EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT (“Agreement”), made as of the 24th day of August, 2006, effective on the Effective Date (as defined herein), between Greens Worldwide Incorporated (the “Company”), an Arizona corporation , having its principal place of business at Hertford, NC, and Xxxxx Xxxxxxxx, (the “Executive”).
W I T N E S S E T H:
WHEREAS, Executive has agreed to serve as the Chief Financial Officer of the Company.
WHEREAS, the Company desires to secure the services of Executive, upon the terms and subject to the conditions set forth in this Agreement;
WHEREAS, Executive possesses knowledge and skills that will contribute to the continued success of the Company’s business, and,
WHEREAS, the Company believes that Executive’s knowledge and skills will prove to be crucial in executing the business plan of the Company;
WHEREAS, the Company is prepared to commit to the terms and conditions of employment as forth herein currently applicable to Executive; and
WHEREAS, the recitals set forth above are hereby incorporated into and made a part of this Agreement.
NOW, THEREFORE, intending to be legally bound, the Company agrees to employ Executive, and Executive hereby agrees to be employed by the Company, upon the following terms and conditions:
ARTICLE I
EMPLOYMENT
1.01. Position and Duties. Executive is hereby employed as the Chief Financial Officer of the Company, and will use his energies and abilities in the performance of his duties, related to and consistent with his position, as may be assigned to him from time to time by the Board of Directors of the Company (the “Board”) and/or executive management. Executive shall perform such services as directed by Board of Directors of the Company, COO, or CEO.
1.02. Location. Executive’s place of work shall be in North Carolina, subject to Executive traveling outside of such location from time to time as business needs may require.
1.03. Term. This Agreement shall be effective as of the date of this agreement (the “Effective Date”), and shall continue for an initial term (the “Initial Term”) of five years from the Effective Date. The Initial Term will extend automatically for consecutive one-year periods (each, an “Extension Term”) unless either Executive or the Company provides at least 90 days’ advance written notice prior to the expiration of the Initial Term or an Extension Term, as applicable, to the other that the term will not be extended.
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1.04. |
Compensation. |
1.04.1. Salary. Executive compensation hereunder shall be an annual base salary of $110,000 with 5% minimum annual increases on anniversary dates payable in accordance with the Company’s generally applicable payroll practices and policies but not less frequently than twice per month in arrears. In addition, Executive shall receive options to acquire 75,000 shares of Greens Worldwide Inc. stock under the GRWW non-statutory employee stock option plan at the fair market value as of prior day’s close (Aug. 24th). These options vest to Executive immediately, and may be exercised over a three year period from the date of this agreement.
1.04.2. Bonus Opportunity. Executive shall be eligible to receive a bonus from the Company, and to participate in any Company’s bonus plan or plans that may be adopted for the benefit of executives of the Company, as the same may be amended or adopted from time to time, pursuant to the terms of which Executive shall be eligible to earn a cash bonus for each calendar year during which Executive is employed by the Company. The award of any discretionary bonus under this section shall be determined by the Board of Directors of the Company.
1.04.3. Equity Compensation. Executive shall also receive such stock options as may be granted to other executives of the Company as adopted by the Board of Directors from time to time.
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1.05. |
Benefits and Expenses. |
1.05.1. Benefits. Executive will be covered by such health insurance, group insurance and other benefit plans and shall be eligible for such paid vacation and holidays as are available generally to other executives of the Company. Such benefit plans may be amended from time to time by the Company to increase or add benefits, or to comply with any legal requirements applicable to such benefit plans, or necessary to maintain the deductibility for tax purposes of amounts paid by the Company to provide or maintain such benefits. The Company shall not terminate or eliminate any such benefit plans or reduce benefits provided under such plans, unless a change in the law applicable to such benefits or benefit plans shall cause the continued provision of such benefits to be contrary to applicable law, or shall cause the amounts paid by the Company to provide or maintain such benefits, which amounts formerly were deductible for tax purposes by the Company, to no longer be deductible for such purposes under applicable law.
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1.05.2. Business Expenses. The Company shall pay or reimburse Executive for all reasonable expenses incurred or paid by Executive in the performance of Executive’s duties hereunder, upon presentation of expense statements or vouchers and such other information as the Company may require in accordance with the generally applicable and reasonable policies and procedures of the Company, including direct home office expenses of internet access and cell phone expenses, as approved by the Company.
ARTICLE II
TERMINATION
2.01. Incapacity. If during the term of Executive’s employment, Executive is prevented from effectively performing the essential functions of his job, with reasonable accommodation (if such reasonable accommodation can be provided by Company), for a period of 180 days within any twelve month period by reason of illness or Disability, the Company, by written notice to Executive, may terminate Executive’s employment. Upon delivery to Executive of such notice, together with payment of any salary, bonus and commissions accrued under Sections 1.04.1 and 1.04.2 and any other amounts as may be due and/or accrued (which amounts shall be pro-rated up to the date of termination) under Sections 1.04 and 1.05 up to the date of termination, Executive’s employment and all obligations of the Company will terminate and this Agreement shall end. For purposes of this Agreement, “Disability” is defined as the Executive being eligible for disability insurance benefits under the Company’s long term disability insurance policy, or in the absence of such disability insurance coverage, Disability shall be defined as provided under applicable disability discrimination law.
2.02. Retirement. This Agreement shall end, without notice to terminate being required, upon Executive’s voluntary election to retire at any time after Executive reaches age 65. Upon retirement, Executive’s employment shall terminate and Executive shall be entitled to payment of any salary accrued under Section 1.04.1, any awarded but unpaid bonuses applicable to any prior period, together with any other amounts as may be due and/or accrued (which amounts shall be pro-rated up to the date of termination) under Sections 1.04 and 1.05 up to the date of termination, following which all obligations of the Company will terminate.
2.03. Death. If Executive dies during the term of his employment, Executive’s employment will terminate, the Agreement shall end, and all Company’s obligations, other than any obligations with respect to the payment of accrued but unpaid salary under Section 1.04.1, twelve additional months salary or commission if applicable, to be paid to Executive’s estate immediately following the date of death, and any awarded but unpaid bonuses applicable to any prior period, together with any other amounts as may be due and/or accrued (which amounts shall be pro-rated up to the date of termination) under Sections 1.04 and 1.05 up to the date of death, will cease.
2.04. Termination For Cause. If the Company terminates Executive for Cause, this Agreement and all obligations of the Company shall terminate effective upon notice of termination for Cause, other than any obligations with respect to the payment of
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accrued but unpaid salary and bonus under Sections 1.04.1 and 1.04.2, together with any other amounts as may be due and/or accrued under Section 1.05 up to the date of termination. For purposes of this Agreement, “Cause” shall mean:
(i) Executive’s failure to perform duties (other than as a result of incapacity as described in Section 2.01) in any material respect that remains uncured for 30 days after written notice thereof is given to Executive;
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(ii) |
Executive’s willful misconduct or gross negligence; |
(iii) Executive’s willful failure to conduct the business of the Company in accordance with the lawful directives of the Board, which failure causes material harm to the Company or would be likely to cause material harm to the Company;
(iv) any material breach by Executive of any of the covenants, terms or conditions of this Agreement that remains uncured for 30 days after written notice thereof is given to Executive;
(v) Executive’s engagement in conduct during the term of this agreement, which is dishonest or disloyal, which has injured or would injure the business or reputation of the Company or otherwise adversely affects its interests in any material respect; or
(vi) Executive’s engagement in fraud or embezzlement or Executive’s conviction or plea of nolo contendre to a felony. This provision shall not apply to any conviction or plea of nolo contendre to any traffic (driving) offenses.
2.04.1. Any notice given by the Company under this Section 2.04 shall specifically state the manner in which the Executive has not performed his duties, or has breached any of the covenants, terms or conditions of this Agreement, that the notice is given under this Section 2.04, and that failure to correct such breach will result in termination of employment under this Agreement. For the purpose of the above definition of Cause, no act, or failure to act, on Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. Failure of the Company or the Executive to achieve or satisfy any target, milestone or other performance goal or hurdle shall not be deemed a failure by the Executive to perform his duties or to comply with any of the directives of the Board of Directors.
2.04.2. Notwithstanding the foregoing, termination by the Company for Cause shall not be effective until and unless (i) notice of intention to terminate for Cause has been given by the Company within 60 days after the Company learns of the act, failure or event constituting “Cause” under this Section 2.04 (which is not cured by the Executive within any time period permitted for such cure above), and (ii) the Board of Directors has voted (at a meeting of the Board duly called and held as to which termination of Executive is an agenda item) to terminate Executive for Cause, and (iii) if Executive has commenced arbitration in the manner prescribed in this Agreement within 15 days after receipt of such notice of termination, disputing the Company’s right
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under this Agreement to terminate for Cause, the Arbitrator shall thereafter have determined that the Executive was terminated for Cause. If the Arbitrator declines to rule that the Executive was terminated for Cause, the Executive shall be treated as having been terminated without cause and the Executive shall be entitled to receive the Severance Benefits pursuant to Section 3.
2.05. Termination Without Cause. Executive’s employment is at-will, and this Agreement may be terminated at any time by the Company without Cause upon 30 days’ notice to Executive. If the Company terminates Executive without Cause hereunder, the Company shall pay to Executive accrued but unpaid salary or commissions under Section 1.04.1, together with any other amounts as may be due and/or accrued under Sections 1.04 and 1.05 up to the date of termination (which amounts shall be pro-rated up to the date of termination), and any awarded but unpaid bonuses applicable to any prior period, together with Severance Benefits in accordance with Article III. The Company’s provision of written notice not to extend either the Initial Term or any Extension Term of this Agreement pursuant to Section 1.03 shall be deemed to be a termination of the Executive by the Company without Cause hereunder.
2.06. Executive Termination for Good Reason. If Executive terminates his employment for Good Reason, this Agreement and all obligations of the Company shall terminate effective upon Executive’s provision of notice of termination, and Executive shall receive the same salary, benefits and Severance Benefits as would be provided or payable to him in connection with a termination without Cause under Section 2.05 hereof. For purposes of this Agreement “Good Reason” shall mean:
(i) an assignment to Executive of any duties or responsibilities inconsistent with, or a significant reduction or change by the Company (or its successor) in the nature or scope of the authority of, such duties or responsibilities assigned to or held by Executive hereunder or as of the Effective Date;
(ii) any removal of Executive from the position of Chief Operating Officer with the Company (or its successor);
(iii) a reduction by the Company (or its successor) and its subsidiaries in Executive’s base salary under this Agreement or as it may be increased at any time thereafter;
(iv) a transfer or relocation of the site of employment of Executive, without his express written consent, to a location more than 500 miles from the location of his principal place of business as set forth in this Agreement; or
(v) any failure of the Company to comply with and satisfy its material obligations under this Agreement (other than those specified in clauses (i) through (vi) above, as to which no notice and opportunity to cure shall be provided) that remains uncured for 30 days after written notice thereof is given to the Company.
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ARTICLE III
SEVERANCE BENEFITS
3.01. Benefits Payable Upon Termination without Cause, Non-Renewal or Termination for Good Reason. If, during the Initial Term or any Extension Term, the Company terminates Executive without Cause or gives notice of non-renewal of this Agreement, or Executive terminates his employment for Good Reason, Executive shall be paid Severance Benefits, as hereafter defined, in addition to all other amounts payable to Executive as referenced in Section 2.05.
3.02. Severance Benefits. “Severance Benefits” means an amount equal to the sum of:
(i) One half times either Executive’s annual base salary or, if greater, the annual base salary as in effect immediately prior to Executive’s termination of employment, to be paid within 30 days of the date of termination;
(ii) the pro-rated amount of any cash bonus which Executive otherwise would have been eligible to receive under any Company bonus plan, as set forth in Section 1.04.2, for each whole or partial calendar quarter of employment during the partial year in which Executive’s employment is terminated, to be paid within ten (10) days of the date of termination;
(iii) the pro-rated amount of any equity compensation award which Executive would have been eligible to receive, as set forth in Section 1.04.3, for each whole or partial calendar quarter of employment during the partial year in which Executive’s employment is terminated, provided that any Company performance goals under such plan are achieved for the year in which termination of employment occurs; and
(iv) provision of six (6) months of Executive’s then current medical, dental and other benefits, or the cash equivalent payment thereof, such election to be at the sole discretion of the Executive.
ARTICLE IV
EXECUTIVE’S REPRESENTATIONS AND WARRANTIES
4.01. Duties. Executive agrees that, in addition to all other obligations commensurate with his employment with the Company, he shall comply with each of the Company’s corporate governance and ethics guidelines, conflict of interests policies and code of conduct applicable to all Company employees or senior Executives as adopted by the Board from time-to-time. Executive first shall obtain the consent of the Board in writing before engaging in any other business or commercial activities, duties or pursuits; provided however that nothing shall preclude Executive from (i) engaging in charitable activities and community affairs, (ii) acting as a member, director or officer of any industry trade association or group, (iii) serving as a trustee, director or advisor to any family companies or trusts, (iv) managing his personal investments and affairs, and (v)
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acting as a director of any other companies, provided that in the case of clause (v), such service is not to any company which competes with the Company, and further provided that such activities under clause (v) do not, in the reasonable judgment of the Board, materially interfere with the proper performance of his duties and responsibilities hereunder.
4.02. Executive Nonsolicitation. Should Executive’s employment with the Company be terminated with Cause or by Executive’s voluntary resignation without Good Reason, for a period of twelve (12) months following such termination, Executive shall not solicit or induce, or attempt to solicit or induce, any employee of the Company or its affiliates, other than any administrative assistant, to terminate such employment for any reason whatsoever or hire any employee of the Company or its affiliates, other than any administrative assistant.
4.03. Non-Disclosure. Executive shall not, during or after his employment with the Company, (i) disclose, in whole or in part, any Company Confidential Information, as hereinafter defined, to any person, firm, corporation, association or other entity for any reason or purpose whatsoever unless authorized in writing to do so by the Company or required by law, order of any court or court process, or (ii) use any Company Confidential Information for Executive’s own purpose or for the benefit of any person, firm, corporation, association or other entity other than the Company; except in the proper performance of Executive’s duties as instructed by the Company. Company Confidential Information shall not include (i) information in the public domain or generally known in the industry (unless Executive is responsible, directly or indirectly, for such Company Confidential Information entering the public domain or becoming known in the industry without the Company’s consent), (ii) information and know-how derived or known by Executive from experience in the industry generally and not specific to Company, and (iii) information disclosed by the Company to third parties without any duty or obligation of confidentiality or non-disclosure. .
4.03.1. Confidential Information. For purposes of this Agreement, Company Confidential Information shall mean the knowledge and information acquired by Executive concerning the Company’s confidential and proprietary information regarding its business plans, programs, client prospects, client lists, supplier and vendor information, client contacts, client information and data, marketing plans, data processing systems and information contained therein, products, proposals to clients and potential clients, account reports, plans, studies, price lists, financial statements and records, files and other trade secrets, know-how, or other private, confidential or proprietary information of or about the Company which is not already available to the public or known generally in the industry.
4.04. Acknowledgment. Executive acknowledges and agrees that the terms of this Article IV: (i) are reasonable in light of all of the circumstances; (ii) are sufficiently limited to protect the legitimate interests of the Company and its subsidiaries; (iii) impose no undue hardship on Executive; and (iv) are not injurious to the public. Executive further acknowledges and agrees that Executive’s breach of the provisions of this Article IV will cause the Company irreparable harm, which cannot be adequately compensated
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by money damages. Executive consents and agrees that if Executive commits any such breach or threatens to comment any breach, the Company shall (at its election and notwithstanding Section 5.010 hereof) be entitled to temporary and permanent injunctive relief from a court of competent jurisdiction, without posting any bond or other security and without the necessity of proof of actual damage, in addition to, and not in lieu of, such other remedies as may be available to the Company for such breach, including the recovery of money damages.
ARTICLE V
GENERAL PROVISIONS
5.01. Authorization to Modify Restrictions. The provisions of this Agreement will be enforceable to the fullest extent permissible under applicable law, and the unenforceability (or modification to conform to law) of any provision will not render unenforceable, or impair, the remainder of this Agreement. If any provision will be found invalid or unenforceable, in whole or in part, this Agreement will be considered amended to delete or modify, as necessary, the offending provision or provisions and to alter its bounds to render it valid and enforceable.
5.02. No Waiver. The failure of either the Company or Executive to insist upon the performance of any term in this Agreement, or the waiver of any breach of any such term, shall not waive any such term or any other term of this Agreement. Instead, this Agreement shall remain in full force and effect as if no such forbearance or waiver had occurred.
5.03. Entire Agreement. This Agreement represents the entire agreement of the parties with respect to the subject matter hereof and supersedes any prior agreement between Executive and the Company (or any of its predecessors or affiliates). This Agreement may be amended only by a writing signed by each of the parties. This Agreement may be assigned by the Company to any successor. This Agreement may not be assigned by Executive.
5.04. Governing Law. This Agreement will be governed by and construed in accordance with the law of the State of Arizona.
5.05. Consent to Jurisdiction. Executive and Company hereby irrevocably submits to the personal jurisdiction of the federal and state courts in the State of Arizona with jurisdiction in any action or proceeding seeking to enforce or interpret this Agreement.
5.06. Service of Process. Executive irrevocably consents to the service of any summons and complaint and any other process which may be served in any action or proceeding arising out of or related to this Agreement brought in the federal or state courts of Arizona with jurisdiction by the mailing by certified or registered mail of copies of such process to Executive at his address as set forth on the signature page of this Agreement.
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5.07. Venue. Executive irrevocably waives any objection which he now or hereafter may have to the laying of venue of any action or proceeding arising out of or relating to this Agreement brought in the federal or state courts of Arizona and any objection on the ground that any such action or proceeding in such courts has been brought in an inconvenient forum.
5.08. Agreement Binding. The obligations of the parties under this Agreement will be binding on their respective heirs, executors, legal representatives, successors and assigns. In the event of any change of control or acquisition of the Company by any other company or entity, such company or entity shall be deemed a successor or assign of the Company under the terms of this Agreement, and shall be required to assume or guaranty the obligations of the Company under this Agreement. Such assumption or guaranty shall not affect or diminish the liability or obligations of the Company to Executive under this Agreement.
5.09. Counterparts, Section Headings. This Agreement may be executed in any number of counterparts. Each will be considered an original, but all will constitute one and the same instrument. The section headings of this Agreement are for convenience of reference only and will not affect the construction or interpretation of any of its provisions.
5.010. Arbitration. In the event that any disagreement or dispute whatsoever shall arise between the parties concerning this Agreement, such disagreement or dispute shall be submitted to the Judicial Arbitration and Mediation Services, Inc (“JAMS”) for resolution in a confidential private arbitration in accordance with the comprehensive rules and procedures of JAMS, including the internal appeal process provided for in Rule 34 of the JAMS rules with respect to any initial judgment rendered in an arbitration. Any such arbitration proceeding shall take place in Phoenix, Arizona, before a single arbitrator (rather than a panel of arbitrators). The parties agree that the arbitrator shall have no authority to award any punitive or exemplary damages and waive, to the full extent permitted by law, any right to recover such damages in such arbitration. The costs and expenses of such arbitration shall be borne by the Company. The Company shall pay or reimburse Executive for all reasonable attorneys’ fees and costs incurred by Executive in prosecuting or defending any claim under this Agreement and any such arbitration proceeding, unless the arbitrator(s) shall determine in their award that Executive’s defense or claim with respect to any material matter in such arbitration proceeding was frivolous and without merit. Nothing herein shall prevent the Company from seeking injunctive relief as provided for in Article 4 of this Agreement. Judgment upon the final award rendered by such arbitrator, after giving effect to the JAMS internal appeal process, may be entered in any court having jurisdiction thereof. If JAMS is not in business or is no longer providing arbitration services, then the American Arbitration Association shall be substituted for JAMS for the purposes of the foregoing provisions.
5.011. Notice. For the purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States certified mail, return receipt requested, postage prepaid, addressed as follows:
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If to the Executive:
Xxxxx Xxxxxxxx
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If to the Company: 000 Xxxxxxxx Xxxxxx Xxxx Xxxxxxxx, XX 00000
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or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
5.012. Employee Manuals and Handbooks. Executive acknowledges that from time to time the Company or its affiliates may establish, maintain and distribute employee manuals or handbooks or personnel policy manuals, and officers or other representatives of the Company may make written or oral statements relating to personnel policies and procedures. Such manuals, handbooks and statements are intended only for general guidance. No policies, procedures or statements of any nature by or on behalf of the Company (whether written or oral, and whether or not contained in any employee manual or handbook, as the same may exist from time to time, or personnel policy manual), and no acts or practices of any nature, shall be construed to modify this Agreement or to create express or implied obligations of any nature to the Executive or to impose any such obligations on the Executive in conflict with or in any manner inconsistent with the provisions of this Agreement.
5.013. Insurance and Indemnity. The Company shall, to the fullest extent permitted by law, indemnify the Executive. The Company shall also provide the Executive with coverage as a named insured under a directors and officers liability insurance policy to be maintained for the Company’s directors and officers. The Company shall continue to maintain directors and officers liability insurance for the benefit of Executive during the term of this Agreement and for at least three (3) years following the termination of Executive’s employment with the Company, provided that such insurance is available on commercially reasonable terms. This obligation to provide insurance and indemnify the Executive shall survive expiration or termination of this Agreement with respect to proceedings or threatened proceedings based on acts or omissions of the Executive occurring during the Executive’s employment with the Company or with any affiliated company. Such obligations shall be binding upon the Company’s successors and assigns and shall inure to the benefit of the Executive’s heirs and personal representatives.
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EXECUTIVE ACKNOWLEDGES THAT HE HAS READ AND UNDERSTANDS THE FOREGOING PROVISIONS AND THAT SUCH PROVISIONS ARE REASONABLE AND ENFORCEABLE.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed this 24th day of August, 2006.
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EXECUTIVE |
GREENS WORLDWIDE INCORPORATED
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/s/Xxxxx Xxxxxxxx |
By: /s/Xxxxxxx Xxxxxxx |
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Xxxxx Xxxxxxxx |
Name: Xxxxxxx Xxxxxxx |
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Its: Chief Operating Officer |
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