EMPLOYMENT AGREEMENT
THIS AGREEMENT, (the "Agreement") effective as of the 16th day of October,
1997 between IMSCO Technologies, Inc., a Delaware corporation ( the "Company")
and XXXXXXXXX X. XXXXXXXX ("Employee").
WHEREAS, the Company desires for Employee to serve in the capacity as of
the Company, and the Employee desires to serve in such capacity.
WHEREAS, the Board of Directors of the Company (the "Board") desires to
employ Employee as Chairman of the Board of Directors and Chief Executive
Officer of the Company and the parties desire to provide greater detail to his
employment arrangements with the Company which the Board has determined will
encourage the attention and dedication to the Company of Employee as a senior
member of the Company's management, and is in the best interest of the Company
and its shareholders.
WHEREAS, Employee is willing to serve in the capacity as Chairman of the
Board of Directors and Chief Executive Officer of the Company.
WHEREAS, in order to effect the foregoing, the Company and Employee wish to
enter into an employment agreement on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, the parties hereto
agree as follows:
ARTICLE I
EFFECTIVE TIME
1.00 Effective Time:Superceding Effect of Agreement. This Agreement shall
be effective as of the date hereof. This Agreement shall supercede any prior
agreement or understanding, oral or written, between the parties and any such
prior agreement or understanding shall be terminated and of no further force or
effect and this Agreement shall constitute the entire agreement and
understanding between the parties with respect to the subject matter thereof.
ARTICLE II
EMPLOYMENT
2.00 Employment. The Company hereby employs Employee and Employee hereby
agrees to serve the Company on the terms and conditions set forth herein.
Employee shall hold the office of Chairman of the Board of Directors and Chief
Executive Officer of the Company.
ARTICLE III
TERM
3.00 Term. The term of employment of Employee by the Company pursuant to
this agreement shall commence on the date hereof and end on October 31, 2000,
provided, however, that the Board shall have the right to terminate this
Agreement after four (4) months from the Funding Date, as defined below, in
accordance with the provisions of Section 6.05.
ARTICLE IV
DUTIES OF EMPLOYMENT
4.01 Duties. Subject to the authority and direction of the Board of
Directors of the Company, Employee shall perform such duties and functions as
the Board shall from time to time determine and as customarily assigned to the
Chief Executive Officer of a corporation. Employee shall be elected or appointed
as a Director of the Company during the term of this Agreement. Employee shall
devote his full time and effort to the business and affairs of the Company.
Employee further agrees to serve, if elected or appointed thereto, as a director
of the Company's subsidiaries and affiliated entities (if any) and in one or
more executive offices of any of the Company's subsidiaries (if any), provided
that Employee is indemnified for serving in any and all such capacities on a
basis no less favorable than is currently provided by the Company's Certificate
of Incorporation or By-laws.
4.02 Near -Term Performance Goals. Within 120 days after the Company
receives capital financing of at least $500,000 (the "Capital Funding"), the
Employee shall have the following specific performance goals (the "Performance
Goals"):
(A) The commercial decaffeinator basket and separator prototypes shall have
been prepared, successfully tested and ready for manufacturing (i.e., it
decaffeinates brewed coffee, has adequate taste, and is ready for commercial
manufacture), and
(B) Twelve (12) stand-alone decaffeinator prototypes (multi-cup, 3 cup
minimum capacity) have been prepared, successfully tested and ready for public
demonstration (i.e., it decaffeinates brewed coffee, has adequate taste, and is
ready for introduction to major consumer automatic drip coffeemakers for their
review and tasting).
ARTICLE V
COMPENSATION AND RELATED MATTERS
5.01 Salary. As compensation for the employment services to be rendered by
Employee hereunder, the Company shall pay to Employee a salary at a rate of
$150,000 per annum, payable in monthly installments, subject to increase by the
Board of Directors. If the salary is so increased, it shall not thereafter
during the term of this Agreement be decreased. Compensation of Employee by
salary payments shall not be deemed exclusive and shall not prevent Employee
from participating in any other compensation or benefit plan of the Company. The
salary payments (including any increased salary payments) hereunder shall not in
any way limit or reduce any other obligation of the Company hereunder, and no
other compensation, benefit or payment hereunder shall in any way limit or
reduce the obligation of the Company to pay Employee's salary hereunder. 5.02
Expenses. During the term of Employee's employment hereunder, Employee shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
Employee in performing the services hereunder, including, but not limited to,
automobile expense reimbursement as well as all expenses for travel and living
expenses while away from home on business or at the request of and in the
service of the Company, its subsidiaries or affiliated companies, provided that
such expenses are incurred and accounted for in accordance with the policies and
procedures established by the Company. Notwithstanding, Employee shall not incur
an expense for in excess of $2,000 without the prior written consent of the
Company. The Company shall provide Employee with a 1997 model year automobile,
at a price deemed appropriate by the Board of Directors, for Employee's personal
and business use during the term of this Agreement. Additionally, at all times
during the term of this Agreement or any extensions or renewals thereof, the
Company agrees to provide at its sole cost and expense health (including medical
and hospitalization) insurance coverage or a health maintenance organization
program for Employee and Employee's dependents of a type at least as
comprehensive as such coverage provided to senior executive officers of the
Company.
5.03 Other Benefits.
(a) Continued Participation. Employee shall be entitled to continue to
participate in all of the Company's employee benefit plans, if any, in effect on
the date hereof and any other plans made available by the Company in the future
to its executives and key management employees.
(b) Changes to Plans. The Company shall not make any changes in such plans
which would adversely affect Employee's rights or benefits thereunder, unless
such change occurs pursuant to a program applicable to all executives of the
Company and does not result in a proportionately greater reduction in the rights
of or benefits to Employee as compared with any other executive of the Company.
(c) Pro-Ration. Nothing paid to Employee under any plan presently in effect
or made available in the future shall be deemed to be in lieu of the salary
payable to Employee pursuant to paragraph 5.01 of this Article. Any payments or
benefits payable to Employee hereunder in respect of any calendar year during
which Employee is employed by the Company for less than the entire such year
shall, unless otherwise provided in the applicable plan or arrangement, be
prorated in accordance with the number of days in such calendar year during
which he is so employed.
5.04 Stock Grant Upon Execution. Upon Employee's execution of this
Agreement, the Company shall grant to Employee 80,000 shares of its common
stock, $.01 par value per share, as bonus compensation for entering into this
Agreement.
5.05 Warrants to Purchase Common Stock. The Company shall convey to
Employee Warrants to Purchase 250,000 shares of its common stock, $.001 par
value, exercisable for a price of $2.00 per share over a period of five years
from their date of vesting (the "Warrants").
The Warrants shall vest to the Employee as follows: 20,833 Warrants after each
calendar quarter for a period ending three-years from the date hereof. The
Warrant shall be substantially in the form of Exhibit A hereto.
ARTICLE VI
TERMINATION
6.01 Termination. Employee's employment hereunder may be terminated without
cause and without any breach of this Agreement upon written notice from the
Company to Employee only as set forth in this Article.
6.02 Death. Employee's employment hereunder shall terminate upon his death.
6.03 Disability. If, as a result of Employee's incapacity due to physical
or mental illness, Employee shall have been absent from his duties on a
full-time basis for the entire period of five consecutive months or for a total
of six months (whether or not consecutive), in any twelve (12) month period
during the term of this Agreement, and within thirty (30) days after written
notice of termination is given (which may occur before or after the end of such
six month period) Employee shall not have returned to the performance of his
duties hereunder on a full-time basis, the Company may terminate Employee's
employment hereunder.
6.04 Cause.
(i) The Company may terminate Employee's employment hereunder at any time
for cause, which shall be deemed to include but not be limited to the following:
(a) Employee's engaging in fraud, misappropriation of funds, embezzlement
or like conduct committed against the Company.
(b) Employee's conviction of a felony.
(c) Employee's material violation of a generally recognized policy of the
Company.
(d) Employee's material violation of any provision of this Agreement.
(ii) The Company may terminate the employment of Employee hereunder for
cause 120 days after the Capital Funding has occurred if the Employee has not
substantially met the Performance Goals set forth in Section 4.02.
In the event of a termination pursuant to either Section 6.02, 6.03 or 6.04
above, Employee shall thereafter be entitled to no further compensation,
including without limitation, no further salary, benefits or Warrants which have
not yet vested.
6.05 Termination by Employee.
(a) Reasons for Termination. Employee may terminate his employment
hereunder (i) at any time during the life of this Agreement after the occurrence
of any of the events which constitute "Good Reason" (as defined below) or (ii)
if his health should become impaired to an extent that makes his continued
performance of his duties hereunder hazardous to his physical or mental health
or his life, provided that Employee shall furnish the Company with a written
statement from a qualified doctor to such effect and provided further, that at
the Company's request, Employee shall submit to an examination by a doctor
selected by the Company's Board, and such doctor shall have concurred in the
conclusion of Employee's doctor.
(b) Good Reason. For purposes of this Agreement, "Good Reason" shall mean a
failure by the Company to comply with any material provision of this Agreement
which has not been cured within sixty (60) days after notice of such
noncompliance has been given by Employee to the Company.
6.06 Notice of Termination. Any termination of Employee's employment by the
Company or by Employee (other than termination pursuant to paragraph 6.02 above)
shall be communicated by thirty (30) days written notice of termination to the
other party hereto. For purposes of this Agreement, "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for the termination of Employee's
employment under the provision so indicated.
6.07 Date of Termination. "Date of Termination" shall mean (i) if
Employee's employment is terminated by his death, the date of his death, (ii) if
Employee's employment is terminated pursuant to paragraph 6.03 above, thirty
(30) days after Notice of Termination is given (provided that Employee shall not
have returned to the performance of his duties on a full-time basis during such
thirty (30) day period), (iii) if Employee's employment is terminated for any
other reason the date on which a Notice of Termination.
6.08 Compensation Upon Termination by Employee for "Good Cause" or
Termination Without Cause. In the event that Employee elects to terminate this
Agreement for Good Cause as defined above or is terminated without cause at the
election of the Company , then by way of a final severance payment under this
Agreement, Employee shall receive a sum equal to his annual base salary then in
effect and any unvested Warrants shall immediately vest and become exercisable.
Upon such payment by the Company to Employee, the Company shall have no further
liabilities or obligations to the Employee in any manner.
ARTICLE VII
SUCCESSORS, BINDING AGREEMENT
7.01 Successors. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the
business and/or assets of the Company, by agreement in form and substance
reasonably satisfactory to Employee, to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle Employee to
exercise in his discretion any and all rights arising from such a breach as
provided in this Agreement. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business and/or assets
as aforesaid which executes and delivers the agreement provided for in this
Article or which otherwise becomes bound by all terms and provisions of this
Agreement by operation of law.
7.02 Binding Agreement. This Agreement and all rights of Employee hereunder
shall inure to the benefit of and be enforceable by Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Employee should die while any amounts would still be
payable to him hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to Employee's devisee, legatee, designee or, if there is no such
designee, to Employee's estate.
ARTICLE VIII
REPRESENTATIONS AND AGREEMENTS OF EMPLOYEE
8.01 Ability to Perform. Employee represents and warrants that he is free
to enter into this Agreement and to perform the duties required hereunder, and
that there are no employment contracts or understandings, restrictive covenants
or other restrictions, whether written or oral, preventing the performance of
his duties hereunder.
ARTICLE IX
EMPLOYEE COVENANTS
9.01 Non-Competition. Employee agrees that for a period of eighteen months
(the "Non-Competitive Period"), from his voluntary resignation from employment
with the Company or termination for Cause before the end of this Agreement (but
not for termination by Employee for Good Reason), Employee shall not, directly
or indirectly, as owner, partner, joint venturer, stockholder, employee, broker,
agent, principal, trustee, corporate officer, director, licensor or in any
capacity whatsoever engage in, become financially interested in, be employed by,
render any consultation or business advice with respect to, or have any
connection with, any business engaged in electrostatic separation technology or
related products or any other material business being conducted by the Company,
in any geographic area where, at the time of the termination of his employment
hereunder, the business of the Company was being
conducted in any material respect; provided, however, that Employee may own any
securities of any corporation which is engaged in such business and is (i)
publicly owned and traded but in an amount not to exceed at any one time five
percent (5%) of any class of stock or securities of such corporation or (ii) a
non-public start-up company.
9.02 No Hiring. During the Non-Competitive Period, Employee will not
knowingly (i) hire or attempt to hire any employee of the Company or
subsidiaries (if any); (ii) assist in such hiring by any other person; or (iii)
encourage any such employee to terminate his employment with the Company.
9.03 Severability. If any portion of the restrictions set forth in this
section 9 should, for any reason whatsoever, be declared invalid by a court of
competent jurisdiction, the validity of enforceability of the remainder or such
restrictions shall not thereby be adversely affected.
9.04 Reasonableness. Employee agrees that the territorial and time
limitations set forth in this section 9 are reasonable and properly required for
the adequate protection of the business of the Company. In the event any such
territorial or time limitation is deemed to be unreasonable by a court of
competent jurisdiction, Employee agrees to the reduction of the territorial or
time limitation to the area or period which such court shall have deemed
reasonable.
ARTICLE X
NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
10.01 Non-Disclosure.
(a) Information.
Employee will not at any time, whether during or after the termination of
my employment, reveal to any person or entity any of the know-how, trade secrets
or confidential information concerning the research, development, technology,
business or finances of the Company or of any third party which the Company is
under an obligation to keep confidential (including but not limited to trade
secrets or confidential information respecting research, inventions, products,
designs, methods, know-how, techniques, systems, processes, software programs,
works of authorship, customer lists, projects, loans and proposals), except as
may be required in the ordinary course of performing his duties as an employee
of the Company, and he shall keep secret all matters entrusted to me and shall
not use or attempt to use any such information in any manner which may injure or
cause loss or may be calculated to injure or cause loss whether directly or
indirectly to the Company.
Further, Employee agree that during his employment he shall not make, use
or permit to be used any notes, memoranda, reports, lists, records, drawings,
sketches, specifications, software programs, data, documentation or other
materials of any nature relating to any matter within the scope of the business
of the Company or concerning
any of its dealings or affairs otherwise than for the benefit of the Company. He
further agree that he shall not, after the termination of his employment, use or
permit to be used any such notes, memoranda, reports, lists, records, drawings,
sketches, specification, software programs, data, documentation or other
materials, it being agreed that all of the foregoing shall be and remain the
sole and exclusive property of the Company and that immediately upon the
termination of his employment, he shall deliver all of the foregoing, and all
copies thereof, to the Company, at its main office.
(b) Work Product.
If at any time or times during his employment, Employee shall (either alone
or with others) make, conceive, discover or reduce to practice any invention,
modification, discovery, design, development, improvement, precess, software
program, work of authorship, documentation, formula, data, technique, know-how,
secret or intellectual property right whatsoever or any interest therein
(whether or not patentable or registrable under copyright or similar statues or
subject to analogous protection) (herein called "Developments") that (a) relates
to the business of the Company or any customer of or supplier to the Company or
any of the products or services being developed, manufactured or sold by the
company or which may be used in relation therewith, (b) results from tasks
assigned me by the Company, or (c) results from the use of premises or personal
property (whether tangible or intangible) owned, leased or contracted for by the
Company, such Developments and benefits thereof shall immediately become the
sole and absolute property of the Company and its assigns and Employee shall
promptly disclose to the Company's Board of Directors (or any persons designated
by them) each such Development and Employee hereby assign any rights he may have
or acquire in the Developments and benefits and/or rights resulting therefrom to
the Company and its assignees without further compensation and shall
communicate, without cost or delay, and without publishing the same, all
available information relating thereto (with all necessary plans and models) to
the Company.
Upon disclosure of each Development to the Company, Employee will, during
his employment and at any time thereafter, at the request and cost of the
Company, sign, execute, make and do all such deeds, documents, acts and things
as the Company and its duly authorized agents may reasonably require:
(a) to apply for, obtain and vest in the name of the Company alone
(unless the Company otherwise directs) letters patent, copyrights or other
analogous protection in any country throughout the world and when so
obtained or vested to renew and restore the same; and
(b) to defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or applications
for revocation of such letters patent, copyright or other analogous
protection.
In the event the Company is unable, after reasonable effort, to secure
Employee's signature on any letters patent, copyright or other analogous
protection relating to a Development, whether because of his physical or mental
incapacity or for any other reason whatsoever, Employee hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents
as my agent and attorney-in-effect,
to act for and in my behalf and stead to execute and file any such application
or applications and to do all other lawfully permitted acts to further the
prosecution and issuance of letters patent, copyright or other analogous
protection thereon with the same legal force and effect as if executed by
Employee.
10.02 Return of Documents. Upon termination of Employee's employment with
the Company, all documents, records, reports, writings and other similar
documents containing confidential information, including copies thereof, then in
Employee's possession or control shall be returned and left with the Company.
ARTICLE XI
EQUITABLE RELIEF
11.01 Right to Injunction. Employee recognizes that the services to be
rendered by him hereunder are of a special unique, unusual, extraordinary and
intellectual character involving skill of the highest order and giving them
peculiar value, the loss of which cannot be adequately compensated for in
damages. In the event of a breach of this Agreement by Employee, the Company
shall be entitled to injunctive relief or any other legal or equitable remedies.
Employee agrees that the Company may recover by appropriate action the amount of
the actual damages caused the Company by any failure, refusal or neglect of
Employee to perform his agreements, representations and warranties herein
contained. The remedies provided in this Agreement shall be deemed cumulative
and the exercise of one shall not preclude the exercise of any other remedy, at
law or in equity, for the same event or any other event.
ARTICLE XII
MISCELLANEOUS
12.01 Arbitration. Should any dispute arise between the parties concerning
the performance of this Agreement, the parties agree to mediation and, if not
resolved through such mediation within thirty days, final and binding
arbitration in New York, New York in accordance with the rules of the American
Arbitration Association subject to Article XI in the case of alleged breach of
Articles IX or X.
The decision rendered in any arbitration proceedings shall be in writing
and shall set forth the basis therefor. The parties shall abide by the award
rendered in the arbitration proceedings, and such award may be entered as a
final, nonappealable judgment, and may be enforced and executed upon, in any
court having jurisdiction over the party against whom enforcement of such award
is sought. Each of the parties agrees (in connection with any action brought to
enforce the arbitration provisions of this paragraph) not to assert in any such
action, any claim that it is not subject to the personal jurisdiction of such
court, that the action is brought in an inconvenient forum,
that the venue of the action is improper, or that such mediation or arbitration
may not be enforced by such courts. Each party agrees that service of process
may be made upon it by any method authorized by the laws of the State of New
York.
12.02 Notice. For the purposes of this Agreement, notices, demands and all
other communications provided for in the Agreement shall be in writing, shall be
deemed to have been duly given when delivered or unless otherwise specified
mailed by U.S. registered mail, return receipt requested, postage prepaid,
addressed as follows:
If to Employee:
Xxxxxxxxx X. Xxxxxxxx
If to the Company:
IMSCO Technologies, Inc.
00 Xxxxxxxx Xxxxx
Xxxxx Xxxxxxx, Xxxx 00000
Attention: Chairman of the Board
and
Xxxxxxxx & Xxxxxxx, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
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.
12.03 Amendment or Alteration. No amendment or alteration of the terms of
this Agreement shall be valid unless made in writing and signed by both of the
parties hereto.
12.04 Governing Law. This Agreement shall be governed by the laws of the
State of New York.
12.05 Severability. The holding of any provision of this Agreement to be
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Agreement, which shall remain in full force and
effect.
12.06 Waiver or Breach. No waiver of or failure to enforce any provisions
of this Agreement shall be deemed, or shall constitute, a waiver of any other
provision of this Agreement, nor shall such waiver or failure to enforce
constitute a continuing waiver.
12.07 Assignment. This Agreement may not be transferred or assigned by
either party without the prior written consent of the other party.
12.08 Further Assurances. The parties agree to execute and deliver all such
further documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes and intent
of this Agreement.
12.09 Entire Agreement. This Agreement constitutes the entire understanding
between the parties with respect to the subject matter hereof and supercedes any
and all prior understandings and agreements, oral and written, relating hereto.
12.10 Headings. The section headings appearing in this Agreement are for
purposes of each reference and shall not be considered a part of this Agreement
or in any way modify, amend or affect its provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
EMPLOYER:
IMSCO TECHNOLOGIES, INC.
By:____________________________________
Title:____________________
EMPLOYEE:
Xxxxxxxxx X. Xxxxxxxx
