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EXHIBIT 6(i)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated October , 1999, by and between
Enviro-Clean of America, Inc., a Nevada corporation with offices at 000 Xxxx
Xxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000 (hereinafter referred to as the "Company")
and Xxxxxxx Xxxxxx, an individual residing at c/o 000 Xxxx Xxxxxx, Xxxxxxxxxx,
Xxx Xxxx 00000 (hereinafter referred to as the "Executive").
WHEREAS, the Executive is presently employed by the Company as the
Chief Executive Officer of the Company;
WHEREAS, the Board of Directors of the Company (the "Board") desires to
provide for the continued employment of the Executive, which the Board believes
is in the best interests of the Company and its shareholders, and the Executive
is willing to commit himself to serve the Company, on the terms and conditions
herein provided;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto hereby agree as follows:
The Company agrees to employ the Executive, and the Executive agrees to
serve the Company, on the terms and conditions set forth herein.
1. Title; Capacity. The Executive shall serve as Chief Executive
Officer of the Company and shall be based at the Company's headquarters in
Hicksville, New York. The Executive hereby accepts such employment and agrees to
undertake the duties and responsibilities inherent in such position and such
other duties and responsibilities as the Board or its designee shall from time
to time reasonably assign to him. The Executive agrees to abide by the rules,
regulations, instructions, personnel practices and policies of the Company and
any changes therein which may be adopted from time to time by the Company.
The Company further agrees to use its best efforts to cause the
Executive to be nominated as a member of the Board and a member of the Executive
Committee (if such a committee is created).
2. Term of Employment. The Company agrees to employ the Executive, and
the Executive agrees to serve the Company for a period commencing on the date
hereof (the "Commencement Date") and continuing for three years thereafter (such
period, including all extensions thereto, to be collectively referred to as the
"Employment Period"), unless otherwise terminated pursuant to the terms hereof.
The Employment Period shall automatically renew annually for a new three-year
term unless prior to the end of the first year of each three-year term, either
the Company or the Executive provides notice to the other party to this
Agreement of its intention not to extend the Employment Period beyond the then
current three-year term. Any notice given pursuant to this Section shall be
provided in accordance with the terms of Section 8.1 hereof and shall be
provided not later than 30 days prior to the end of such one-year period.
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3. Compensation and Benefits.
3.1. Salary. The Company will compensate the Executive for services
to be rendered by the Executive hereunder at the per annum rate of (i)
one hundred thousand ($100,000) dollars for the year ending December
31, 1999, (ii) two hundred thousand ($200,000) dollars for the year
ending December 31, 2000, and (iii) three hundred thousand ($300,000)
dollars for the year ending December 31, 2001, and for periods
subsequent thereto (the "Base Compensation"), payable in accordance
with the Company's customary payroll practices. Additionally, the Base
Compensation may be increased annually as determined by the Board of
Directors of the Company.
3.2. Bonus and Fringe Benefits. In addition to the compensation
provided in Section 4(a) above, the Company agrees to pay the Executive
an annual bonus payment (the "Basic Bonus Payment") for each of the
fiscal years during the Employment Period equal to fifteen thousand
($15,000) dollars upon the occurrence of each of the following events:
(a) listing of the Company's shares on NASDAQ, a comparable
inter-dealer automated quotation system, or a recognized exchange, (b)
the Company achieves revenues for any monthly period that would, if
annualized, equal $50 million or more in revenues, (c) the Company
achieves revenues for any monthly period that would, if annualized,
equal $75 million or more in revenues, (d) the Company achieves
revenues for any monthly period that would, if annualized, equal $100
million or more in revenues. The term "Revenues" shall mean the
revenues of the Company for such month as determined by the independent
public accountants then employed by the Company.
3.3. Reimbursement of Expenses. The Company shall reimburse the
Executive for all reasonable travel, entertainment and other expenses
incurred or paid by the Executive in connection with, or related to,
the performance of his duties, responsibilities or services under this
Agreement, upon presentation by the Executive of documentation, expense
statements, vouchers and/or such other supporting information as the
Company may reasonably request, provided, however, that the amount
available for such travel, entertainment and other expenses may be
fixed in advance by the Board.
3.4. Insurance. The Executive shall be entitled to health insurance
coverage, term life insurance and long term disability insurance to the
extent that the Executive's position, tenure, salary, age, health and
other qualifications make him eligible to participate.
3.5. Vacation. The Executive shall be entitled to six weeks paid
vacation per year.
4. Employment Termination. The employment of the Executive by the
Company pursuant to this Agreement may be terminated under the following
circumstances:
4.1. Expiration of Term. Expiration of the Employment Period in
accordance with Section 2.
4.2. Death. Upon the death of the Executive.
4.3. Disability. If, as a result of the Executive's incapacity due
to physical or mental illness, the Executive shall have failed to
perform the services contemplated under this Agreement for a period of
270 consecutive days, or a total of at least 300 calendar days during
any 365-day
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period, or a determination of disability shall have been made by a
physician satisfactory to both the Executive and the Company, provided
that if the Executive and the Company do not agree on a physician, the
Executive and the Company shall each select a physician and these two
together shall select a third physician whose determination as to
disability shall be binding on both parties.
4.4. Cause. The Company may terminate the Executive's employment
hereunder for Cause. For purposes of this Agreement, the Company shall
have "Cause" to terminate the Executive's employment hereunder in the
event:
(i) Executive shall have willfully failed and continued to fail
subsequently to perform the duties (other than any failure resulting
from the Executive's incapacity due to physical or mental illness or
any actual or anticipated failure after the issuance by him of a
Notice of Termination, as defined in Section 4.6), for 30 days after
a written demand for performance is delivered to the Executive on
behalf of the Company which specifically identifies the manner in
which it is alleged that the Executive has not substantially
performed his duties; provided that the Company's economic
performance or failure to meet any specific projection shall not, in
and of itself, constitute "Cause"; or
(ii) the Executive shall have engaged in (A) any material
misappropriation of funds, properties or assets of the Company, it
being understood that "material" for these purposes shall take into
account both the amount of funds, properties or assets
misappropriated and the circumstances thereof (including the intent
of the Executive in connection therewith), or (B) any malicious
damage or destruction of any property or assets of the Company,
whether resulting from the Executive's wilful actions or omissions
or the Executive's gross negligence; or
(iii) the Executive shall (A) have been convicted of a crime
involving moral turpitude or constituting a felony or (B) entered a
plea of nolo contendere to any such crime, either of which has had a
material adverse effect upon the business of the Company; or
(iv) the Executive shall have (A) materially breached his
obligations under Section 6 hereof or (B) breached any of the other
material provisions of this Agreement and such breach shall remain
uncured by the Executive within 30 days following receipt of notice
from the Company specifying such breach.
4.5. Termination by the Executive. The Executive may terminate his
employment hereunder (i) upon 90 days written notice or (ii) for Good
Reason (as defined below).
For purposes of this Agreement, "Good Reason" shall exist if there is a
Change in Control (as defined below) of the Company and one or more of the
following events shall have occurred (without the Executive's express written
consent):
(a) the assignment to the Executive of any duties
inconsistent with his status as Chief Executive Officer of the
Company, his removal from the position of Chief Executive
Officer of the Company, or a substantial alteration
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in the nature or status of his responsibilities from those in
effect immediately prior to the Change in Control;
(b) a reduction by the Company of the Executive's annual
base salary in effect on the date immediately prior to the
Change in Control;
(c) the relocation by the Company's principal executive
offices to a location more than twenty-five miles from its
present location or a requirement that the Executive shall be
based anywhere other than the Company's principal executive
offices except for required travel on the Company's business to
an extent substantially consistent with his business travel
obligations prior to the Change in Control;
(d) the failure by the Company to continue in effect any
bonus plan in which the Executive was participating immediately
prior to the Change in Control; or
(e) the failure by the Company to continue to provide the
Executive with benefits at least as favorable as those enjoyed
by him under any of the Company's pension, life insurance,
medical, health and accident, disability, deferred compensation
or savings plans in which he was participating at the time of
the Change in Control, the taking of any action by the Company
which would directly or indirectly materially reduce any of such
benefits or deprive him of any material fringe benefit enjoyed
by him at the time of the Change in Control, or the failure by
the Company to provide the Executive with the number of paid
vacation days to which he was entitled at the time of the Change
in Control.
For purposes of this Agreement, a "Change in Control" of the Company shall
mean a change in control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended.
4.6. Notice of Termination. Any termination of the Executive's
employment by the Company or by the Executive (other than termination
pursuant to Section 4.2) shall be communicated by Notice of Termination
to the other party hereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice which shall indicate the
specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances which
provide a basis for termination of the Executive's employment under the
provisions so indicated.
4.7. Date of Termination. "Date of Termination" shall mean (i) of
the Executive's employment is terminated pursuant to Section 4.1, the
date on which the Employment Period expires pursuant to Section 2, (ii)
if the Executive's employment is terminated pursuant to Section 4.2,
the date of the Executive's death, (iii) if the Executive's employment
is terminated pursuant to Section 4.3, 30 days after the Notice of
Termination is given (provided that the Executive shall not have
returned to the performance of his duties on a full-time basis during
such 30 day period), (iv) if the Executive's employment is terminated
pursuant to Section 4.4 or subsection (i) of Section 4.5, the date
specified in the Notice of Termination, provided that in the case of a
Section 4.4 termination it is at least 30 days subsequent to the date
of the issuance of such Notice of Termination and in the case of a
subsection (i) of Section 4.5 termination it is at least 90 days
subsequent to the date of the issuance of such Notice of
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Termination, (v) if the Executive's employment is terminated pursuant
to subsection (ii) of Section 4.5, the date specified in such Notice of
Termination, and (iv) if the Executive's employment is terminated other
than as provided herein, the date specified in the Notice of
Termination, provided that it is at least 30 days subsequent to the
date of the issuance of such Notice of Termination.
5. Compensation Upon Termination.
5.1 If the Executive's employment is terminated under the provisions
of Sections 4.1, .4.4 or subsection (i) of Section 4.5, the Company
shall pay to the Executive his full salary, bonus and benefits through
the Date of Termination.
5.2 If the Executive's employment is terminated by the Executive's
death under the provisions of Section 4.2, the Company shall pay to
Executive's estate the Executive's full salary, bonus and benefits to
the Executive through the Date of Termination.
5.3 If the Executive's employment is terminated under the provisions
of Section 4.3, the Company shall pay to the Executive his full salary,
bonus and benefits through the Date of Termination. During any period
that the Executive fails to perform his duties hereunder as a result of
disability (as defined in Section 4.3), the Executive shall continue to
receive his full salary, bonus and benefits through the Date of
Termination.
5.4 If the Company shall terminate the Executive's employment other
than as provided herein or the Executive shall terminate his employment
pursuant to subsection (ii) of Section 4.5, then:
(i) The Company shall pay the Executive his full salary, bonus
and benefits through the Date of Termination.
(ii) Subject to subsection (iv) of this Section 5.4, in lieu of
any further salary payments to the Executive for periods subsequent
to the Date of Termination, the Company shall pay as severance pay
to the Executive an amount equal to the remainder of the salary,
bonus and value of the fringe benefits which the Executive would be
entitled to receive for the balance of the Employment Period.
(iii) The Company shall pay all other damages to which the
Executive may be entitled as a result of such termination, including
damages for any and all legal fees and expenses incurred by him as a
result of such termination.
(iv) In the event that (A) any payment or benefit received or to
be received by the Executive in connection with a Change in Control
of the Company or the termination of the Executive's employment
(whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company) (collectively referred to
herein as "Severance Payments") would not be deductible (in whole or
part) as a result of section 280G of the Internal Revenue Code of
1986, as amended, (the "Code") by the Company, an affiliate or other
person making such payment or providing such benefit and (B) it
shall be determined that the net amount retained by the Executive,
after deduction of the excise tax imposed by section 4999 of the
Code and any federal, state and local income and employment taxes on
\the Severance Payments, does not exceed 110% of the net amount
retained by the Executive after applying the limitations
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of this subsection (iv) of Section 5.4 and after deduction of any
federal, state and local income and employment taxes on the
Severance Payments as so reduced, the Severance Payments shall be
reduced until no portion of the Severance Payments is not
deductible, or the Severance Payments are reduced to zero. For
purposes of this limitation (i) no portion of the Severance Payments
the receipt or enjoyment of which the Executive shall have
effectively waived in writing prior to the date of payment of the
Severance Payments shall be taken into account, (ii) no portion of
the Severance Payments shall be taken into account which in the
opinion of tax counsel selected by the Company's independent
auditors and acceptable to the Executive does not constitute a
"parachute payment" within the meaning of section 280G(b)(2) of the
Code, (iii) the Severance Payments shall be reduced only to the
extent necessary so that the Severance Payments (other than those
referred to in clauses (i) or (ii) in their entirety constitute
reasonable compensation for services actually rendered within the
meaning of section 280G(b)(4) of the Code or are otherwise not
subject to disallowance as deductions, in the opinion of the tax
counsel referred to in clause (ii); and (iv) the value of any
non-cash benefit or any deferred payment or benefit included in the
Severance Payments shall be determined by the Company's independent
auditors in accordance with the principles of sections 280G(d)(3)
and (4) of the Code. For purposes of determining the income taxes on
the Severance Payments, the Executive shall be deemed to pay federal
income tax at the highest marginal rate of federal income taxation
in the calendar year in which the Severance Payments are to be made
and local income taxes at the highest marginal rate of taxation in
the state and locality of the Executive's residence on the Date of
Termination, net of the maximum reduction in federal taxes which
could be obtained from deduction of such state and local taxes.
6. Proprietary Information and Developments.
6.1 Proprietary Information.
(i) The Executive agrees that all information and know how,
whether or not in writing, of a private, secret or confidential
nature concerning the Company's business or financial affairs
(collectively, "Proprietary Information") is and shall be the
exclusive property of the Company. The Executive will not disclose
any Proprietary Information to others outside the Company or use the
same for any unauthorized purposes without written approval by the
Board, either during or after his employment, unless and until such
Proprietary Information has become public knowledge without fault by
the Executive.
(ii) The Executive agrees that all files, letters, memoranda,
reports, records, data, sketches, drawings, or other written,
photographic, or other tangible material containing Proprietary
Information, whether created by the Executive or others, which shall
come into his custody or possession, shall be and are the exclusive
property of the Company to be used by the Executive only in the
performance of his duties for the Company.
(iii) The Executive agrees that his obligation not to disclose
or use information, know-how and records of the types set forth in
subsection (i) and (ii) above, also extends to such types of
information, know-how, records, and tangible property of
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third parties who may have disclosed or entrusted the same to the
Company or to the Executive in the course of the Company's business.
6.2 Other Agreements. The parties acknowledge that Executive may
also enter into employment and other agreements with other parties,
including, but not limited to, X0xxxxxxx.xxx, Inc., with respect to
business activities in which he may engage and devote up to fifty (50%)
percent of his time.
7. Non-Competition, Non-Soliciting.
7.1 Non-solicitation of Employees. The Executive agrees that during
the term of the Executive's employment with the Company, the Executive
shall not directly recruit, solicit or otherwise induce or attempt to
induce any employees of the Company to leave the employment of the
Company.
7.2 Non-competition. The Executive agrees that during the term if
the Executive's employment with the Company, the Executive shall not
directly or indirectly, except as a passive investor in publicly held
companies and except for investments held at the date hereof, engage in
competition with the Company, or any of its subsidiaries, or own or
control any interest in, or act as director, officer or employee of, or
consultant to, any firm, corporation or institution directly engaged in
competition with the Company or any of its subsidiaries; provided the
Company or one of its subsidiaries are actively engaged in such
business at the time the Executive's employment by the Company is
terminated.
8. Miscellaneous.
8.1 Notices. All notices required or permitted under this Agreement
shall be in writing and shall be deemed effective upon personal
delivery or upon deposit in the United States Post Office, by
registered or certified mail, postage prepaid, addressed to the other
party at the address shown above, or at such other addresses as either
party shall designate to the other in accordance with this Section 8.1.
8.2 Pronouns. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular forms of nouns and pronouns shall
include the plural, and vice versa.
8.3 Entire Agreement. This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter
of this Agreement.
8.4 Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Executive.
8.5 Governing Law. This Agreement shall be construed, interpreted
and enforced in accordance with the laws of the State of New York.
8.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors
and assigns, including any corporation with which or into which the
Company may be merged or which may succeed to its assets or business,
provided, however, that the obligations of the Executive are personal
and shall not be assigned by him.
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8.7 Waivers. No delay or omission by the Company in exercising any
right under this Agreement shall operate as a waiver of that or any
other right. A waiver or consent given by the Company on any one
occasion shall be effective only in that instance and shall not be
construed as a bar or waiver of any right on any other occasion.
8.8 Captions. The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the
scope or substance of any section of this Agreement.
8.9 Severability. In case any provision of this Agreement shall be
invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected
or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.
ENVIRO-CLEAN OF AMERICA, INC.
By:
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Title: President
EXECUTIVE:
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Xxxxxxx Xxxxxx
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