EXHIBIT 10.14
AGREEMENT
This Agreement ("Agreement"), dated as of December 31, 1997, is by and
between North American Technologies Group, Inc., a Delaware corporation
("NATK"), and Xxxxx X. Xxxxxxx, an individual ("Xxxxxxx").
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. TERMINATION OF EMPLOYMENT AGREEMENT AND RELATED MATTERS. At the
Closing (as defined below):
(a) Xxxxxxx and NATK shall execute and deliver to each other that certain
Termination and Release Agreement, in the form of Exhibit A, attached hereto and
made a part hereof ("Release"); and
(b) NATK agrees to pay to Xxxxxxx the amount of $30,000 (the "Initial Cash
Payment"), such amount to be paid by the issuance of a check drawn from the
accounts of NATK at the Closing and immediately delivered to Xxxxxxx at the
Closing; provided, however, that upon the execution of this Agreement, NATK
agrees to advance to Xxxxxxx $5,000 (without employer withholding) of such
$30,000 amount, and in the event the Closing does not occur on or before January
16, 1998, Xxxxxxx agrees to repay such $5,000 in full on or before February 28,
1998; and
(c) NATK agrees that it shall pay to Xxxxxxx twenty-five (25) consecutive
payments, each such payment to be equal to $2,400 (an aggregate of $60,000), and
such payments to be paid in accordance with the customary payroll practices of
NATK, and in no event less than twice per month, the first such payment to be
due and payable on January 23, 1998; and
(d) NATK agrees to continue its health and dental insurance coverage for
Xxxxxxx during the calendar year 1998 as in effect from time to time during such
period for all its employees; and
(e) NATK shall transfer and convey to Xxxxxxx title to a certain computer
notebook that he has been using in connection with his employment with NATK
and/or its subsidiaries; and
(f) Xxxxxxx shall resign in writing as a director of NATK; and
(g) all of Xxxxxxx' current options to purchase 200,000 shares of common
stock, par value $0.001 per share, of NATK (the "200,000 Option Shares") that
are subject of Section 1 of that certain Stock Option Agreement, dated as of
February 7, 1995, by and between the parties hereto, as the same may have been
amended or modified from time to time before the date hereof (the "200,000 Stock
Option Agreement"), and all additional options to purchase an additional 300,000
shares of common stock, par value $0.001 per share, of NATK (the "300,000 Option
Shares;"
together with the 200,000 Option Shares, the "Xxxxxxx Option Shares"), shall be
deemed fully vested and exercisable in full as of the Closing. In addition, the
option exercise price of the 300,000 Option Shares shall be decreased, at or
before the Closing, from $1.25 to $0.75 per share. At the Closing, NATK agrees
to deliver to Xxxxxxx one or more written instruments reasonably satisfactory to
the parties evidencing the provisions of this clause (g) (the "Stock Option
Amendments Document"); and
(h) Xxxxxxx shall be released, without further liability, from, and shall
have no further rights under, that certain Stockholders' Agreement, dated as of
April 5, 1996, by and among NATK, certain parties (including without limitation
Xxxxxxx) defined therein as the Management Stockholders and certain other
parties defined therein as the Investors, as amended and/or modified by
Amendments No. 1 and No. 2 thereto (as so amended and/or modified, the
"Stockholders' Agreement"), and neither any shares of capital stock of NATK
currently owned by Xxxxxxx, any of the Xxxxxxx Option Shares, nor the options
relating to any of the Xxxxxxx Option Shares shall remain subject to the
provisions of the Stockholders' Agreement, such release and other terms
described in this sentence to be evidenced by a writing (the "Stockholders'
Agreement Release") in form and substance reasonably satisfactory to the parties
hereto. In connection therewith, promptly after the Closing, with respect to
any certificates representing shares of common stock of NATK already issued in
Xxxxxxx' name that contain a legend, if any, relating to the Stockholders'
Agreement, NATK agrees to cause such restrictive legend to be removed from those
certificates and to cause certificates representing such shares to be reissued
to Xxxxxxx free of such restrictive legend, such reissuance to occur within 15
days of the date Xxxxxxx delivers to NATK his certificates containing such a
legend.
The obligations of each party hereto to consummate the transactions
contemplated by this Section shall be conditioned upon (i) a valid action of the
Board of Directors of NATK approving of the transactions contemplated by clauses
(g) and (h) of this Section; and (ii) written approval of the transactions
contemplated by clause (h) of this Section by the appropriate parties to the
Stockholders' Agreement.
2. THE CLOSING. The closing ("Closing") of the transactions contemplated
by Section 1 hereof shall occur at 11:00 a.m., on January 16, 1998, at the
principle executive offices of NATK, or at such other time and place as shall be
reasonably agreed to by the parties hereto; provided, however, that the parties
hereto agree to use reasonable efforts to cause the Closing to occur within two
(2) business days of the date that both the conditions described in the last
sentence of Section 1 have been fulfilled. At the Closing, (a) each of Xxxxxxx
and NATK shall execute and deliver to each other the Release, (b) NATK shall
deliver to Xxxxxxx a check in the amount of $30,000, less the $5,000 advance
referred to in Section 1(b), and less all applicable employer withholdings, such
amount representing the remaining unadvanced portion of the Initial Cash
Payment, drawn from the accounts of NATK, (c) NATK shall execute and deliver to
Xxxxxxx a xxxx of sale conveying to Xxxxxxx title ("AS IS WHERE IS", with no
other representations or warranties) in and to the notebook computer referred to
in Section 1(e), (d) Xxxxxxx agrees to deliver to NATK a list setting out the
names, telephone numbers, addresses and other related information that he has
recorded or stored,
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whether in written form or in computer file or program form, relating to each
person or party he has been in contact with during his tenure with NATK and/or
any of its subsidiaries, such information to be provided, at the option of NATK,
in both hard copy and in computer file or program format. Xxxxxxx hereby
represents, warrants, covenants and agrees that he has not destroyed, deleted or
otherwise made unavailable to NATK, on or prior to the date of this Agreement,
and will not destroy, delete or otherwise make unavailable to NATK, prior to the
delivery of all of the same to NATK, any of the information described in the
immediately preceding sentence, (e) Xxxxxxx shall deliver to NATK his written
resignation as a director of NATK, (f) NATK shall execute and deliver to Xxxxxxx
the Stock Option Amendments Document, and (g) NATK and Xxxxxxx shall deliver to
each other the Stockholders' Agreement Release, which shall have been executed
by the other appropriate parties thereto.
3. XXXXXXX' COVENANTS. From the date hereof and continuing until January
1, 2002, Xxxxxxx agrees that he shall not, without the prior written consent of
NATK, and except pursuant to and consistent with the order of any court,
legislative body or regulatory agency:
(a) engage directly or indirectly (including, by way of example only, as a
principal, partner, venturer, employee or agent), nor have any direct or
indirect interest, in (i) any business which competes with NATK or any of its
subsidiaries in any material way or (ii) the business formerly conducted by a
subsidiary of NATK formerly known as Industrial Pipe Fittings, Inc., a Texas
corporation ("IPF"), in any material way (provided, however, that the provisions
of this clause (a) shall not apply to any investment by Xxxxxxx in the stock of
a publicly-traded corporation, provided such investment constitutes less than
one percent (1%) of such corporation's cumulative voting shares);
(b) disclose, communicate or deliver in any manner (including without
limitation any oral disclosure or communication or any written or computer
generated information) to any person or party, either directly or indirectly,
any information regarding NATK's or its past or current subsidiaries' business,
actions, omissions, inactions (including without limitation any actions,
omissions or inactions involving any past or current director, officer,
employee, agent or Board of Directors of NATK or any of its subsidiaries),
customers, results of operations, business practices, financial condition,
strategies or operations, including without limitation disclosing or
communicating any comment, opinion, evaluation or advice regarding any of the
same;
(c) in any capacity bring any claim or legal action against or involving,
or assist, directly or indirectly (including without limitation, acting as an
advisor or witness), any other party in bringing any claim or legal action
against or involving, NATK, its subsidiaries or any of the past or current
directors, officers, employees, agents or consultants relating to any matter
involving NATK's or its past or current subsidiaries' business, actions,
omissions, inactions (including without limitation any action, omissions or
inactions involving any past or current director, officer, employee, agent or
Board of Directors of NATK or any of its subsidiaries); provided, however, that
nothing in this clause (c) shall act so as to prevent Xxxxxxx from enforcing his
rights under this Agreement or the Release; provided further, that in enforcing
any such
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rights, Xxxxxxx agrees to abide by the provisions of this clause (c) to
the maximum extent possible.
(d) Xxxxxxx acknowledges and agree that irreparable injury and damage will
result to NATK in the event he fails or refuses to comply with any of the
provisions of this Section in accordance with its specific terms. It is
accordingly agreed that in addition to any other remedy to which NATK may be
entitled at law or in equity, NATK shall be entitled to an injunction or
injunctions to prevent the breach of this Agreement and specifically enforce
this Agreement and the terms and provisions hereof in any action instituted in
any court having subject matter jurisdiction. In addition, no remedy conferred
by any of the specific provisions of this Agreement is intended to be exclusive
of any other remedy, and each and every remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute or otherwise. The election of any one or more
remedies by NATK shall not constitute a waiver of the right to pursue other
available remedies.
Notwithstanding anything in this Section to the contrary, Xxxxxxx shall not
be bound by the provisions of this Section in the event the Closing does not
occur on or before January 16, 1997, as a result of the failure to occur of the
conditions to the Closing, or the failure of NATK to consummate the transactions
contemplated to occur at the Closing for any reason other than Xxxxxxx' failure
to consummate such transactions; provided, however, that Xxxxxxx shall continue
to be bound by the provisions of this Section in any such event until he repays
the $5,000 advance referred to in Section 1(b) hereof.
4. MISCELLANEOUS.
(a) Expenses. Except as otherwise expressly provided in this Agreement, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs
and expenses whether or not the transactions contemplated hereby are
consummated.
(b) Entire Agreement; Assignment. This Agreement, including all exhibits
and Schedules hereto, (i) constitutes the entire agreement among the parties
with respect to its subject matter and supersedes all prior agreements and
understandings, both written and oral, among the parties or any of them with
respect to such subject matter and (ii) shall not be assigned by operation of
law or otherwise without the express prior written consent of the other party
hereto, which consent shall not be unreasonably withheld.
(c) Headings. The descriptive headings of the sections, subsections,
exhibits and schedules of this Agreement are inserted for convenience only, do
not constitute a part of this Agreement and shall not affect in any way the
meaning or interpretation of this Agreement.
(d) Counterparts. This Agreement may be executed in counterparts, both of
which shall be deemed to be an original, and all of which together shall be
deemed to
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be one and the same instrument.
(e) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to the laws that
might otherwise govern under principles of conflicts of laws applicable thereto.
(F) COURTS IN XXXXXX COUNTY, TEXAS TO HAVE EXCLUSIVE JURISDICTION. THE
PARTIES AGREE THAT THE FEDERAL AND STATE COURTS LOCATED IN XXXXXX COUNTY, TEXAS
SHALL HAVE EXCLUSIVE JURISDICTION OVER AN ACTION BROUGHT TO ENFORCE THE RIGHTS
AND OBLIGATIONS CREATED IN OR ARISING FROM THIS AGREEMENT, AND EACH OF THE
PARTIES HERETO IRREVOCABLY SUBMITS TO THE JURISDICTION OF SAID COURTS.
NOTWITHSTANDING THE ABOVE, APPLICATION MAY BE MADE BY A PARTY TO ANY COURT OF
COMPETENT JURISDICTION WHEREVER SITUATED FOR ENFORCEMENT OF ANY JUDGMENT AND THE
ENTRY OF WHATEVER ORDERS ARE NECESSARY FOR SUCH ENFORCEMENT.
(g) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void, unenforceable or against its regulatory policy, the remainder of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
(h) Employer Withholdings. To the extent required by law, NATK shall have
the right to withhold from any payments due Xxxxxxx under this Agreement any
applicable federal, state or local taxes and such other deductions as are
prescribed by law, provided, however, that any such withholdings and deductions
relating to the $5,000 advance referred to in Section 1(b) hereof shall be
withheld or deducted at the time of the payment of the Initial Cash Payment at
the Closing.
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement
effective as of the date first above written.
NATK: NORTH AMERICAN TECHNOLOGIES GROUP, INC.
By:/s/ Xxx X. Xxxxxxxxxx
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Xxx X. Xxxxxxxxxx
As its Authorized President
Xxxxxxx: XXXXX X. XXXXXXX
/s/ Xxxxx X. Xxxxxxx
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