AGREEMENT OF EMPLOYMENT
THIS AGREEMENT, effective as of October 1, 1995, is entered into by and
between ASPEN CONSULTING COMPANIES, INC., a Colorado corporation ("Employer"), a
wholly owned subsidiary of ECO SOIL SYSTEMS, INC., a Nebraska corporation
("ECO") and XXXX X. XXXXX (the "Employee"), with respect to the following facts:
RECITALS
A. Employer is a California corporation engaged in the general business
of turf and crop maintenance products, sales and service.
B. Employee is the originator of the Employer and is currently being
employed to act as the Chief Executive Officer and Chief Operating Officer for
the Employer.
C. Employer desires assurance of the continued association and services
of Employee in order to retain his experience, skills, abilities, background and
knowledge, and is therefore willing to engage his services on the terms and
conditions set forth below.
D. Employee desires to be employed by Employer and is willing to do so
on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows.
COVENANTS
1. Employment
The Employer hereby employs Employee and Employee accepts employment
with Employer pursuant to the terms and provisions of this Agreement.
2. Effective Date
The effective date of this Employment Agreement shall be as of the date
first written above.
3. Term
Said employment shall continue until September 30, 1999, and from year
to year thereafter, unless terminated earlier under the provisions of Paragraph
18.
a. Any change in the term of this Agreement shall be reflected by a
written endorsement attached to this Agreement and signed by Employee and a duly
authorized officer of Employer.
4. Title
Employee's title during the term of employment shall be "Chief
Executive Officer" and "Chief Operating Officer".
5. Duties of Employee
The duties of the Employee during the term of this Agreement are to
perform those duties ordinarily and necessarily performed by a Chief Executive
Officer and Chief Operating Officer as well as those duties deemed necessary and
appropriate by the Board of Directors of Employer or ECO. In addition, Employee
shall serve as a member of ECO's executive management committee.
6. Matters Requiring Consent of Board of Directors
The Employee shall not, without specific approval of the Board of
Directors of Employer, or its President, do or contract to do any of the
following:
a. Borrow on behalf of Employer sums exceeding $2,500.
b. Purchase capital equipment or make expenditures for amounts in
excess of the amounts budgeted by the Board of Directors.
c. Do any act, except in the exercise of his best judgment, which would
or could subject Employer to liability.
7. Devotion to Employer's Business
Employee shall devote all of his time toward the satisfactory
performance of his duties for Employer.
8. Competitive Activities
During the term of this Agreement and for a period of one (1) year
after its termination the Employee shall not, directly or indirectly, either as
an Employee, Employer, Consultant, Agent, Principal, Partner, Stockholder,
Corporate officer, Director, or in any other individual or representative
capacity, engage or participate in any business that is in competition in any
manner with the business of the Employer or ECO. Such agreement not to compete
shall include such activities in any country, state or county, in which Employer
or ECO conducts business.
9. Trade Secrets
The parties acknowledge and agree that during the term of this
Agreement Employee shall have access to and become acquainted with information
concerning operations and products of Employer and ECO and that such information
constitutes Employer's trade secrets. The Employee specifically agrees that he
shall not misuse, misappropriate, or disclose any such trade secrets, directly
or indirectly, to any other person or use them in any way during the term of
this Agreement or at any time thereafter.
10. Base Compensation
The compensation to be paid to Employee during the term shall be as
follows:
a. For the employment years beginning October 1, 1995, and ending
September 30, 1999, Employee shall receive compensation of Ninety-Six Thousand
Dollars ($96,000), unless increased by the Employer at its sole discretion,
commencing with the first payment on October 15 of each such year and ending
with the last payment on September 15 of each year. Employee shall receive equal
monthly installments of Eight Thousand Dollars ($8,000). The monthly
installments shall be payable one-half (1/2) on the first day of each month and
one-half (1/2) on the fifteenth day of each month.
b. Any change in the base compensation shall be reflected by a written
endorsement attached to this Agreement and signed by Employee and a duly
authorized officer of Employer.
11. Incentive Compensation
Employee shall be entitled to incentive compensation as follows:
a. Stock Incentive Program. Employee shall be entitled to participate
in Eco's stock incentive program and may do so in accordance with the terms and
conditions spelled out in that certain Non-qualified Stock Option Plan effective
October 1, 1995, a copy of which is attached hereto as Exhibit "A" and
incorporated herein by this reference.
b. Performance Bonus 1995. In an effort to encourage the peak
performance of Employee, to the extent that the pre-tax net profit of Employer,
determined in accordance with Generally Accepted Accounting Principals
(excluding performance bonuses), which can be passed up to Eco on its
consolidated tax return for the period beginning on November 1, 1994 and ending
on December 31, 1995, is in excess of Eighty Thousand Dollars ($80,000),
Employer shall pay Employee a one time bonus of Fifty Thousand Dollars
($50,000). Such bonus shall be made in twelve equal monthly installments of Four
Thousand One Hundred Sixty-Six and 67/100 Dollars ($4,166.67) payable fifteen
days after Aspen has delivered its year end 1995 financial statements to Eco.
c. Performance Bonus 1996. In an effort to encourage the peak
performance of Employee, to the extent that the pre-tax net profit of Employer,
determined in accordance with Generally Accepted Accounting Principals
(excluding performance bonuses), which can be passed up to Eco on its
consolidated tax return for its year ending December 31, 1996, is in excess of
One Hundred Ten Thousand Dollars ($110,000), Employer shall pay to Employee a
one time bonus of One Hundred Fifty Thousand Dollars ($150,000). Such bonus
shall be made in one lump sum payment fifteen days after Aspen has delivered its
year end 1996 financial statements to Eco.
12. Business Expenses
The Employer shall promptly reimburse Employee for all reasonable
business expenses within its stated annual budget and for all other preapproved
business expenses incurred by the Employee on behalf of the Employer.
13. Facilities
The Employer shall provide the Employee with an office consistent with
that which Employee had prior to the merger of Employer with ECO, appropriate
office equipment, supplies, stenographic and other employee services, and all
other facilities and services suitable to Employee's position and necessary and
customary for the performance of his duties.
14. Medical Insurance
Employer agrees to provide Employee with suitable medical insurance
commensurate with what Employee maintained for himself just prior to entering
into this Agreement.
15. Life Insurance
To the extent Employee can reasonably pass the required physical
without creating an unreasonable premium, Employer shall provide Employee with
term life insurance with a face amount of One Million Dollars ($1,000,000)
designating the spouse of Employee as the beneficiary.
16. Vacations
The Employee shall be entitled to three (3) weeks vacation time for his
first two (2) years of employment without loss of compensation. For years
beginning October 1, 1997 and October 1, 1998, Employee shall be entitled to
four (4) weeks vacation without loss of compensation. The Employee may be absent
from his employment for vacation at such time or times as the Board of Directors
shall approve. If the Employee is unable, for any reason, to take the total
amount of vacation time authorized during any year, he may accrue that time or
may, in his discretion, receive cash payment in an amount equal to the amount of
annual salary attributable to that period of time.
17. Car Allowance
Employer shall provide Employee with a car allowance of Four Hundred
Sixty Dollars ($460) per month, the agreed upon value of obtaining the use of a
suitable automobile. The Employee shall procure his own automobile and the
Employer shall be responsible for obtaining adequate insurance coverage for the
automobile and for its maintenance.
18. Termination
This Agreement may be terminated in the following manner:
a. For Cause
The Employer may terminate this Agreement upon thirty (30) days written
notice if Employee willfully breaches or habitually neglects the duties he is
required to perform or commits such acts of dishonesty, fraud, misrepresentation
or other acts of moral turpitude as would prevent the effective performance of
his duties.
b. Without Cause
This Agreement may be terminated without cause upon thirty (30) days
written notice to the Employee. If Employee is terminated without cause, he
shall be entitled to severance pay equal to six (6) months of pay.
c. By Employee
The Employee may terminate this Agreement upon giving sixty (60) days
written notice to the Board of Directors.
d. Death or Disability
In the event of Employee's death or on the continuing incapacitating
disability of the Employee for a period in excess of one (1) year during the
term of this Agreement, it shall terminate immediately.
19. Notices
All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given on the
date of service if served personally to the party to whom notice is to be given,
or on the third day after mailing if mailed to the party to whom notice is to be
given, by first class mail, registered or certified, postage prepaid, and
properly addressed as follows:
To Employer: ASPEN CONSULTING COMPANIES, INC.
c/o Xxxxxxx X. Xxxxx
00000 Xxxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
To Employee: Xxxx X. Xxxxx
00000 X. Xxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
20. Arbitration
Any controversy between the Employer and Employee regarding the
construction or application of any of the terms, provisions, or conditions of
this Agreement shall, upon the written request of either party served on the
other, be submitted to arbitration in accordance with the provisions of the
California Arbitration Act.
21. Entire Agreement
This Agreement supersedes any and all other agreements, either oral or
in writing, between the parties hereto with respect to provisions of this
Agreement and contains all of the covenants and agreements between the parties
whatsoever. Each party to this Agreement acknowledges that they have read and
understood this Agreement and that no representations, inducements, promises, or
agreements, oral or otherwise, have been made by either party or anyone acting
on behalf of either party, which are not embodied herein, and that no agreement,
statement, or promise not contained in this Agreement shall be valid or binding.
22. Modifications
Any modification of this Agreement will be effective only if it is in
writing and signed by all of the parties.
23. Severability
Should any provision in this Agreement be declared invalid, void or
unenforceable, then such portion shall be deemed to be severable from this
instrument and shall not affect the remainder thereof.
24. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of California.
25. Binding Upon Successors
This instrument shall be binding upon and inure to the benefit of the
personal and legal representatives, successors and assigns, except as restricted
in Paragraph 26 below, of the parties hereto and also upon the heirs, executors
and administrators of the individual persons executing this instrument.
26. Non-Assignability Clause
It is agreed that neither Employee nor any other designee or successor,
other than the estate of Employee, shall have any right to commute, sell,
assign, transfer, encumber or otherwise convey the right to receive any payments
hereunder, which payments and the right thereto are expressly declared to be
non-assignable and non-transferable, and any attempt to do such shall be null
and void.
27. Cumulative Rights
The various rights, options, elections, powers and remedies of a party
or parties to this instrument shall be construed as cumulative and no one of
them exclusive of any others or of any other legal or equitable remedy which
said party or parties might otherwise have in the event of breach or default in
the terms hereof, and the exercise of one right or remedy by a party or parties
shall not in any way impair his rights to any other right or remedy until all
obligations imposed on a party or parties have been performed.
28. Time
Time is of the essence of this Agreement.
29. No Waiver of Default
No waiver of default by any party or parties hereto shall be implied
from any omission by a party or parties to take any action on account of such
default if such default persists or is repeated and no express waiver shall
affect any default other than the default specified in the express waiver, and
that only for the time and to the extent therein stated. One or more waivers of
any covenant, term or condition of this instrument by a party or parties shall
not be construed to be a waiver of any subsequent breach of the same covenant,
term or condition. The consent or approval by any party or parties shall be
deemed to waive or render unnecessary the consent to or approval of said party
or parties of any subsequent or similar acts by a party or parties.
30. Attorney's Fees
If any action at law or equity is necessary to enforce the terms of
this Agreement, the prevailing party shall be entitled to reasonable attorney's
fees, costs, and necessary disbursements, in addition to any other relief to
which he or it may be entitled.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the dates below.
EMPLOYER:
ASPEN CONSULTING COMPANIES, INC.
a Colorado corporation
Date:_____________________ By: Xxxxxxx X. Xxxxx, President
EMPLOYEE:
Date:_September 30, 1995__
Xxxx X. Xxxxx
EXHIBIT "A"
ECO SOIL SYSTEMS, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT effective as of October 1, 1995, is entered into by and
between ECO SOIL SYSTEMS, INC. (the "Company"), a Nebraska corporation and XXXX
X. XXXXX (the "Employee").
WHEREAS, Employee, the Company, and Aspen CONSULTING COMPANIES, INC.
("Aspen") are parties to that certain Agreement of Employment dated of even date
herewith (the "Employment Agreement") pursuant to which the Company is granting
this Option to Employee; and
WHEREAS, consistent with the Employment Agreement, the Company wishes
to provide incentive for the Employee to perform services for Aspen and the
Company and to maximize his performance on their behalf by providing a means by
which he can benefit from the increases in the value of the Company.
NOW THEREFORE, in consideration of the foregoing premises and of the
mutual promises and covenants herein contained, the Company and the Employee
agree as follows:
1. Grant. The Company hereby grants to the Employee an option (the
"Option") to purchase shares of the Company's common stock upon the terms and
conditions set forth below. The number of shares and the Employee's eligibility
to exercise such options are as follows:
1.1 A total of Fifty Thousand (50,000) shares in increments of
Twelve Thousand Five Hundred (12,500) shares for each year of Employee's
employment for a period of four (4) years. Employee shall be entitled to
purchase such incremental shares on December 31, 1996, December 31, 1997,
December 31, 1998 and December 31, 1999, so long as Employee continues to be
employed by Aspen on such dates.
1.2 A total of One Hundred Fifty Thousand (150,000) additional
shares shall be made available to Employee in the following incremental amounts,
so long as Employee continues to be employed by Aspen at the times stated below,
and achieves the stated income objectives for Aspen for each period. Such
options shall be exercisable on the first day of the month following the month
in which the Company has had an opportunity to audit the financial statements of
Aspen for each stated period.
1.2.1 Ten Thousand (10,000) shares if the December 31, 1996
pre-tax net income of Aspen which can be passed up to the Company on its
consolidated tax return is greater than One Hundred Ten Thousand Dollars
($110,000).
1.2.2 Twenty Thousand (20,000) shares if the December 31, 1997
pre-tax net income of Aspen which can be passed up to the Company on its
consolidated tax return is greater than One Hundred Sixty Thousand Dollars
($160,000).
1.2.3 Forty Thousand (40,000) shares if the December 31, 1998
pre-tax net income of Aspen which can be passed up to the Company on its
consolidated tax return is greater than Two Hundred Seventy-Five Thousand
Dollars ($275,000).
1.2.4 Eighty Thousand (80,000) shares if the December 31, 1999
pre-tax net income of Aspen which can be passed up to the Company on its
consolidated tax return is greater than Five Hundred Thousand Dollars
($500,000).
2. Definitions. As used herein, the following terms shall have the
meanings set forth below, and where said meaning is intended, said terms shall
be capitalized:
2.1 "Options" mean the Options which are granted to Employee
hereunder.
2.2 "Stock" means the common stock of the Company.
2.3 "Subject Stock" means shares of stock acquired by the
Employee through the exercise of the Options.
3. Purchase Price. The purchase price of the stock shall be Three
Dollars ($3.00) per share.
4. Nonqualified Options. The Options shall be Nonqualified Options and
are not intended to be treated as an incentive stock option under the Internal
Revenue Code of 1986.
5. Term; Exercise. The Options will expire December 31, 2001.
6. Transferability. The Options are not transferable except by will or
the laws of descent and distribution and my be exercised during the lifetime of
the Employee only by him.
7. Death. If the Employee dies, the Options - provided that they have
become exercisable pursuant to the other provisions of this Agreement - may be
exercised by his legal representative or by a person who acquired the right to
exercise such Options by request or inheritance or by reason of the death of the
Employee.
8. Acquisition.
8.1 Acquisition. For purposes of this Section 8, an
"Acquisition" shall mean any transaction in which a majority of the Company's
assets are acquired, or in which shares of the Company's stock representing more
than a fifty percent (50%) equity interest or a fifty percent (50%) voting
interest in the Company are acquired. An Acquisition shall include any
transaction in which the foregoing results are effectuated, whether through a
purchase, merger, consolidation, liquidation and transfer of assets, or
comparable transaction.
8.2 Right to Exercise in the Event of an Acquisition. In the
event that an Acquisition occurs with respect to the Company, the Options shall
become immediately and fully exercisable by Employee.
9. Adjustment to Prevent Dilution. In the event of any change in the
outstanding shares of Stock by reason of a stock dividend or split, or any
combination, recapitalization, or reclassification, the number of unexercised
Options hereunder shall be appropriately adjusted by the Company, whose
reasonable determination shall be conclusive, provided, however, that the
Company may round fractional shares to the nearest whole share.
10. Investment Representation; Legend. The Employee represents and
agrees that all shares of common stock purchased by him under this Agreement
will be purchased for investment purposes only and not with a view to
distribution or resale within the meaning of applicable securities laws. The
Company may required that an appropriate legend be inscribed on the face of any
certificate issued under this Agreement, indicating that transfer of the shares
is restricted, and may place an appropriate stop transfer order with the
Company's transfer agent with respect to such shares. It is understood, that
pursuant to the Consulting Agreement, the Employee holds registration rights
which, in certain circumstances, may result in the restrictions of this section
not being applicable.
11. Method of Exercise. Provided that this Option has become
exercisable as provided in Sections 1, 5 or 8 hereof, the Options may be
exercised, at any time, in whole or in part, by written notice to the Company.
The notice shall be in the form attached to this Agreement and will be
accompanied by payment (in such form as the Company may specify) of the full
purchase price of the shares to be issued. The Company will issue and deliver
certificates representing the number of shares purchased under the Options,
registered in the name of the Employee (r other purchaser under paragraph 7
hereof) as soon as practicable after receipt of the notice. The Company shall
pay any issue or transfer taxes payable in connection with the issue of such
Stock, or the transfer of any Stock by Employee in payment of the exercise
price.
Employee shall pay the exercise price for any shares of Stock purchased
pursuant to the exercise of an Option by delivering to the Company (a) cash in
the amount of the exercise price, (b) certificates, a valid assignment and nay
other necessary documents of transfer assigning to the Company Employee's rights
in shares of Stock of the Company having a Fair Market Value equal to the
exercise price, or (c) a combination of (a) and (b).
12. Miscellaneous.
12.1 Shareholder Privileges. The Employee shall not possess
any right or privilege as a holder of Stock until such time as a certificate for
Stock has been issued to him.
12.2 Governing Law. This Agreement shall be construed under
and governing by the laws of the State of California.
12.3 Amendments. This Agreement shall not be amended except by
a writing duly executed by the parties hereto.
COMPANY:
ECO SOIL SYSTEMS, INC. a Nebraska
corporation
Dated:_September 30, 1995__ By: Xxxxxxx X. Xxxxxxx
President
EMPLOYEE:
Dated:_September 30, 1995__
Xxxx X. Xxxxx
