Exhibit 10(f)
EMPLOYMENT AGREEMENT
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This Employment Agreement is made and entered into effective as of the 1st
day of June, 1996, by and between DK Industries, Inc., a Colorado corporation
(the "Company"), and Xxxxx X. Xxxxxx, an individual ("Executive").
RECITALS
A. The Company desires to be assured of the association and services of
Executive for the Company.
B. Executive is willing and desires to be employed by the Company, and
the Company is willing to employ Executive, upon the terms, covenants and
conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions hereinafter set forth, the parties hereto do hereby agree as follows:
1. Employment. The Company hereby employs Executive as President of the
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Company, subject to the supervision and direction of the Company's Board of
Directors.
2. Term. The term of this Agreement shall be for a period of three (3)
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years commencing on the effective date hereof, unless terminated earlier
pursuant to Section 6 below; provided, however, that Executive's obligations in
Section 5 below shall continue in effect after such termination.
3. Compensation; Reimbursement.
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3.1 Base Salary. For all services rendered by Executive under this
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Agreement, the Company shall pay Executive a base salary of One Hundred Fifty
Thousand Dollars ($150,000.00) per annum, payable monthly in equal installments
(the "Base Salary"). The amount of the Base Salary may be increased at any time
and from time to time by the Board of Directors of the Company. No such change
shall in any way abrogate, alter, terminate or otherwise affect the other terms
of this Agreement. Notwithstanding any other provision hereof, however, prior
to the Company's consummation of the "Private Placement Financing" (as hereafter
defined), Executive's Base Salary shall be payable by the Company at the rate of
$130,000 per annum. Immediately following the consummation of such Private
Placement Financing, Executive shall receive a lump sum salary payment equal to
the difference between the Base Salary provided for under the first sentence of
this Section 3.1 from the effective date hereof to the date of the consummation
of the Private Placement Financing and the portion of the Base Salary actually
paid to Executive for such period under the provisions of the immediately
preceding sentence. Following the consummation of the Private Placement
Financing, Executive shall be entitled to receive the Base Salary in accordance
with the provisions of the first sentence of this Section 3.1. For purposes
hereof, the term "Private Placement
Financing" shall mean an offering of the stock, and/or warrants of the Company
not requiring registration under the Securities Act of 1933, as amended, that
provides the Company with proceeds (including any debt conversions) in an amount
of at least $3,000,000.
3.2 Incentive Bonus. In addition to the Base Salary, Executive shall
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be eligible for an incentive bonus ("Incentive Bonus") each year. The Incentive
Bonus shall be determined by, and at the sole discretion of, the Compensation
Committee of the Company's Board of Directors, and Executive shall have no
specific right to receive any Incentive Bonus.
3.3 Additional Benefits. In addition to the Base Salary and the
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Incentive Bonus, Executive shall be entitled to all other benefits of employment
(including without limitation health and dental benefits), provided to the
employees of GDC Enviro Solutions, Inc., an indirectly owned subsidiary of the
Company. Executive also shall be entitled to obtain, at the Company's expense,
an annual health physical examination from a physician chosen by employee;
provided, that such physician must be qualified for the provision of such
services under the existing health insurance plan that applies to Executive in
accordance with the preceding sentence. Both the Company and Executive shall be
entitled to receive the results of any such physical examination. Executive
also shall be entitled to six weeks' paid vacation time during each year of the
term hereof; provided, that unused vacation time shall only accrue and
accumulate at the rate of two-thirds of the days not utilized by Executive in a
given year. In addition, the Company shall be required to procure and maintain
a term life insurance policy on the life of Executive with a face value death
benefit of at least $225,000. Executive shall have sole discretion to designate
the beneficiary or beneficiaries of such term life insurance policy.
3.4 Moving Expenses. The Company shall pay all reasonable moving
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expenses incurred by the Executive in moving from his present address in Baton
Rouge, Louisiana, to the Denver, Colorado, area.
3.5 Reimbursement. Executive shall be reimbursed for all reasonable
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"out-of-pocket" business expenses for business travel and business entertainment
incurred in connection with the performance of his duties under this Agreement
(1) so long as such expenses constitute business deductions from taxable income
for the Company and are excludable from taxable income to the Executive under
the governing laws and regulations of the Internal Revenue Code (provided,
however, that Executive shall be entitled to full reimbursement in any case
where the Internal Revenue Service may, under Section 274(n) of the Internal
Revenue Code (or any successor provision), disallow to the Company any
percentage of meals and entertainment expenses); and (2) to the extent such
expenses do not exceed the amounts allocable for such expenses in budgets that
are approved from time to time by the Company. The reimbursement of Executive's
business expenses shall be upon monthly presentation to and approval by the
Company of valid receipts and other appropriate documentation for such expenses.
In addition, Executive shall be entitled to receive a non-accountable automobile
reimbursement expense of $500.00 per month for the use of his personal vehicle.
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3.6 Stock Options. Executive shall be entitled to, and has been
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granted, incentive stock options to acquire 200,000 shares of the Company's
Common Stock under the Company's 1996 Stock Option Plan (the "Plan") and as more
particularly evidenced by a Stock Option Agreement by and between the Company
and Executive dated as of July 10, 1996. Executive shall continue to be
eligible for additional grants of stock options under the Plan; provided, that
such grants shall be at the discretion of the Stock Option Committee as provided
in the Plan.
3.7 Tax Deferral. Executive shall be entitled to elect the deferral
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of up to 50% of any Base Salary payments or other cash payments due to Executive
under this Section 3 for tax planning purposes; provided, that any such election
must be accomplished in accordance with applicable laws and regulations and must
be evidenced by a written instrument executed by both Executive and the Company.
4. Scope of Duties.
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4.1 Assignment of Duties. Executive shall have such duties as may be
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assigned to him from time to time by the Company's Board of Directors
commensurate with his experience and responsibilities in the position for which
he is employed pursuant to Section 1 above. Such duties shall be exercised
subject to the control and supervision of the Board of Directors of the Company.
4.2 Executive's Devotion of Time. Executive hereby agrees to devote
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the majority of his time, abilities and energy to the faithful performance of
the duties assigned to him and to the promotion and forwarding of the business
affairs of the Company, and not to divert any business opportunities from the
Company to himself or to any other person or business entity.
4.3 Conflicting Activities.
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(a) Executive shall not, during the term of this Agreement, be
engaged in any other business activity without the prior consent of the Board of
Directors of the Company; provided, however, that this restriction shall not be
construed as preventing Executive from investing his personal assets in passive
investments in business entities which are not in competition with the Company
or its affiliates, or from pursuing business opportunities as permitted by
paragraph 4.3(b).
(b) Executive hereby agrees to promote and develop all business
opportunities that come to his attention relating to current or anticipated
future business of the Company, in a manner consistent with the best interests
of the Company and with his duties under this Agreement. Should Executive
discover a business opportunity that does not relate to the current or
anticipated future business of the Company, he shall first offer such
opportunity to the Company. Should the Board of Directors of the Company not
exercise its right to pursue this business opportunity within a reasonable
period of time, not to exceed sixty (60) days, then Executive may develop the
business opportunity for himself; provided, however, that such development may
in no way conflict or interfere with the duties owed by Executive to the Company
under this Agreement. Further, Executive may develop such business opportunities
only on his own time, and may not use
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any service, personnel, equipment, supplies, facility, or trade secrets of the
Company in their development. As used herein, the term "business opportunity"
shall not include business opportunities involving investment in publicly traded
stocks, bonds or other securities, or other investments of a personal nature.
5. Confidentiality of Trade Secrets and Other Materials.
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5.1 Trade Secrets. Other than in the performance of his duties
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hereunder, Executive agrees not to disclose, either during the term of his
employment by the Company or at any time thereafter, to any person, firm or
corporation any information concerning the business affairs, the trade secrets
or the customer lists or similar information of the Company. Any technique,
method, process or technology used by the Company shall be considered a "trade
secret" for the purposes of this Agreement.
5.2 Ownership of Trade Secrets; Assignment of Rights. Executive
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hereby agrees that all know-how, documents, reports, plans, proposals, marketing
and sales plans, client lists, client files and materials made by him or by the
Company are the property of the Company and shall not be used by him in any way
adverse to the Company's interests. Executive shall not (except in the normal
and usual performance of his duties) deliver, reproduce or in any way allow such
documents or things to be delivered or used by any third party without specific
direction or consent of the Board of Directors of the Company. Executive hereby
assigns to the Company any rights which he or she may have in any such trade
secret or proprietary information.
6. Termination and Severance.
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6.1 Bases for Termination.
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(a) Executive's employment hereunder may be terminated at any
time by mutual agreement of the parties.
(b) This Agreement shall automatically terminate on the last day
of the month in which Executive dies or becomes permanently incapacitated.
"Permanent incapacity" as used herein shall mean mental or physical incapacity,
or both, reasonably determined by the Company's Board of Directors based upon a
certification of such incapacity by, in the discretion of the Company's Board of
Directors, either Executive's regularly attending physician or a duly licensed
physician selected by the Company's Board of Directors, rendering Executive
unable to perform substantially all of his duties hereunder and which appears
reasonably certain to continue for at least six consecutive months without
substantial improvement. Executive shall be deemed to have "become permanently
incapacitated" on the date the Company's Board of Directors has determined that
Executive is permanently incapacitated and so notifies Executive.
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(c) Executive's employment may be terminated by the Company
"with cause," effective upon delivery of written notice to Executive given at
any time (without any necessity for prior notice) if any of the following shall
occur:
(i) failure to perform duties as prescribed by paragraph
4.1 hereof or refusal to obey written direction or instruction of the Company's
Board of Directors;
(ii) any material breach of Executive's obligations under
the provisions of this Agreement; or
(iii) any material acts or events which inhibit Executive
from fully performing his responsibilities to the Company in good faith, or
which discredit the Company, its management, products or services, such as (i) a
felony criminal conviction; (ii) any other criminal conviction involving
Executive's lack of honesty or Executive's moral turpitude; (iii) drug or
alcohol abuse; or (iv) acts of dishonesty, gross carelessness or gross
misconduct.
6.2 Payment Upon Termination.
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(a) Upon termination under paragraph 6.1, the Company shall pay
to Executive within 10 days after termination an amount equal to the sum of (1)
Executive's Base Salary accrued to the date of termination; and (2) unreimbursed
expenses accrued to the date of termination. After any such termination, the
Company shall not be obligated to compensate Executive, his estate or
representatives except for the foregoing compensation then due and owing, nor
provide the benefits to Executive described in Section 3 (except as provided by
law).
(b) In the event of termination by the Company of Executive
during the term hereof for any reason or reasons other than those set forth
under paragraph 6.1 above, Executive (i) shall be entitled to continue to
receive from the Company, for a two-year period commencing on the date of such
termination (and regardless of whether the term hereof expires prior to the end
of such two-year period), Executive's Base Salary as set forth in paragraph 3.1
above payable at the times and in the manner specified in paragraph 3.1, and
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(ii) shall be paid within 10 days after termination an amount equal to the sum
of unreimbursed expenses accrued to the date of termination. After any such
termination, the Company shall not be obligated to compensate Executive, his
estate or representative except for the foregoing compensation, nor provide the
benefits to Executive described in Paragraph 3 (except as provided by law).
6.3 Change in Control Payments.
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(a) The Company agrees that if there is a "change in control" of
the Company (as defined below) and the Executive leaves the employment of the
Company within six months following the date of such change in control (but
during the term hereof) for any reason other
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than any of the reasons set forth in paragraph 6.1 above or 6.3 below, then
Executive shall receive, in a lump sum, a cash payment in an amount equal to
Executive's then effective annual Base Salary under paragraph 3.1 above.
(b) The Company agrees that if there is a "change in control" of
the Company (as defined below) and the Executive, within six months of the date
of such change in control (but during the term hereof), terminates his
employment by the Company for "good reason" (as hereinafter defined) or is
terminated by the Company for any reason or reasons other than those reasons set
forth in paragraph 6.1 above, then Executive shall receive, in a lump sum, a
cash payment in an amount equal to twice the amount of Executive's then
effective annual Base Salary under paragraph 3.1 above. For purposes hereof,
"good reason" shall mean any of the following:
(1) a change in the Executive's status, title, position
or responsibilities (including reporting responsibilities) which, in
the Executive's reasonable judgment does not represent a promotion
from his status, title, position or responsibilities as in effect
immediately prior thereto; the assignment to the Executive of any
duties or responsibilities which, in the Executive's reasonable
judgment, are inconsistent with such status, title, position or
responsibilities; or any removal of the Executive from or failure to
reappoint or reelect him to any of such positions;
(2) a reduction by the Company in the Executive's Base
Salary as in effect on the date hereof or as the same may be increased
from time to time;
(3) the relocation of the Company's principal
executive offices to a location outside a thirty-mile radius of
Denver, Colorado or the Company's requiring the Executive to be based
at any place other than the Denver, Colorado area, except for
reasonably required travel on the Company's business which is not
materially greater than such travel requirements prior to the change
in control;
(4) the adverse and substantial alteration in the
nature and quality of the office space within which the Executive
performs his duties, including the size and location thereof, as well
as the secretarial and administrative support provided to the
Executive;
(5) the failure by the Company to continue to provide
the Executive with compensation and benefits provided for under this
Agreement or benefits substantially similar to those provided to him
under any of the employee benefit plans in which the Executive becomes
a participant, or the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits or
deprive the Executive of any material fringe benefit enjoyed by him at
the time of the change in control;
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(6) any material breach by the Company of any
provision of this Agreement; and
(7) the failure of the Company to obtain a
satisfactory agreement from any successor or assign of the Company to
assume and agree to perform this Agreement.
(c) As used herein, the term "change in control" shall mean
either:
(1) the acquisition of ownership (whether direct or
indirect) of shares in excess of 30 percent of the outstanding shares
of common stock of the Company by a person or group of persons that
theretofore did not own such 30% position, or
(2) the occurrence of any transaction relating to the
Company required to be described pursuant to the requirements of item
6(e) of schedule 14A of regulation 14A of the Securities and Exchange
Commission under the Securities and Exchange Act of 1934, or
(3) any change in the composition of the board of
directors of the Company resulting in a majority of the present
directors of the Company not constituting a majority; provided, that
in making such determination directors who were elected by, or on the
recommendation of, such present majority (or such present majority as
extended under this subparagraph 6.3(c)(3)), shall be excluded.
(d) Any amounts payable under this paragraph 6.3 shall be considered
severance pay in consideration for past services rendered and in consideration
of Executive's continued service from the date hereof to his entitlement to
those payments. If Executive receives payment under this paragraph 6.3 he shall
not be entitled to any payment under paragraph 6.2; provided, that Executive
shall be promptly paid for all Base Salary amounts and unreimbursed expenses
accrued prior to the date of termination. The Executive shall have no duty to
mitigate his damages by seeking other employment (in regard to either this
paragraph 6.3 or paragraph 6.2(b) above). Should the executive actually receive
other payments from any such other employment, the payments called for under
this paragraph 6.3 or paragraph 6.2(b) shall not be reduced or offset by any
such future earnings.
7. Injunctive Relief. The Company and Executive hereby acknowledge and
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agree that any default under Section 5 above will cause damage to the Company in
an amount difficult to ascertain. Accordingly, in addition to any other relief
to which the Company may be entitled, the Company shall be entitled to such
injunctive relief as may be ordered by any court of competent jurisdiction
including, but not limited to, an injunction restraining any violation of
Section 5 above and without the proof of actual damages.
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8. Miscellaneous.
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8.1 Transfer and Assignment. This Agreement is personal as to
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Executive and shall not be assigned or transferred by Executive without the
prior written consent of the Company. This Agreement shall be binding upon and
inure to the benefit of all of the parties hereto and their respective permitted
heirs, personal representatives, successors and assigns.
8.2 Severability. Nothing contained herein shall be construed to
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require the commission of any act contrary to law. Should there be any conflict
between any provisions hereof and any present or future statute, law, ordinance,
regulation, or other pronouncement having the force of law, the latter shall
prevail, but the provision of this Agreement affected thereby shall be curtailed
and limited only to the extent necessary to bring it within the requirements of
the law, and the remaining provisions of this Agreement shall remain in full
force and effect.
8.3 Governing Law. This Agreement is made under and shall be
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construed pursuant to the laws of the State of Colorado.
8.4 Counterparts. This Agreement may be executed in several
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counterparts and all documents so executed shall constitute one agreement,
binding on all of the parties hereto, notwithstanding that all of the parties
did not sign the original or the same counterparts.
8.5 Entire Agreement. This Agreement constitutes the entire
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agreement and understanding of the parties with respect to the subject matter
hereof and supersedes all prior oral or written agreements, arrangements, and
understandings with respect thereto, including without limitation that Contract
of Employment between the Executive and GDC Engineering, Inc. (an indirect
subsidiary of the Company that has subsequently changed its name to GDC Enviro
Solutions, Inc.) dated December 16, 1996, and all amendments thereof.
Notwithstanding the foregoing, it is recognized that Executive is serving as an
officer and a director of various directly and indirectly owned subsidiaries of
the Company, and it is anticipated that he shall continue such service, at the
discretion of the Company, during the term of this Agreement. No
representation, promise, inducement, statement or intention has been made by any
party hereto that is not embodied herein, and no party shall be bound by or
liable for any alleged representation, promise, inducement, or statement not so
set forth herein.
8.6 Modification. This Agreement may be modified, amended,
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superseded, or canceled, and any of the terms, covenants, representations,
warranties or conditions hereof may be waived, only by a written instrument
executed by the party or parties to be bound by any such modification,
amendment, supersession, cancellation, or waiver.
8.7 Attorneys' Fees and Costs. In the event of any dispute arising
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out of the subject matter of this Agreement, the prevailing party shall recover,
in addition to any other damages assessed, its attorneys' fees and court costs
incurred in litigating or otherwise settling or resolving such dispute whether
or not an action is brought or prosecuted to judgment. In construing this
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Agreement, none of the parties hereto shall have any term or provision construed
against such party solely by reason of such party having drafted the same.
8.8 Waiver. The waiver by either of the parties, express or implied,
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of any right under this Agreement or any failure to perform under this Agreement
by the other party, shall not constitute or be deemed as a waiver of any other
right under this Agreement or of any other failure to perform under this
Agreement by the other party, whether of a similar or dissimilar nature.
8.9 Cumulative Remedies. Each and all of the several rights and
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remedies provided in this Agreement, or by law or in equity, shall be
cumulative, and no one of them shall be exclusive of any other right or remedy,
and the exercise of any one of such rights or remedies shall not be deemed a
waiver of, or an election to exercise, any other such right or remedy.
8.1 Headings. The section and other headings contained in this
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Agreement are for reference purposes only and shall not in any way affect the
meaning and interpretation of this Agreement.
8.1 Notices. Any notice under this Agreement must be in writing, may
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be telecopied, sent by express 24-hour guaranteed courier, or hand-delivered, or
may be served by depositing the same in the United States mail, addressed to the
party to be notified, postage-prepaid and registered or certified with a return
receipt requested. The addresses of the parties for the receipt of notice shall
be as follows:
If to the Company:
DK Industries, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
If to the Executive:
Xxxxx X. Xxxxxx
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Each notice given by registered or certified mail shall be deemed delivered and
effective on the date of delivery as shown on the return receipt, and each
notice delivered in any other manner shall be deemed to be effective as of the
time of actual delivery thereof. Each party may change its address for notice
by giving notice thereof in the manner provided above.
8.12 Survival. Any provision of this Agreement which imposes an
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obligation after termination or expiration of this Agreement shall survive the
termination or expiration of this Agreement and be binding on Executive and the
Company.
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8.13 Right of Set-Off. Upon termination or expiration of this
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Agreement, the Company shall have the right to set-off against the amounts due
Executive hereunder the amount of any outstanding loan or advance from the
Company to Executive.
8.14 Effective Date. This Agreement shall become effective as of the
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date set forth on page 1 when signed by Executive and the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed as of the date first set forth above.
EXECUTIVE:
By:/s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
COMPANY:
DK INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
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Title: Vice President
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AGREED TO AND ACCEPTED AS
TO SECTION 8.5 ABOVE:
GDC ENVIRO SOLUTIONS, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name : Xxxxx X. Xxxxxx
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Title: _________________________
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