EMPLOYMENT AGREEMENT
This employment Agreement is entered into this 1st day of September,
2000, between Metalclad Insulation Corporation ("Company") and Xxxxxx X.
Xxxxx ("Employee").
It is the desire of the Company to formalize its employment
relationship with the Employee on the following terms and conditions:
1. Title: President and Chief Operating Officer
2. Term: The term of this agreement is from September 1, 2000 for a
period of fifteen months to December 31, 2001. This agreement shall be
automatically renewed for subsequent calendar year periods unless canceled
by either party by giving written notice at least 60 days before the
expiration of any given calendar year period.
3. Duties: The Employee shall perform such duties and functions as
are consistent with those customarily performed by a President and Chief
Operating Officer, at the Company, in addition to responsibilities and
duties assigned by superiors or the Board of Directors.
4. Non Compete and Loyalty: At all times while this agreement is in
effect, the Employee shall devote his full attention, loyalty and efforts
to the promotion, advancement and enhancement of the Company, its
employees, officers and agents. The Employee shall devote full employment
energies, interests, abilities and time to the performance of the
obligations contemplated herein, and may not render service of any kind
which would place him in a conflict of interest or diminish his efforts
and energies in discharging his duties hereunder.
5. Compensation: During the term of this agreement, Employee shall
be compensated as follows:
A. Base salary to be $130,000 per year. Employee's salary and
performance will be reviewed annually for periods beginning January 1,
2002 in accordance with the Company's compensation policies and practices
for executive officers.
B. Annual bonus target of ten percent of the annual salary being
paid at the time payable in March of each year. Beginning with the
Company's 2001 calendar year, bonus calculations will be in accordance
with Exhibit I.
C. Company will pay current cost of vehicle payments, at the
maximum rate of $500 per month. The vehicle will be fueled, licensed,
insured and maintained by the Company. Appropriate tax obligations on
income will be deducted from Employee's pay. Vacation to accrue at the
rate of three (3) weeks per year.
6. Stock Options: Employee is eligible to participate in the
Company's stock option program as awarded and determined by the Board of
Directors from time to time. Ten thousand options at $3.00 per share
have been approved by the Board for the year 2000 subject to shareholder
approval, which has been solicited.
7. Conflict of Interest: Employee will be bound by the Company's
Conflict of Interest policy as required of all officers, managers and
employees.
8. Termination:
A. The Company has the right to involuntarily terminate the
employee (i) on any basis which constitutes misconduct according to law or
(ii) the failure of the Employee to perform his duties in compliance with
this agreement after notice to Employee by the Board of Directors
specifying such failure, and his failure to correct said performance
within 60 days thereafter.
Employee has the option to terminate this Agreement and retain
all compensation benefits for the remainder of its term in the event there
is a change of control. Change of control is defined as a change in
ownership in any calendar year greater than 50%.
9. Severance: Upon termination in accordance with paragraph 8, the
Employee shall receive:
X. Xxxxxxxxx equal to six months salary in effect at time of
termination and continuation of benefits for three months. Severance
will be increased by one month for each additional year or service after
the year 2001.
B. Accrued vacation and Cobra rights.
C. As consideration for the compensation outlined in this
contract and severance pay Employee agrees to cooperate in the transfer of
various licenses Employee now holds. This will include having Employee
remain as the responsible party for a period not to exceed six months to
enable Employer to replace Employee as the responsible licensee.
10. Indemnity: The Company agrees to indemnify and hold Employee
harmless from any liability, litigation or cost of defending the same to
the broadest possible extent allowed by the law. The parties acknowledge
that the Company carries directors and officers liability insurance and
that Employee is entitled to all the coverage and benefits afforded
thereby.
11. Dispute Resolution: The parties agree that the sole and
exclusive remedy for the breach, interpretation or application of this
agreement, or for any injury or damage arising out of the employment
relationship memorialized by this agreement, shall be through the
below-designated arbitration process, and in conjunction with Section 638 et
seq. of the California Code of Civil Procedure (C.C.P.).
A. If a dispute arises over the breach, interpretation or
application of this agreement, or any damage or any damage or injury
arising out of the employment relationship between the parties, either
party may, upon twenty days notice to the other of the dispute, compel the
other party to arbitrate the dispute pursuant to C.C.P. Section 638 et
seq. The twenty-day period shall serve as an opportunity to resolve the
dispute prior to selecting an arbitrator.
B. The moving party shall set forth, in his request, the basis
for his claim. The responding party may assert any claim or defense it
has.
C. Once the twenty days have elapsed, the parties shall have
thirty days within which to select an arbitrator from the orange County
list of the Judicial Arbitration and Mediation Service (JAMS).
D. If the parties are unable to agree on an arbitrator, they
shall alternatively strike names from the list, the party seeking
arbitration striking first.
E. Discovery shall be conducted as agreed by the parties or as
allowed by the arbitrator. All discovery requests or other disputes will
be decided by the arbitrator.
F. The arbitrator shall have authority to award damages
commensurate with a non-tortious breach of contract action only; punitive
and compensatory damages may not be awarded to either party.
G. The decision of the arbitrator shall be a basis for a
judgment as provided for in C.C.P. Section 644 and shall be subject to
exception and review as provided in C.C.P. Section 645.
12. Entire Agreement: This agreement supersedes all prior agreements
or representations, between the parties concerning the subject matter
hereof and there are no representations or promises regarding the
commitments and obligations made herein except as herein set forth and all
previous discussions, representations or commitments are merged herein or
otherwise extinguished. This agreement may only be amended by an
instrument in writing executed by the parties hereto.
13. Governing Law: This agreement is made and entered into in the
State of California and the laws of California shall govern its validity,
interpretation and the performance of the obligations of the parties
hereunder.
14. Notices: Any notice, request, demand or other communication
hereunder shall be in writing and shall be deemed to be duly given when
personally delivered to an officer of Metalclad or to Employee, as the
case may be, or when delivered by mail at the following addresses:
Company: Metalclad Insulation Corporation
0 Xxxxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Employee: Xxxxxx X. Xxxxx
000 Xxxxx Xxxxx
Xxxxxx, XX 00000
IN WITNESS WHEREOF, the parties have duly executed this agreement on
the day and year set forth below.
METALCLAD INSULATION CORPORATION
Dated: September 1, 2000 /s/Xxxxx X. Xxxxxx, President
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Member of the Board of Directors
EMPLOYEE
Dated: September 1, 2000 /s/Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
