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EXHIBIT 10.9
EMPLOYMENT AGREEMENT
AGREEMENT, made as of May 1, 2000, between Industrialex Manufacturing
Corporation, a Colorado corporation ("Industrialex"), and Xxxxx Xxxxxxxx,
residing at 0000 Xxxxxxxxx Xxxxx Xxxx, Xxxxxxx, XX 00000 ("Employee").
WITNESSETH:
WHEREAS, Industrialex desires to employ the Employee and Employee desires
to be employed by Industrialex upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises, representations and covenants herein contained, the parties hereto
agree as follows:
1. EMPLOYMENT
Industrialex hereby employs Employee and Employee hereby accepts such
employment, subject to the terms and conditions herein set forth. Employee shall
hold the position of President and Chief Operating Officer of Industrialex, and
report to the Chairman and Chief Executive Officer and serve at the pleasure of
the board of directors.
2. TERM
The initial term of employment under this Agreement shall begin on May 1,
2000 (the "Employment Date") and shall continue for a period of three (3) years
from that date, subject to prior termination in accordance with the terms
hereof. Thereafter, this Agreement shall automatically be renewed for successive
one year terms unless either party shall give the other sixty (60) days' prior
written notice of its or his intent not to renew this Agreement. The initial
term together with all such additional one-year period(s) of employment, if any,
are collectively referred to herein as the "Term" of this Agreement.
3. COMPENSATION
As compensation for the employment services to be rendered by Employee
hereunder, Industrialex shall pay, or cause to be paid, to Employee, and
Employee agrees to accept, an annual salary of $120,000 or such higher amount as
the chairman of the board or the chief executive officer or the board of
directors of Industrialex may determine from time to time, subject to such
payroll deductions as are required by law and deductions for applicable employee
contributions to Industrialex's normal benefit programs in which Employee
participates and subject to further adjustment as set forth on Exhibit A. The
annual salary provided for hereunder shall be payable in equal installments
commencing at the Employment Date, in accordance with the usual practice of
Industrialex. In addition, Employee may receive additional bonus compensation as
may be awarded from time to time at the discretion of the chairman of the board
or the chief executive officer of Industrialex
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with the approval of the board of directors of Industrialex, based on
Industrialex's overall performance.
On May 1, 2000 or the date of your employment, Employee shall receive a
grant of options to purchase 300,000 shares of Industrialex Common Stock with
the following exercise prices: 100,000 shares with exercise price of $0.50 per
share and 200,000 shares with exercise price equal to the fair market value on
the day of Initial Public Offering of Industrialex Common Stock on CDNX. The
options will vest according to a four year vesting schedule as follows: 25% of
options vesting after 12 months from the date of grant and thereafter the
remaining 75% of options vesting monthly (i.e. 1/36 per month) over a 36 months
period and otherwise in accordance with the terms of Industrialex's stock option
or equity compensation plan.
On May 1, 2000 or the date of your employment, employee shall receive a
loan in the amount of $130,000 in cash. This loan will bear an interest of 7%
per annum and will be due on April 30, 2003. In the event that the employee
remains employed in good standing by Industrialex be the loan's due date, the
loan will be forgiven and there will be no obligation on the employee's part to
repay the balance of the loan.
4. EXPENSES
Industrialex shall pay or reimburse Employee, upon presentment of suitable
vouchers, for all reasonable business and travel expenses which may be incurred
or paid by Employee in connection with his employment hereunder. Employee shall
comply with restrictions and shall keep records in compliance with
Industrialex's policy and procedures related to travel and entertainment
expenses.
5. CAR ALLOWANCE
Industrialex shall pay or reimburse Employee, a monthly car allowance of
$400.00 to be paid through the first payroll check of each month.
6. INSURANCE AND OTHER BENEFITS
Employee shall be entitled to such vacations and to participate in and
receive any other benefits customarily provided by Industrialex for its
employees generally (including any profit sharing, pension, health insurance,
dental coverage, life insurance, AD&D and short- and long-term disability in
accordance with the terms of such plans) and including stock option and/or stock
purchase plans, all as determined from time to time by the board of directors of
Industrialex or appropriate committee thereof. Unused annual vacations may be
carried over to the extent permitted by Company policy.
7. DUTIES
(a) Employee shall perform such duties and functions as the Chief Executive
Officer of Industrialex or the board of directors of Industrialex shall from
time to time
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determine and Employee shall comply in the performance of his duties with the
policies of, and be subject to, the direction of such offers and such boards of
directors.
(b) Employee agrees to devote his entire working time, attention and
energies to the performance of the business of Industrialex and of any of its
subsidiaries or affiliates by which he may be employed; and Employee shall not,
directly or indirectly, alone or as a member of any partnership or other
organization, or as an officer, director or employee of any other corporation,
partnership or other organization, be actively engaged in or concerned with any
other duties or pursuits which interfere with the performance of his duties
hereunder, or which, even if non-interfering, may be inimical, or contrary, to
the best interests of Industrialex, except those duties or pursuits specifically
authorized by the board of directors of Industrialex.
8. TERMINATION OF EMPLOYMENT; EFFECT OF TERMINATION
(a) Either Industrialex or Employee may terminate the Employee's employment
hereunder at any time upon giving thirty (30) days prior written notice to the
other party. If Employee voluntary terminates his employment, Employee shall not
be entitled to any amounts or benefits hereunder other than the portion of
Employee's annual salary and reimbursement of expenses pursuant to Section 4
hereof as has accrued through the date of his termination of employment. If
Industrialex terminates the Employee's employment hereunder without justifiable
cause, as hereinafter provided, Employee's rights shall be those set forth in
Section 8(h).
(b) Employee's employment hereunder may be terminated at any time upon
written notice from Industrialex to the Employee if the board of directors of
Industrialex determines that justifiable cause (as hereinafter defined) exists
for such termination.
(c) Employee's employment shall terminate upon:
(i) the death of the Employee; or
(ii) the "disability" of Employee (as hereinafter defined pursuant to
subsection (d) herein).
(d) For the purpose of this Agreement, the term "disability" shall mean the
inability of Employee, due to illness, accident or any other physical or mental
incapacity, to perform his duties in a normal manner for a period of three (3)
consecutive months or for a total of four (4) months (whether or not
consecutive) in any twelve (12) month period during the term of this Agreement.
(e) For the purpose hereof, the term "justifiable cause" shall mean and be
limited to: (i) any repeated failure or refusal by Employee to perform, or
willful neglect by Employee of, any of his duties pursuant to this Agreement;
(ii) Employee's conviction (which,
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through lapse of time or otherwise, is not subject to appeal) of any crime or
offense involving money or other property of Industrialex or any of its
subsidiaries or affiliates, or which constitutes a felony in the jurisdiction
involved; (iii) Employee's performance of any act or his failure to act, which
if he were prosecuted therefor and convicted, would constitute a crime or
offense involving money or property of Industrialex or any of its subsidiaries
or affiliates, or which would constitute a felony in the jurisdiction involved;
(iv) any disclosure by Employee to any person, firm or corporation other than
Industrialex or any of its subsidiaries or affiliates and its directors,
officers and employees, of any confidential information or trade secret of
Industrialex or its subsidiaries or affiliates or any other breach by Employee
of any of the provisions of Sections 10, 11 or 12 hereof; (v) any attempt by
Employee to secure any personal profit in connection with the business of
Industrialex or any of its subsidiaries or affiliates; or (vi) the engaging by
Employee in any business or activities other than the business of Industrialex
and any of its subsidiaries or affiliates which interferes with the performance
of his duties hereunder. Upon termination of Employee's employment for
justifiable cause, this Agreement shall terminate immediately and Employee shall
not be entitled to any amounts or benefits hereunder other than such portion of
Employee's annual salary and reimbursement of expenses pursuant to Section 4
hereof as has accrued through the date of his termination of employment.
(f) If Employee shall die during the term of his employment hereunder, this
Agreement shall terminate immediately. In such event, the estate of Employee
shall thereupon be entitled to receive such portion of Employee's annual salary
and reimbursement of expenses pursuant to Section 4 hereof as has been accrued
through the date of his death.
(g) Upon Employee's "disability," Industrialex shall have the right to
terminate Employee's employment. Notwithstanding any inability to perform his
duties, Employee shall be entitled to receive his compensation as provided
herein until the termination of his employment for disability. Any termination
pursuant to this subsection (g) shall be effective on the date thirty (30) days
after which Employee shall have received written notice from Industrialex of its
election to terminate. Notwithstanding anything to the contrary contained
herein, during any period that Employee fails to perform his duties hereunder as
a result of his disability (but prior to receiving the notice of termination
specified in this Section 8(g), (i) Employee shall continue to receive his full
salary at the rate then in effect and all benefits provided for in Section 6
hereof, provided that payment made to Employee pursuant to this Section 8(g)
shall be reduced by the sum of the amounts, if any, payable to Employee at or
prior to the time of any such payment under any disability benefit plan or
program of, or provided by Industrialex, and (ii) Industrialex shall have the
right to hire any other individual or individuals to perform such duties and
functions as Industrialex shall desire, including those duties heretofore
performed by Employee.
(h) Notwithstanding any provision to the contrary contained herein, in the
event that employee's employment is terminated by Industrialex at any time
during the Term of this Agreement for any reason other than justifiable cause,
disability or death, the parties hereto agree that damages to Employee shall be
difficult to ascertain in any such event, but in order to limit the liability of
Industrialex in any such event, Employee shall be entitled to
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receive as liquidated damages and not as penalty, and Industrialex shall pay to
Employee, Employee's salary (payable in such amount and in such manner as set
forth in Section 3 herein) from and after the date of such termination for a
period ending six (6) months from the date that such termination occurs.
9. REPRESENTATION AND AGREEMENT OF EMPLOYEE
(a) Employee represents and warrants that he is free to enter into this
Agreement and to perform the duties required hereunder, and that there are no
employment contracts or understandings, restrictive covenants or other
restrictions, whether written or oral, preventing the performance of his duties
hereunder. Employee further represents and warrants that he is in full
compliance with all existing agreements between himself and Industrialex.
(b) Employee agrees to submit to a medical examination and to cooperate and
supply such other information and documents as may be required by any insurance
company in connection with the Employees' inclusion in any insurance or fringe
benefit plan or program as Industrialex shall determine from time to time to
obtain, or in connection with, Industrialex's sole discretion, Industrialex's
obtaining life insurance for its benefit on the life of Employee.
10. NON-COMPETITION
(a) Employee agrees that during his employment by Industrialex (which shall
be deemed to include the period in which Employee is receiving any severance
payments set forth in Section 8(h) hereto), and for a period of three (3) years
after the later to occur of the termination or expiration of Employee's
employment hereunder (the "Non-Competitive Period"), Employee shall not,
directly or indirectly, as owner, partner, joint venturer, stockholder,
principal, corporate officer, director, trustee, licensor, or in any executive,
management, supervisory, consultative, ownership capacity engage in, become
financially interested in, be employed by, render any consultation or business
advice with respect to, or have connection with, any business, engage in the
research, development, testing, design, manufacture, sale, lease, marketing,
utilization or exploitation of any products or services which are designed for
the same purpose as, are similar to, or are otherwise competitive with, products
or services of Industrialex or any of its subsidiaries or affiliates which at
the time of termination of Employee's employment, are being sold or provided or
proposed to be sold or provided in any geographic area where, at the time of the
termination or expiration of his employment hereunder, the business of
Industrialex or its subsidiaries or affiliates was being conducted or was
proposed to be conducted in any manner whatsoever; provided, however, that (i)
Employee may own securities of any corporation which is engaged in such business
and is publicly owned and traded in an amount not to exceed at any one time one
percent (1%) of any class of stock or securities of such corporation, and (ii)
Employee may be employed in a capacity that does not involve executive,
managerial, supervisory or consultation services, subject to the provisions of
the next sentence of this Section 10(a) and Sections 11 and 12 hereof. In
addition, Employee shall not, directly or indirectly, during the
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Non-Competitive Period, request or cause contracting parties, suppliers or
customers with whom Industrialex or its subsidiaries or affiliates has a
business relationship to cancel or terminate any such business relationship with
Industrialex or its subsidiaries or affiliates or solicit, interfere with or
entice from Industrialex or its subsidiaries or affiliates any employee (or
former employee) of Industrialex or its subsidiaries or affiliates.
Notwithstanding the foregoing, in the event Employee's employment hereunder is
terminated by Industrialex for justifiable cause pursuant to Section 8(b)
hereof, or by Employee pursuant to Section 8(a) hereof, the Non-Competitive
Period shall continue through the expiration of the Term of this Agreement, and
for three (3) years thereafter.
(b) If any portion of the restrictions set forth in this Section 10 should,
for any reason whatsoever, be declared invalid by a court of competent
jurisdiction, the validity or enforceability of the remainder of such
restrictions shall not thereby be adversely affected.
(c) Employee acknowledges that Industrialex conducts business on a world-
wide basis, that its sales and marketing prospects are continued expansion into
world markets and that, therefore, the territorial and time limitations set
forth in this Section 9 are reasonable and properly required for the adequate
protection of the business of Industrialex and its subsidiaries. In the event
any such territorial or time limitation is deemed to be unreasonable by a court
of competent jurisdiction, Employee agrees to the reduction of the territorial
or time limitation to the area or period that such court deems reasonable.
(d) The existence of any claim or cause of action by Employee against
Industrialex or its subsidiaries or affiliates shall not constitute a defense to
the enforcement by Industrialex or any such subsidiary or affiliate of the
foregoing restrictive covenants, but such claim or cause of action shall be
litigated separately.
11. INVENTIONS AND DISCOVERIES
(a) Employee shall promptly and fully disclose to Industrialex, and with
all necessary detail for a complete understanding of the same, all developments,
know-how, discoveries, inventions, improvements, concepts, ideas, writings,
formulae, processes and methods (whether copyrightable, patentable or otherwise)
made, received, conceived, acquired or written during working hours, or
otherwise, by Employee (whether or not at the request or upon the suggestion of
Industrialex) during the period of his employment with Industrialex or any of
its subsidiaries or affiliates, solely or jointly with others, in all instances
in or relating to any activities of Industrialex or any of its subsidiaries or
affiliates known to him as a consequence of his employment hereunder
(collectively the "Subject Matter").
(b) Employee hereby assigns and transfers, and agrees to assign and
transfer, to Industrialex, all his rights, title and interest in and to the
Subject Matter, and Employee further agrees to deliver to Industrialex any and
all drawings, notes, specifications and data relating to the Subject Matter, and
to execute, acknowledge and deliver all such further papers, including
applications for copyrights or patents, as may be necessary to obtain copyrights
and patents for any thereof in any and all countries and to vest title thereto
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Industrialex. Employee shall assist Industrialex in obtaining such copyrights or
patents during the term of this Agreement, and any time thereafter on reasonable
notice, and Employee agrees to testify in any prosecution or litigation
involving any of the Subject Matter.
12. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
(a) Employee shall not, during the term of this Agreement or at any time
following termination or expiration of this Agreement, directly or indirectly,
disclose or permit to be known (other than as is required in the regular course
of his duties or required by law (in which case Employee shall give Industrialex
prior written notice of such required disclosure) or with the prior written
consent of the President of Industrialex), to any person, firm or corporation,
any confidential information acquired by Employee during the course of, or as an
incident to, his employment hereunder, relating to Industrialex or any of its
subsidiaries or affiliates, the directors of Industrialex or any of its
subsidiaries or affiliates, any clients of Industrialex or any of its
subsidiaries or affiliates, or any corporation, partnership or other entity
owned or controlled, directly or indirectly, by any of the foregoing, or in
which any of the foregoing has a beneficial interest, including, but not limited
to, the business affairs of each of the foregoing. Such confidential information
shall include, but shall not be limited to, proprietary technology, trade
secrets, patented processes, research and development data, know-how, market
studies and forecasts, competitive analyses, pricing policies, employee lists,
personnel policies, the substance of agreements with customers, suppliers and
others, marketing or dealership arrangements, servicing and training programs
and arrangements, customer lists and any other documents embodying such
confidential information. This confidentiality obligation shall not apply to any
confidential information which thereafter becomes publicly available other than
pursuant to a breach of this Section 12(a), directly or indirectly, by Employee.
(b) All information and documents relating to Industrialex and its
subsidiaries or affiliates as hereinabove described (or other business affairs)
shall be the exclusive property of Industrialex and Employee shall use
commercially reasonable best efforts to prevent any publication or disclosure
thereof. Upon termination of Employee's employment, all documents, records,
reports, writings and other similar documents containing confidential
information, including copies thereof, then in Employee's possession of control
shall be returned and left with Industrialex.
13. RIGHT TO INJUNCTION
Employee recognizes that the services to be rendered by him hereunder are
of a special, unique, unusual, extraordinary and intellectual character
involving skill of the highest order and giving them peculiar value the loss of
which cannot be adequately compensated for in damages. In the event of a breach
of this Agreement by Employee, Industrialex shall be entitled to injunctive
relief or any other legal or equitable remedies. Employee agrees that
Industrialex may recover by appropriate action the amount of the actual damage
caused Industrialex by any failure, refusal or neglect of Employee to perform
his agreements, representations and warranties herein contained. The remedies
provided in this Agreement
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shall be deemed cumulative and the exercise of one shall not preclude the
exercise of any other remedy at law or in equity for the same event or any other
event.
14. AMENDMENT OR ALTERATION
No amendment or alteration of the terms of this Agreement shall be valid
unless made in writing and signed by both of the parties hereto.
15. GOVERNING LAW
This Agreement shall be governed by the laws of the State of Colorado
applicable to agreements made and to be performed therein.
16. CONSENT TO JURISDICTION
Each party hereto hereby irrevocably submits to the exclusive jurisdiction
of the courts of the State of Colorado, including the jurisdiction of the United
States District Courts therein, and agrees not to assert by way of motion, as a
defense or otherwise, in any such suit, action or proceeding, any claim that he
or it is not subject to the jurisdiction of the above-named courts, that suit,
action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that this Agreement may not be
enforced in or by such courts. Employee agrees that all actions and proceedings
to be instituted hereunder by Employee or his successors or assigns arising out
of or related to this Agreement or the transactions contemplated hereby shall be
commenced only in the courts having a status in Colorado.
17. SEVERABILITY
The holding of any provision of this Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Agreement, which shall remain in full force and effect.
18. NOTICES
Any notices required or permitted to be given hereunder shall be sufficient
if in writing, and if delivered by hand, or sent by certified mail, return
receipt requested, to the addresses set forth above or such other address as
either party may from time to time designated in writing to the other, and shall
be deemed given as of the date of the delivery or mailing. 7. WAIVER OR BREACH
19. WAIVER OR BREACH
It is agreed that a waiver by either party of a breach of any provision of
this Agreement shall not operate, or be construed, as a waiver of any subsequent
breach by that same party.
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20. ENTIRE AGREEMENT AND BINDING EFFECT
This Agreement contains the entire agreement of the parties with respect to
the subject matter hereof and shall be binding upon and inure to the benefit of
the parties hereto and their respective legal representatives, heirs,
distributors, successors and assigns.
21. SURVIVAL
The termination of Employee's employment hereunder shall not affect the
enforceability of Section 8, 9(a), 10, 11, 12, 13, 15 and 16 hereof, all of
which shall survive such termination of employment or of this Agreement.
22. NON-ASSIGNABILITY
This Agreement is entered into in consideration of the personal qualities
of Employee and may not be, nor may any right or interest hereunder be, assigned
by him without the prior written consent of Industrialex. It is expressly
understood and agreed that this Agreement, and the rights accruing and
obligations owed to Industrialex hereunder, and the obligations to be performed
by Industrialex hereunder, may be assigned by Industrialex at any time without
the consent of Employee to any successor of Industrialex.
23. HEADINGS
This Section headings appearing in this Agreement are for the purposes of
easy reference and shall not be considered a part of this Agreement or in any
way modify, demand or affect its provisions.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
INDUSTRIALEX MANUFACTURING
CORPORATION
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title:CEO
EMPLOYEE
By: /s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
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EXHIBIT A
ANNUAL BASE SALARY:
Company's Revenue* Base Salary
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Up to $7.0M $120,000
$7.0M to $10.0M $125,000
$10.0M and above $150,000
ANNUAL BONUS:
Company's Profit Before Tax and bonus calculation* Bonus (% of base salary)
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Up to 8% 0%
9% to 14% 30%
15% and above 45%
* based on the Industrialex's year-end audited financial results.
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