EMPLOYMENT AGREEMENT
EXHIBIT
10.37
This Employment Agreement (“Agreement”)
is entered into between Xxxxx X. Xxxxxxx (“Executive”), an individual, and
Sionix, Inc. (“Sionix”), a Nevada corporation, effective December 15, 2010
(“Effective Date”). Sionix and Executive wish to memorialize the
terms on which Executive is employed by Sionix, as described in this
Agreement.
1. Title
and Duties.
1.1 Title. Executive
shall be employed as the Chief Executive Officer of Sionix.
1.2 Duties. Subject
to the direction and supervision of the Board of Directors, Executive shall have
the general powers and duties of supervision and management usually vested in
the Chief Executive Officer of a corporation.
2. Compensation
2.1 Salary. Executive’s
salary will be $180,000 per year, less applicable tax and other customary
payroll withholdings and deductions. Executive’s salary will be
payable every two (2) weeks or twice per month, on such basis as Sionix’ other
salaried personnel generally are paid.
2.2 Performance Bonus.
Executive will be eligible to participate in a senior executive bonus plan,
providing an opportunity for Executive to earn up to an additional 50% of his
salary amount as a bonus, to be adopted by the Board and for which other senior
executives are similarly eligible. Such bonuses will be paid 50% in cash and 50%
in common stock using a Volume Weighted Average Price (“VWAP”) for the period of
service under which the task was accomplished, upon the achievement of the
following objectives for the 2010 fiscal year:
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Filing
of Restatements for all prior periods
(20%)
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All
Form 10-Qs and Form 10-K in 2010 filed timely
(20%)
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Proxy
– filed and approved (20%)
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Company
achieving booked revenue of $5m in 2010
(20%)
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Executive
completing Calendar 2010 in the position defined in this agreement
(20%)
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2.3 Benefits. Subject
to the satisfaction of any general eligibility criteria, Executive will be
permitted to participate in such benefits as Sionix offers to other senior
executive officers, subject to the terms of the applicable benefit
plan. Such benefits may include, for example, life, health, dental,
accident, disability, or other insurance programs; pension, profit-sharing,
401(k), savings, or other retirement programs; but Sionix is not obligated by
this Agreement to adopt or maintain any particular benefit
programs. Executive shall be entitled to four (4) weeks of vacation
per year, exclusive of Sionix holidays.
2.4 Expense
Reimbursement. Sionix will pay directly or advance funds to or
reimburse Executive for reasonable travel and other business expenses incurred
by him in connection with the performance of services under this Agreement in
accordance with Sionix’ general policies applicable to its other senior
executives, as those policies may be amended from time to time, upon
presentation of expense statements or vouchers or such other supporting
information as Sionix may reasonably request.
2.5 Audit Committee
Review. Executive agrees that if the Company’s cash or cash
equivalents fall below $50,000 at any time, then the Audit Committee of the
Board of Directors may, at its discretion, exercise its right to pre-approve
cash disbursements of the Company.
2.6 Equity
Compensation: Sionix shall grant to Executive as compensation for his services
an option to purchase 400,000 shares of its Common Stock, at a price of $0.15
per share (the “Signing Option”), and for the first year will grant an
additional option to purchase 400,000 shares at the beginning of each fiscal
quarter at a price equal to the trailing VWAP of the Company’s common stock as
quoted on the OTCBB market, but in any event no less than $0.15 per share
(“Quarterly Options”, and collectively the “Options”). All shares
with respect to the Options will vest immediately upon
receipt. Thereafter, the Board will review the Equity compensation to
the Executive. The detailed terms and provisions of the Options shall
be governed by a definitive stock option agreement which will include all of the
terms outlined in this Section 4, along with additional terms that are in the
Company’s standard stock option agreement. Once that stock option
agreement has been executed by both Sionix and Executive, its terms and those of
the Sionix’ stock option plan under which the Option is granted, shall control
in place of this Section 4.
2.7 Ordinary Vesting
Schedule. The Options described in Section 2.2 will vest immediately upon
receipt by the Executive.
3. Term
and Termination of Employment
3.1 Term. The
initial term of Executive’s employment will be for three (3) years from the
Effective Date. Unless Sionix gives written notice to Executive not
less than six (6) months prior to the expiration of the employment term,
commencing on the date six (6) months prior to such scheduled expiration, the
duration of the employment term shall be extended an additional day for each day
that passes, so that at any time, unless Sionix has given written notice of
termination, there will be not less than six (6) months remaining in the
employment term.
3.2 Early Termination Without
Cause. Notwithstanding Section 3.1, Sionix may terminate
employment under this Agreement at any time, without Cause, provided that it
continues nonetheless to compensate Executive for a
period of
six (6) months following such termination, with salary and benefits
under Sections 2.1 and 2.3. Executive shall also be entitled to
reimbursement of otherwise allowable expenses incurred or committed prior to the
date of termination.
3.3 Early Termination With
Cause. Notwithstanding Section 3.1 and Section 3.2, Sionix may
terminate employment under this Agreement at any time, for Cause, in which case
Executive shall be entitled to no additional cash compensation other than salary
and vacation pay accrued through the date of termination, and reimbursement of
otherwise allowable expenses incurred or committed prior to the date of
termination.
3.4 Death. The
term of employment created by this Agreement shall automatically terminate upon
the death of Executive. Upon termination due to death, Sionix shall pay to
Executive’s devisee, legatee, or if there is no such designee, to his estate,
the salary, vacation pay and expense reimbursement accrued prior to death and
the base pay and (to the extent eligible) benefits under Sections 2.1 and 2.3
that would have been payable for a period of six (6) months following
death. The devisee, legatee, or estate shall also be entitled to
reimbursement of otherwise allowable expenses incurred or committed prior to the
date of death.
3.5 Resignation Without Good
Reason. Executive may resign at any time, but will use
reasonable efforts to give not less than thirty (30) days prior notice of such
resignation to Sionix. Upon resignation, Executive shall be entitled
to no cash compensation other than salary and vacation pay accrued through the
effective date of resignation, and reimbursement of otherwise allowable expenses
incurred prior to the effective date of the resignation, or committed prior to
the date that such resignation is tendered.
3.6 Resignation from Board Upon
Dismissal. If a majority of the Board of Directors votes to
terminate the Executive’s employment for any reason, the Executive agrees to
simultaneously tender his resignation from the Board of Directors.
4. Company Location.
Sionix'
current headquarters is located in Anaheim, California. From time to
time it is understood that the headquarters location might change. The executive
team will be expected to spend significant amounts of time meeting at that
headquarters, regardless of place of residence. Executive will not be
required to relocate his residence as a condition of
employment. Should Sionix relocate further than fifty (50) miles from
Executive’s residence, business travel for attendance at Sionix meetings will be
at the expense of Sionix.
5. Indemnification
and Insurance.
5.1 Indemnification.
Sionix will enter into a customary form of Officer Indemnification Agreement
with Executive.
5.2 Insurance. Sionix
will use commercially reasonable efforts to procure and maintain prudent level
of Officer Liability Insurance coverage for Executive.
6. Definitions
6.1 Cause. “Cause” will
exist if Sionix terminates Executive’s employment for any of the following
reasons, as determined by unanimous decision of those members of the Board other
than Executive:
(a) Executive
willfully fails to substantially perform his duties or willfully acts in a
manner contrary to direction from the Board of Directors, and such willful
failure or action is not remedied within ten (10) business days after written
notice from the the Board of Directors, which written notice shall
state that failure to remedy such conduct may result in an involuntary
termination for Cause;
(b) Executive
engages in willful and serious misconduct that causes material injury to Sionix;
or
(c) Executive
is convicted of or enters a plea of guilty or nolo contendere to a
felony.
6.2 Good Reason. “Good
Reason” means: (a) a decrease in Executive’s base salary (other than as part of
a cost-cutting effort that proportionately affects other senior executive
officers and is unanimously approved by the Board of Directors, including
Executive); or (b) loss of the title of Chief Executive Officer.
7. Miscellaneous
7.1 Notices. All notices, requests,
and other communications to any party provided for, under, or made in connection
with this Agreement must be in writing and will be effective on the sooner of
delivery to, if by personal delivery, or actual receipt by, if by prepaid
registered mail, return receipt requested, each of the appropriate
recipients.
If to
Executive:
Xxxxx X.
Xxxxxxx
0000 X.
00xx
Xxxxxx
Xxxxxxx,
XX 00000
If to
Sionix:
Board of
Directors
Sionix,
Inc.
0000
Xxxxx Xxxxx
Xxxxxxx, XX 0xx7.2 Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to any
conflict of law principle that might permit or require the application of some
other law.
7.3 Integrated Agreement.
This Agreement, along with the definitive stock option agreement referred to in
Section 4.1, when executed by the parties hereafter, constitutes the entire
agreement between the parties with respect to their subject matter and merges
and supersedes all prior discussions, agreements, and understandings of every
kind and nature between the parties.
7.4 Amendments and
Waivers. This Agreement may not be modified, amended, or terminated,
except in writing, signed by both parties. Either party may waive compliance by
the other party with any provision of this Agreement only by an instrument in
writing similarly executed, provided, however that such waiver shall not operate
as a waiver of, or estoppel with respect to, any other or subsequent
failure.
[Signature
Page Follows]
IN
WITNESS HEREOF, Executive has signed this Agreement, and Sionix has caused this
Agreement to be signed by its authorized officer to take effect as of the
Effective Date.
________________________
XXXXX X.
XXXXXXX
SIONIX,
INC.
By: ______________________________________
Name: ____________________________________
Title: ____________________________________
