Exhibit 6.3
EMPLOYMENT AGREEMENT
BETWEEN
PRECISION PLASTICS MOLDING, INC.
AND
XXXXX X. XXXXXXXX
AGREEMENT made this 1st day of June, 1998 to be effective June 1, 1998,
between Precision Plastics Molding, Inc., incorporated in the state of Nevada
and having principal place of business in Tempe, Arizona, hereinafter referred
to as the Employer, and Xxxxx X. Xxxxxxxx of Tempe, AZ, hereinafter referred to
as the Employee.
ARTICLE 1
TERM OF EMPLOYMENT
1.01 The Employer hereby employs the Employee and the Employee hereby
accepts employment with the Employer for an initial term of three (3) years
beginning on the first day of June, 1998; with said term renewable for
additional three (3) year terms unless prior written notice to the contrary is
given by one party to the other at least ninety (90) days prior to the
expiration of the initial term or any renewal thereof, subject to prior
termination as hereinafter provided.
ARTICLE 2
DUTIES OF EMPLOYEE
2.01 DUTIES. The Employee is hereby employed as a Director and Chief
Executive Officer and shall work at Precision Plastics Molding, Inc. located at
Tempe, Arizona and at such other place or places as may be reasonably directed
by the Employer. The duties to be performed by the Employee are set forth on
Schedule A, attached hereto and made a part hereof.
2.02 CHANGE OF DUTIES-MUTUAL CONSENT. The duties and titles of the Employee
may be reasonably changed from time to time by the mutual consent of the
Employer and the Employee without resulting in the recission of this Agreement.
Notwithstanding any such change, the employment of the Employee shall be
construed as continuing under this Agreement as modified.
2.03 CHANGE OF DUTIES IF EMPLOYEE DISABLED. If the Employee at any time
during the term of this Agreement should be unable, because of personal injury,
illness, or any other cause to perform his duties under this Agreement, the
Employer, in its sole discretion, may assign the Employee to other duties which
are commensurate with the Employee's ability to perform. If the Employee is
unwilling to accept the modification in duties by the Employer, this Agreement
shall terminate ten (10) days thereafter, and such termination shall be
considered to be termination for good reason for purposes of Article 6 hereof.
2.04 PLACE OF PERFORMANCE. At the commencement of his employment, the
Employee shall perform his duties at the office of the Employer, located at
Tempe, Arizona. However, at any time deemed necessary or advisable by the
Employer for business purposes, the Employee shall work at such other place or
places as may be reasonably determined by the Employer.
2.05 ENGAGING IN OTHER ACTIVITIES. During the term of this Agreement, the
Employee will devote a portion of his business time and attention to the affairs
of the Employer provided, however, the Employee may serve as a director of other
corporations and may engage in other business and professional activities,
whether as an investor or otherwise, to the extent that they do not
substantially interfere with the performance of his duties.
ARTICLE 3
COMPENSATION
3.01 BASIC COMPENSATION. As compensation for services rendered under this
Agreement, the Employee shall be entitled to receive from the Employer a basic
salary with terms of payment described on Schedule B, attached hereto and made a
part hereof.
3.02 COST OF LIVING INCREASE. The basic salary provided herein shall be
adjusted annually to reflect the increase, if any, in the cost of living by
adding to such basic salary an amount obtained by multiplying the basic salary
by the percentage by which the level of the Consumer Price Index for the
relevant or nearest Metropolitan Area, as reported for the last day of such
annual period by the Bureau of Labor Statistics for the United States Department
of Labor, has increased over its level as of the commencement date of this
Agreement.
Following the end of each year of this Agreement, and within thirty (30)
days after the release by the Bureau of Labor Statistics of the figure for such
year, the Employer shall pay to the Employee the amount of any additional
compensation to which he is entitled on account of adjustment herein above
provided.
ARTICLE 4
EMPLOYEE BENEFITS AND BONUSES
4.01 BONUS. For each fiscal year of the Employer in which the annual
performance requirements of the Employee and/or business, as set forth on
Schedule C, attached hereto and made a part hereof, are met, the Employee shall
be entitled to receive a bonus. This bonus shall be in addition to any other
compensation to which the Employee may be entitled under this Agreement, and
shall be paid within thirty (30) days following completion of the Employer's
fiscal year audit, review or compilation by its outside accountants or within
one hundred twenty (120) days after the end of the fiscal year, whichever is
earlier.
4.02 VACATION PAY. The Employee shall be entitled to an annual vacation
with pay as set forth in Schedule D, attached hereto and made a part hereof. The
time for such vacation shall be selected by the Employee and approved by the
Employer, and must be taken within one (1) year after it is accrued. In lieu of
the vacation leave hereinbefore specified, the Employee may elect to receive
payment of the whole or any portion of the vacation time to which he is entitled
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as of the date of this Agreement, such vacation time to be valued at the amount
of salary valued under Schedule B, as adjusted for cost of living, earned by the
Employee during the equivalent period of time.
4.03 HOLIDAYS. The Employee shall be entitled to a holiday, with full pay,
on those days set forth on Schedule D, attached hereto and made a part hereof.
4.04 PAID SICK LEAVE. The Employee shall be entitled to sick leave with
full pay as set forth on Schedule D, attached hereto and made a part hereof.
4.05 INSURANCE. Employer shall offer Employee health and dental insurance
coverage at Employer's cost.
ARTICLE 5
REIMBURSEMENT OF EMPLOYEE EXPENSES
5.01 BUSINESS EXPENSES. The Employer in accordance with the procedural
rules and regulations that it may issue from time to time shall reimburse the
Employee for all business expenses incurred in the performance of his duties.
5.02 MOVING EXPENSES. In the event that the Employee during the term of
this Agreement is transferred by the Employer to a new principal place of work,
the Employer shall be liable for all moving and traveling expenses.
ARTICLE 6
TERMINATION
6.01 DEATH. The Employee's employment hereunder shall terminate upon his
death.
6.02 DISABILITY. If as a result of the Employee's incapacity due to
physical or mental illness or disability, the Employee shall have been absent
from his duties hereunder on a full-time basis for the entire period of three
(3) consecutive months, and within thirty (30) days after notice of termination
is given, (which may occur before or after the end of such three (3) month
period) shall not have returned to the performance of his duties hereunder on a
full-time basis, the Employer may terminate the Employee's employment hereunder.
6.03 TERMINATION FOR CAUSE. The Employer may terminate the Employee's
employment hereunder for Cause. For purposes of this Agreement, the Employer
shall have Cause to terminate the Employee's employment hereunder upon the
willful and continued failure by the Employee to substantially perform his
duties hereunder (other than any such failure resulting from Employee's
incapacity due to physical or mental illness or disability), after written
demand for substantial performance is delivered by the Employer that
specifically identifies the manner in which Employer believes the Employee has
not substantially performed his duties. For purposes of this paragraph, no act,
or failure to act, on the Employee's part shall be considered "willful" unless
done, or omitted to be done, by him not in good faith and without reasonable
belief that his action or omission was in the best interest of the Employer.
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Notwithstanding the foregoing, the Employee shall not be deemed to have been
terminated for Cause without (i) reasonable notice to the Employee setting forth
the reasons for the Employer's intent to terminate for Cause, (ii) an
opportunity for the Employee, together with his counsel, to be heard before the
Chief Executive Officer of the Employer, or if the Employee is the Chief
Executive Officer, at a meeting of the Board of Directors (held upon reasonable
notice to all directors), and (iii) delivery to the Employee of a Notice of
Termination as defined in Section 6.05 hereof from the Chief Executive Officer
of the Employer or from the Board of Directors (upon vote of not less than a
majority of the directors then in office), as appropriate, finding in good faith
that the Employee was guilty of conduct constituting Cause as set forth above,
and specifying the particulars thereof in detail.
6.04 TERMINATION BY EMPLOYEE. This Agreement may be terminated by the
Employee for Good Reason by giving the Employer Notice of Termination in
accordance with Section 6.05 hereof. For purposes of this Section, Good Reason
shall mean (i) a failure by the Employer to comply with any material provision
of this Agreement which has not been cured within thirty (30) days after notice
of such non-compliance has been given by the Employee to the Employer, of (ii)
any purported termination of the Employee's employment which is not effected
pursuant to a Notice of Termination satisfying the requirements of Section 6.05
hereof (and for the purposes of this Agreement no such termination shall be
effective).
6.05 NOTICE OF TERMINATION. Any termination of the Employee's employment by
the Employer or by the Employee (other than termination by reason of the
Employee's death) shall be communicated by written Notice of Termination to the
other party hereto. For purposes of this Agreement, a Notice of Termination
shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon, which shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Employee's
employment under the provision so indicated and which shall state the Date of
Termination in accordance with Section 6.06 below.
6.06 DATE OF TERMINATION. For the purposes of this Agreement, Date of
Termination shall mean
(i) if the Employee's employment is terminated by his death, the date
of his death,
(ii) if the Employee's employment is terminated pursuant to Section
6.02 above, thirty (30) days after Notice of Termination is given (provided
that the Employee shall not have returned to the performance of his duties
on a full-time basis during such thirty (30) day period,
(iii) if the Employee's employment is terminated pursuant to Section
6.03 above, the date specified in the Notice of Termination, and
(iv) if the Employee's employment is terminated by the Employee
pursuant to Section 6.04 above, the date specified in the Notice of
Termination is given; provided however, that if within thirty (30) days
after any Notice of Termination is given the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination the Date of Termination shall be the date on which the dispute
is finally determined, either by mutual written agreement of the parties,
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by a binding and final arbitration award or by a final judgment, order or
decree of a court of competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been perfected).
6.07 EFFECT OF TERMINATION OF COMPENSATION.
(A) During any period that the Employee fails to perform his duties
hereunder as a result of incapacity by reason of physical or mental illness or
disability, the Employee shall continue to receive his full salary at the rate
in effect for such period until his employment is terminated pursuant to Section
6.02 hereof and thereafter until the end of the then current term of this
Agreement.
(B) If the Employee's employment is terminated by death, Employer shall pay
to the Employee's spouse, or if he leaves no spouse, to his estate, the amounts
which would have been payable to the Employee at the times payable had he
survived for one (1) year from the date of his death.
(C) If the Employee's employment shall be terminated for Cause, the
Employer shall pay Employee his full salary through the Date of Termination at
the rate in effect at the time Notice of Termination is given.
(D) If (a) in breach of this Agreement, the Employer shall terminate the
Employee's employment other than pursuant to Section 6.02 or 6.03 hereof (if
being understood that a purported termination pursuant to Section 6.02 or 6.03
hereof which is disputed and finally determined not to have been proper shall be
a termination by Employer in breach of this Agreement) or (b) the Employee shall
terminate his employment for Good Reason, then
(1) The Employer shall pay the Employee his full salary through the Date
of Termination at the rate in effect at the time Notice of Termination
is given; and
(2) In lieu of any further salary payments to the Employee for periods
subsequent to the Date of Termination, the Employer shall pay as
severance pay to the Employee an amount equal to one (1) times the
Employee's annual salary rate in effect at the Date of Termination in
substantially equal monthly installments on the last day of each month
commencing with the month in which the Date of Termination occurs and
continuing for twelve (12) months.
(E) The Employee shall not be required to mitigate the amount of any
payment provided for in the Section 6.07 by seeking other employment or
otherwise, and, if he obtains other employment following termination, amounts
received in connection therewith shall not reduce amounts to which he is
entitled hereunder.
6.08 EFFECT OF TERMINATION BY EMPLOYEE ON PARTICULAR COMPENSATION. In the
event of the termination of this Agreement by the Employee without Good Reason
prior to the term of employment specified herein, notwithstanding any bonus or
incentive plan requirement of employment at the time an award is made, the
Employee shall be entitled to an award if all other plan performance criteria
have been met.
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ARTICLE 7
COUNSEL FEES AND INDEMNIFICATION
7.01 TERMINATION DISPUTES. Should (i) Employer terminate or seek to
terminate this Agreement for Cause, and Employee disputes such termination or
attempted termination ; or (ii) Employee elects to terminate his service
hereunder, and Employer disputes said action and the amount of compensation
owing; Employer and Employee shall each pay their own costs incurred in said
dispute, including attorney fees and costs.
7.02 INDEMNIFICATION. Employer shall indemnify and hold Employee harmless
to the maximum extent permitted by law against judgments, fines, amounts paid in
settlement and reasonable expenses, including attorney fees incurred by
Employee, in connection with the defense of, or as a result of any action, or
proceeding (or any appeal from any action or proceeding) in which Employee is
made or threatened to be made a party by reason of fact Employee was or is an
officer of Employer, regardless of whether such action or proceeding is one
brought by or in the right of Employer, to procure judgment in its favor (or
other than by or in the right of the Employer).
7.03 AUTHORITY TO ACT. Employer warrants and represents that the
undertakings of payment and indemnification as set forth in Section 7.02 above
is not in conflict with the Employer's articles of incorporation, bylaws, or
with any validly existing agreement or other proper corporate action of
Employer. The Board of Directors of the Employer have taken whatever action is
necessary to approve/ratify the appointment of the Employee to the position
described herein and of this Agreement.
ARTICLE 8
GENERAL PROVISIONS
8.01 NOTICES. Any notices to be given hereunder by either party to the
other may be effected in writing by personal delivery, U. S. mail, registered or
certified, postage prepaid with return receipt requested. Mailed notices shall
be addressed to the parties at the addresses appearing on the signature page of
this Agreement, but each party may change his address by written notice in
accordance with this paragraph. Notices delivered personally or by mail shall be
deemed communicated as of actual receipt.
8.02 INCLUSION OF ENTIRE AGREEMENT HEREIN. This Agreement supersedes any
and all other agreements, either oral or in writing, between the parties hereto
with respect to the employment of the Employee by the Employer and contains all
of the covenants and agreements between the parties with respect to such
employment in any manner whatsoever.
8.03 SUCCESSORS. This Agreement shall be binding upon and inure to the
benefit of any successor to the Employer.
8.04 LAW GOVERNING AGREEMENT. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada.
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8.05 PAYMENT OF MONEYS DUE DECEASED EMPLOYEE. Excepting as expressly
directed herein, if Employee dies prior to the expiration of the term of
employment, any moneys due him from the Employer under this Agreement as of the
date of his death shall be paid to his executors, administrators, heirs,
personal representatives, successors and assigns.
8.06 AMENDMENT. This Agreement and its Schedules may be amended from time
to time only by a writing signed by each of the parties hereto.
This Agreement is executed this 1st day of June, 1998 as shown by the
signatures of the parties below.
PRECISION PLASTICS MOLDING, INC. MAJORITY SHAREHOLDER CONSENT:
DIAMOND EQUITIES, INC.
/s/ Xxxxx X. Xxxxxxxx
------------------------------ /s/ Xxxx X. Xxxxxxxx
By: Xxxxx X. xxxxxxxx ------------------------------
Title: Chief Executive Officer By: Xxxx X. Xxxxxxxx
Title: Director/Chief Financial Officer
EMPLOYEE
/s/ Xxxxx X. Xxxxxxxx
------------------------------
By: Xxxxx X. xxxxxxxx
Address: 000 X. Xxxxx Xxxxx
Xxxxx, XX 00000
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SCHEDULE A
TO
EMPLOYMENT AGREEMENT
Duties:
Executive Management of Precision Plastics Molding, Inc. including areas of
operations, sales, and finance of the plastic injection molding facilities.
PRECISION PLASTICS MOLDING, INC. MAJORITY SHAREHOLDER CONSENT:
DIAMOND EQUITIES, INC.
/s/ Xxxxx X. Xxxxxxxx
------------------------------ /s/ Xxxx X. Xxxxxxxx
By: Xxxxx X. xxxxxxxx ------------------------------
Title: Chief Executive Officer By: Xxxx X. Xxxxxxxx
Title: Director/Chief Financial Officer
EMPLOYEE
/s/ Xxxxx X. Xxxxxxxx
------------------------------
By: Xxxxx X. xxxxxxxx
Address: 000 X. Xxxxx Xxxxx
Xxxxx, XX 00000
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SCHEDULE B
TO
EMPLOYMENT AGREEMENT
Basic Compensation
Basic Salary:
Salary: $ 40,000 for annual sales up to $2.5 million
$ 60,000 for annual sales from $2.5 million to $5 million
$ 80,000 for annual sales from $5 million to $7.5 million
$100,000 for annual sales from $7.5 million to $10 million
$150,000 for annual sales from $10 million to $15 million
$200,000 for annual sales from $15 million to $20 million
Terms of Payment:
Regular Employer payroll schedule, except that a portion of salary may be
deferred and will accrue from June 1, 1998 until such time as the cash flow of
the Company permits full salary payment.
PRECISION PLASTICS MOLDING, INC. MAJORITY SHAREHOLDER CONSENT:
DIAMOND EQUITIES, INC.
/s/ Xxxxx X. Xxxxxxxx
------------------------------ /s/ Xxxx X. Xxxxxxxx
By: Xxxxx X. xxxxxxxx ------------------------------
Title: Chief Executive Officer By: Xxxx X. Xxxxxxxx
Title: Director/Chief Financial Officer
EMPLOYEE
/s/ Xxxxx X. Xxxxxxxx
------------------------------
By: Xxxxx X. xxxxxxxx
Address: 000 X. Xxxxx Xxxxx
Xxxxx, XX 00000
9
SCHEDULE C
TO
EMPLOYMENT AGREEMENT
PERFORMANCE REQUIREMENT AND BONUS AND STOCK OPTION PLAN
Performance Requirement:
Positive earnings before depreciation, interest and taxes (EBDIT).
Bonus Plan:
EBDIT at the following minimum threshold and bonus rate, to be applied as a
percent of EBDIT to determine bonus amount earned by Employee.
EBDIT Threshold Bonus Rate
$1 million 5%
Stock Option Plan:
Each year employee will be granted the option of purchasing 100,000 shares of
the common stock of the Company at $.02 per share.
PRECISION PLASTICS MOLDING, INC. MAJORITY SHAREHOLDER CONSENT:
DIAMOND EQUITIES, INC.
/s/ Xxxxx X. Xxxxxxxx
------------------------------ /s/ Xxxx X. Xxxxxxxx
By: Xxxxx X. xxxxxxxx ------------------------------
Title: Chief Executive Officer By: Xxxx X. Xxxxxxxx
Title: Director/Chief Financial Officer
EMPLOYEE
/s/ Xxxxx X. Xxxxxxxx
------------------------------
By: Xxxxx X. xxxxxxxx
Address: 000 X. Xxxxx Xxxxx
Xxxxx, XX 00000
10
SCHEDULE D
TO
EMPLOYMENT AGREEMENT
VACATION: HOLIDAYS AND SICK LEAVE
Vacation:
First year of agreement Three weeks
Subsequent years Four weeks
Holidays:
New Years Eve, New Years Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, Christmas Eve, and Christmas Day.
Paid Sick Leave:
5 days per year.
PRECISION PLASTICS MOLDING, INC. MAJORITY SHAREHOLDER CONSENT:
DIAMOND EQUITIES, INC.
/s/ Xxxxx X. Xxxxxxxx
------------------------------ /s/ Xxxx X. Xxxxxxxx
By: Xxxxx X. xxxxxxxx ------------------------------
Title: Chief Executive Officer By: Xxxx X. Xxxxxxxx
Title: Director/Chief Financial Officer
EMPLOYEE
/s/ Xxxxx X. Xxxxxxxx
------------------------------
By: Xxxxx X. xxxxxxxx
Address: 000 X. Xxxxx Xxxxx
Xxxxx, XX 00000
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