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Exhibit 10(a)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as
of the first day of September, 1996 by and between Interstate Waste
Technologies, Inc., a Delaware corporation (the "Company"), and Xxxxxxx X.
Xxxxxxxx.
In consideration of the mutual covenants herein contained, the
parties agree to be bound by the following terms and conditions:
I. POSITION AND AUTHORITY
Xxxxxxx X. Xxxxxxxx (the "Employee") will hold the title of
Executive Vice President and Chief Operating Officer of the Company. The
Employee shall report to the Chief Executive Officer of the Company.
II. TERM
The term of employment of the Employee by the Company hereunder (the
"Term") shall begin on September 1, 1996, and shall expire on August 31,
1998 and thereafter for successive one-year terms; provided however, that
either party may terminate this Agreement on sixty (60) days prior written
notice, and the Company may terminate this Agreement for "cause" (defined
in Section VIII below) immediately upon written notice. In addition, on the
occurrence of the closing of the initial financing adequate to complete the
initial waste disposal facility developed by the Company or by an
organization in which the Company (or any affiliate of the Company
organized to engage in the waste disposal/power generation business (an
"Operating Affiliate")) has at least a 50% equity interest or some lesser
equity interest approved by the Company's board of directors (the
"Financial Closing"), the expiration date of the then effective Term shall
be extended by an additional three (3) years, subject again to the same
notice proviso set forth in the preceding sentence. Any renewal or
extension periods of employment pursuant to this Section II shall also be
included in the Term for purposes of this Agreement.
III. COMPANY RULES AND REGULATIONS
The Employee agrees to comply with all directives of the Board of
Directors and the Chief Executive Officer and all written rules, policies,
and regulations of the Company, including, but not limited to, those set
forth in the Employee Handbook as in effect from time to time, and to carry
out and perform such directives, policies, and mandates of the Company as
set forth herein. In the event of an express conflict between the terms of
this Agreement and the written rules, policies, and regulations of the
Company, as set forth in the Employee Handbook, the terms of this Agreement
shall govern.
IV. LOCATION OF EMPLOYMENT
The Employee's office location will be in the Malvern, Pennsylvania
area. The Employee acknowledges that performance of his duties may require
frequent travel and/or extended periods away from his office and that his
office may be relocated for appropriate business reasons at the direction
of the Company's Board of Directors.
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V. DUTIES AND RESPONSIBILITIES
A. The Employee's authority and obligations are set forth in a
document entitled "Job Description," which is attached hereto as Exhibit A
and which may be amended from time to time by the Chief Executive Officer
or the Board of Directors.
B. The Employee agrees to devote his entire professional
time, energy, and ability to the proper and efficient performance of
professional services for the Company and its Operating Affiliates. Without
the prior express written authorization of the Company, the Employee shall
not, directly or indirectly, during his employment with the Company render
services of a professional nature to any other person or firm, whether for
compensation or otherwise.
C. During the Term and for a period of three (3) years
thereafter, the Employee shall not, without the written consent of the
Board of Directors or a person authorized by the Board of Directors,
disclose to any person other than as required by law or court order, or
other than to an authorized employee of the Company or its affiliates, or
to a person to whom disclosure is necessary or appropriate in connection
with the performance by the Employee of his duties as an executive of the
Company (e.g., disclosure to the Company's or its affiliates' outside
accountants or bankers of financial data properly requested by such persons
and approved by an authorized officer of the Company), any confidential
information obtained by him while in the employ of the Company with respect
to the Company or its affiliates, including confidential information
regarding any of the Company's or its affiliates' business opportunities or
projects (collectively "Projects"); provided, however, that confidential
information shall not include any information known generally to the public
(other than as a result of unauthorized disclosure by the Employee). The
Employee shall be allowed to disclose confidential information to his
attorney solely for the purpose of ascertaining whether such information is
confidential within the intent of this Agreement; provided, however, that
the Employee (a) discloses to his attorney the provisions of this
subsection C and (b) agrees not to waive the attorney-client privilege with
respect thereto.
D. While the Employee is employed by the Company hereunder,
the Employee shall make available to the Company business opportunities
that come to his attention or to the attention of persons (other than
natural persons) under his control, and shall promptly provide to the Chief
Executive Officer of the Company all material facts regarding such
opportunities.
E. During the Term and for a one-year period following the
termination of the Term, the Employee agrees that he shall not compete with
the Company or any of its affiliates without the prior written consent of
the Board of Directors. For purposes of this Agreement, the term "compete"
shall mean participating as a more than five percent (5%) stockholder, an
officer, a director, an employee, a partner, an agent, a consultant, or in
any other individual or representative capacity in any business entity
engaged in the business of consulting with respect to, developing,
designing, or constructing waste disposal facilities within North America
and/or the Caribbean. During the Term and for a period of two years
following termination of the Term, the Employee shall not engage in any
Prohibited Solicitation. For purposes of this Agreement, the term
"Prohibited Solicitation" shall mean (i) contacting directly or indirectly
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regarding any business relating to waste disposal and/or power generation
any potential customer (A) to which the Company or any of its affiliates
made a proposal during the Term, (B) which issued to the Company, or
disclosed to the Company plans to issue, during the Term any request for
proposal or invitation for bids regarding waste disposal facilities or, (C)
about which a prospective project was reported or advertised during the
Term in either of the trade publications The Resource Recovery Report or
Sludge, or (ii) employing or soliciting for employment any employees of the
Company or any of its affiliates. In the event the restrictions against
engaging in a competitive activity or Prohibited Solicitation contained in
this subsection E shall be determined by any court of competent
jurisdiction to be unenforceable by reason of their extending for too great
a period of time or over too great a geographical area or by reason of
their being too extensive in any other respect, this subsection E shall be
interpreted to extend only over the maximum period of time for which it may
be enforceable and over the maximum geographical area as to which it may be
enforceable and to the maximum extent in all other respects as to which it
may be enforceable, all as determined by such court in such action. The
Employee acknowledges that a breach of the restrictions against engaging in
a competitive activity or Prohibited Solicitation contained in this
subsection E may cause irreparable damage to the Company or its affiliates,
the exact amount of which will be difficult to ascertain, and that the
remedies at law for any such breach may be inadequate. Accordingly, the
Employee and the Company agree that if the Employee breaches the
restrictions against engaging in a competitive activity or Prohibited
Solicitation contained in this subsection E, in addition to any other
remedies to which it or they may be entitled then the Company or its
affiliates shall be entitled to equitable relief, including but not limited
to injunctive relief, without posting bond or other security.
VI. COMPENSATION
A. The Employee shall be compensated by the Company with an
annual base salary payable semi-monthly ("Annual Base Salary"). Initially,
the Annual Base Salary payable to the Employee shall be $150,000. The
Employee's Annual Base Salary shall be increased (i) to $175,000 commencing
on the first month next following the execution by the Company or an
Operating Affiliate and a customer of a definitive service agreement for
waste disposal (a "Service Agreement"), and (ii) to $200,000 commencing on
the first of the month next following the Financial Closing.
B. The Employee shall receive a financing bonus (a "Project
Financing Bonus") and a completion bonus (a "Project Completion Bonus") of
$25,000 and $75,000, respectively, per each processing line of
Thermoselect, Xxxxx or similar technology to be installed in a facility in
which the Company or any Operating Affiliate has at least a 50% equity
interest or a lesser equity interest approved by the Company's board of
directors. The Employee shall be entitled to receive a Project Financing
Bonus upon closing by the Company or an Operating Affiliate of financing
adequate to complete the related project either during (i) the Term, or
(ii) within three (3) years following expiration or termination of the Term
with respect to any facility for which the Company or any affiliate has
presented a definitive proposal during the Term. The Employee shall be
entitled to receive a Project Completion Bonus when each processing line
becomes operational and accepted by the customer either during the Term, or
(ii) within three (3) years following the expiration or termination of the
Term with respect to any facility for which the Company or an Operating
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Affiliate has presented a definitive proposal during the Term. Each
Project Completion Bonus shall become due and payable when each such
processing line becomes operational and accepted by the customer.
C. The Company hereby transfers to the Employee a 2.5% interest
in the Company's dividends paid and in any liquidation proceeds in respect
of its common equity whether evidenced by this Agreement or subsequently
evidenced by shares of common stock of the Company or any Operating
Affiliate ("Employee's Equity"). Within sixty (60) days following a
Financial Closing the Company shall issue, and, if applicable, cause any
Operating Affiliate receiving financing pursuant to the Financial Closing
to issue, to Employee a number of shares of the Company's, and, if
applicable, such Operating Affiliate's, common stock which following such
issuance will equal 2.5% of the then outstanding common stock of the
Company, and, if applicable, such Operating Affiliate ("Employee Shares").
Following issuance of Employee Shares, the Employee's Equity shall be
evidenced exclusively by the Employee Shares. Prior to issuance of Employee
Shares, the Employee's Equity shall not be transferable. Following issuance
of Employee Shares, but prior to the class of securities evidenced by
Employee Shares being registered under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934 (a "Public Registration"), the Employee
Shares shall not be transferable without the prior approval of the Board of
Directors of the Company. Following a Public Registration, Employee Shares
shall be transferable subject to any restrictions under applicable
securities laws. Notwithstanding the foregoing, if (i) there is no
Financial Closing prior to the third anniversary following expiration or
termination of the term of this Agreement or (ii) the Financial Closing
relates to a project with respect to which the Company or an Operating
Affiliate did not make a definitive proposal during the Term, the Employee
shall forfeit and retain no interest in the Employee's Equity after such
expiration or termination.
VII. FRINGE BENEFITS
In addition to the compensation as defined above, the Employee shall
be entitled to the following fringe benefits:
A. The Employee shall be eligible to participate in the Company's
health plans, life and disability insurance programs, retirement plans,
vacation plans and other employee benefit plans (collectively the "Employee
Plans") available to senior executive employees in accordance with the
terms and provisions thereof. While the Company remains a wholly owned
subsidiary of Interstate General Company L.P. ("IGC"), the Employee Plans
shall be the employee benefit plans provided by IGC to its senior
executives.
B. The Company will provide the Employee (i) an automobile
allowance of $700 per month, payable semi-monthly concurrent with the
Employee's Annual Base Salary, (ii) a nationally recognized gasoline credit
card, and (iii) an internationally recognized credit card to pay for
expenses incurred by the Employee in connection with Company business
(collectively the Specified Benefits").
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VIII. SEVERANCE
Upon termination of the Employee's employment hereunder, all payment
and benefit obligations of the Company hereunder shall immediately
terminate except as follows:
A. In the event of a termination of the Employee's employment due
to the Employee's death or disability, he Employee, or his estate shall (i)
continue to receive his Annual Base Salary and benefits (excluding the
Specified Benefits) for which the Employee remains eligible under the terms
of the Company's benefit plans (collectively, "Severance Compensation") for
a period commencing on the effective date of the Employee's termination
determined by the Board (the "Termination Date") and ending six (6) months
following the Termination Date, (ii) remain entitled to receive any Project
Financing Bonus or Project Completion Bonus in accordance with Section VI B
hereof and the Employee's Equity in accordance with Section VI C hereof;
and
B. In the event of a Qualifying Termination (defined below) by
the Company, the Employee shall (i) receive Severance Compensation for a
period commencing on the Termination Date and ending one year following the
Termination Date, and (ii) remain entitled to receive any Project Financing
Bonus or Project Completion Bonus in accordance with Section VI B hereof
and the Employee's Equity in accordance with Section VI C hereof.
For purposes of this Agreement, "Qualifying Termination" shall mean
any termination of the Employee by the Company other than for "cause" or
any termination by the Employee for "Good Reason." For purposes hereof,
"cause" shall be defined as (1) conviction of a felony, other crime
involving theft or fraud, or other crime of moral turpitude involving the
Company, and/or (2) engaging in fraud or conduct with the intent of causing
substantial harm to the Company. In the event the Company elects to
terminate the Employee's employment for cause, such termination may be made
effective immediately, and no advance notice shall be required.
For purposes of this section VIII, Employee shall have terminated
the employment for a Good Reason if:
A. the Employee terminates the employment relationship within 2
years following the occurrence of (i) a transaction or series of
transactions other than as a result of a Financial Closing or other equity
investment in the Company which result in neither Interstate General
Company L.P. ("IGC") nor the family of Xxxxx X. Xxxxxx exercising at least
fifty percent (50%) of the voting control of the Company; or (ii) a
transfer of all or substantially all of the assets of the Company or
the merger of the Company into another entity other than an entity at least
50% of the voting control of which is held by either IGC or the Xxxxxx
family; or
B. the Employee terminates the employment relationship within 6
months following the occurrence of (i) the Company materially reducing,
diminishing, terminating or otherwise impairing the Employee's duties,
titles and/or responsibilities despite his written objection delivered to
the Board of Directors (ii) the Company instructing the Employee despite
his written objection delivered to the Board of Directors to take any
action which is in violation of any law, ordinance or regulation or would
require any act of dishonesty or moral turpitude; or (iii) the Company
committing a material breach of any of the provisions of this Agreement.
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IX. RETURN OF COMPANY MATERIALS
Upon termination of his employment for any reason, the Employee
shall return to the Company all Company Records (defined below) and all
other items of personal property, including all Company credit cards,
telephone cards, keys, identification cards and software, that were in the
Employee's possession, custody or control as of the termination date and
that were generated or acquired by the Employee for use in connection with
his employment by the Company (collectively "Company Materials"). "Company
Records" shall mean all copies of all written materials, notes, notebooks,
minutes, letters, memoranda, books of account, litigation records, files,
drawings, photographs, video recordings, audio recordings, electronically
or magnetically stored data, charts, plans, specifications, maps and other
documents relating to the Company or any of its affiliates, or any of their
respective officers, personnel, customers, suppliers, contractors, counsel,
accountants or other parties having any business relationship with the
Company or any of its affiliates (collectively "Covered Persons"); provided
that, Company Records shall not include any written materials or other
documents relating to the foregoing that have been made generally available
to the public without violating any property rights of the Company.
X. INDEMNIFICATION
The Company agrees to indemnify the Employee, with respect to his
performance of his duties described herein, to the maximum extent permitted
by law.
XI. ARBITRATION; REMEDIES
A. Any dispute or controversy arising between the Employee and
the Company relating to this Agreement or otherwise to the Employee's
employment by the Company shall be submitted to private, binding
arbitration, upon the written request of either the Employee or the
Company, before a panel of three arbitrators, under the administration of
and in accordance with the Commercial Arbitration Rules of the American
Arbitration Association ("AAA"). In the event of such dispute or
controversy, the Company and the Employee shall independently and
simultaneously select and identify one arbitrator each, both of whom must
have no past or present familial business relationships with the parties
and must possess expertise in the area of compensation of senior management
employees. In the event that a party has not selected its arbitrator within
60 days of initiation of the arbitration, the AAA shall select such
arbitrator. These two arbitrators shall jointly agree upon and select a
third arbitrator who also possesses such credentials. These three
arbitrators shall hear and decide the dispute or controversy by majority
vote, and their decision and award shall be final and conclusive upon the
parties, and their heirs, administrators, executors, successors, and
assigns. The arbitrators shall have no power or authority to add to,
subtract from, or otherwise modify the terms of this Agreement. Wherever
the Commercial Arbitration Rules of the AAA conflict with the procedures
set forth in this section, the terms of this section shall govern. The
Employee and the Company agree that the arbitration must be initiated by
personally delivering a statement of claim to the AAA and to the party
against whom the claim is asserted no later than ninety (90) days after the
basis of the claim becomes known, or reasonably should have been known or
discovered, by the party asserting the claim. In the event arbitration is
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not initiated within such ninety (90) day period, such claim, dispute, or
controversy shall be irrevocably time-barred. A judgment based upon such
arbitration award may be entered in any court having jurisdiction thereof.
B. Notwithstanding the foregoing, any action brought by the
Company seeking a temporary restraining order, temporary and/or permanent
injunction, and/or a decree of specific performance of the terms of this
Agreement may be brought in a court of competent jurisdiction without the
obligation to proceed first to arbitration.
C. In addition to any other remedy available at law or equity, or
otherwise hereunder, in the event of any breach by the Employee not cured
within 30 days following notice by the Company of his obligations under any
of Sections V.C, V.E, or IX hereof, the Employee shall forfeit any right to
Severance Compensation and Project Completion Bonuses hereunder.
XII. ASSIGNABILITY AND BINDING EFFECT
Neither party may assign this Agreement, or any obligation or rights
hereunder, to any other person or entity without the express written
consent of the other party. This Agreement shall be binding upon the
parties and their heirs, executors, administrators, and successors.
XIII. GOVERNING LAW
This Agreement shall be governed by the laws of the State of
Maryland.
XIV. CAPTIONS
All captions contained in this Agreement are for convenience only
and in no way define or describe the intent of the parties or specific
terms hereof.
XV. SEVERABILITY
If any provision of this Agreement shall to any extent be held
invalid or unenforceable, the remaining terms and provisions shall not be
affected thereby.
XVI. ENTIRE AGREEMENT
This Agreement contains the entire agreement between the parties
relating to the subject matter hereof. All prior negotiations or
stipulations concerning any matter which preceded or accompanied the
execution hereof are conclusively deemed to be superseded hereby.
No provision of this Agreement may be modified, waived, or discharged
unless such waiver, modification or discharge is agreed to in writing
signed by the Employee and such officer or director as may be specifically
designated by the Board of Directors.
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XVII. NOTICES; MISCELLANEOUS
For purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be duly given
when delivered by hand or facsimile transmission or when mailed by United
States registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Company:
Interstate Waste Technologies, Inc.
000 Xxxxxxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
If to the Employee:
Xx. Xxxxxxx X. Xxxxxxxx
000 Xxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
XVIII. WITHHOLDING
Anything in this Agreement to the contrary notwithstanding, all
payments required to be made by the Company hereunder to the Employee or
his estate or beneficiaries shall be subject to the withholding of such
amounts relating to taxes as the Company may reasonably determine it should
withhold pursuant to any applicable law or regulation. In lieu of
withholding such amounts, in whole or in part, the Company may, in its sole
discretion accept other provisions for payment of taxes and withholdings as
required by law, provided it is satisfied that all requirements of law
affecting its responsibilities to withhold compensation have been
satisfied.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first set forth below, and the parties represent that they have
the capacity and authorization, whether it be personal or by the Board of
Directors of the Company, to execute this Agreement.
INTERSTATE WASTE TECHNOLOGIES, INC.
Date: October 11, 1996 /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Title:
Date: October 11, 1996 /s/ Xxxxxxx X. Xxxxxxxx
------------------ -----------------------------------
Xxxxxxx X. Xxxxxxxx
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In order to induce the Employee to enter into this Employment Agreement,
Interstate General Company L.P., a Delaware limited partnership ("IGC"),
hereby unconditionally guarantees the performance of the obligations of the
Company under this Employment Agreement; provided that upon the earlier of
(i) the Financial Closing, or (ii) a sale or other disposition by IGC of
the shares or substantially all of the assets of the Company as a going
concern and assumption of this guarantee obligation by the acquirer, this
guarantee shall automatically become void and of no further effect and IGC
shall be released of all obligations hereunder.
INTERSTATE GENERAL COMPANY L P.
By: Interstate General Management
Corporation,
its managing general partner
Date: October 11, 1996 /s/ Xxxxx X. Xxxxxx
------------------ ----------------------------------------
Xxxxx X. Xxxxxx
Title: Chairman
