EMPLOYMENT AGREEMENT
Exhibit
10.11
THIS
EMPLOYMENT AGREEMENT (the "Agreement")
is
made as of this [7th]
day of
September, 2006 between Xethanol Corporation (the "Company")
and
Xxxxxx Xxxxxx (the "Executive").
WHEREAS,
the parties hereto wish to enter into an employment agreement to employ the
Executive as the Company’s Senior Vice President - Operations and to set forth
certain additional agreements between the Executive and the
Company.
NOW,
THEREFORE, in consideration of the mutual covenants and representations
contained herein, the parties hereto agree as follows:
1.
Employment
Period.
The
Company will employ the Executive, and the Executive will serve the Company,
under the terms of this Agreement during a term of eighteen (18) months (the
"Employment
Period")
commencing as of the date first above written (the "Commencement
Date")
and
ending on March [6],
2008
(the "Expiration
Date",
and
the period of time described in this Section 1 being the "Term").
2.
Duties
and Status.
The
Company hereby engages the Executive as the Senior Vice President - Operations
of the Company, or in such other capacity as the Board of Directors of the
Company shall determine, in its sole discretion, on the terms and conditions
set
forth in this Agreement. During the Employment Period, the Executive shall
exercise such authority, perform such duties and functions and discharge such
responsibilities as are reasonably associated with the Executive's position,
commensurate with the authority vested in the Executive by the Company’s
President and Board of Directors and consistent with this Agreement and the
Bylaws of the Company. During the Employment Period, the Executive shall devote
his full business time, skill and efforts to the business of the Company.
Notwithstanding the foregoing, the Executive may make and manage passive
personal business investments of his choice and serve in any capacity with
any
civic, educational or charitable organization, or any trade association, without
seeking or obtaining approval by the Board of Directors, provided such
activities and service do not materially interfere or conflict with the
performance of his duties hereunder.
3. Compensation
and Benefits.
(a)
Salary.
During
the Employment Period, the Company shall pay to the Executive, as compensation
for the performance of his duties and obligations under this Agreement, a base
salary at the rate of $150,000 per annum, payable in arrears not less frequently
than monthly and in accordance with the normal payroll practices of the Company.
(b)
Equity
Participation.
(i) Effective
on the Commencement Date, the Company shall grant the Executive an option to
acquire 30,000 shares of its $.001 par value common stock at the closing price
of such Common Stock on the Commencement Date. Such options shall be for a
10-year term and shall otherwise be on the terms and subject to the conditions
that are contained in the Company’s 2005 Incentive Compensation Plan (the
“Plan”).
Such
options shall vest on the earliest of (a) December 31, 2006, if Executive is
then employed by the Company, (b) the date on which Executive’s employment with
the Company is terminated by the Company other than for “cause”, as such term is
defined in Section 4.1(a) or (c) the date on which Executive terminates his
employment with the Company for “good reason” as such term is defined in Section
4.1(b). If Executive’s employment with the Company is terminated before December
31, 2006 by the Company for “cause” or by Executive without “good reason”, such
option shall not vest.
(ii) In
addition to the options described in the foregoing clause (i), the Board of
Directors in its sole discretion may determine to grant the Executive additional
awards under the Plan and/or under any other stock option or equity based
incentive compensation plan or arrangement adopted by the Company during the
Employment Period for which the Company's senior executives are eligible. The
level of the Executive's participation in any such plan or arrangement, if
any,
shall be determined by the Board of Directors in its sole discretion. Without
limiting the foregoing, the Company’s Board of Directors shall consider granting
Executive additional stock options pursuant to the Plan on the later of January
1, 2007 or the date that is 60 days after the commencement of employment of
a
person designated as the Company’s Chief Executive Officer (other than its
present acting Chief Executive Officer); provided that the Company shall have
no
obligation to grant any such additional options.
(iii)
To
the
greatest extent permissible in accordance with applicable IRS regulations,
options to acquire Company stock which may be granted to the Executive shall
be
in the form of qualified options. Any options which cannot be granted in the
form of qualified options will be granted to the Executive as non-qualified
options.
(c)
Other
Benefits.
During
the Employment Period, the Executive shall be entitled, at his option, to
participate in all of the employee benefit plans, programs and arrangements
of
the Company in effect during the Employment Period which are generally available
to senior executives of the Company. Such participation shall be subject to
and
on a basis consistent with the terms, conditions and overall administration
of
such plans, programs and arrangements. In addition, during the Employment
Period, the Executive shall be entitled to fringe benefits and perquisites
comparable to those of other senior executives of the Company. Such fringe
benefits shall include, but not be limited to, four (4) weeks of vacation pay
per year, to be used in accordance with the Company's vacation pay policy for
senior executives.
(d)
Business
Expenses.
During
the Employment Period, the Company shall promptly reimburse the Executive for
all appropriately documented, reasonable business expenses incurred by the
Executive in the performance of his duties under this Agreement, in accordance
with the Company's policies as then in effect.
4.
Termination
of Employment.
(a)
Termination
for Cause.
The
Company may terminate the Executive's employment hereunder for cause. For
purposes of this Agreement and subject to the Executive's opportunity to cure
as
provided in Section 4(c) hereof, the Company shall have "cause" to terminate
the
Executive's employment hereunder if such termination shall be the result of
the
Executive's:
(i)
willfully
engaging in conduct which is materially injurious to the Company;
(ii)
willful
fraud or material dishonesty in connection with his performance
hereunder;
(iii)
deliberate
or intentional failure to substantially perform his duties hereunder that
results in material harm to the Company;
(iv)
the
conviction for, or plea of nolo contendere to a charge of, commission of a
felony; or
(v)
the
continuous and habitual failure by the Executive to substantially perform his
duties under this Agreement.
(b)
Termination
for Good Reason.
The
Executive shall have the right at any time to terminate his employment with
the
Company for "good reason". For purposes of this Agreement and subject to the
Company's opportunity to cure as provided in Section 4(c) hereof, the Executive
shall have "good reason" to terminate his employment hereunder in the following
cases:
(i) a
breach
by the Company of the compensation and benefits provisions set forth in Section
3 hereof;
(ii) a
material breach by the Company of any of the terms of this Agreement, other
than
as specifically provided herein; or
(iii)
the
relocation of Executive's principal place of business
at the request of the Company beyond 50 miles from its current
location
The
Company shall have the right to change or diminish Executive's duties,
responsibilities or title, and no such action shall constitute grounds for
the
Executive to terminate his employment with the Company for "good
reason".
(c)
Notice
and Opportunity to Cure.
Notwithstanding the foregoing, except in the situations described in sections
4(a)(i) through 4(a)(iv), the Company may not terminate the Executive's
employment for "cause" and the Executive may not terminate his employment for
"good reason" unless (i) the party seeking to terminate the Executive's
employment shall have first provided the other party with written notice of
the
intended termination and the reason for such termination ("breach") and (ii)
if
such breach is susceptible of cure or remedy, a period of twenty (20) days
shall
have elapsed between the delivery of such notice and the termination of this
Agreement without the breaching party having, in the opinion of the party
alleging a breach, effectively cured or remedied such breach.
(d)
Termination
Upon Death or Permanent and Total Disability.
The
Employment Period shall be terminated by the death of the Executive. The
Employment Period may be terminated by the Board of Directors if the Executive
shall be rendered incapable of performing his duties to the Company by reason
of
any medically determined physical or mental impairment that can be expected
to
result in death or that can be expected to last for a period of either (i)
six
or more consecutive months from the first date of the Executive's absence due
to
the disability or (ii) nine months during any twelve-month period (a
"Permanent
and Total Disability").
If
the Employment Period is terminated by reason of Permanent and Total Disability
of the Executive, the Company shall give 30 days' advance written notice to
that
effect to the Executive.
5.
Consequences
of Termination.
(a)
Without
Cause or for Good Reason.
In the
event of a termination of the Executive's employment during the Employment
Period (i) by the Company other than for "cause" (as provided for in Section
4(a) hereof), (ii) by the Executive for "good reason" (as provided for in
Section 4(b) hereof) or (iii) due to death or disability (as provided for in
Section 4(d) hereof) the Company shall pay the Executive and provide him with
the following:
(i)
Salary.
The
Executive's then current base salary payable for the remainder of the Employment
Period, in accordance with the timetable and schedule contemplated for such
payments, as though such termination had not occurred.
(ii) Equity.
Any
existing stock options or other similar awards outstanding at the date of
termination shall immediately vest and will, in all other respects, continue
to
be governed by, and continued in accordance with, their applicable plan and
grant documents.
(iii)
Other
Benefits.
Continued coverage under all health, life, disability and similar employee
benefit plans and programs of the Company on the same basis as the Executive
was
entitled to participate immediately prior to such termination for the remainder
of the Employment Period; provided that the Executive's continued participation
is possible under the general terms and provisions of such plans and programs.
In the event that the Executive's participation in any such plan or program
is
barred, the Company shall arrange to provide the Executive with benefits
substantially similar to those which the Executive would otherwise have been
entitled to receive under such plans and programs from which his continued
participation is barred. If Executive is covered under substitute benefit plans
of another employer prior to the expiration of the Employment Period, the
Company will no longer be required to continue the respective coverage described
in this Section 5(a)(iii).
(b)
Other
Termination of Employment.
In the
event that the Executive's employment with the Company is terminated during
the
Employment Period (i) by the Company for "cause" (as provided for in Section
4(a) hereof),or (ii) by the Executive other than for "good reason" (as provided
for in Section 4(b) hereof), the Company shall pay the Executive (or his legal
representative) any earned but unpaid salary through the Executive's final
date
of employment with the Company, and the Company shall have no further
obligations to the Executive.
(c)
Withholding
of Taxes.
All
payments required to be made by the Company to the Executive under this
Agreement shall be subject to the withholding of such amounts, if any, relating
to tax, social security, excise tax and other payroll deductions as the Company
may reasonably determine it should withhold pursuant to any applicable law
or
regulation.
(d)
No
Other Obligations.
The
benefits payable to the Executive under this Agreement are not in lieu of any
benefits payable under any employee benefit plan, program or arrangement of
the
Company, except as provided specifically herein, and upon termination the
Executive will receive such benefits or payments, if any, as he may be entitled
to receive pursuant to the terms of such plans, programs and arrangements.
Except for the obligations of the Company provided by the foregoing and this
Section 5, the Company shall have no further obligations to the Executive upon
his termination of employment.
(e)
No
Mitigation or Offset.
The
Executive shall be required to mitigate the damages provided by this Section
5
by seeking substitute employment or otherwise and there shall be offset by
the
Executive with respect to the payments or benefits set forth in this Section
5
and compensation received by virtue of such substitute employment or other
activity.
6. Indemnity.
The
Company shall, to the fullest extent permitted by law and by its Certificate
of
Incorporation and Bylaws, indemnify Executive and hold him harmless for any
acts
or decisions made by him in good faith while performing his duties pursuant
to
this Agreement.
7.
Notices.
All
notices, requests and other communications pursuant to this Agreement shall
be
in writing and shall be deemed to have been duly given, if delivered in person
or by courier, telegraphed, telexed or by facsimile transmission or sent by
express, registered or certified mail, postage prepaid, addressed as
follows:
If
to the
Executive:
Lt.
Col.
Xxxxxx Xxxxxx
0
Xxxxxxx
Xxxx
Xxxxxxxx,
XX 00000
If
to the
Company:
Xethanol
Corporation
1185
Avenue of the Xxxxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attn:
President
Either
party may, by written notice to the other, change the address to which notices
to such party are to be delivered or mailed.
8
Arbitration.
Except
as
specifically provided herein, any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a single arbitrator in the State of New York, in accordance
with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
Except in the case of disputes or controversies arising from circumstances
described in sections 4(a)(i) through 4(a)(iv) of this Agreement, the Company
shall bear the expense of any such arbitration proceeding and shall reimburse
the Executive, regardless of the outcome, for all of his reasonable costs and
expenses relating to such arbitration proceeding, including, without limitation,
reasonable attorneys' fees and expenses.
9.
Waiver
of Breach.
Any
waiver of any breach of this Agreement shall not be construed to be a continuing
waiver or consent to any subsequent breach on the part either of the Executive
or of the Company.
10.
Non-Assignment;
Successors.
Neither
party hereto may assign his or its rights or delegate his or its duties under
this Agreement without the prior written consent of the other party; provided,
however, that the parties hereto hereby agree in advance that (i) this Agreement
may be assigned to, and shall inure to the benefit of and be binding upon,
the
successors and assigns of the Company upon any sale of all or substantially
all
of the Company's assets, or upon any merger, consolidation or reorganization
of
the Company with or into any other corporation, all as though such successors
and assigns of the Company and their respective successors and assigns were
the
Company; and (ii) this Agreement shall inure to the benefit of and be binding
upon the heirs, assigns or designees of the Executive to the extent of any
payments which may become due to them hereunder. As used in this Agreement,
the
term "Company" shall be deemed to refer to any such successor or assign of
the
Company referred to in the preceding sentence.
11.
Severability.
To
the
extent any provision of this Agreement or portion thereof shall be invalid
or
unenforceable, it shall be considered deleted therefrom and the remainder of
such provision and of this Agreement shall be unaffected and shall continue
in
full force and effect.
12.
Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together will constitute one and
the
same instrument.
13.
Governing
Law.
This
Agreement shall be construed, interpreted and enforced in accordance with the
laws of the State of New York, without giving effect to the choice of law
principles thereof.
14.
Survivability.
Any
covenant or agreement of the parties which by its term contemplates performance
after the Expiration of this Agreement shall survive and remain in full force
and effect notwithstanding the fact that the Employment Period has lapsed or
that this Agreement or Executive's employment hereunder, has been
terminated.
15.
Entire
Agreement.
This
Agreement constitutes the entire agreement by the Company and the Executive
with
respect to the subject matter hereof and except as specifically provided herein,
supersedes any and all prior agreements or understandings between the Executive
and the Company with respect to the subject matter hereof, whether written
or
oral. This Agreement may be amended or modified only by a written instrument
executed by the Executive and the Company.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the parties have executed this Agreement as
of the
date first above written.
| EXECUTIVE: | ||
| |
|
|
| /s/ Xxxxxx Xxxxxx | ||
| Name: |
Xxxxxx Xxxxxx |
|
| Xethanol Corporation | ||
| |
|
|
| By: | /s/ Xxxxx Xxxxxxxxx | |
| Name: |
Xxxxx Xxxxxxxxx |
|
| Title: | President and Chief Executive Officer | |
