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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made as of the 15th day of
April, 1988, by and between Environmental Products Technologies Corporation, a
Delaware corporation (the "Company"), and Xxxxxx Xxxxx, an individual
("Employee"), and is made with respect to the following facts:
R E C I T A L S
A. The Company and the Employee wish to ensure that the Company will
receive the benefit of Employee's loyalty and service.
B. In order to help ensure that the Company receives the benefit of
Employee's loyalty and service, the parties desire to enter into this formal
Employment Agreement to provide Employee with appropriate compensation
arrangements and to assure Employee of employment stability.
C. The parties have entered into this Agreement for the purpose of
setting forth the terms of employment of the Employee by the Company.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, THE PARTIES HERETO AGREE AS FOLLOWS:
1. EMPLOYMENT OF EMPLOYEE AND DUTIES. The Company hereby hires Employee
and Employee hereby accepts employment upon the terms and conditions described
in this Agreement. The Employee shall be the Chief Executive Officer of the
Company with all of the duties, privileges and authorities usually attendant
upon such office, including but not limited to responsibility for the
day-to-day management and oversight of the Company and its subsidiaries.
Subject to (a) the general supervision of the Board of Directors of the
Company, and (b) the Employee's duty to report to the Board of Directors
periodically, as specified by it from time-to-time, Employee shall have all of
the authority and discretion in the conduct of the Company's business and
affairs that can lawfully be delegated by the Board of Directors. The Employee
will serve as Chairman and Chief Executive Officer of the Company for as long
as he is employed.
2. TIME AND EFFORT. Employee agrees to devote his full working time and
attention to the management of the Company's business affairs, the
implementation of its strategic plan, as determined by the Board of Directors,
and the fulfillment of his duties and responsibilities as the Company's primary
representative. Expenditure of a reasonable amount of time for personal matters
and business and charitable activities shall not be deemed to be a breach of
this Agreement, provided that those activities do not materially interfere with
the services required to be rendered to the Company under this Agreement.
3. THE COMPANY'S AUTHORITY. Employee agrees to comply with the Company's
rules and regulations as adopted by the Company's Board of Directors regarding
performance of his duties, and to carry out and perform those orders,
directions and policies established by the Company with respect to his
engagement. Employee shall promptly notify the Company's Board of Directors of
any objection he has to the Board's directives and the reasons for such
objection.
4. Noncompetition by Employee. During the term of this Agreement and
during any period in which Employee is receiving severance benefits, if any,
the Employee shall not, directly or
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indirectly, either as an employee, employer, consultant, agent, principal,
partner, stockholder (in a private company), corporate officer, director, or in
any other individual or representative capacity, engage or participate in any
business that is in competition with the business of the Company or its
affiliates.
5. TERM OF AGREEMENT. This Agreement shall commence to be effective on
the date first above written and shall continue until April 14, 2002, unless
terminated sooner as provided in Section 14 hereof.
6. COMPENSATION. Commencing on April 15, 1998 and during the balance
of the term of this Agreement thereafter, the Company shall pay the following
compensation to Employee:
6.1 ANNUAL COMPENSATION. Employee shall be paid a fixed salary of
$96,000 for the 1st twelve months. There shall be two equal installments per
month on the 15th and last day of each month.
6.2 ADDITIONAL COMPENSATION. In addition to the compensation set
forth in Section 6.1 of this Agreement, Employee may be paid a bonus or bonuses
during each year, as determined at the sole discretion of the Company's Board of
Directors based on the Board's evaluation of the Employee's definable efforts,
accomplishments and similar contributions.
6.3 ANNUAL RAISES. The Employee will receive $120,000 for a
twelve month period commencing April 15, 1999. The Employee will receive
$144,000 for a twelve month period commencing April 15, 2000. The Employee will
receive $168,000 for a twelve month period commencing April 15, 2001. All
payments will be made in two equal installments per month on the 15th and last
day of each month.
7. FRINGE BENEFITS. Employee shall be entitled to all fringe benefits
which the Company or its subsidiaries may make available from time-to-time for
persons with comparable positions and responsibilities. Without limitation,
such benefits shall include participation in any life and disability insurance
programs, profit incentive plans, pension or retirement plans, and bonus plans
as are maintained or adopted from time-to-time by the Company.
The Company shall also provide Employee with medical group insurance
coverage or equivalent coverage for Employee and his dependents. The
medical insurance coverage shall begin on December 31, 1998 and
shall continue throughout the term of this Agreement.
8. REIMBURSEMENT OF EXPENSES. The Company shall reimburse Employee for
all reasonable travel, mobile telephone, promotional and entertainment expenses
incurred in connection with the performance of Employee's duties hereunder, and
subject to Section 10 of this Agreement with respect to automobile expenses.
Employee's reimbursable expenses shall be paid promptly by the Company upon
presentment by Employee of an itemized list of invoices describing such
expenses. All compensation provided in Sections 6, 7, 9 and 10 of this
Agreement shall be subject to customary withholding tax and other employment
taxes, to the extent required by law.
9. AUTOMOBILE. Notwithstanding anything else herein to the contrary,
the Company shall pay to the Employee a fixed amount equal to $750.00 per month
on the last day of each month during the term of this Agreement as
reimbursement to the Employee on a nonaccountable basis of all
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expenses incurred by the Employee for the use of his automobile for Company
business purposes, including but not limited to depreciation, repairs,
maintenance, gasoline and insurance. Employee shall not be entitled to any
other reimbursement for the use of his automobile for business purposes.
10. VACATION. Employee shall be entitled to two weeks of paid vacation
per year or pro rata portion of each year of service by Employee under this
Agreement. The Employee shall be entitled to the holidays provided in the
Company's established corporate policy for employees with comparable duties and
responsibilities.
11. RIGHTS IN AND TO INVENTIONS AND PATENTS.
11.1 DESCRIPTION OF PARTIES' RIGHTS. The Employee agrees that with
respect to any inventions made by him or the Company during the term of this
Agreement, solely or jointly with others, (i) which are made with the Company's
equipment, supplies, facilities, trade secrets or time, or (ii) which relate to
the business of the Company or the Company's actual or demonstrably anticipated
research or development, or (iii) which result from any work performed by the
Employee for the Company, such inventions shall belong to the Company. The
Employee also agrees that the Company shall have the right to keep such
inventions as trade secrets, if the Company chooses.
11.2 DISCLOSURE REQUIREMENTS. For purposes of this Agreement, an
invention is deemed to have been made during the term of this Agreement if,
during such period, the invention was conceived or first actually reduced to
practice. The Employee agrees that any patent application filed within one year
after termination of his employment shall be presumed to relate to an invention
made during the term of this Agreement unless he can provide evidence to the
contrary. In order to permit the Company to claim rights to which it may be
entitled, the Employee agrees to disclose to the Company in confidence all
inventions which the Employee makes during the term of this Agreement and all
patent applications filed by the Employee within one year after termination of
this Agreement.
12. ARBITRATION Any disputes arising under this Agreement will be
resolved in accordance with the rules of the American Arbitration Association
as they apply in the County of Los Angeles, State of California. The decision
of the arbitrator shall be binding on all parties to this Agreement.
13. TERMINATION. This Agreement may be terminated in the following
manner and not otherwise:
13.1 MUTUAL AGREEMENT. This Agreement may be terminated by the
mutual written agreement of the Company and Employee to terminate.
13.2 TERMINATION BY EMPLOYEE FOR BREACH. Employee may at his
option and in his sole discretion terminate this Agreement for the material
breach by the Company of the terms of this Agreement. In the event of such
termination, Employee shall give the Company 30 days' prior written notice.
13.3 TERMINATION BY THE COMPANY FOR BREACH.
a. The Company may at its option immediately terminate this
Agreement in the event Employee commits gross negligence in the
performance of his duties under this Agreement, or breaches his
fiduciary duty to the Company, to the Board of Directors or to the
Company's shareholders.
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b. The Company may at its option terminate this Agreement
in the event that the Employee does not perform his duties in
accordance with the direction or policies of the Company's Board
of Directors or otherwise materially breaches this Agreement;
provided, however, that the Company shall give the Employee
written notice of specific instances for the basis of any
termination of this Agreement by the Company. Employee shall
have a period of 30 days after said notice in which to cease the
alleged violations before the Company may terminate this
Agreement. If Employee ceases to commit the alleged violations
within said 30 day period, the Company may not terminate this
Agreement pursuant to this Section. If Employee continues to
commit the alleged violations after said 30 day period, the
Company may terminate this Agreement immediately upon written
notification to Employee.
13.4 TERMINATION UPON DEATH. This Agreement shall terminate upon the
death of the Employee.
13.5 TERMINATION UPON THE DISABILITY OF THE EMPLOYEE. This agreement
shall terminate upon the disability of the Employee. As used in the previous
sentence, the term "disability" shall mean the complete disability to discharge
Employee's duties and responsibilities for a continuous period of not less than
six months during any calendar year. Any physical or mental disability which
does not prevent Employee from discharging his duties and responsibilities in
accordance with usual standards of conduct as determined by the Company in its
reasonable opinion shall not constitute a disability under this Agreement.
If the Employee is disabled to a degree that he is unable to
fulfill his duties then the Company will pay his full salary for
the first 12 months of his disability, 75% of salary, as defined
in Section #6, for the second twelve months and 50% of salary,
as defined in Section #6, for the next twenty-four months. These
will end April 14, 2002, regardless of when the disability
commences.
13.6 TERMINATION FOR OTHER THAN CAUSE UPON A CHANGE OF
CONTROL. If there is an attempt to terminate this agreement, then the Employee
will be entitled to receive a severance bonus of $250,000 and all of the
employee's stock options issued, any and all restrictions on the exercise of
stock grants or stock options will end. Additionally all stock options or
grants will become fully vested. The Company will immediately be required to
pay a bonus over and above the severance bonus to Employee to cover the cost of
exercising all options and payment of all taxes, if any, resulting from the
payment of this bonus or the vesting of any stock or stock options.
14. IMPROPER TERMINATION. If this Agreement is terminated by
Employee pursuant to Section 13.2 herein or by the Company in any manner except
as specifically provided in Section 13 herein, the Company shall continue to
pay to Employee all of Employee's benefits provided in this Agreement
including, but not limited to, those benefits provided in Sections 6, 7 and 9 of
this Agreement for the remaining term of this Agreement. It is specifically
agreed that in such event Employee shall have no duty to mitigate his damages
by seeking comparable, inferior, or different employment.
15. INDEMNIFICATION OF EMPLOYEE. Pursuant to the provisions and
subject to the limitations of the Delaware Corporations Law and, if applicable,
the California Corporations Code, the Company
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shall indemnify and hold Employee harmless as provided in Sections 15.1 and
15.2 of this Agreement. The Company shall, upon the request of Employee, assume
the defense and directly bear all of the expense of any action of proceedings
which may arise for which Employee is entitled to indemnification pursuant to
this Section.
15.1 INDEMNIFICATION OF EMPLOYEE FOR ACTIONS BY THIRD PARTIES. The
Company agrees to indemnify and hold Employee harmless from any liability,
claims, fines, damages, losses, expenses, judgments or settlements actually
incurred by him, including but not limited to reasonable attorneys' fees and
costs actually incurred by him as they are incurred, as a result of Employee
being made at any time a party to, or being threatened to be made a party to,
any proceeding (other than an action by or in the right of the Company, which
is addressed in Section 15.2 of this Agreement), relating to actions Employee
takes within the scope of his employment as the President of the Company or in
his role as a director of the Company, provided that Employee acted in good
faith and in a manner he reasonably believed to be in the best interest of the
Company and, in the case of a criminal proceeding, had no reasonable cause to
believe his conduct was unlawful.
15.2 INDEMNIFICATION OF EMPLOYEE FOR ACTIONS IN THE RIGHT OF THE
COMPANY. The Company hereby agrees to indemnify and hold Employee harmless
from any liability, claims, damages, losses, expenses, judgments or settlements
actually incurred by him, including but not limited to reasonable attorneys'
fees and costs actually incurred by him as they are incurred, as a result of
Employee being made a party to, or being threatened to be made a party to, any
proceeding by or in the right of the Company to procure a judgment in its favor
by reason of any action taken by Employee as an officer, director or agent of
the Company, provided that Employee acted in good faith in a manner he
reasonably believed to be in the best interests of the Company and its
shareholders, and provided further, that no indemnification by the Company
shall be required pursuant to this Section 15.2 (i) for acts or omissions that
involve intentional misconduct or a knowing and culpable violation of law,
(ii) for acts or omissions that Employee believed to be contrary to the best
interests of the Company or its shareholders or that involve the absence of
good faith on the part of Employee, (iii) for any transaction from which
Employee derived an improper personal benefit, (iv) for acts or omissions that
show a reckless disregard by Employee of his duties to the Company or its
shareholders in circumstances in which Employee was aware, or should have been
aware, in the ordinary course of performing his duties, of a risk of serious
injury to the Company or its shareholders, or (v) for acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication of
Employee's duties to the Company or its shareholders.
15.3 REIMBURSEMENT. In the event that it is determined that
Employee is not entitled to indemnification by the Company pursuant to Sections
15.1 or 15.2 of this Agreement, then Employee is obligated to reimburse the
Company for all amounts paid by the Company on behalf of Employee pursuant to
the indemnification provisions of this Agreement. In the event that Employee is
successful on the merits in the defense of any proceeding referred to in
Sections 15.1 or 15.2 of this Agreement, or any related claim, issue or matter,
then the Company will indemnity and hold Employee harmless from all fees, costs
and expenses actually incurred by him in connection with the defense of any
such proceeding, claim, issue or matter.
16. ASSIGNABILITY OF BENEFITS. Except to the extent that this provision
may be contrary to law, no assignment, pledge, collateralization or attachment
of any of the benefits under this Agreement shall be valid or recognized by the
Company. Payment provided for by this Agreement shall not be subject to seizure
for payment of any debts or judgments against the Employee, nor shall the
Employee have any right to transfer, modify, anticipate or encumber any rights
or benefits hereunder; provided that
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any stock issued by the Company to the Employee pursuant to this Agreement
shall not be subject to Section 16 of this Agreement.
17. DIRECTORS' AND OFFICERS' LIABILITY INSURANCE. The Company will review
in good faith the prospect of purchasing directors' and officers' liability
insurance for the officers and directors of the Company, which would include the
same coverage for Employee, provided, that any decision was to whether or not
the Company purchases such insurance coverage will be in the sole discretion of
the Company's Board of Directors.
18. NOTICE. Except as otherwise specifically provided, any notices to be
given hereunder shall be deemed given upon personal delivery, air courier or
mailing thereof, if mailed by certified mail, return receipt requested, to the
following addresses (or to such other address or addresses as shall be specified
in any notice given):
IN CASE OF THE COMPANY:
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Secretary
IN CASE OF THE EMPLOYEE:
Xxxxxx Xxxxx
The address listed below Xx. Xxxxx'x
signature to this Agreement.
19. ATTORNEYS' FEES. In the event that any of the parties must resort to
legal action in order to enforce the provisions of this Agreement or to defend
such suit, the prevailing party shall be entitled to receive reimbursement from
the nonprevailing party for all reasonable attorneys' fees and all other costs
incurred in commencing or defending such suit.
20. ENTIRE AGREEMENT. This Agreement embodies the entire understanding
among the parties and merges all prior discussions or communications among them,
and no party shall be bound by any definitions, conditions, warranties, or
representations other than as expressly stated in this Agreement or as
subsequently set forth in a writing signed by the duly authorized
representatives of all of the parties hereto.
21. NO ORAL CHANGE; AMENDMENT. This Agreement may only be changed or
modified and any provision hereof may only be waived by a writing signed by the
party against whom enforcement of any waiver, change or modification is sought.
This Agreement may be amended only in writing by mutual consent of the parties.
22. SEVERABILITY. In the event that any provision of this Agreement shall
be void or unenforceable for any reason whatsoever, then such provision shall be
stricken and of no force and effect. The remaining provisions of this Agreement
shall, however, continue in full force and effect, and to the extent required,
shall be modified to preserve their validity.
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23. APPLICABLE LAW. This Agreement shall be construed as a whole and in
accordance with its fair meaning. This Agreement shall be interpreted in
accordance with the laws of the State of California, and venue for any action or
proceedings brought with respect to this Agreement shall be in the County of
Ventura in the State of California.
24. SUCCESSORS AND ASSIGNS. Each covenant and condition of this Agreement
shall inure to the benefit of and be binding upon the parties hereto, their
respective heirs, personal representatives, assigns and successors in interest.
Without limiting the generality of the foregoing sentence, this Agreement shall
be binding upon any successor to the Company whether by merger, reorganization
or otherwise.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
COMPANY: ENVIRONMENTAL PRODUCTS &
TECHNOLOGIES CORPORATION.
a Delaware corporation
Attest:
By: ___________________________
Xxxxxx Xxxxxx, Secretary
____________________________
Xxxxxx Xxxxx, Director
____________________________
Xxxxxx Xxxxxx, Director
____________________________
Xxxxx X. XxXxxxxx, Director
EMPLOYEE:
____________________________
Xxxxxx Xxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000
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