Exhibit 10(iii)
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EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement") made and effective as of March 19, 2001,
is between URECOATS INDUSTRIES INC., a Delaware corporation with offices at
0000 Xxxxx Xxxxxxxxx Xxxx, Xxxxx X-0, Xxxxxxx Xxxxx, Xxxxxxx 00000 (the
"Company"), and XXXXXXX X. XXXXXX, an individual with an address at 0000 X.X.
00xx Xxxxx, Xxxxxxxx, Xxxxxxx 00000 (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company wishes to employ the Executive and the Executive
wishes to accept such employment, subject to the terms and conditions
hereinafter set forth.
NOW, THEREFORE, the parties hereto, in consideration of the premises and
mutual promises contained herein and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, agree as follows:
1. EMPLOYMENT TERM.
The Company hereby agrees to employ the Executive, and the Executive hereby
accepts such employment for a period of two (2) years starting on March 19, 2001
and ending on February 28,2003 (the "Initial Term"), unless sooner terminated in
accordance with Section 7 hereof. The Initial Term together with the period of
any extension or renewal of such employment is referred to herein as the
"Employment Period".
2. POSITION; DUTIES.
From March 19, 2001 to the end of the Initial Term, unless sooner
terminated in accordance with Section 7 hereof, the Executive shall hold the
title of President and Chief Operating Officer of Urecoats Industries Inc. The
Executive shall have the duties and responsibilities of management usually
vested in a president and chief operating officer and such other duties and
responsibilities as may be assigned to him from time to time by the Company's
Board of Directors.
During the Employment Period, the Executive shall also be appointed and
serve as a director of the Company. Such appointment shall terminate
automatically upon the termination the Executive's employment hereunder without
need for a formal resignation.
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3. MANNER OF PERFORMANCE
The Executive shall serve the Company and Urecoats and devote all his
business time, his best efforts and all his skill and ability in the performance
of his duties hereunder. The Executive shall carry out his duties in a competent
and professional manner, shall work with other Executives of the Company and of
its affiliates and generally promote the best interests of the Company and its
customers. The Executive shall not, in any capacity, engage in any activity
which is, or may be, contrary to the welfare, interest or benefit of the
business now or hereafter conducted by the Company or any of its affiliates.
4. COMPENSATION. The Executive's compensation for all of his services
hereunder shall be as follows:
4.1 BASE COMPENSATION. During the months of March, April and May 2001,
the Executive's base compensation shall consist of a weekly salary equal to
$3,365.38 ($6,730.76 every two weeks, or $175,000.00 per year). During the
months of June, July and August 2001, the Executive's base compensation shall
consist of a weekly salary of $3,846.15 ($7,692.30 every two weeks, or
$200,000.00 per year). Beginning on September 1,2001 and thereafter during the
Employment Period, the Executive's base compensation shall consist of a weekly
salary of $4,326.92 ($8,653.84 every two weeks, or $225,000.00 per year). The
salary payments described above shall be made by the Company to the Executive
every two weeks commencing on March 1, 2001 and shall be subject to any
applicable tax withholdings.
4.2 BONUS. The Executive shall be entitled to a yearly minimum bonus of
$10,000.00, due and payable not later than January 30 with respect to the
immediately preceding calendar year during the Employment Period. The bonus
shall commence on or before April 30, 2002. The Company's Board of Directors
may, in its sole and absolute discretion, increase the amount of such bonus to
as much as $100,000. Each bonus shall be subject to applicable tax withholdings.
4.3 RESTRICTED STOCK. On or before May 30, 2001, the Company shall cause
the issuance of, and shall hold in escrow for the Executive an aggregate of
1,000,000 shares of common stock of Urecoats, $.01 par value per share (the
"Shares"), to be evidenced by six (6) certificates issued in the name of the
Executive, for delivery in accordance herewith. The Shares shall be additional
compensation to the Executive for all of his services hereunder and shall vest
and be delivered to the Executive as follows:
Certificate No. Vesting Date Number of Shares
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1 June 1,2001 166,667
2 December 1,2001 166,667
3 June 1,2002 166,667
4 December 1,2002 166,667
5 June 1,2003 166,667
6 December 1,2003 166,667
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Notwithstanding the foregoing, all unvested Shares listed above shall
immediately vest and be delivered to the Executive upon the sale of
substantially (more than 50%) of all stock or assets of the Company provided
that the Executive is employed by the Company on the date of sale.
If the Executive is not employed by the Company on any of the above vesting
dates, the Shares vesting on such date shall be irrevocably forfeited and the
Executive shall have no rights thereto and the Company may in its discretion,
cancel the stock or deposit it in its treasury.
The Executive shall have no voting or other stockholder rights with respect to
any unvested Shares.
The Shares shall not be assignable by the Executive or be subject to any claims
by creditors until they shall have vested in accordance with this Section 4.3.
In addition to any other restrictions on the Shares described in this Section
4.3, which may be incorporated by reference in the stock certificates evidencing
the Shares, such certificates shall bear a legend substantially as follows:
"The securities evidenced hereby have not been registered under
the Securities Act of 1933, as amended ("Securities Act"). The
holder hereof, by acquiring such securities, agrees that such
securities may not be resold, pledged or otherwise transferred
except pursuant to an effective registration statement duly filed
under the Securities Act, or pursuant to an exemption effective
under the Securities Act."
The Executive hereby agrees with Company that the holding period set forth in
Rule 144 of the Securities Act of 1933, as amended, shall only begin to run,
with respect to any Shares, on the date that such Shares vest in accordance
herewith.
5. ADDITIONAL BENEFITS; REIMBURSEMENT OF EXPENSES.
5.1 BENEFITS. Beginning on March 1, 2001, the Company shall make
available and pay for an automobile for the Executive's use, the monthly lease
payments of which shall not exceed $600. The Company shall pay the insurance
premiums for such automobile. The benefits shall be paid by the Company
continuously through the term of Executive's employment.
5.2 INSURANCE. Beginning on March 1,2001, the Company shall provide and
pay for full medical and dental insurance for the Executive and his immediate
family. The benefits shall be paid by the Company continuously through the term
of Executive's employment.
5.3 EXPENSES. The Company shall reimburse the Executive for all
reasonable and necessary expenses and disbursements incurred by him for and on
behalf of the Company in the performance of his duties under this Agreement,
provided that such expenses and disbursements are approved by the Company's
Board of Directors. The Company and the Board of Directors shall not
unreasonably withhold approval for all reasonable and necessary day-to-day
expenses so incurred by Executive.
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6. NON-COMPETITION; NON-DISCLOSURE.
6.1 NON-COMPETITION. During the Employment Period and for a period of
two (2) years thereafter (collectively the "Restriction Period"), the Executive
shall not, either directly or indirectly, for himself or any third party,
anywhere within the United States (a) engage in any activity that directly or
indirectly competes with the business of the Company or of any of the
affiliates, as conducted at any time during the Employment Period, including
without limitation, accepting employment form or providing consulting services
to any such competitor, (b) solicit, induce, recruit, or cause another person in
the employ of the Company or who is a consultant for the Company to terminate
his or her employment, engagement or other relationship with the Company, or (c)
solicit or accept the business from any individual or entity which shall have
obtained the goods or services of, or purchased goods or services from, the
Company or its affiliates during the one year period to the end of the
Employment Period.
6.2 NONDISCLOSURE.
6.2.1 DEFINITIONS. The Executive recognizes and acknowledges that
he has access to certain confidential information of the Company or any of its
affiliates which is either non-public, proprietary or confidential in nature,
including without limitation the identity and information concerning customers
and potential customers of the Company, operational policies, and pricing and
cost policies that are valuable, special and unique assets of the Company and
its affiliates, and/or their respective businesses (the "Confidential
Information"). Confidential Information shall not include any information:
6.2.1.1 which becomes known to the public generally
through no fault of the Executive, or
6.2.1.2 as to which disclosure is required by law or the
order of any governmental authority under color of law; provided, that prior to
disclosing any information pursuant to this clause, the Executive shall give
prior written notice thereof to the Company and provide the Company with the
opportunity to contest such disclosure.
6.2.2 COVENANT TO MAINTAIN CONFIDENTIALITY. The Executive agrees
that he will not disclose, without limitation as to time, Confidential
Information to any person, firm, corporation, association or other entity for
any purpose or reason whatsoever, except
6.2.2.1 to authorized representatives of the Company,
6.2.2.2 during the Employment Period, such information
may be disclosed by the Executive as is required in the course of performing his
duties for the Company, and
6.2.2.3 to counsel and other advisers provided that such
advisers agree to the confidentiality provisions of this Section 6.
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6.3 INJUNCTIVE RELIEF; DAMAGES. Because of the difficulty of measuring
economic losses to the Company as a result of a breach of the foregoing
covenants in this Section 6, and because of the immediate and irreparable damage
that could be caused to the Company for which it would have no other adequate
remedy, the Executive agrees that the foregoing covenants may be enforced by the
Company in the event of breach by the Executive, by injunctions and restraining
orders. Nothing herein shall be construed as prohibiting the Company from
pursuing any other available remedy for such breach or threatened breach,
including the recovery of damages.
6.4 REASONABLE RESTRAINT. It is agreed by the parties hereto that the
foregoing covenants in this Section 6 impose a reasonable restraint on the
Executive in light of the activities and business of the Company (including the
affiliates thereof) on the date of the execution of this Agreement and the
current plans of the Company.
6.5 SEVERABILITY; REFORMATION. The covenants in this Section 6 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, in the event any
court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth are unreasonable, then it is the intention of
the parties that such restrictions be enforced to the fullest extent which the
court deems reasonable, and the Agreement shall thereby be reformed.
6.6 INDEPENDENT COVENANT. All of the covenants in this Section 6 shall
be construed as an agreement independent of any other provision in this
Agreement, and the existence of any claim or cause of action by the Executive
against the Company (including the subsidiaries thereof), whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Company of such covenants. It is specifically agreed that the periods of
restriction during which the agreements and covenants of the Executive made in
this Section 6 shall be effective, shall be computed by extending such periods
by the amount of time during which the Executive is in violation of any
provision of Section 6. The covenants contained in this Section 6 shall not be
affected by any breach of any other provision hereof by any party hereto.
6.7 SURVIVAL. The obligations of the parties under this Section 6 shall
survive the termination of this Agreement.
6.8 LEGAL FEES AND EXPENSES. The prevailing party in any proceeding to
enforce the terms and conditions of this agreement shall be entitled to an award
of reasonable attorney's fees and costs, including attorney's fees in all trial
and appellate courts.
7. TERMINATION.
The Executive's employment hereunder may be terminated at any time by
either party hereto, with or without cause. If the Company terminates the
Executive, whether or not for cause, the Executive shall be entitled to a
severance payment equal to (i) six months of the then current base compensation
if the termination occurs on or by September 1,2001, or (ii) twelve months of
the then current base compensation if the termination occurs after September
1,2001 but before February 28,2003.
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8. ASSIGNMENT.
This Agreement may not be sold, transferred, assigned, pledged or
hypothecated by either party, without the express prior written consent of the
other party, except as otherwise set forth herein. This Agreement shall inure
to the benefit of and be binding upon the Company and the Executive, and each
of their heirs, successors and assigns, including without limitation, any
corporation or other entity into which the Company is merged or which acquires
all or substantially all of the assets of the Company.
9. NOTICES.
Any notice required or permitted to be given pursuant to this Agreement
shall be deemed given (i) upon receipt by personal delivery, (ii) one (1)
business day after delivered by a nationally recognized overnight courier or
(iii) three (3) business days after such notice is mailed by certified mail,
return receipt requested, addressed to the parties at each of their addresses
set forth at the beginning of this Agreement, or at such other address as such
party shall designate by written notice to the other party. Copies of all
notices shall also be provided to Xxxxxx X. Xxxxx, PLLC, 000 Xxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxxxx X. Xxxxx, Esquire.
10. GOVERNING LAW.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of Delaware, without regard to its conflict-of-laws
rules. Each of the parties (i) consents and submits to the jurisdiction of the
federal and state courts of Delaware, regardless of whether the controversy
arises or not from this Agreement; (ii) consents that such courts shall have
the exclusive jurisdiction with regard to any controversy between the parties,
and no action or proceeding shall be commenced by any party in any other
jurisdiction; (iii) consents that if a federal court in the state of Delaware
has jurisdiction with respect to any action, then such action shall be brought
first in any such federal court and, that if such federal court determines that
it lacks jurisdiction, then such action may subsequently be filed in any state
court of Delaware; and (iv) consents that service of process on such party may
be made in the same manner as provided above with respect to notices, and that
such service of process shall have the same force and effect as if personally
served.
11. WAIVER.
Waiver by either party of a breach of any provision of this Agreement by
the other shall not operate or be construed as a waiver of any subsequent breach
by such other party. The failure of either party hereto to take any action by
reason of such breach shall not deprive such party of the right to take action
at any time while such breach continues.
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12. INVALIDITY AND SEVERABILITY.
If any provisions of this Agreement are held invalid or unenforceable by a
court of competent jurisdiction, such invalidity or unenforceability shall not
affect the other provisions of this Agreement and, to that extent, the
provisions of this Agreement are intended to be and shall be deemed severable;
provided, however, that if any provision of Section 6 hereof is held invalid or
otherwise unenforceable in any action, then any claims for monies allegedly due
and owing to the Executive shall automatically be deemed waived.
13. ENTIRE AGREEMENT; AMENDMENT.
This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and there are no representations,
warranties or commitments except as set forth herein. This Agreement supersedes
any other prior and contemporaneous agreements, understandings, negotiations
and discussions, whether written or oral, of the parties hereto relating to the
transactions contemplated by this Agreement. This Agreement may be extended,
renewed or amended only by writing executed by both parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement this 15th
day of May, 2001.
URECOATS INDUSTRIES INC. Xxxxx X. Xxxxxx
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Witness
By: /s/ Xxxxxxx Xxxxx Xxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxx Witness
Chairman of the Board
By: /s/ Xxxxxxx Xxxxxx Xxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx Witness
Xxxxxxx X. Xxxxxxxx
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Witness
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