technologies, Inc. In his capacity as
Chief Financial 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 terms 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.
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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 six months, at the rate of $5,000.00 per
Month, payable not less than once each month, on or
before the 15th day of each month during the employment
term.
(2) For the seventh month (July, 2001) through the balance
of the first year Employee will paid at the rate of
$10416.67 per month, 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 five 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
June 30, 2001, 200,000 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
December 31, 2001, an option to purchase 50,000 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 December 31, 2002.
(a) If the employment term is not terminated by Employer for
cause, Employer agrees to transfer to Employee on December 31,
2002, an option to purchase 50,000 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
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and has become the shareholder of record of those shares. This
option shall expire on December 31, 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
December 31, 2001 by Employer for reasons other than cause,
Employee shall retain the right to exercise any unused portion of
the option until December 31, 2002.
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 time. 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 being impaired or invalidated in
any way.
Law 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 January 1, 2001 at San Diego, California.
EMPLOYER Naturally Safe Technologies, Inc.
/s/ Xxxxxx X. Xxxxxxxx
By: Xxxxxx X. Xxxxxxxx Chairman of the Board of Directors
EMPLOYEE
/s/ Xxxxx Xxxxxxxx
By: Xxxxx Xxxxxxxx
Employee
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