EMPLOYMENT AGREEMENT
EXHIBIT
10.2
This
EMPLOYMENT AGREEMENT (this “Agreement”),
is
entered into as of November 10, 2005 (the “Effective
Date”),
by
and between SulphCo, Inc., a Nevada corporation (along with its successors
and
assigns, the “Company”),
and
Xxxxx X. Xxxxxx (“Executive”).
WHEREAS,
the Company desires to employ Executive, and Executive desires to be employed
by
the Company, on the terms and conditions hereinafter set forth;
NOW,
THEREFORE, in consideration of the mutual promises contained herein and other
good and valuable consideration, the Company and Executive agree as
follows:
1. Employment.
(a) Term.
Subject
to the terms hereof, Executive’s employment hereunder shall commence as of the
Effective Date and shall continue until terminated pursuant to Section 3
below
(such period, the “Employment
Period”).
(b) Position,
Place of Performance and Duties.
Executive will serve as the Company’s Chief Financial Officer. Executive will
have the responsibilities, duty and authority commensurate with the position
of
Chief Financial Officer and will perform such other services of an executive
nature as may be prescribed from time to time by the Company’s Board of
Directors (the “Board”) and agreed to by Executive. Executive’s employment will
be based at the Company’s principal offices in Sparks, Nevada or such other
place as may be agreed to by Executive and the Board. In addition, Executive
will be available to travel at such times and to such places as may be
reasonably necessary in connection with the performance of his duties hereunder.
Subject to the last sentence of this Section 1(b), Executive
shall devote his full business time and efforts in the performance of his
duties
hereunder. Notwithstanding the foregoing, it is expressly agreed that (i)
Executive may (A) manage his personal investments, (B) provide consulting
services to existing clients of Xxxxx X. Xxxxxx, CPA, Ltd., (C) engage in
charitable or not-for-profit activities, and/or (D) serve on the board of
directors of up to one other company which is not a competitor of the Company,
in
each
case, in a manner that does not materially interfere with his obligations
to the
Company hereunder, and (ii) neither the Company nor any officer, director,
employee, shareholder or other person shall have any right, by virtue of
this
Agreement, to share or participate in such other investments or activities
or to
the income or proceeds derived therefrom. It is recognized by the Company
that
Executive is in the process of closing out a long-standing CPA practice and
needs to focus some attention thereon during the first months of his employment.
It is understood, therefore, that his salary in those first months is in
part to
compensate him for difficulties encountered in winding-up his
practice.
2. Compensation.
(a) Base
Salary.
Commencing on the Effective Date, the Company will pay Executive a base salary
at the annual rate of $300,000, which amount shall be reviewed annually and
subject to increase (but not decrease) at the good faith discretion of the
Board
(as adjusted from time to time, the “Base
Salary”).
The
Base Salary will be payable in substantially equal installments (no less
frequently than bi-weekly) in accordance with the Company’s payroll practices as
in effect from time to time.
1
of
8
(b) Bonus.
Based
on Executive’s performance and the overall performance of the Company, Executive
will be eligible to receive bonuses from time to time, the amount and nature
of
which shall be determined by the Board.
(c) Equity
Compensation.
Executive shall be entitled to receive awards from any Company incentive
compensation plan applicable to similarly situated senior executives of the
Company, in accordance with the terms thereof and on a basis commensurate
with
Executive’s position and responsibilities.
(d) Vacation.
Executive will be entitled to (i) a minimum of four calendar weeks paid vacation
in each calendar year to be taken at such times and in such number of days
as is
agreeable between the Company and Executive, but never more than two weeks
at
once, (ii) paid sick days as needed due to illness or other incapacity, and
(iii) paid holidays in accordance with the Company’s policies for its senior
executives as in effect from time to time. Accrued unused vacation may be
carried over for up to twelve months.
(e) Benefits.
Commencing as of the Effective Date, Executive (and his eligible dependents)
will be entitled to participate in the same manner as the Company’s other senior
executives in any employee benefit plans which the Company provides or may
establish for the benefit of its senior executives generally (including,
without
limitation, disability, medical, and other insurance, bonuses and similar
plans)
(collectively, the “Benefits”).
(f) Reimbursement
of Expenses.
The
Company will reimburse Executive for all out-of-pocket business expenses
that
are incurred by him in furtherance of the Company’s business in accordance with
the Company’s policies with respect thereto as in effect from time to time.
Without limiting the generality of the foregoing, the Company shall pay or
reimburse Executive for charges relating to the use of his cellular phone
and
business travel expenses, it being understood that he shall travel on first
or
business class at his discretion.
3. Termination.
Executive’s employment
hereunder will terminate upon the first to occur of the following:
(a) Executive’s
his death;
(b) by
the
Company or Executive (or his legal representative) in the event of Executive’s
Disability (as defined below);
(c) by
the
Company for Cause (as defined below);
(d) by
the
Company without Cause; or
(e) by
Executive, with or without Good Reason (as defined below).
2
of
8
For
purposes of this Agreement, the following terms shall have the following
meanings:
“Cause”
means
(i) Executive’s conviction of a felony, either in connection with the
performance of his obligations to the Company or which otherwise materially
and
adversely affects his ability to perform such obligations, (ii)
Executive’s willful disloyalty or deliberate dishonesty, (iii) the commission by
Executive of an act of fraud or embezzlement against the Company, or (iv)
a
material breach by Executive of any material provision of this Agreement
which
breach is not cured within 30 days after delivery to Executive by the Company
of
written notice of such breach, provided that, if such breach is not capable
of
being cured within such 30 day period, Executive will have a reasonable
additional period to cure such breach. No act or omission on Executive’s part
will be considered “willful” unless done, or admitted to be done, by Executive
in bad faith or without his reasonable belief that such act or omission was
in
the best interest of the Company.
“Disability”
means
Executive’s mental, physical or other disability the condition of which renders
him incapable of performing his obligations under this Agreement for a period
of
90 consecutive days or an aggregate of 120 days (whether or not consecutive)
in
any 12-month period.
“Good
Reason”
means
(i) a failure by the Company to comply with any material provision of this
Agreement which is not cured within 10 days after Executive has given written
notice of such noncompliance to the Company, (ii) any change in Executive’s
duties inconsistent with his positions as President and Chief Operating Officer
(including, any change in his offices or reporting requirements), or (iii)
at
Executive’s election, a Change in Control of the Company if, following such
Change in Control, Executive is no longer the President and Chief Operating
Officer of the Company (or the surviving or successor company, as applicable),
or is offered a position not acceptable to him.
“Change
in Control”
means
(i) the acquisition by any person, entity or affiliated group (other than
Xxxxxx
X. Xxxxxxxxx) becoming the beneficial owner or owners of more than 50% of
the
outstanding equity securities of the Company or otherwise becoming entitled
to
vote more than 50% of the voting power of the Company, (ii) a consolidation
or
merger (in one transaction or a series of related transactions) of the Company
pursuant to which the holders of the Company’s equity securities immediately
prior to such transaction or series of related transactions would not be
the
holders immediately after such transaction or series of related transactions
of
more than 50% of the voting power of the entity surviving such transaction
or
series of related transactions, or (iii) the sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all
or
substantially all of the assets of the Company.
4. Termination
Procedures; Effect of Termination.
(a) Notice
of Termination.
Any
termination of Executive’s employment by the Company or Executive (other than
termination on account of Executive’s death) shall be communicated by written
notice (a “Notice
of Termination”)
to the
other party hereto in accordance with Section 8(a) below, which notice shall
indicate the specific termination provision in Section 3 of this Agreement
relied upon and, if termination by the Company for Cause, the specific reasons
therefore.
3
of
8
(b) Date
of Termination.
As used
herein, “Date
of Termination”
shall
mean (i) if Executive’s employment is terminated as a result of Executive’s
death, the date of Executive’s death, (ii) if Executive’s employment is
terminated by reason of Executive’s Disability, on the date Notice of
Termination is given or such later date specified in the Notice of Termination
as the effective date of termination, (iii) if Executive’s employment is
terminated by the Company for Cause, on the date Notice of Termination is
given
or such later date specified in the Notice of Termination as the effective
date
of termination, (iv) if Executive’s employment is terminated by the Company
without Cause, such date which is specified in the Notice of Termination
as the
effective date of termination, provided that such date shall be at least
30 days
after the date such Notice of Termination is given, and (v) if Executive’s
employment is terminated by Executive, with or without Good Reason, such
date
which is specified in the Notice of Termination as the effective date of
termination.
(c) Compensation
Upon Termination.
(i) At
any
time that Executive’s employment is terminated, the Company will pay the Accrued
Obligations to Executive (or to his estate or legal representative, if
applicable) on or promptly following the Date of Termination. For purposes
of
this Agreement, “Accrued
Obligations”
means
(A) the portion of Executive’s Base Salary as has accrued up through the Date of
Termination which the Executive has not yet been paid, (B) an amount equal
to
any unpaid bonus which have accrued through the Date of Termination, (C)
an
amount equal to the value of Executive’s accrued unused vacation days, and (D)
the amount of expenses incurred by Executive on behalf of the Company prior
to
the Date of Termination and not yet reimbursed.
(ii) In
addition to the payments required under subsection 4(c)(i), if Executive’s
employment is terminated by reason of his Disability and such Disability
arose
from a job-related accident or other event, by the Company without Cause
or by
Executive for Good Reason, then within 30 days following the Date of
Termination, the Company will (A) pay to Executive (or his estate or legal
representative if applicable), a lump-sum severance payment equal to three
months of his then current Base Salary, and (B) continue to pay the group
medical and dental insurance coverage premiums of fees for Executive and
his
eligible dependents for a period of six months following the Date of Termination
as an “active employee” under the Company’s then existing plans.
(d) Other
Provisions.
The
effect of termination on any stock options or restricted stock granted or
issued
to Executive shall be governed by the terms and provisions of any applicable
option agreement, restricted stock agreement or equity incentive plan. If
Executive’s employment is terminated by the Company without Cause, the Company
will use its best efforts to secure Executive alternative employment on
substantially the same or more favorable terms. Notwithstanding any other
provision of this Agreement, (i) Executive will have no obligation to mitigate
Executive’s damages for any breach of this Agreement by the Company or for any
termination of this Agreement, whether by seeking employment or otherwise,
and
(ii) the amount of any benefit due to Executive after the date of such
termination pursuant to this Agreement will not be reduced or offset by any
payment or benefit that Executive may receive from any other
source.
4
of
8
5. Confidentiality.
Executive will enter into a confidentiality/non-disclosure agreement,
substantially similar to the Company’s standard form of
confidentiality/non-disclosure agreement for its senior executives.
6. Indemnification.
The
Company shall, to the fullest extent permitted by law and by its Certificate
of
Incorporation and Bylaws, indemnify Executive and hold him harmless for any
acts
or decisions made by him in good faith while performing his duties to the
Company, and shall at all times during Executive’s employment with the Company,
maintain Directors’ and Officers’ Liability Insurance in amounts and on such
other terms as agreed to by Executive and the Board. In addition, the Company
will enter into a separate indemnification agreement setting forth the Company’s
indemnification obligations to Executive, in form and substance mutually
agreeable to Executive and the Board.
7. Company
Representations and Warranties.
In
order
to induce Executive to accept employment as the Company’s President and Chief
Operating Officer, the Company represents and warrants to Executive as set
forth
below and acknowledges that Executive is relying on such representations
and
warranties in accepting his employment hereunder:
(a) The
Company is in compliance in all material respects with all applicable
requirements of the Xxxxxxxx-Xxxxx Act of 2002, as amended, and the rules
and
regulations thereunder, and all other applicable laws, regulations, orders,
judgments and decrees.
(b) The
registration statements, proxy statements, annual, quarterly and current
reports
and other reports or filings filed with the U.S. Securities Exchange Commission,
and the press releases disseminated, by the Company since its inception,
taken
as a whole, do not contain any untrue statement of a material fact or omit
to
state a material fact required to be stated therein or necessary in order
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading, including, without limitation, with regard to the
Company’s technology or other intellectual property.
(c) The
Company is in compliance with all listing or maintenance requirements of
the
American Stock Exchange and has no reason to believe that it will not, in
the
foreseeable future, continue to be in such compliance.
8. General.
(a) Notices.
All
notices, requests, consents and other communications hereunder will be in
writing, will be addressed to the receiving party’s address set forth below or
to such other address as a party may designate by notice hereunder, and will
be
either (i) delivered by hand, (ii) sent by overnight courier,
or
(iii) sent by registered or certified mail, return receipt requested,
postage prepaid. All notices, requests, consents and other communications
hereunder will be deemed to have been given either (A) if by hand,
at the
time of the delivery thereof to the receiving party at the address of such
party
set forth above, (B) if sent by overnight courier, on the next business
day
following the day such notice is delivered to the courier service, or (C)
if
sent by registered or certified mail, on the third business day following
the
day such mailing is made. All notices, requests, consents and other
communications hereunder will be sent as follows:
| If to the Company: |
SulphCo,
Inc.
|
|
000
Xxxxx Xxxxxxx Xxxxx
|
|
Xxxxxx,
Xxxxxx 00000
|
|
Attention:
Chairman of the Board
|
| If to Executive: | Xxxxx X. Xxxxxx |
| 0000 Xxxxxx Xxxxx Xxxxx |
|
Xxxx,
Xxxxxx 00000
|
5
of
8
(b) Entire
Agreement.
This
Agreement (together with the indemnification agreement referred to herein)
embodies the entire agreement and understanding between the parties hereto
with
respect to the subject matter hereof and supersedes all prior oral or written
agreements and understandings relating to the subject matter hereof. No
statement, representation, warranty, covenant or agreement of any kind not
expressly set forth in this Agreement will affect, or be used to interpret,
change or restrict, the express terms and provisions of this
Agreement.
(c) Modifications
and Amendments.
The
terms and provisions of this Agreement may be modified or amended only by
written agreement executed by the parties hereto.
(d) Waivers
and Consents.
The
terms and provisions of this Agreement may be waived, or consent for the
departure therefrom granted, only by written document executed by the party
entitled to the benefits of such terms or provisions. No such waiver or consent
will be deemed to be or will constitute a waiver or consent with respect
to any
other terms or provisions of this Agreement, whether or not similar. Each
such
waiver or consent will be effective only in the specific instance and for
the
purpose for which it was given, and will not constitute a continuing waiver
or
consent.
(e) Successors
and Assigns; Third Party Beneficiaries.
All
statements, representations, warranties, covenants and agreements in this
Agreement will be binding on the parties hereto and will inure to the benefit
of
the respective successors, heirs, executors and permitted assigns of each
party
hereto; provided that no party hereto may assign any rights or obligations
hereunder without the consent of the other party. Nothing in this Agreement
will
be construed to create any rights or obligations except among the parties
hereto, and (except for Executive’s estate or other legal representative) no
person or entity will be regarded as a third-party beneficiary of this
Agreement.
(f) Governing
Law.
This
Agreement and the rights and obligations of the parties hereunder will be
construed in accordance with and governed by the law of the State of Nevada,
without giving effect to the conflict of law principles thereof.
(g) Jurisdiction,
Venue.
Any
legal action or proceeding with respect to this Agreement will be brought
in the
Federal or state courts of Washoe County, Nevada with competent subject matter
jurisdiction. By execution and delivery of this Agreement, each of the parties
hereto accepts for itself and in respect of its property, generally and
unconditionally, the exclusive jurisdiction of the aforesaid
courts.
6
of
8
(h) Severability.
The
parties intend this Agreement to be enforced as written. However, if
any
court of competent jurisdiction determines any provision, or any portion
thereof, of this Agreement to be unenforceable or invalid, then such provision
shall be deemed limited to the extent that such court deems it valid or
enforceable and the remaining provisions of this Agreement shall nevertheless
remain in full force and effect
(i) Headings
and Captions.
The
headings and captions of the various subdivisions of this Agreement are for
convenience of reference only and will in no way modify or affect the meaning
or
construction of any of the terms or provisions hereof.
(j) No
Waiver of Rights, Powers and Remedies.
No
failure or delay by a party hereto in exercising any right, power or remedy
under this Agreement, and no course of dealing between the parties hereto,
will
operate as a waiver of any such right, power or remedy of the party. No single
or partial exercise of any right, power or remedy under this Agreement by
a
party hereto, nor any abandonment or discontinuance of steps to enforce any
such
right, power or remedy, will preclude such party from any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder.
The election of any remedy by a party hereto will not constitute a waiver
of the
right of such party to pursue other available remedies. No notice to or demand
on a party not expressly required under this Agreement will entitle the party
receiving such notice or demand to any other or further notice or demand
in
similar or other circumstances or constitute a waiver of the rights of the
party
giving such notice or demand to any other or further action in any circumstances
without such notice or demand.
(k) Deductions
and Withdrawals.
The
Company will deduct from each payment to be made to Executive under this
Agreement such amounts, if any, required to be deducted or withheld under
applicable law or under any employment benefit plan in which Executive
participate.
(l) Counterparts.
This
Agreement may be executed in two or more counterparts, and by different parties
hereto on separate counterparts, each of which will be deemed an original,
but
all of which together will constitute one and the same instrument. This
Agreement may be delivered by facsimile, and facsimile signatures shall be
treated as original signatures for all applicable purposes.
{Remainder
of page left intentionally blank. Signature page(s) to follow.}
7
of
8
IN
WITNESS WHEREOF, the undersigned has executed and delivered this Employment
Agreement as of the date and year first above written.
| SULPHCO, INC. | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxxxxx | |
|
|
||
|
Xx.
Xxxxxx X. Xxxxxxxxx
Chairman & Chief Executive
Officer
|
||
| By: | /s/ Xxxxx X. Xxxxxx | |
|
|
||
|
XXXXX
X. XXXXXX
|
||
|
8
of 8
|
||
