EX 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of the day of June 30, 2004, by and
between Xxxxxxx Xxxxxx ("Employee") and RECLAMATION CONSULTING AND APPLICATIONS,
INC., a Colorado Corporation with its principal place of business at 00000
Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxxxx 00000 ("Company").
1. RECITALS:
1.1 The company is in the business of manufacturing and marketing asphalt,
cement and related products release agents in liquid form that are non-toxic,
non-explosive and environmentally compatible, the formulation and ingredients
of which are confidential.
1.2 Employee has experience in the businesses conducted and to be conducted
by the Employer, or in related businesses, and desires to be employed by the
Company, and the Company desires to employee the Employee, on the terms and
conditions specified below
2. COVENANTS:
In consideration of the recitals and mutual covenants contained herein, the
parties agree that:
2.1 Employment. The Company will employ Employee to serve as Executive
Vice President & Chief Financial Officer with the duties listed and defined
by the Company or the Board, in connection with the Company's operations and
Employee does hereby accept such employment, all subject to the terms and
provisions of this Agreement. Employee represents that he is legally free
to enter into this agreement and that it does not conflict with any of his
duties or obligations to any other person and that he is not in any way
restricted by any duties or obligations to any other person from contributing
his knowledge and talents to the Company in performing his duties hereunder.
2.2 Term. This Agreement shall have an initial five-year term, which shall
be automatically renewed each year thereafter unless the Company, upon thirty
(30) days prior notice notifies Employee of its intent not to renew the
Agreement. Notwithstanding the foregoing, the Company or the Employee may
at any time terminate this Agreement and the employment relationship on
thirty (30) days prior notice to the other, with the consequences hereinafter
set forth.
2.3 Compensation. During the first twelve months of employment, the
Company agrees to compensate Employee (from the commencement of this
agreement) at the rate of not less than $135,200 per year base compensation
for the first year of employment. Thereafter, Employee's annual compensation
shall be increased by 20% on each anniversary date of this agreement, provided
that the Company reaches a minimum net profit of $250,000. In no event shall
Employee's minimum base compensation be reduced below $135,200 per year.
Such compensation shall be payable monthly or on such more frequent basis
as the Company may establish.
2.4 Bonuses. An annual bonus will be paid to Employee, the amount of
which is based upon the Company's net profits and shall be structured as
follows:
RCAI % of Salary Salary Bonus
Net Profit Paid as Bonus Amount Amount
$250,000 10% $135,200 $13,500
$500,000 20% $135,200 $27,000
$750,000 30% $135,200 $40,500
$1,000,000 40% $135,200 $54,000
$1,250,000 50% $135,200 $67,500
$1,500,000 60% $135,200 $81,000
$1,750,000 70% $135,200 $94,500
$2,000,000 80% $135,200 $108,000
$2,250,000 90% $135,200 $121,000
$2,500,000 100% $135,200 $135,000
RCAI % of Salary Salary Bonus
Net Profit Paid as Bonus Amount Amount
$250,000 10% $162,240 $16,224
$500,000 20% $162,240 $32,448
$750,000 30% $162,240 $48,672
$1,000,000 40% $162,240 $64,898
$1,250,000 50% $162,240 $81,120
$1,500,000 60% $162,240 $97,344
$1,750,000 70% $162,240 $113,568
$2,000,000 80% $162,240 $129,792
$2,250,000 90% $162,240 $146,016
$2,500,000 100% $162,240 $162,240
RCAI % of Salary Salary Bonus
Net Profit Paid as Bonus Amount Amount
$250,000 10% $194,688 $19,468.80
$500,000 20% $194,688 $38,937.60
$750,000 30% $194,688 $58,406.40
$1,000,000 40% $194,688 $77,857.20
$1,250,000 50% $194,688 $97,344
$1,500,000 60% $194,688 $116,812.80
$1,750,000 70% $194,688 $136,281.60
$2,000,000 80% $194,688 $155,750.40
$2,250,000 90% $194,688 $175,219.20
$2,500,000 100% $194,688 $194,688
June 30, 2006 through June 30, 2007
RCAI % of Salary Salary Bonus
Net Profit Paid as Bonus Amount Amount
$250,000 10% $233,625.60 $23,362.56
$500,000 20% $233,625.60 $46,727.12
$750,000 30% $233,625.60 $70,087.68
$1,000,000 40% $233,625.60 $93,450.24
$1,250,000 50% $233,625.60 $116,812.80
$1,500,000 60% $233,625.60 $140,175.36
$1,750,000 70% $233,625.60 $163,537.92
$2,000,000 80% $233,625.60 $186,900.48
$2,250,000 90% $233,625.60 $210,263.04
$2,500,000 100% $233,625.60 $233,625.60
RCAI % of Salary Salary Bonus
Net Profit Paid as Bonus Amount Amount
$250,000 10% $280,350.72 $28,035.07
$500,000 20% $280,350.72 $56,070.14
$750,000 30% $280,350.72 $84,105.21
$1,000,000 40% $280,350.72 $112,140.28
$1,250,000 50% $280,350.72 $140,175.36
$1,500,000 60% $280,350.72 $168,210.43
$1,750,000 70% $280,350.72 $196,245.49
$2,000,000 80% $280,350.72 $224,280.57
$2,250,000 90% $280,350.72 $252,315.64
$2,500,000 100% $280,350.72 $280,350.72
2.5 Stock Options. The option to purchase 1,500,000 shares of common
restricted stock in the Company has been granted in Employee's name. All
options shall expire 5-years from the vesting date. 1,500,000 of these options
have been carried over from Employee's previous Employment Agreement with th
e Company. Options will be vested annually, subject to continued employment,
and released to Employee as per the schedule below. The corresponding number
of share options shall be vested to Employee at the purchase values and on the
dates indicated.
No. Options Date Available Exercise Price
500,000 January 15, 2002 $0.40 per share
500,000 January 15, 2003 $0.40 per share
500,000 January 15, 2004 $0.40 per share
Additional stock options shall be granted to Employee each year following the
above schedule on the anniversary date of this Agreement, the amount and price
of which to be determined solely by the Company.
2.6 Duties. Employee agrees to devote his energies to the business of the
Company and agrees to perform such reasonable responsibilities and duties as may
be assigned to him from time to time by the Company or by the Company's board of
directors, which shall be consistent with his position as Executive Vice
President. In no event shall the Employee be precluded from activities in
professional societies, or from lecturing or writing in areas of his
professional expertise for reasonable periods, and Employee shall be entitled to
retain fees, honoraria, publication royalties and similar compensation paid as a
result of such activities.
2.7 Additional Benefits. The Company agrees to reimburse Employee promptly
for or to pay on behalf of Employee, any reasonable expenses heretofore or h
ereafter incurred by Employee (to the extent not paid by others) in the
furtherance of the goals of the Company upon submission of a satisfactory
accounting by Employee, and to provide Employee with the following additional
benefits:
2.7.1 A minimum of three weeks annual paid vacation. Vacation shall accrue
on a monthly basis or part thereof; however, once unused vacation has accrued
to a maximum of three weeks, accrual of additional vacation shall cease until
the balance of accrued vacation has been reduced below six weeks. The Company
will not cause the vacation accrual to cease by withholding its approval of any
of the Employee's vacation requests.
2.7.2 Any other standard benefits that may be established by the Company or
its affiliates for its employees.
2.8 Non-Disclosure of Confidential Information. It is understood that
employee will acquire and be informed of confidential technical and/or business
information used by and belonging to the Company ("Confidential Information"),
including Confidential Information as defined in the Company's EMPLOYEE
NON-DISCLOSURE AND NON-COMPETITION AGREEMENT. Employee agrees that some or
all of such Confidential Information is in the nature of trade secrets and
is the sole property of the Company. Employee will keep confidential, and
will not disclose to any third person or entity, any Confidential Information
without Employer's consent and pursuant to the proceedings further defined in
the Company's EMPLOYEE NON-DISCLOSURE AND NON-COMPETITION AGREEMENT.
2.9 Confidentiality after Termination of Employment. Employee agrees that
upon termination of employment, he or she shall surrender promptly to the
Company any and all documents and property of the Company, including, but
not limited to: reports, drawings, manuals, correspondence, customer lists
and other Confidential Information which he or she may possess, and all other
materials and all copies thereof relating in any way to the Company's business,
or in any way obtained by the Employee during the course of his employment,
and that he shall not retain any copies, notes or abstracts of the foregoing.
Employee further agrees that such documents, lists and information shall
be and remain the sole property of the Company. All of the terms of
paragraph 2.8 shall remain in full force and effect both during the
continuation of employment of Employee by the Company and after the
termination of employment for any reason.
2.10 Confidentiality. Employee agrees to execute standard Company documents
establishing the Employee's duties of confidentiality and the rights of the
Company to all inventions, trade secrets, etc., developed by the Employee in
the course of his employment, namely the EMPLOYEE NON-DISCLOSURE AND
NON-COMPETITION AGREEMENT.
2.11 Non-Competition. Employee agrees that during the term of his
employment by Company, Employee will not engage in any way whatsoever,
directly or indirectly, in any business that is competitive with the
Company and its subsidiaries and affiliate operations, nor solicit or
in any other manner work for or assist any business which is competitive
to the Company and its subsidiaries and affiliate operations.
2.12 Non-Participation in Competitive Activities. During the term of this
agreement, Employee will undertake no planning for or organization of any
business activity competitive with the work he performs as an Employee of
the Company and its subsidiaries and affiliate operations, and Employee will
not combine or participate with other employees of the Company and its
subsidiaries and affiliate operations for the purpose of organization of any
such competitive business activity.
2.13 Assignment to Company of Proprietary Rights. Employee agrees to
execute any and all documents and take any and all other actions necessary
or desirable for the assignment to the Company and its subsidiaries and
affiliate operations of all of his interests in any Confidential Information,
trade secrets, copyrightable materials and patentable or patented ideas
developed by him, alone or in conjunction with others, in the course of
his employment by the Company.
2.14 Injunctive Relief. The parties hereto agree and acknowledge that
many of the rights conveyed by this Agreement are of a unique and special
nature and that the Company and its subsidiaries and affiliate operations
will not have an adequate remedy at law in the event of failure of Employee
to abide by its terms and conditions, nor will money damages adequately
compensate for such injury. It is, therefore, agreed between the parties
that in the event of breach by Employee of Employee's covenants contained
in this Agreement, the Company and its subsidiaries and affiliate operations
shall have the rights, among other rights, to damages sustained thereby and
to a preliminary or permanent injunction to restrain Employee from the
prohibited acts. Employee agrees that this Paragraph shall survive for
one year after the termination of his employment, and Employee shall be
bound by its terms for a period of one year subsequent to the termination
of his employment, providing that the Company and its subsidiaries and
affiliate operations continue to conduct the same business or businesses
as they were conducting during the period of this Agreement. Nothing herein
contained shall in any way limit or exclude any and all other rights granted
by law or equity to the Company and its subsidiaries and affiliate operations.
2.15 Termination of Employment. If Employee's employment terminates or
is terminated, the rights and obligations of the parties shall depend upon
the reason for termination. Termination may occur for any one of the
following reasons: termination by the Company for cause, termination by
the Company without cause, termination by Employee without cause,
termination by Employee with cause, or termination of Employee by reason
of his death or long-term disability.
2.15.1 Termination by Company for Cause. In the event of termination by the
Company for cause, which shall consist only of specific actions knowingly and
intentionally taken by Employee to the specific material detriment of the
Company and not reasonably intended by him to benefit the company, the Employee
will receive all unpaid salary, bonuses, and other benefits accrued through
the last day of employment. Employee agrees, if he is so terminated for cause,
that, for a period of one year following the termination of employment of the
Employee, Employee will not engage in any way whatsoever, directly or
indirectly, in any business that is competitive with the Company and its
subsidiaries and affiliates utilizing any Confidential Information acquired
while organizing, founding, or acting as an officer, director or employee of
the Company, its subsidiaries or affiliates, nor solicit customers,
investors, service providers, or strategic partners of the Company, with
the Company's, or its subsidiary's or affiliates' business whether by
interfering with or raiding their employees, or disrupting or interfering
with their relationships with customers, investors, service providers, or
strategic partners. Employee will have thirty days after termination by
the Company for cause to challenge the termination. Employee may challenge
the termination by the Company for cause by sending written notice to that
effect to the Company via registered or certified mail, postmarked no later
than 30-days from the date that employee received notice from the Company
that Employee was being terminated by the Company for cause. The Company
and Employee will each select an arbitrator who will each review the facts
surrounding the termination and the challenge. The arbitrators will
decide whether the Company was justified in terminating the Employee
for cause. If the arbitrators cannot agree whether the Company was
justified in terminating Employee for cause, the arbitrators will select
a third arbitrator who will make the determination of whether the
Company was justified in terminating the Employee for cause. The arbitration
proceeding shall be conducted in accordance with the provisions of California's
Arbitration act, Code of Civil Procedure, Sections 1280, et seq. The Company
and Employee agree to abide by the decision of the arbitration.
If the arbitrators agree or if the third arbitrator determines, as applicable,
that the Company was not justified in terminating the Employee for cause,
within 72 hours of receiving the arbitration decision that the termination
by the Company for cause was not justified, the Company will pay Employee
back pay for all salaries and benefits from the date of termination through
the date of the arbitration decision. The termination will then be treated
as a termination by the Company without cause, subject to the provisions of
subparagraphs
2.15.2 Termination by Company without Cause. In the event of termination by
the Company without cause, i.e., an involuntary termination, or notification
by the Company of an intent not to renew the Agreement pursuant to paragraph
2.2 of this Agreement, Employee shall be entitled to elect to receive
severance pay equal to 50% of the annual total compensation in effect in
the last month of employment, but in no cause less than $67,600 and will
receive all unpaid salary, bonuses, and other benefits accrued through the
last day of employment.
2.15.3 Termination by Employee without Cause. In the event of termination by
Employee without cause, i.e., a voluntary termination, the Employee will
receive all unpaid salary, bonuses, and other benefits accrued through the
last day of employment. Employee agrees, if he so terminates without cause,
that, for a period of one year following the termination of employment of
the Employee, Employee will not engage in any way whatsoever, directly of
indirectly, in any business that is competitive with the Company and its
subsidiaries and affiliates utilizing any Confidential Information acquired
while organizing, founding, or acting as an officer, director or employee of
the Company, its subsidiaries, or affiliates, nor solicit customers, investors,
service providers, or strategic partners of the Company, or any of its
subsidiaries or operating affiliates; or disrupt, damage, impair or interfere
with the Company's, or its subsidiary's or affiliates' business whether by
interfering with or raiding their employees, or disrupting or interfering with
their relationships with customers, investors, service providers or strategic
partners. Thereafter, he will be free to so compete or participate with a
competitor.
2.15.4 Termination by Employee with Cause. In the event of receipt of notice
of termination by Employee with cause, which shall consist only of a material
breach of the agreement by the Company including, without limitation,
nonpayment of salary or other compensation due, non-reimbursement of
business expenses, or failure to provide either health insurance allowance
or coverage or other benefits, the Company will have thirty days after receipt
of notice of termination by Employee to challenge the termination by Employee
with cause. The Company and Employee will each select an arbitrator who will
each review the facts surrounding the termination and the challenge. The
arbitrators will decide wither the Employee is justified in terminating
with cause. If the arbitrators cannot agree whether the Employee is justified
in terminating with cause, the arbitrators will select a third arbitrator who
will make the determination of whether the Employee is justified in
terminating with cause. The arbitration proceeding shall be conducted in
accordance with the provisions of California's Arbitration act, Code of
Civil Procedure, Sections 1280, et seq. The Company and Employee agree
to abide by the decision of the arbitration.
If the arbitrators agree, or if the third arbitrator determines, as applicable,
that the Employee is justified in terminating with cause, or if the Company
fails to challenge the termination by the Employee with cause within the thirty
day period, the Employee shall be entitled to elect to receive severance pay
equal to 100% of the annual total compensation in effect in the last month of
employment, but in no case less than
$135,200 and will receive all unpaid salary, bonuses, and other benefits
accrued through the last day of employment plus 30 days. If the arbitrators
agree, or if the third arbitrator determines, as applicable, that the Employee
is not justified in terminating with cause, the termination will be treated as
a termination by Employee without cause, subject to the provisions of
subparagraphs 2.15.3.
2.15.5 Termination by Death or Disability. In the event of termination by
reason of death of the Employee or the long-term disability of the Employee,
Employee shall be entitled to termination pay equal to three month's pay
plus three month's benefits, and will receive all unpaid salary, bonuses,
and other benefits accrued through the last day of employment. All payments
due under this paragraph will be made on the date of termination of employment.
For purposes of this section, the Company may terminate the Employee due to
long-term disability if the Employee is unable to perform any of his duties
for a period of ninety consecutive days or more, for reasons of sickness or
injury. Additionally, in the event of the long-term disability of Employee,
if Employee is terminated by the Company and then subsequently recovers from
the disability, Employee will be free to compete in any way whatsoever,
directly or indirectly, in any business that is competitive with the Company,
and may solicit or in any other manner work for or assist any business
which is competitive to the Company.
2.15.6 Severance Pay. If Employee elects to receive the severance pay
provided for in subparagraph 2.15.2 or 2.15.4, whichever is applicable,
and that severance pay together with all other payments required by this
Agreement are paid to Employee in accordance with subparagraph 2.15.7,
Employee agrees that for a period of one year following the termination
of employment of the Employee, Employee will not engage in any way whatsoever,
directly or indirectly, in any business that is competitive with the Company
and its subsidiaries and affiliates utilizing any Confidential Information
acquired while organizing, founding, or acting as an officer, director or
employee of the Company, its subsidiaries or affiliates, nor solicit
customers, investors, service providers, or strategic partners of the
Company, or any of its subsidiaries or operating affiliates; or disrupt,
damage, impair or interfere with the Company's, or its subsidiary's or
affiliates' business whether by interfering with or raiding their employees,
or disrupting or interfering with their relationships with customers,
investors, service providers or strategic partners.
If Employee elects not to receive such severance pay, Employee will be free to
compete in any way whatsoever, directly or indirectly, in any business that
is competitive with the Company, and may solicit or in any other manner work
for or assist any business which is competitive to the Company.
2.15.7 Termination for any reason. In the event of termination for any
reason, all pay due under this Agreement except for severance pay is payable
by the Company on the last day of employment. Severance pay, when applicable,
will be paid as follows: one-half on the last day of employment and the
remaining payments in three equal monthly installments payable on the
first of months four through six.
2.16 Future Agreement. This Agreement and the documents referred to
herein contain the entire agreement of the parties relevant to the subject
matter hereof, and it may be amended only by a written document signed by
both Employee and Company.
2.17 Governing Law. The laws of California, without regard to conflicts
of laws principles thereof, shall govern this agreement.
2.18 Binding Effect. This Agreement shall inure to the benefit of
and be binding upon the heirs, successors and assigns of the parties
hereto.
EMPLOYEE:
[Print Name]
RECLAMATION CONSULTING AND APPLICATIONS, INC.
By:
Its.
