EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of this 4th day of
October, 2006 by and between ZBB ENERGY CORPORATION, a Wisconsin corporation,
hereinafter referred to as the "CORPORATION," and XXXXXXXX XXXXX XXXX,
hereinafter referred to as the "EMPLOYEE."
W I T N E S S E T H:
WHEREAS, the Employee desires to be continued by the
Corporation in the capacity of Chief Financial Officer; and
WHEREAS, the Corporation and the Employee desire to set forth
in this Agreement the terms and conditions under which the Employee is to
continue to be employed by the Corporation and intend to hereby replace in its
entirety, the previous Employment Agreement between the parties, as amended.
NOW, THEREFORE, the Corporation and the Employee, in
consideration of the mutual promises hereinafter set forth, do hereby promise
and agree as follows:
ARTICLE I
Term
The term of the Employee's employment under this Agreement
shall commence effective as of the date set forth in Section I of Exhibit A
attached hereto and shall, except as it may otherwise be subject to termination
hereunder, continue thereafter for a period of time as set forth in Section I of
Exhibit A. The Corporation and the Employee acknowledge and agree that the term
of the Employee's employment hereunder shall be automatically extended from year
to year thereafter upon the same terms and conditions, unless terminated by
either party hereto upon ninety (90) days written notice given prior to the
expiration of the original term of this Agreement or any extension thereof.
ARTICLE II
Employment Duties
During the term of the Employee's employment hereunder, the
Corporation shall employ the Employee and the Employee shall serve the
Corporation as a full-time employee in such capacity and with such powers and
duties as are set forth in Section II of Exhibit A. The Board of Directors of
the Corporation may from time to time prescribe amended duties for the Employee.
The Employee shall devote his entire working time and efforts to the business
affairs of the Corporation and shall faithfully and to the best of his ability
perform his duties hereunder.
ARTICLE III
Compensation
3.1. Salary and Benefits. During the term of the Employee's
employment hereunder, the Employee shall be entitled to receive the salary and
fringe benefits set forth in Section III of Exhibit A. The Employee acknowledges
that he shall have no vested rights in any such fringe benefit programs except
as expressly provided under the terms thereof and that such programs may be
terminated as well as supplemented.
3.2. Withholding Taxes. The Corporation shall deduct from all
payments to the Employee hereunder any federal, state or local withholding or
other taxes or charges which the Corporation is from time to time required to
deduct under applicable law, and all amounts payable to the Employee hereunder
are stated herein before any such deductions. The Corporation shall have the
right to rely upon written opinion of legal counsel, which may be independent
legal counsel or legal counsel regularly employed by the Corporation, if any
questions should arise as to any such deductions.
ARTICLE IV
Termination of Employment
4.1. Causes for Termination. Notwithstanding the term set
forth in Article I, above, the Employee's employment hereunder shall be
terminated prior to the expiration of such term upon the occurrence of any of
the following events:
4.1.1. In the event of the Employee's death.
4.1.2. In the event of the disability of the Employee. For
purposes of this Agreement, the term "disability" shall be defined as the
inability of the Employee to perform his normal duties as a full-time employee
of the Corporation for a period of ninety (90) consecutive days by reason of
physical or mental illness or incapacity, or for periods of physical or mental
illness or incapacity aggregating one hundred twenty (120) days in any
consecutive twelve (12) month period. A physical or mental disability shall be
deemed to include the written direction by a physician that the Employee shall,
for medical reasons, terminate or substantially reduce his services to the
Corporation. If there is any dispute as to whether the termination of the
Employee's employment was due to his physical or mental illness or incapacity,
such question shall be submitted to a licensed physician for the purpose of
making such determination. An examination of the Employee shall be made within
thirty (30) days after written notice by the Corporation or the Employee to the
other by a licensed physician agreeable to the Corporation. The Employee shall
submit to such examination and provide such information that such physician may
request and the determination of such physician as to the question of the
Employee's physical or mental condition shall be binding and conclusive on all
parties concerned for purposes of this Agreement. no information that is not
specifically authorized by the Employee to be disclosed by the physician need to
be disclosed. A disability shall be deemed to be continuing unless the Employee
performs his regular duties for the Corporation for a continuous period of one
(1) month.
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4.1.3. Upon the commission of any of the following acts:
(a) The failure of the Employee to perform his duties
for the Corporation (other than by reason of illness) after being given
written notice specifying the breach and actions to be taken to cure
such material breach and giving Employee reasonable time (not under 20
days) to cure such breach.
(b) Willful misconduct by the Employee which is
demonstrably and materially injurious to the Corporation, monetarily or
otherwise (for the avoidance of debt, any actions taken in good faith
as an officer or director shall not be deemed misconduct).
(c) Conviction of the Employee of a felony or
misdemeanor which, in the reasonable judgment of the Board of Directors
of the Corporation, is likely to have a material adverse effect upon
the business or reputation of the Corporation, or which substantially
impairs the Employee's ability to perform his duties for the
Corporation.
(d) Breach by the Employee of any agreement with the
Corporation concerning noncompetition or the confidentiality of trade
secrets or proprietary or other information after a notice of breach
has been given specifying the actions to be taken and given opportunity
to take cure such breach.
4.2. Consequences of Termination. If the Employee's employment
with the Corporation is terminated, the following shall occur:
(a) If the Employee's employment is terminated prior to the
expiration of this Agreement pursuant to any of the provisions of
Section 4.1.1 or 4.1.2, above, (1) the Corporation shall pay to the
Employee or the Employee's estate, as the case may be, all compensation
accrued under Article III, above, to the date of termination, (ii) the
Corporation shall pay to the Employee or the Employee's estate, as the
case may be, an amount equal to the Employee's annual salary paid to
him in the one (1) year period immediately prior to his termination of
employment which shall be payable in 12 equal consecutive monthly
installments commencing upon the Employee's termination, (iii) the
Employee or the Employee's estate, as the case may be shall be entitled
to receive for a one (1) year period following the date of termination
all benefits the Employee was receiving on the date of termination
pursuant to Article III above, all in accordance with the terms of such
plans including, without limitation, any forfeiture provisions set
forth in such plans, and (iv) the Corporation shall cause all unvested
benefits, if any, awarded to the Employee prior to the termination of
his employment under any equity, stock or other option program of the
Corporation (collectively the "Option Plans") to vest and become
immediately exercisable by the Employee.
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(b) If the Employee's employment is terminated prior to the
expiration of this Agreement pursuant to the provisions of Section
4.1.3, above, (i) the Corporation shall pay to the Employee all
compensation accrued under Article III, above, to the date of
termination, (ii) the Employee shall be entitled to receive all
benefits accrued to the date of termination of the Employee's
employment with the Corporation, all in accordance with the terms of
such plans including, without limitation, any forfeiture provisions set
forth in such plans, and shall have all rights to COBRA or similar
benefits and (iii) all vested benefits, if any, held by the Employee on
the date of his termination of employment under the Option Plans shall
become immediately exercisable by the Employee and all unused options
or benefits shall be terminated as provided in such agreements or
plans.
(c) If (i) the Corporation terminates the Employee's
employment prior to the expiration of the Agreement for any reason
other than as set forth in Section 4.1.3, above, or (ii) the Employee
voluntarily terminates his employment with the Corporation because the
Corporation materially adversely modifies or reduces the nature or
scope of the Employee's authority or responsibility or the Corporation
fails to pay the Employee amounts due under the Agreement, then (A) the
Corporation shall continue to pay the Employee his annual base salary
which he received pursuant to Article III, above, in the year
immediately preceding the date of his termination of employment with
the Corporation, for the greater of eighteen (18) months or the
remaining, (B) the Employee shall be entitled to receive all benefits
the Employee was receiving on the date of his termination of employment
pursuant to Article III, above, for the greater of eighteen (18) months
or the remaining term of the Agreement, and (C) all vested or unvested
benefits, if any, which the Employee was entitled to receive during the
term of this Agreement under the Option Plans shall vest and become
immediately exercisable, PROVIDED THAT the provisions of paragraphs (A)
and (B) shall not apply unless and until the common stock of the
Corporation is listed for trading on the American Stock Exchange (the
"AMEX") or any other U.S. market place similar or superior and the
Corporation's securities known as CUFS (CHESS Units of Foreign
Securities) cease trading or, and the Corporation is no longer subject
to the rules of, on the Australian Stock Exchange Ltd (the "ASX").
4.3 Expiration of Term. Except as set forth in Section 4.2, above, upon
the expiration of the term of this Agreement, the Corporation shall pay to the
Employee an amount equal to the Employee's annual base salary paid to him
pursuant to Article III, above, in the eighteen (18) month period immediately
prior to the expiration of the term of this Agreement, in eighteen (18) equal
consecutive monthly installments commencing upon the date of such expiration,
PROVIDED THAT the provisions of this section 4.3 shall not apply unless and
until the common stock of the Corporation is listed for trading on the AMEX or
any other similar or superior U.S. market and the Corporation's securities known
as CUFS (CHESS Units of Foreign Securities) cease trading on the ASX and the
Corporation is no longer subject to the rules of the ASX.
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ARTICLE V
Covenant Not to Compete; Confidentiality
5.1. Restrictions. The Employee agrees that he shall not, at
any time while he is employed by the Corporation or at any time during the
eighteen (18) month period following the termination of his employment with the
Corporation for any reason, either directly or indirectly, whether as agent,
stockholder (except as the holder of not more than five percent (5%) of the
stock of a publicly held company, provided the Employee does not participate in
the business of such company or render advice or assistance to it), employee,
officer, director, trustee, partner, consultant, proprietor or otherwise:
(a) Acquire an ownership interest in, work for or
render advice or assistance to any business, incorporated or otherwise,
operating within a fifty (50) mile radius of the Corporation's offices
which is engaged in the sale, marketing and/or distribution of products
or services sold or offered by the Corporation as of the date hereof or
during the period in which the Employee is employed by the Corporation.
(b) Except on behalf of the Corporation, contact,
sell or solicit to sell, or attempt to contact, sell or solicit to
sell, products or services competitive with those offered or sold by
the Corporation to any customer of the Corporation.
(c) For purposes of this Article V, the following
definitions shall apply:
(i) During the term of the Employee's
employment, the term "customer" shall mean those persons or
entities to whom the Corporation or its predecessor entity has
sold, or solicited to sell, products or services during the
term of the Employee's employment.
(ii) During the period following the
termination of the Employee's employment, the term "customer"
shall mean any entity or person to whom the Corporation or its
predecessor entity has sold, or solicited to sell, products or
services during the two (2) year period prior to the
termination of the Employee's employment.
5.2. Confidential Information. The Employee agrees that he
shall not at any time while he is employed by the Corporation, and for a period
of three years after termination of his employment with the Corporation for any
reason, except on behalf of the Corporation, either directly or indirectly,
disclose to any person other than an employee or agent of the Corporation having
the need to know such information in the ordinary course of business, or to a
person to whom such disclosure has been authorized by the Board of Directors of
the Corporation, any "confidential information." The term "confidential
information" shall mean: (A) all technical information relating to the
Corporation's or its predecessor's business; (B) any information concerning any
product or service under development by, or being tested by, the Corporation but
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not yet offered for sale; (C) any information concerning the pricing policies of
the Corporation, the prices charged by the Corporation to any customer, the
volume of orders of any customer, any bids or negotiations being submitted by or
being conducted by the Corporation and all other information concerning the
transactions of the Corporation with any customer or proposed customer; (D) any
information concerning the marketing programs or strategies of the Corporation;
(E) any financial information concerning the Corporation or its substitutes or
predecessors; (F) any information concerning the salaries or wages paid to, the
work records of or any other personnel information relating to any employee of
the Corporation; and (G) any other information determined by the Corporation to
be confidential and proprietary and which is identified as such prior to or at
the time of its disclosure to the Employee. Notwithstanding the foregoing, no
information shall be considered to be confidential information which (i) is
disclosed or published without the fault of the Employee, or (ii) is or becomes
general public information without disclosure by the Employee. The Employee
acknowledges and agrees that the provisions of this Section 5.2 shall not be
construed to constitute: (a) a waiver by the Corporation of any of its rights in
or to protect specific items of its proprietary information which constitutes
trade secrets, or (b) a release of or a limit on the Employee's legal obligation
not to disclose or misappropriate any trade secrets of the Corporation during or
after his employment with the Corporation. Notwithstanding the foregoing,
Employee shall be permitted to disclose any confidential information that was
requested under subpoena, court order or regulatory requirements or enforcement
proceedings of any governmental agency or such regulatory agency.
5.3. Surrender of Records. The Employee agrees upon
termination of his employment with the Corporation immediately to surrender to
the Corporation all correspondence, letters, contracts, manuals, mailing lists,
customer lists, marketing data, ledgers, supplies, corporate checks and all
other materials or records of any kind relating to the Corporation, its
predecessor or their business then in his possession or under his control, as
well as all copies of any of the foregoing.
5.4. Remedies. The Employee recognizes that irrevocable injury
may result to the Corporation, its business and its property, in the event of a
breach by him of the restrictions imposed by this Article V and that the
Employee's acceptance of such restrictions was a material factor in the
Corporation's decision to provide employment to the Employee. The Employee
agrees that if he shall engage in any acts in violation of this Article V, the
Corporation shall be entitled, in addition to such other remedies and damages as
may be available to it, to an injunction prohibiting him from engaging in any
such acts.
5.5. Notice to Subsequent Employers. The Employee agrees to
fully disclose the terms of this Agreement to any person, firm, corporation or
other entity by which or with whom he may hereafter become employed, or to which
he may hereafter render services, prior to accepting any such employment or
performing any such services and further agrees that the Corporation may, if it
desires, send a copy of this Agreement to, or otherwise make the provisions
hereof known, to any such employer.
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ARTICLE VI
Assignment and Disclosure of Inventions and Patents
The Employee hereby sells, assigns and transfers to the
Corporation all of his right, title and interest in and to any and all
Inventions (as hereinafter defined) and agrees that all Inventions are or shall
become the sole and exclusive property of the Corporation and that only the
Corporation shall have the right to use, sell, license, assign or otherwise
exploit such Inventions and products, articles, commodities, methods or
processes employing them. The Employee shall make a full and complete written
disclosure of any and all Inventions to the Corporation and shall promptly
execute and deliver to the Corporation all documents which the Corporation may
deem necessary or appropriate to effect a valid assignment of the Employee's
right and title to any Invention to the Corporation or to prepare, file or
prosecute any domestic or foreign patent application in connection therewith.
The Employee further agrees to fully cooperate with the Corporation and to take
such actions as the Corporation may request, including testimony in patent or
other legal proceedings, in connection with the protection, establishment and/or
enforcement of the Corporation's rights to any such Invention and/or to permit
the Corporation to reduce the same to practice. The Corporation agrees to
reimburse the Employee for any out-of-pocket expenses expended by the Employee
in complying with the provisions of this Article VI. In addition thereto, the
Corporation shall pay to the Employee an amount equal to Two Hundred Fifty
Dollars ($250.00) for each patent application prepared and filed with respect to
an Invention conceived by the Employee and One Hundred Fifty Dollars ($150.00)
for each Invention conceived by the Employee which constitutes a trade secret of
the Corporation. For purposes hereof, an "Invention" shall mean any idea,
innovation, discovery, process, design, development, improvement, application,
technique or invention, whether patentable or not, which in any way affects or
relates to, or which is or may become capable of being used in the business of
the Corporation and which the Employee may, either wholly or in part, and either
solely or jointly with others, conceive, make or secure or may have conceived,
made or secured at any time during the period of time he is employed by the
Corporation or the Corporation's predecessor entity or during the six-month
period following termination of his employment with the Corporation.
ARTICLE VII
Expenses
During the term of the Employee's employment hereunder, the
Corporation shall pay or reimburse the Employee for all reasonable and necessary
business expenses incurred by the Employee in the interest of the Corporation in
accordance with the Corporation's reimbursement policies in effect from time to
time. The Employee shall be required to submit an itemized account of such
expenditures and such proof as may be necessary to establish to the satisfaction
of the Corporation that the expenses incurred by the Employee were ordinary and
necessary business expenses incurred on behalf of the Corporation.
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ARTICLE VIII
Waiver of Breach
The waiver by the Corporation of any breach of any provision
of this Agreement by the Employee shall not be deemed a waiver by the
Corporation of any subsequent breach.
ARTICLE IX
Notice
Any notice required or permitted to be given hereunder shall
be in writing and shall be deemed to be sufficiently given and received in all
respects when personally delivered or three (3) days after when deposited in the
United States mail, certified mail, postage prepaid, return receipt requested
and addressed to the principal office of the Corporation or the residence of the
Employee, as the case may be.
ARTICLE X
Assignment
This Agreement shall not be assignable by the Corporation
without the written consent of the Employee, except that if the Corporation
shall merge or consolidate with or into, or transfer substantially all of its
assets, including goodwill, to another corporation or other form of business
organization, this Agreement shall be binding upon and inure to the benefit of
the successor of the Corporation resulting from such merger, consolidation or
transfer. The Employee may not assign, pledge or encumber any interest in this
Agreement or any part thereof without the written consent of the Corporation.
ARTICLE XI
Complete Agreement; Amendment
This Agreement contains the full and complete understanding
and agreement of the parties hereto and supersedes all prior agreements or
understandings, whether oral or written, between the parties hereto with respect
to the subject matter hereof. This Agreement may not be modified, amended,
terminated or discharged orally.
ARTICLE XII
Governing Law
This Agreement and all questions of its interpretation,
performance, enforceability and the rights and remedies of the parties hereto
shall be governed by and determined in accordance with the internal laws of the
State of Wisconsin.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day, month and year first above written.
CORPORATION:
ZBB ENERGY CORPORATION
By:
------------------------------
(Title)
EMPLOYEE:
----------------------------------
Xxxxxxxx Xxxxx Xxxx
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EXHIBIT A
SECTION I. TERM
The term of the employee's employment under this agreement shall
commence effective as of July 1, 2006 and shall, except as it may otherwise be
subject to termination hereunder, continue thereafter for a period of three (3)
years.
SECTION II. POSITION AND DUTIES
The employee shall be employed by the Corporation in the capacity of
Chief Financial Officer of the Corporation and in such capacity shall have
responsibility for the overall management and control of the financial
operations and reporting of the Corporation and its subsidiaries.
SECTION III. SALARY AND BENEFITS
The corporation shall pay to the employee an annual salary and benefits
package equal to at least $160,000.00). The employee's salary shall be payable
in equal installments not less frequently than monthly and shall be subject to
increase in each year in an amount mutually agreed by the Employee and the
Corporation and in any event by an amount not less than the Increase in the
Consumer Price Index. As used herein, "Consumer Price Index" as of any date
means the index published most recently preceding such date by the Bureau of
Labor Statistics, United States Department of Labor, "Consumer Price Index, All
urban Consumers, All Items, Xxxxxxxxx, Xxxxxxxxx (0000-00 =100)".
The employee shall also be entitled to participate in any individual or
group life insurance, health insurance, qualified pension or profit sharing plan
or any other fringe benefit program which the Corporation may from time to time
make available to its management employees. In addition thereto, the employee
shall be entitled to participate in a stock option benefit which shall be made
available to the Corporation's management team.
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