EMPLOYMENT AGREEMENT
This Employment Agreement, effective as of January 3, 2001 (the "Agreement"), is
entered into by and between MAXXON, INC., a Nevada corporation (the "Company"),
the principal offices of which are located at 0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000,
Xxxxx, Xxxxxxxx, 00000, and XXXXXX XXXXXXXX ("Xxxxxxxx"). In consideration of
the mutual covenants and conditions contained in this Agreement, the parties
agree to the following:
ARTICLE 1
DUTIES AND COMPENSATION
1.01. Term of Employment and Duties. The Company and Xxxxxxxx agree that for
the period commencing on January 3, 2001, and terminating on January 3,
2002 (the "Termination Date"), the Company shall employ Xxxxxxxx and
Xxxxxxxx shall perform duties ("duties") for the Company as Medical
Advisor and shall report to the Company's President.
1.02. Commitment to the Company. During the term of this Agreement,
Xxxxxxxx shall devote such working time, attention and energies to the
business of the Company, as is necessary or appropriate for the
performance of his duties as Medical Advisor. However, this commitment
shall not be construed as preventing Xxxxxxxx from participating in
other businesses or from investing Xxxxxxxx'x personal assets in such
form or manner as may require occasional or incidental time on the part
of Xxxxxxxx in the management, conservation and protection of such
investments and provided that such investments or business cannot be
construed as being competitive or in conflict with the business of the
Company.
1.03. Renewal of Term. Upon each Termination Date this Agreement shall renew
and continue in effect for an additional two-year period, and each
successive Termination Date shall thereafter be designated as the
"Termination Date" for all purposes under this Agreement.
1.04. (a) Compensation. Xxxxxxxx shall receive a salary of $100,000.00 per
year, payable in 24 semi-monthly installments. Each January the
President shall review Xxxxxxxx'x salary and shall make such increases
in salary as he considers appropriate. Xxxxxxxx'x salary during the
term of this Agreement shall never be less than $100,000.00 per year.
Effective at the beginning of each calendar year Xxxxxxxx shall be
entitled to at least an increase in salary that is equal to the
percentage increase in the Consumer Price Index during the previous
calendar year.
(b) Bonus. During the term of this Agreement Xxxxxxxx shall be entitled
to participate in all bonuses as the President, in its sole discretion,
shall determine.
(c) Fringe Benefits. During the term of this Agreement the Company
shall provide to Xxxxxxxx each of the following: (i) all reasonable and
customary executive "fringe benefits," including, but not limited to,
participation in pension plans, profit-sharing plans, employee stock
ownership plans, stock option plans (whether statutory or not), stock
appreciation rights plans, hospitalization insurance, medical
insurance, dental insurance, disability insurance, life insurance, and
such other benefits that are granted to or provided for executives now
in the employ of the Company or that may be granted to or provided for
them during the term of Xxxxxxxx'x employment under this Agreement; and
(ii) paid vacation and sick leave, as determined by the President.
(d) Reimbursement of Expenses. (i) During the term of this Agreement
the Company shall pay directly or reimburse Xxxxxxxx for all reasonable
and necessary travel, entertainment, or other
1
related expenses incurred by him in carrying on his duties and
responsibilities under this Agreement. In addition, the Company shall
furnish Xxxxxxxx with a cellular telephone and suitable office space
and facilities for the performance of his duties. (ii) During the term
of this Agreement the Company shall pay for Xxxxxxxx'x membership dues
in professional organizations and for any seminars and conferences
related to Company business.
1.05 (a) Indemnification. Xxxxxxxx shall be indemnified by the Company for
all legal expenses and all liabilities incurred in connection with any
proceeding involving him by reason of his being or having been an
officer, director, employee, or agent of the Company to the fullest
extent permitted by the laws of the State of Nevada.
(b) Payment of Expenses. In the event of any action, proceeding or
claim against Xxxxxxxx arising out of his serving or having served in a
capacity specified in Section 1.01 above, which in Xxxxxxxx'x sole
judgment requires him to retain counsel (such choice of counsel to be
made by Xxxxxxxx with the prior consent of the Company, which may not
unreasonably withhold its consent) or otherwise expend his personal
funds for his defense in connection therewith, the Company shall pay
for or reimburse Xxxxxxxx for all reasonable attorney's fees and
expenses and other costs associated with Xxxxxxxx'x defense of such
action as such fees and costs are incurred.
ARTICLE II
TERMINATION OF EMPLOYMENT
2.01. Termination Procedure. Either party to this Agreement may terminate
Xxxxxxxx'x employment under this Agreement by giving the other party
written notice of the intent to terminate at least thirty days prior to
the proposed termination date except as set out in section 2.02. A
decision by the Company to terminate Xxxxxxxx'x employment under this
Agreement shall require an affirmative vote of more than 66-2/3% of the
Board except as set out in Section 2.02.
2.02. Death. This Agreement shall terminate on the date of Xxxxxxxx'x death.
If this Agreement is terminated as a result of Xxxxxxxx'x death, the
Company shall pay to Xxxxxxxx'x estate, not later than the 30th day
following his death, a lump sum severance payment consisting of (1)
Xxxxxxxx'x salary and accrued salary through the date of his death, (2)
all amounts Xxxxxxxx would have been entitled to upon termination of
his employment under the Company's employee benefit plans and (3) a pro
rata amount of bonus Xxxxxxxx was eligible to receive under any Company
bonus plan.
2.03. Disability. The Company shall have the right to terminate this
Agreement if Xxxxxxxx incurs a permanent disability during the term of
his employment under this Agreement. For purposes of this Agreement,
"Permanent Disability" shall mean inability of Xxxxxxxx to perform the
services required hereunder due to physical or mental disability which
continues for either (i) a total of 180 working days during any
12-month period or (ii) 150 consecutive working days. In the event
that either party disputes whether Xxxxxxxx has a permanent
disability, such dispute shall be submitted to a physician mutually
agreed upon by Xxxxxxxx or his legal guardian and the Company. If the
parties are unable to agree on a mutually satisfactory physician, each
shall select a reputable physician, who, together, shall in turn
select a third physician whose determination of Xxxxxxxx'x ability to
perform his job duties shall be conclusive and binding to the parties.
Evidence of such disability shall be conclusive notwithstanding that a
disability policy or clause in an insurance policy covering Xxxxxxxx
shall contain a different definition of "permanent disability." If
Xxxxxxxx'x employment under this Agreement is terminated by the
Company because he has a permanent disability, the Company shall pay
Xxxxxxxx, not later than the 30th
2
day following the date of termination, a lump sum severance payment
consisting of (1) Xxxxxxxx'x salary through the date of his
termination, (2) all amounts Xxxxxxxx is entitled to upon termination
of employment under the Company's employee benefit plans, (3)
Xxxxxxxx'x undiscounted salary through the Termination Date, or if
greater for a period of 24 months, and (4) a pro rata amount of bonus
he is eligible to receive under any Company bonus program.
2.04. Termination With Cause. The Company shall have the right to terminate
this Agreement for cause. For purposes of this Agreement, "for cause"
shall exclusively be defined to mean (a) conviction of a felony which
is materially detrimental to the Company, (b) proof beyond a
reasonable doubt of the gross negligence or willful misconduct which
is materially detrimental to the Company, or (c) proof beyond a
reasonable doubt of a breach of a fiduciary duty which is materially
detrimental to the Company. If the Company terminates Xxxxxxxx'x
employment "for cause" the Company shall pay Xxxxxxxx, not later than
the 30th day following the date of termination, a lump sum severance
payment consisting of (1) Xxxxxxxx'x salary and accrued salary through
the date of his termination and (2) all amounts Xxxxxxxx is entitled
to upon termination of employment under the Company's employee
benefits plans.
2.05. Termination Without Cause. If the Company terminates Xxxxxxxx'x
employment for any reason other than for cause as that term is defined
in section 2.04, the Company shall pay Xxxxxxxx, not later than the
30th day following the date of termination, a lump sum severance
payment consisting of (1) Xxxxxxxx'x salary and accrued salary through
the date of his termination, (2) all amounts Xxxxxxxx is entitled to
upon termination of employment under the Company's employee benefits
plans, (3) Xxxxxxxx'x undiscounted salary through the Termination Date,
or if greater for a period of 24 months, and (4) a pro rata amount of
bonus he is eligible to receive under any Company bonus program.
2.06. Resignation. If Xxxxxxxx resigns from his employment under this
Agreement other than for a reason of change of control as defined in
section 2.07, the Company shall pay Xxxxxxxx, not later than the 30th
day following the effective date of his resignation, a lump sum
severance payment consisting of (1) Xxxxxxxx'x salary and accrued
salary through the date of his termination, (2) all amounts Xxxxxxxx is
entitled to upon termination of employment under the Company's employee
benefit plans, (3) Xxxxxxxx'x undiscounted salary for a period of 90
days after his resignation and (4) a pro rata amount of bonus he is
eligible to receive under any Company bonus program.
2.07. Change of Control. Xxxxxxxx shall have the right to resign from his
employment under this Agreement if there is a change of control. For
purposes of this Agreement a Change of Control shall be deemed to have
occurred if any of the following occur: (i) at any time during any
period of 12 consecutive months, at least a majority of the directors
serving on the Board ceases to consist of individuals who have served
continuously on such Board since the beginning of such 12 month
period, unless the election of directors during such period, or
nomination for election by the shareholders of the Company, was
approved by a vote of at least two-thirds of the members of such Board
at such time still in office and who shall have served continuously on
such Board since the beginning of such 12-month period by reason of
death or disability; or (ii) a merger or consolidation occurs to which
the Company is a party unless following such merger or consolidation
(A) more than 50% of the then outstanding shares of voting capital
stock of the corporation surviving such merger or resulting from such
consolidation is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the
beneficial owners of the outstanding voting capital stock of the
Company immediately prior to such merger or consolidation in
substantially the same proportions as their ownership, immediately
prior to such merger or consolidation, of the outstanding voting
capital stock of the Company, and (B) at least a majority of the
members of the Board surviving such merger or
3
resulting from such consolidation were members of the Board
immediately prior to such merger or consolidation; or (iii) the sale
of all, or substantially all, of the assets of the Company; or (iv) a
person or entity who is not an owner of voting capital stock of the
Company as of the date of this Agreement acquires more than 50% of the
voting capital stock of the Company. Notwithstanding the foregoing,
however, a Change of Control shall not be deemed to have occurred upon
the consummation of an Initial Public Offering of the capital stock of
the Company. If Xxxxxxxx exercises his right to terminate his
employment following a Change of Control, he shall receive, not later
than the 30th day following the date of termination, a lump sum
severance payment consisting of (1) Xxxxxxxx'x salary through the date
of his termination, (2) all amounts Xxxxxxxx is entitled to upon
termination of employment under the Company's employee benefits plans,
(3) Xxxxxxxx'x undiscounted salary through the Termination Date, or if
greater for a period of 24 months, and (4) a pro rata amount of bonus
he is eligible to receive under any Company bonus program.
2.08. Mitigation. Xxxxxxxx shall have no obligation to mitigate any damages
or payments made to him under Article II of this Agreement.
2.09. Excess Parachute Payments. In the event that payment of the amounts
this Agreement requires the Company to pay Xxxxxxxx would cause
Xxxxxxxx to be the recipient of an excess parachute payment (within the
meaning of Section 280G(b) of the Internal Revenue Code of 1986), the
amount of the payments to be made to Xxxxxxxx pursuant to this
Agreement shall be reduced to an amount equal to one dollar less than
the amount that would cause the payments hereunder to be excess
parachute payments. The manner in which such reduction occurs,
including the items of payment and amounts thereof to be reduced, shall
be agreed to by Xxxxxxxx and the Company.
ARTICLE III
RESTRICTIONS DURING AND AFTER EMPLOYMENT
3.01. Company Records and Documents. All Company-related records and
documents are considered to be the exclusive property of the Company.
Upon the termination of Xxxxxxxx'x employment by the Company for any
reason, he shall promptly return to the Company all such records and
documents in his possession or under his control. Xxxxxxxx shall have
the right to retain copies of Company records and documents that he
believes are reasonably necessary for him to retain to be able to
exercise his rights under the Indemnification Provisions of this
Agreement.
ARTICLE IV
MISCELLANEOUS
4.01. Notice. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by certified mail
by the Company to the residence of Xxxxxxxx, or by Xxxxxxxx to the
Company's principal office.
4.02. Further Assurances. Each party agrees to perform any further acts and
to execute and deliver any further documents that may be reasonably
necessary to carry out the provisions of this Agreement.
4.03. Severability. In the event that any of the provisions, or portions
thereof, of this Agreement are held to be unenforceable or invalid by
any court of competent jurisdiction, the validity and enforceability
of the remaining provisions or portions thereof, shall not be affected
thereby.
4
4.04. Construction. Whenever used herein, the singular number shall include
the plural, and the plural number shall include the singular.
4.05. Headings. The headings contained in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning of
any of the provisions contained herein.
4.06. Multiple Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original but all
of which together shall constitute one and the same instrument.
4.07. Governing Law. This Agreement has been executed in and shall be
governed by the laws of the State of Oklahoma.
4.08. Inurement. Subject to the restrictions against transfer or assignment
as herein contained, the provisions of this Agreement shall inure to
the benefit of, and shall be binding on, the assigns, successors in
interest, personal representatives, estates, heirs and legatees of each
of the parties hereto.
4.09. Waivers. No waiver of any provision or condition of this Agreement
shall be valid unless executed in writing and signed by the party to be
bound thereby, and then only to the extend specified in such waiver. No
waiver of any provision or condition of this Agreement shall be
construed as a waiver of any other provision or condition of this
Agreement, and no present waiver of any provision or condition of this
Agreement shall be construed as a future waiver of such provision or
condition.
4.10. Amendment. This Agreement may be amended only by a written document
signed by the parties and stating that the document is intended to
amend this Agreement.
4.11. Disputes. In any dispute or proceeding to construe this Agreement, the
parties expressly consent to the exclusive jurisdiction of state and
federal courts in Tulsa County, Oklahoma, the principal place of
business for Maxxon. The prevailing party in any suit brought to
interpret this Agreement shall be entitled to recover reasonable
attorney's fees and expenses in addition to any other relief to which
it is entitled.
4.12. Payment of Xxxxxxxx'x Attorney's Fees and Expenses in Advance in
Connection with this Agreement. If the Company brings a suit against
Xxxxxxxx in connection with this Agreement or if Xxxxxxxx brings suit
against the Company in connection with this Agreement, the Company
shall pay Xxxxxxxx'x reasonable attorney's fees and expenses as
incurred. If a determination is made in a court of competent
jurisdiction in favor of the Company, then the Company shall be
entitled to be reimbursed by Xxxxxxxx for his attorney's fees and
expenses which were paid by the Company.
4.13. Execution. Each party to this Agreement hereby represents and warrants
to the other party that such party has full power and capacity to
execute, deliver and perform this Agreement.
5
IN WITNESS WHEREOF, the parties to this Agreement have executed this Agreement
effective this 3rd day of January, 2001.
XXXXXX XXXXXXXX MAXXON, INC.
/s/ XXXXXX XXXXXXXX /s/ XXXXXXX XXXXX
--------------------------------- -----------------------------------------
XXXXXX XXXXXXXX, an Individual By: Xxxxxxx X. Xxxxx
President and Chief Executive Officer
6
