EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of the 1st day of
September 1994, by and between EASY GARDENER ACQUISITION CORP., a Delaware
corporation (the "Company"), and Xxxxxxx X. Xxxxxx (the "Executive").
W I T N E S S E T H :
WHEREAS, the Company has entered into an Asset Purchase Agreement with Easy
Gardener, Inc. ("Easy Gardener") and Natural Earth Technologies, Inc. ("NETX")
pursuant to which the Company has agreed to purchase substantially all of the
assets (the "Purchased Assets") of Easy Gardener (the "Acquisition"); and
WHEREAS, the Executive has been an officer and principal shareholder of
Easy Gardener and, as such, possesses an intimate knowledge of the business and
affairs of the business represented by the Purchased Assets, its policies,
methods, personnel, opportunities and problems; and
WHEREAS, the Company recognizes that the Executive's contribution to the
growth and success of the Company following the consummation of the Acquisition
will be substantial and the Company desires to assure itself of the Executive's
employment as the Vice President - Marketing and Sales of the Company and to
compensate him for such efforts; and
WHEREAS, the Executive is desirous of committing himself to serve the
Company on the terms herein provided;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties contained in this Agreement the parties
hereto hereby agree as follows:
1. Employment.
The Company agrees to employ the Executive and the Executive agrees to be
so employed on the terms and conditions set forth in this Agreement, for a
four-year period commencing on the date hereof; provided, however, that this
Agreement may be extended by the mutual written agreement of the Company and the
Executive.
2. Position and Duties.
During the term of this Agreement the Executive shall have the title of the
Vice President - Marketing and Sales of the Company and shall have such duties
as may be from time to
time delegated to him by the Board of Directors or the President of the Company.
The Executive shall report to Xxxxxxx Xxxxxxx or Xxxxxx Xxxxxx (or another
designee of the Board of Directors) and the Board of Directors and shall devote
substantially all of his business time, attention, knowledge and skills
faithfully, diligently end to the best of his ability, in furtherance of the
business and activities of the Company. The Executive shall faithfully and
diligently discharge his duties hereunder and use his best efforts to implement
the policies established by the Board of Directors.
3. Indemnification of Executives.
The Company will indemnify the Executive (and his legal representatives or
other successors) to the fullest extent permitted (including payment of expenses
in advance of final disposition of the proceeding) by the laws of the State of
Delaware as in effect at the time of the subject act or omission, or such other
state in which the Company may be incorporated at such time, or the Certificate
of Incorporation and By-Laws of the Company as in effect at such time or on the
date of this Agreement, whichever affords or afforded greater protection to the
Executive.
4. Place of Performance.
In connection with his employment by the Company, the Executive shall be
based at the Company's principal executive offices in Waco, Texas.
5. Offices.
If mutually agreed between the Company and the Executive, the Executive may
serve on the Board of Directors of the Company, without additional compensation.
6. Compensation.
6.1 Base Salary. During the first full year of the term of this Agreement,
the Executive shall be paid a base salary at the annual rate of $150,000,
payable in advance, in installments, and in the same manner as other employees
of the Company are paid. During the second and third full years of this
Agreement the Executive shall be paid a salary at the annual rate of $175,000
and during the fourth full year of this Agreement, the Executive shall be paid a
salary at the annual rate of $200,000. Such salary is hereinafter referred to as
the "Base Salary."
7. Expenses.
During the term of this Agreement, the Company shall reimburse the
Executive for such costs and expenses as the
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Executive may reasonably incur in connection with the performance of his duties
hereunder, including, but not limited to, expenses for entertainment, travel and
similar items. The Company will reimburse the Executive for such expenses upon
presentation of expense statements or vouchers or such other supporting
information as the Company may require, in accordance with the policies and
procedures of the Company for the reimbursement of business expenses of its
senior executive officers.
8. Participation in Employee Benefit Plans.
During the term of his employment hereunder, the Executive shall have the
right, but only to the extent provided in any such plan, to receive or
participate in all benefits and plans which the Company may from time to time
institute during such period for its employees and for which the Executive is
eligible.
9. Participation in Medical Plan.
During the term of his employment hereunder, the Executive shall be
entitled to participate in the current or any future medical plan of the Company
to the extent provided in such plan.
10. Vacations, Holidays and Sick Leave.
The Executive will be entitled to four (4) weeks paid vacation and the
number of paid holidays, and sick leave days in each calendar year as are
determined by the Company from time to time (prorated, in any calendar year
during which the Executive is employed under this Agreement for less than the
entire such year, in accordance with the number of days in such calendar year
during which he is so employed). Such vacation may be taken in the Executive's
discretion, and at such time or times as are not inconsistent with the
reasonable business needs of the Company. Vacation time may not be carried over
from year to year.
11. Insurability; Right to Insure.
During the continuance of the Executive's employment hereunder, the Company
shall have the right to maintain term life insurance in its own name covering
the Executive's life in such amount as shall be determined by the Company, for a
term ending on the termination date of this Agreement. The Executive shall aid
in the procuring of such insurance by submitting to the required medical
examinations, if any, and by filling out, executing and delivering such
applications and other instruments in writing as may be reasonably required by
an insurance company or companies to which application or applications for
insurance may be made by or for the Company.
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12. Termination.
The Executive's employment under this Agreement may be terminated without
any breach of this Agreement only on the following circumstances:
12.1 Death. The Executive's employment under this Agreement shall terminate
upon his death.
12.2 Disability. If, as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall have been absent from his duties
under this Agreement for 90 calendar days during any calendar year, the Company
may terminate the Executive's employment under this Agreement.
12.3 Cause. The Company may terminate the Executive's employment under this
Agreement for Cause. For purposes of this Agreement, the Company shall have
"Cause" to terminate the Executive's employment under this Agreement upon (a)
the failure by the Executive to perform his duties under this Agreement (other
than any such failure resulting from the Executive's incapacity due to physical
or mental illness) after demand for performance is delivered by the Company, in
writing, identifying the manner in which the Company believes the Executive has
not performed his duties and the Executive fails to perform as required within
15 days after such demand is made, (b) the engaging by the Executive in
misconduct (including embezzlement and criminal fraud) which is injurious to the
Company, monetarily or otherwise or (c) the indictment of the Executive of a
crime involving moral turpitude or dishonesty.
12.4 Termination by the Executive for Good Reason or Because of Ill health.
The Executive may terminate his employment under this Agreement (a) for Good
Reason (as hereinafter defined), or (b) if his health should become impaired to
any extent that makes the continued performance of his duties under this
Agreement hazardous to his physical or mental health or his life, provided that,
in the latter case, the Executive shall have furnished the Company with a
written statement from a qualified doctor to such effect and provided, further,
that at the Company's request and expense the Executive shall submit to an
examination by a doctor selected by the Company and such doctor shall have
concurred in the conclusion of the Executive's doctor.
12.4.1 Good Reason. For purposes of this Agreement, "Good Reason" shall
mean the failure by the Company to comply with its material obligations and
agreements contained in this Agreement including, without limitation, the
relocation of the Executive's workplace to more than forty (40) miles from its
current location or requests by the Company that the Executive engage in illegal
conduct. With respect to the matters set forth
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in this paragraph, the Executive must give the Company 30 days prior written
notice of his intent to terminate this Agreement as a result of any breach or
alleged breach of the applicable provision and the Company shall have the right
to cure any such breach or alleged breach within such 30 day period.
13. Notice of Termination.
Any termination of the Executive's employment by the Company or by the
Executive (other than termination by reason of the Executive's death) shall be
communicated by written Notice of Termination to the other party of this
Agreement. For purposes of this Agreement, a "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 termination of the Executive's
employment under the provision so indicated.
14. Date of Termination.
The "Date of Termination" shall mean (a) if the Executive's employment is
terminated by his death, the date of this death, (b) if the Executive's
employment is terminated pursuant to Paragraph 12.2 above, the date on which the
Notice of Termination is given, (c) if the Executive's employment is terminated
pursuant to Paragraph 12.3 above, the date specified in the Notice of
Termination after the expiration of any cure periods and (d) if the Executive's
employment is terminated for any other reason, the date on which a Notice of
Termination is given after the expiration of any cure periods.
15. Compensation Upon Termination or During Disability
(a) If the Executive's employment shall be terminated by reason of his
death, the Company shall pay to such person as he shall designate in notice
filed with the Company, or, if no such person shall be designated, to his estate
as a lump sum death benefit, his full salary to the date of his death in
addition to any payments the Executive's spouse, beneficiaries or estate may be
entitled to receive pursuant to any pension or employee benefit plan or life
insurance policy or similar plan or policy then maintained by the Company, and
such payments shall , assuming the Company is in compliance with the provisions
of this Agreement, fully discharge the Company's obligations with respect to
this Agreement.
(b) During any period that the Executive fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness, the
Executive shall continue to receive his Base Salary until the Executive's
employment is terminated pursuant to Paragraph 12.2 of this Agreement, or until
the Executive terminates his employment pursuant to Paragraph
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12.4(b) of this Agreement, whichever first occurs, less, in each case, any
disability payments otherwise payable by or pursuant to plans provided by the
Company ("Disability Payments"). The Executive shall provide consulting services
to the Company during the period that he is receiving payments pursuant to this
Paragraph 15(b).
(c) If the Executive's employment shall be terminated for Cause, the
Company shall pay the Executive his Base Salary through the Date of Termination,
at the rate in effect at the time Notice of Termination is given, and the
Company shall, have no further obligation with respect to this Agreement.
(d) If (A) in breach of this Agreement, the Company shall terminate the
Executive's employment other than pursuant to Paragraphs 12.2 or 12.3 hereof (it
being understood that a purported termination pursuant to Paragraphs 12.2 or
12.3 hereof which is disputed and finally determined not to have been proper
shall be a termination by the Company in breach of this Agreement), and/or (B)
the Executive shall terminate his employment for Good Reason, then the Company
shall pay to the Executive his Base Salary through the Date of Termination at
the rate in effect at the time Notice of Termination is given and through the
date of the expiration of the initial term of this Agreement payable in
accordance with the Company's normal payroll policies in full satisfaction of
the Company's obligation to the Executive hereunder.
16. Stock Options. Simultaneous with the execution hereof, the Company
shall cause Natual Earth Technologies, Inc. ("NET") to issue to the Executive
options to purchase up to 100,000 shares of NET's common stock at an exercise
price equal to the closing price of the NET Common Stock on the date hereof;
such options shall be exercisable as follows: 50,000 shares after the first
anniversary of the date of this Agreement; up to 75,000 shares after the second
anniversary of the date of this Agreement; up to 87,500 shares after the third
anniversary of the date of this Agreement, and up to 100,000 shares after the
fourth anniversary of the date of the Agreement.
17. Miscellaneous Provisions.
17.1 Execution in Counterparts. This Agreement may be executed by the
parties in one or more counterparts, each of which shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been
signed by each of the parties hereto and delivered to each of the other parties
hereto.
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17.2 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given or
made as of the date delivered or mailed if delivered personally or mailed by
registered or certified mail, postage prepaid, return receipt requested, as
follows:
If to Company, to: c/o Natural Earth Technologies,
Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Copy to: Tenzer, Greenblatt, Fallon & Xxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to Executive, to: 000 Xxxxxx Xxxxx
Xxxx, Xxxxx 00000
or to such other address as either party hereto shall have designated by like
notice to the other party hereto (except that a notice of change of address
shall only be effective upon receipt).
17.3 Amendments. This Agreement may only be amended by a written instrument
executed by each of the parties hereto.
17.4 Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings of the parties hereto, oral and written,
with respect to the subject matter hereof.
17.5 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
17.6 Binding Effect; Benefits. Employee may not delegate his duties or
assign his rights hereunder. This Agreement shall inure to the benefit of, and
be binding upon, the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns.
17.7 Waiver, etc. The failure of either of the parties hereto to at any
time enforce any of the provisions of this Agreement shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this
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Agreement or any provision hereof or the right of either of the parties hereto
to thereafter enforce each and every provision of this Agreement. No waiver of
any breach of any of the provisions of this Agreement shall be effective unless
set forth in a written instrument executed by the party against whom or which
enforcement of such waiver is sought; and no waiver of any such breach shall be
construed or deemed to be a waiver of any other or subsequent breach.
17.8 Records. Upon the termination of the Executive's employment for any
reason whatsoever, all documents, records, notebooks and other materials which
refer or relate to any aspect of the business of the Company or any of its
parent, subsidiary or affiliated corporations, which are in the possession of
the Executive including all copies thereof, shall be promptly returned to the
Company.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.
EASY GARDENER ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: VP
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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