EMPLOYMENT AGREEMENT
This Employment Agreement, effective as of August 1st, 2001 (the "Agreement"),
is entered into by and between TEXXON, INC., a Oklahoma corporation (the
"Company"), with principal offices at 0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxxx, 00000, and XXXX X. XXXXXXX ("Xxxxxxx"). In consideration of the mutual
covenants and conditions contained in this Agreement, the parties agree to the
following:
WITNESSETH
Whereas, the Employee has agreed to perform services for and on behalf of
the Company, as well as to devote his time, attention and energies to the
business of the Company during the term of this Agreement; and
Whereas, the Company and the Employee have mutually agreed upon the
remuneration the Employee shall receive from the Company as an employee during
the term of this Agreement; and
Whereas, the Company and the Employee have agreed it is in their best
interest to set forth in this Agreement the specific manner in which such
remuneration is to be paid the Employee by the Company; and
Whereas, it is the intention of both the Company and the Employee that this
Agreement be entered into with strict adherence to the definition of Employee
Benefit Plan as set forth in Rule 405 of the Securities Act of 1933, as amended;
Whereas the parties agree that any portion of this Agreement which
conflicts with the Company's Articles of Incorporation or By-Laws shall be void
and the rest of this Agreement shall remain effective.
Whereas, the Company represents that by executing this contract that they
have taken all necessary steps to have the legal authority to bind the Company;
Whereas, the Employee recognizes that he is an affiliate of the Company and
that any and all securities acquired under this Agreement are subject to the
same resale limitations that applied to the Company.
Whereas, the parties acknowledge the following inside and/or related
transactions:
(i) On July 17, 2001, Xxxxxxx purchased 1,000,000 shares of common stock
at $0.001 per share. The shares were issued pursuant to an exemption
from registration under Section 4(2) of the Securities Act of 1933, as
amended.
Now, Therefore, the Company hereby agrees to employ Xxxxxxx as its
Employee, and Xxxxxxx agrees to be employed by the Company upon the terms and
conditions hereinafter set forth.
96
ARTICLE 1
DUTIES AND COMPENSATION
1.05 Term of Employment and Duties. The Company and Xxxxxxx agree that for
the period commencing on August 1st, 2001 and terminating on August 1,
2002 (the "Termination Date"), the Company shall employ Xxxxxxx and
Xxxxxxx shall perform duties ("duties") for the Company as Director and
Vice-President of the Company as set forth in the Company's Articles of
Incorporation and Bylaws and shall report to the Company's Board of
Directors (the "Board").
1.06 Commitment to the Company. During the term of this Agreement, Xxxxxxx
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 Director and Vice-President of the Company. However, this
commitment shall not be construed as preventing Xxxxxxx from
participating in other businesses or from investing Xxxxxxx'x personal
assets in such form or manner as may occasionally require substantial
time on the part of Xxxxxxx 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.
1.06.1 SEC Reporting. Xxxxxxx shall be responsible for the Company's
substantive and financial reporting requirements of the Securities
Exchange Act of 1934 as amended. Xxxxxxx is specifically allowed to
hire any and all professionals necessary to assist this process.
1.07 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.
1.08 (a) Compensation. Xxxxxxx shall receive a salary of $120,000.00 per
year, payable in 24 semi-monthly installments. Each January the Board
shall review Xxxxxxx'x salary and shall make such increases in salary,
as it considers appropriate. Xxxxxxx'x salary during the term of this
Agreement shall never be less than $120,000.00 per year. Effective at
the beginning of each calendar year Xxxxxxx 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 Xxxxxxx shall be entitled
to participate in all executive bonuses, as the Board, in its sole
discretion, shall determine. During such period as Xxxxxxx is the sole
director the fairness of the bonus shall be opined by an independent
third party, shareholder vote or as set forth in the Company by-laws.
(c) Fringe Benefits. During the term of this Agreement the Company
shall provide to Xxxxxxx 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 Xxxxxxx'x employment under this Agreement; and
(ii) paid vacation and sick leave, as determined by industry standards.
(d) Reimbursement of Expenses. (i) During the term of this Agreement
the Company shall pay directly or reimburse Xxxxxxx for all reasonable
and necessary travel, entertainment, or other related expenses incurred
by him in carrying on his duties and responsibilities under this
Agreement. In addition, the Company shall xxxxxxx Xxxxxxx with a
cellular telephone and suitable office space and
97
facilities for the performance of his duties. (ii) During the term of
this Agreement the Company shall pay for Xxxxxxx'x membership dues in
professional organizations and for any seminars and conferences
related to Company business.
(e) License to the Technology. Upon commencement of this employee
agreement, the company shall xxxxx Xxxxxxx a complete license to the
technology assignable to Xxxxxxx as an individual without the
assessment of any fees for the license. This license is non-revocable
even in the event of termination or dissolution of this agreement.
1.05 Assistance of Xxxxxxx. Xxxxxxx agrees to assist the Company during any
and all investigatory matters, threatened or pending litigation during
and after his employment. After employment assistance shall not be
required in matters to which he is personally a party or which he has
written opinion and advice of counsel that the same would be personally
damaging.
1.06 (a) Indemnification. Xxxxxxx 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 Oklahoma.
(b) Payment of Expenses. In the event of any action, proceeding or
claim against Xxxxxxx arising out of his serving or having served in a
capacity specified in Section 1.01 above, which in Xxxxxxx'x sole
judgment requires him to retain counsel (such choice of counsel to be
made by Xxxxxxx 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 Xxxxxxx for all reasonable attorney's fees and
expenses and other costs associated with Xxxxxxx'x defense of such
action as such fees and costs are incurred.
1.07 Director and Officer Liability Insurance. The Company shall provide
reasonable D&O and/or Warranty and Representations insurance
coverage for Xxxxxxx. The terms and extent of such insurance
shall be dictated by industry standard and circumstance.
ARTICLE II
TERMINATION OF EMPLOYMENT
2.01 Termination Procedure. Either party to this Agreement may terminate
Xxxxxxx'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 Xxxxxxx'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 Xxxxxxx'x death.
If this Agreement is terminated as a result of Xxxxxxx'x death, the
Company shall pay to Xxxxxxx'x estate, not later than the 30th day
following his death, a lump sum severance payment consisting of (1)
Xxxxxxx'x salary and accrued salary through the date of his death, (2)
all amounts Xxxxxxx 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 Xxxxxxx was eligible to receive under any Company
bonus plan.
2.03 Disability. The Company shall have the right to terminate this
Agreement if Xxxxxxx incurs a permanent disability during the term of
his employment under this Agreement. For purposes of this Agreement,
"Permanent Disability" shall mean inability of Xxxxxxx to perform the
services required hereunder due to physical or mental disability which
continues for either (i) a total of 180 working
98
days during any 12-month period or (ii) 150 consecutive working days.
In the event that either party disputes whether Xxxxxxx has a
permanent disability, such dispute shall be submitted to a physician
mutually agreed upon by Xxxxxxx 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
Xxxxxxx'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 Xxxxxxx shall contain a different definition
of "permanent disability." If Xxxxxxx'x employment under this
Agreement is terminated by the Company because he has a permanent
disability, the Company shall pay Xxxxxxx, not later than the 30th day
following the date of termination, a lump sum severance payment
consisting of (1) Xxxxxxx'x salary through the date of his
termination, (2) all amounts Xxxxxxx is entitled to upon termination
of employment under the Company's employee benefit plans, (3)
Xxxxxxx'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 Xxxxxxx'x
employment "for cause" the Company shall pay Xxxxxxx, not later than
the 30th day following the date of termination, a lump sum severance
payment consisting of (1) Xxxxxxx'x salary and accrued salary through
the date of his termination and (2) all amounts Xxxxxxx is entitled to
upon termination of employment under the Company's employee benefits
plans.
2.05. Termination Without Cause. If the Company terminates Xxxxxxx'x
employment for any reason other than for cause as that term is defined
in section 2.04, the Company shall pay Xxxxxxx, not later than the 30th
day following the date of termination, a lump sum severance payment
consisting of (1) Xxxxxxx'x salary and accrued salary through the date
of his termination, (2) all amounts Xxxxxxx is entitled to upon
termination of employment under the Company's employee benefits plans,
(3) Xxxxxxx'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 Xxxxxxx 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 Xxxxxxx, not later than the 30th
day following the effective date of his resignation, a lump sum
severance payment consisting of (1) Xxxxxxx'x salary through the date
of his termination, (2) all amounts Xxxxxxx is entitled to upon
termination of employment under the Company's employee benefit plans,
(3) Xxxxxxx'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. Xx. Xxxxxxx'x accrued salary
shall be paid within thirty days if the Company has available funds,
if the Company does not have said funds then the accrued salary shall
be paid in a reasonable time after his severance in no case shall that
time period extend over six months.
2.07 Change of Control. Xxxxxxx 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
99
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
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 Xxxxxxx 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) Xxxxxxx'x salary through the date
of his termination, (2) all amounts Xxxxxxx is entitled to upon
termination of employment under the Company's employee benefits plans,
(3) Xxxxxxx'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. Xxxxxxx 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 Xxxxxxx would cause Xxxxxxx
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 Xxxxxxx 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 Xxxxxxx and
the Company.
100
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 Xxxxxxx'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. Xxxxxxx 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. He will further be allowed to retain any records or
documents that are reasonably necessary for him to utilize the license
to the technology granted by the execution 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 Xxxxxxx, or by Xxxxxxx 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 portion thereof, shall not be affected
thereby.
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.
4.07.3 Governing Law. This Agreement has been executed in and shall be
governed by the laws of the State of Oklahoma.
4.07.4 Assignment. This Agreement shall be assignable and binding upon any
purchasers or successors in interest of the Company.
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.
101
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 extent 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.
4.13 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.
4.14 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 TEXXON. 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.
4.15 Payment of Xxxxxxx'x Attorney's Fees and Expenses in Advance in
Connection with this Agreement. If the Company brings a suit against
Xxxxxxx in connection with this Agreement or if Xxxxxxx brings suit
against the Company in connection with this Agreement, the Company
shall pay Xxxxxxx'x reasonable attorney's fees and expenses as incurred
as limited by Oklahoma law. 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 Xxxxxxx 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.
IN WITNESS WHEREOF, the parties to this Agreement have executed this
Agreement effective this 1st day of August, 2001.
XXXX X. XXXXXXX TEXXON, INC.
/s/ Xxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxx III
---------------------------------- --------------------------------------
Xxxx X. Xxxxxxx, an Individual By: Xxxxxxx X. Xxxxx III
President and CEO
102
