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EMPLOYMENT AGREEMENT
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THIS AGREEMENT, effective as of December 1, 1995, is made by and
between XXXXX INDUSTRIES, INC., a Washington corporation having its
principal place of business in Wenatchee, Washington (the "Company"), and
XXXXXXX X. XXXXX, a resident of Washington (the "Executive").
RECITALS
A. The Company desires to obtain the services of the Executive, and
the Executive is willing to render such services, in accordance with the
terms hereinafter set forth; and
B. The Board of Directors of the Company (the "Board") by appropriate
resolutions has authorized the employment of the Executive as provided for
in this Agreement.
Accordingly, the Company and the Executive agree as follows:
ARTICLE 1.
Duties
The Executive shall be President of the Company. The duties to be
performed by the Executive under this Agreement are as specified in the
Company's Bylaws, if applicable, or as may reasonably be prescribed from
time to time by the Board or by the Board of Directors of the Company's
parent corporation, PCT Holdings, Inc., a Nevada corporation ("PCTH"),
commensurate with the abilities, experience and know-how of Executive.
During the Contract Term (as defined below), and excluding any periods of
vacation, sick leave or disability to which the Executive is entitled, the
Executive agrees to devote the Executive's full attention and time to the
business and affairs of the Company and, to the extent necessary to
discharge the duties assigned to the Executive hereunder, to use the
Executive's best efforts to perform faithfully and efficiently such duties.
ARTICLE 2.
Term of Agreement
The term of this Agreement shall commence on the date hereof and end
three years from the date of this Agreement (the "Contract Term"). The
Contract Term shall be automatically extended for an additional two years,
unless either party gives written notice to the other party at least six
months before the last day of Contract Term, that the Contract Term shall
not be so extended. All references to "Contract Term" in this Agreement,
except as used in this Article 2, shall include the extended period, unless
the option not to extend is exercised.
ARTICLE 3.
Compensation
3.1 Annual Base Salary. During the Contract Term, the Company shall
pay or cause to be paid to the Executive in cash in accordance with the
normal payroll practices of the Company for peer executives, including
deductions, withholdings and collections as required by law, in
installments not less frequently than monthly, an annual base salary of
$105,000 ("Annual Base Salary"). The Executive shall not be entitled to any
increases in the
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Annual Base Salary during the initial Contract Term. As of the third and
fourth anniversary date of this Agreement, if the Contract Term is extended
as provided in Article 2, the Annual Base Salary shall be increased by a
cost of living adjustment equal to the increase in the Consumer Price Index
for Chelan County, Washington ("CPI"), using as a base the CPI for the six
month period ending December 31, 1997.
3.2 Bonuses. The Board may award the Executive cash bonuses based on
the Executive's performance, as measured by comparing the actual
performance of the Company for each year to the Company's approved business
plan for that year, at the Board's sole discretion.
ARTICLE 4.
Other Benefits
4.1 Savings and Retirement Plans. In addition to the Annual Base
Salary, the Executive shall be entitled to participate during the Contract
Term in all savings and retirement plans, practices, policies and programs
applicable to other peer executives of the Company or PCTH.
4.2 Welfare Benefits. During the Contract Term, the Executive and/or
the Executive's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit
plans, practices, policies and programs provided by the Company (including,
and without limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, dependent life, accidental death
and travel accident insurance plans and programs) and applicable to other
peer executives of the Company or PCTH.
4.3 Vehicles. The Executive shall be entitled to full use of the
vehicle currently provided by the Company during the Contract Term. The
Company shall fully pay all lease payments, insurance and maintenances
costs associated with such vehicle for the remainder of the current lease
term. When the current lease term expires, PCTH's management and Executive
shall determine whether the Executive's duties require the use of a Company
vehicle.
4.4 Fringe Benefits. During the Contract Term, the Executive shall be
entitled to fringe benefits applicable to other peer executives of the
Company or PCTH.
4.5 Expenses. During the Contract Term, the Executive shall be
entitled to receive prompt reimbursement for all reasonable
employment-related expenses incurred by the Executive upon the Company's
receipt of accountings in accordance with practices, policies and
procedures applicable to peer executives of the Company or PCTH.
4.6 Office and Support Staff. During the Contract Term, the Executive
shall be entitled to an office or offices of a size and with furnishings
and other appointments, and to personal secretarial and other assistance,
provided to other peer executives of the Company or PCTH.
4.7 Vacation. During the Contract Term, the Executive shall be
entitled to be paid vacation time in accordance with the plans, policies,
and programs applicable to other peer executives of the Company or PCTH.
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ARTICLE 5.
Restrictive Covenants
5.1 Trade Secrets, Confidential and Proprietary Business Information.
5.1.1 The Company has advised the Executive and the Executive has
acknowledged that it is the policy of the Company to maintain as secret and
confidential all Protected Information (as defined below), and that
Protected Information has been and will be developed at substantial cost
and effort to the Company. "Protected Information" means trade secrets,
confidential and propriety business information of the Company, any
information of the Company other than information which has entered the
public domain (unless such information entered the public domain through
effects of or on account of the Executive), and all valuable and unique
information and techniques acquired, developed or used by the Company
relating to its business, operations, employees, customers and suppliers,
which give the Company a competitive advantage over those who do not know
the information and techniques and which are protected by the Company from
unauthorized disclosure, including but not limited to, customer lists
(including potential customers), sources of supply, processes, plans,
materials, pricing information, internal memoranda, marketing plans,
internal policies, and products and services which may be developed from
time to time by the Company and its agents or employees.
5.1.2 The Executive acknowledges that the Executive will acquire
Protected Information with respect to the Company and its successors in
interest, which information is a valuable, special and unique asset of the
Company's business and operations and that disclosure of such Protected
Information would cause irreparable damage to the Company.
5.1.3 Either during or after termination of employment by the
Company, the Executive shall not, directly or indirectly, divulge, furnish
or make accessible to any person, firm, corporation, association or other
entity (otherwise than as may be required in the regular course of the
Executive's employment) nor use in any manner, any Protected Information,
or cause any such information of the Company to enter the public domain.
5.2 Non-Competition.
5.2.1 The Executive agrees that the Executive shall not during
the Executive's employment with the Company, and, for a period of two (2)
years after the termination of this Agreement directly or indirectly, in
any capacity, engage or participate in, or become employed by or render
advisory or consulting or other services in connection with any Prohibited
Business as defined in Section 5.2.3.
5.2.2 The Executive agrees that the Executive shall not during
the Executive's employment with the Company, and, for a period of two (2)
years after the termination of this Agreement, make any financial
investment, whether in the form of equity or debt, or own any interest,
directly or indirectly, in any Prohibited Business. Nothing in this Section
5.2.2 shall, however, restrict the Executive from making any investment in
any company whose stock is listed on a national securities exchange or
actively traded in the over-the-counter market; provided that: (i) such
investment does not give the Executive the right or ability to control or
influence the policy decisions of any Prohibited Business; and (ii) such
investment does not create a conflict of interest between the Executive's
duties hereunder and the Executive's interest in such investment.
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5.2.3 For purposes of this Section 5.2, "Prohibited Business"
shall be defined as any business organization whose activities or products
are directly or indirectly competitive with the activities or products of
the Company.
5.2.4 The Executive shall not be bound by Sections 5.2.1 and
5.2.2 if the Executive's employment is terminated by the Company without
cause.
5.3 Non-Solicitation. From the date hereof until two (2) years after
the Executive's termination of employment with the Company, the Executive
shall not, directly or indirectly: (a) encourage any employee or supplier
of the Company or its successors in interest to leave his or her employment
with the Company or its successors in interest; (b) employ, hire, solicit
or cause to be employed, hired or solicited (other than by the Company or
its successors in interest), or encourage others to employ or hire any
person who within two (2) years prior thereto was employed by the Company
or its successors in interest; or (c) establish a business with, or
encourage others to establish a business with, any person who within two
(2) years prior thereto was an employee or supplier of the Company or its
successors in interest.
5.4 Employee-Created Trade Secrets, Confidential and Propriety
Business Information. The Executive agrees to promptly disclose to the
Company all Protected Information developed in whole or in part by the
Executive during the Executive's employment with the Company and which
relates to the Company's business. Such Protected Information is, and shall
remain, the exclusive property of the Company. All writings created during
the Executive's employment with the Company (excluding writings unrelated
to the Company's business) are considered to be "works-for-hire" for the
benefit of the Company and the Company shall own all rights in such
writings. Washington law requires the following notice be given to the
Executive:
This Agreement does not require Executive to assign to the Company any
invention by Executive for which no equipment, supplies, facility or
trade secret information of the Company was used and which was
developed entirely on Executive's own time unless the invention
related (1) directly to the Company's business, or (2) to the
Company's actual or demonstrably anticipated research or development,
or (3) the development results from any work performed by Executive
for the Company.
5.5 Survival of Undertakings and Injunctive Relief.
5.5.1 The provisions of Sections 5.1, 5.2, 5.3 and 5.4 shall
survive the termination of the Executive's employment with the Company
irrespective of the reasons therefor.
5.5.2 The Executive acknowledges and agrees that the restrictions
imposed upon the Executive by Sections 5.1, 5.2, 5.3 and 5.4 and the
purpose of such restrictions are reasonable and are designed to protect the
Protected Information and the continued success of the Company without
unduly restricting the Executive's future employment by others.
Furthermore, the Executive acknowledges that, in view of the Protected
Information which the Executive has or will acquire or has or will have
access to and in view of the necessity of the restrictions contained in
Sections 5.1, 5.2, 5.3 and 5.4, any violation of any provision of Sections
5.1, 5.2, 5.3 and 5.4 hereof would cause irreparable injury to the Company
and its successors in interest with respect to the resulting disruption in
their operations. By reason of the foregoing, the Executive consents and
agrees that if the Executive violates any of the provisions of Sections
5.1, 5.2, 5.3 or 5.4 of this Agreement, the Company and its successors in
interest, as the case may be, shall be entitled, in addition
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to any other remedies that they may have, including money damages, to an
injunction to be issued by a court of competent jurisdiction, restraining
the Executive from committing or continuing any violation of such Sections
of this Agreement.
In the event of any such violation of Sections 5.1, 5.2, 5.3 and
5.4 of this Agreement, the Executive further agrees that the time periods
set forth in such Sections shall be extended by the period of such
violation.
5.6 References to Company. All references to the Company in this
Article 5 shall be deemed to include all subsidiaries of the Company, the
parent corporation of the Company, and all other subsidiaries of the
Company's parent corporation.
ARTICLE 6.
Termination
6.1 Termination by Mutual Agreement. The Executive's employment may be
terminated at any time during the Contract Term by mutual agreement of the
parties, or as otherwise provided in this Article.
6.2 Termination for Cause. The Company may terminate the Executive's
employment without notice at any time for cause. For purposes of this
Agreement, cause for termination shall include: continued neglect, after
notice thereof, or willful misconduct by the Executive with respect to his
duties and obligations under this Agreement; unauthorized expenditure of
the Company's funds; unethical business practices in connection with the
Company's business; misappropriation of the Company's assets; any material
breach by the Executive of any term or provision of this Agreement; any act
or action of the Executive during the term of this Agreement involving
embezzlement, dishonesty related to the Company or the Company's business,
or habitual use of alcohol or drugs; conviction of any felony; or any
similar or related act or insubordination by the Executive. Upon
termination for cause, the Executive shall not be entitled to payment of
any compensation other than salary and accrued benefits under this
Agreement earned up to the date of such termination.
ARTICLE 7.
Miscellaneous
7.1 Assignment, Successors. The Company may freely assign its
respective rights and obligations under this Agreement to a successor of
the Company's business, without the prior written consent of the Executive.
This Agreement shall be binding upon and inure to the benefit of the
Executive and the Executive's estate and the Company and any assignee of or
successor to the Company.
7.2 Beneficiary. If the Executive dies prior to receiving all of the
salary payable hereunder, one-month's salary shall be paid to the
beneficiary designated in writing by the Executive ("Beneficiary") and if
no such Beneficiary is designated, to the Executive's estate.
7.3 Nonalienation of Benefits. Benefits payable under this Agreement
shall not be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge, garnishment, execution
of levy of any kind, either voluntary or involuntary, prior to actually
being received by the Executive, and any such attempt to dispose of any
right to benefits payable hereunder shall be void.
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7.4 Severability. If all or any part of this Agreement is declared by
any court or governmental authority to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate any portion of
this Agreement not declared to be unlawful or invalid. Any paragraph or
part of a paragraph so declared to be unlawful or invalid shall, if
possible, be construed in a manner which will give effect to the terms of
such paragraph or part of a paragraph to the fullest extent possible while
remaining lawful and valid.
7.5 Amendment and Waiver. This Agreement shall not be altered, amended
or modified except by written instrument executed by the Company and the
Executive. A waiver of any term, covenant, agreement or condition contained
in this Agreement shall not be deemed a waiver of any other term, covenant,
agreement or condition, and any waiver of any other term, covenant,
agreement or condition, and any waiver of any default in any such term,
covenant, agreement or condition shall not be deemed a waiver of any later
default thereof or of any other term, covenant, agreement or condition.
7.6 Notices. All notices and other communications hereunder shall be
in writing and delivered by hand, facsimile transmission, or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Company: Xxxxx Industries, Inc.
00000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Board of Directors
Fax: (000) 000-0000
With a copy to: PCT Holdings, Inc., a Nevada corporation
000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: President
Phone: (000) 000-0000
Fax: (000) 000-0000
If to the Executive: Xxxxxxx X. Xxxxx
000 Xxxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Either party may from time to time designate a new address by notice given
in accordance with this Section. Notice and communications shall be
effective when actually received by the addressee.
7.7 Counterpart Originals. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
7.8 Entire Agreement. This Agreement forms the entire agreement
between the parties hereto with respect to any severance payment and with
respect to the subject matter contained in the Agreement.
7.9 Applicable Law. The provisions of this Agreement shall be
interpreted and construed in accordance with the laws of the State of
Washington, without regard to its choice of law principles.
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7.10 Effect on Other Agreements. This Agreement shall supersede all
prior agreements, promises and representations regarding employment by the
Company and severance or other payments contingent upon termination of
employment. Notwithstanding the foregoing, the Executive shall be entitled
to any other severance plan applicable to other peer executives of the
Company.
IN WITNESS WHEREOF, the parties have executed this Agreement on
the date first written above.
COMPANY: XXXXX INDUSTRIES, INC.
By:/s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
Its Executive Vice President
EXECUTIVE: /s/ XXXXXXX X. XXXXX
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XXXXXXX X. XXXXX
