Exhibit 10.2
EMPLOYMENT and CONSULTING AGREEMENT
THIS EMPLOYMENT AND CONSULTING AGREEMENT ("Agreement") is made this
1st day of July, 1998 by and between Innovative Coatings Corporation, a
Georgia corporation having its principal office at 0000 Xxxx Xxxx Xxxxx
Xxxxx, Xxxxxxxx, Xxxxxxx 00000 (the "Company"); and Xxxxx X. Xxxxxxxx, an
individual residing at 3064 Intrepid Wake, Marietta, Georgia, ("Xxxxxxxx"
or "Employee").
FOR AND IN CONSIDERATION of the mutual promises, agreements and
covenants contained herein, the parties hereto, intending to be legally
bound, do hereby agree as follows:
1. Employment: Position and Duties. The Company hereby agrees to employ
Xxxxxxxx to act as, and to exercise all of the powers and functions of,
its President and Chief Executive Officer during the term hereof (as set
forth in paragraph 4 herein) and to perform such acts and duties and to
generally furnish such services to the Company and its subsidiaries (if
any) as is customary for a senior management person with a similar
position in like companies; and he shall have such specific powers,
duties and responsibilities as the Board of Directors of the Company
shall from time to time reasonably prescribe, provided that such duties
and responsibilities are consistent with Xxxxxxxx 's senior management
position. Xxxxxxxx hereby agrees to accept such employment and shall
perform and discharge faithfully, diligently, and to the best of his
abilities such duties and responsibilities and shall devote most of his
working time and efforts to the business and affairs of the Company and
its subsidiaries; provided however, that, to the extent consistent with
the needs of the Company, Xxxxxxxx shall be entitled to expend a
reasonable amount of time on civic, public, industry, and philanthropic
activities and on the management of his own investments and assets.
Xxxxxxxx recognizes that as a matter of law the election of a person to a
board of directors is performed by the shareholders of a corporation and
that such election cannot generally be the subject of a contractual
agreement, however, as long as Xxxxxxxx is elected to the board as a
director, Xxxxxxxx shall perform all those duties of a Director.
2. Place of Employment. During his employment hereunder, Xxxxxxxx 's
principal place of employment shall be located at the Company's principal
place of business or principal executive office, wherever located as
designated from time to time by the Board of Directors of the Company;
provided however, notwithstanding the foregoing, Xxxxxxxx shall be
required to conduct his duties and responsibilities hereunder (except for
routine and customary business travel) only from executive offices
located in Georgia.
3. Compensation.
(a) Base Salary. The Company shall pay to Xxxxxxxx an annual base
salary ("Base Salary") of $80,000, payable in accordance with the
Company's customary payroll policy for its executives, and subject to
applicable tax and payroll deductions, and an annual non-accountable
expense allowance of $20,000.00 payable monthly. Xxxxxxxx' Base Salary
shall be reviewed annually by the Company's Board of Directors which
may make upward adjustments as within its discretion and it deems
appropriate.
(b) Incentive Compensation. Xxxxxxxx' incentive compensation, if
any, shall be determined annually by the Company's Board of Directors.
(c) Certain Other Benefits. During the term of this Agreement,
Xxxxxxxx shall be entitled to equity participate in any and all Xxxxxxxx
benefit plans and arrangements which are available to senior executive
officers of the Company, including without limitation, group medical and
life insurance plans, accidental death benefit plans, disability
insurance plans, pension plans, and automobile expense reimbursement
allowances or Company-provided automobiles.
4. Term. The term of Xxxxxxxx' employment with the Company shall be for a
one-year period commencing July 1, 1998 or earlier and continuing through
June 30, 1999 (the "initial term"); provided, however, that this
Agreement shall be automatically renewed for successive one-year periods
(each a "successor term"; and together with the initial term, generally
'the term') unless either party hereto gives written notice of
termination to the other party at least twelve months prior to the
expiration of the initial term or of any successor term. By way of
illustration, if neither party gives to the other party a written notice
of termination by June 30, 1999 this Agreement shall be automatically
renewed for a one-year period ending on June 30, 2000.
5. Stock Options. Periodic stock and incentive stock option grants to
Xxxxxxxx, if any, shall be determined by the Board of Directors.
6. Unauthorized Disclosure and Xxxxxxxx 's Right of Ownership. For a
period of two years after termination of employment, Xxxxxxxx shall not
without the written consent of the Company, disclose to any person, other
than person to whom disclosure is reasonably necessary or appropriate in
connection with the performance by Xxxxxxxx of his duties as an executive
officer of the Company, any material confidential information obtained by
Xxxxxxxx while in the employ of the Company with respect to the
businesses of the Company or any of its subsidiaries, including by not
limited to, operations, pricing, contractual or personnel date, products,
discoveries, improvements, trade secrets, license agreements, marketing
information, suppliers, dealers, principals, customers, or methods of
distribution, or any other confidential information the disclosure of
which Xxxxxxxx knows or in the exercise of reasonable care should know
will be damaging to the Company; provided, however, that confidential
information shall not include any information known generally to the
public (other than as a result of unauthorized disclosure by Employee)
or any information not otherwise considered by the Company to be
confidential. Furthermore, all inventions conceived or developed by
Xxxxxxxx in which the equipment, supplies, facilities, or trade secret
information of the Company was used, or that relate to the business of
the Company or to the Company's actual or demonstrably anticipated
research and development, or that result from any work performed by
Xxxxxxxx for the Company will remain the property of the Company. All
other inventions conceived or developed by Xxxxxxxx during the term of
this Agreement will remain the property of Employee.
7. Indemnification of Employee. The Company shall indemnify Xxxxxxxx if
Xxxxxxxx is made a party, or threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative, or investigative, because Xxxxxxxx is
or was an officer or director of the Company or any of its subsidiaries,
affiliates, or successors, against expenses (including reasonable
attorneys fees and disbursements), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding to the fullest extent and in the manner
set forth in and permitted by the General Corporation Law of the State of
Georgia and any other applicable law in effort from time to time.
8. Termination.
(a) Termination Upon Death. If Xxxxxxxx dies during the term of this
Agreement, Xxxxxxxx' legal representatives shall be entitled to receive
the Base Salary through the last day of the first month following the
month in which Xxxxxxxx' death occurred. If in respect of the fiscal year
in which Xxxxxxxx dies he would otherwise have been entitled to receive
incentive compensation under paragraph 3(c) by reason of the operations
of the Company during such fiscal year, Xxxxxxxx' legal representatives
shall be entitled to receive a pro rata portion of such incentive
compensation determined by multiplying the dollar amount of the incentive
compensation involved by a fraction, the numerator of which shall be the
number of complete calendar months that elapsed during the fisc4d year
through the end of the month in which Xxxxxxxx died and denominator of
which shall be twelve.
(b) Termination Upon Disability or Incapacity. The Company may
terminate Xxxxxxxx' employment hereunder at the end of any calendar month
by giving written notice of termination to Xxxxxxxx in the event of
Xxxxxxxx' incapacity due to physical or mental illness which prevents the
proper performance of the duties of Xxxxxxxx set forth herein or
established pursuant hereto for a substantial portion of any six-month
period of Xxxxxxxx 's term of employment hereunder. Any questions as to
the existence or extent of illness or incapacity of Xxxxxxxx upon which
the Company and Xxxxxxxx cannot agree shall be determined by a qualified
independent physician selected by the Company and approved by Xxxxxxxx
(or, if Xxxxxxxx is unable to give such approval, by any adult member of
the immediate family or the duly appointed guardian of Employee). The
determination of such physician certified in writing to the Company and
to Xxxxxxxx shall be final and conclusive for all purposes of this
Agreement. In the event of any such termination pursuant to this
subparagraph 8(b), Xxxxxxxx shall be entitled to receive his Base Salary
through the last day of the month in which this Agreement is terminated.
If in respect of the fiscal year in which Xxxxxxxx' employment terminates
pursuant to this subparagraph 8(b) he would otherwise have been entitled
to receive incentive compensation under paragraph 3(c) by reason of the
operations of the Company during such fiscal year, Xxxxxxxx shall be
entitled to receive a pro rata portion of such incentive compensation
determined by multiplying the dollar amount of the incentive compensation
by a fraction, the numerator of which shall be the number of complete
calendar months that elapsed during the fiscal year through the end of
the month in which Xxxxxxxx 's employment terminated pursuant to
subparagraph 8(b) and the denominator of which shall be twelve.
(c)Termination for Cause. The Company may terminate Xxxxxxxx'
employment hereunder for "cause" (as hereinafter defined) by giving
written notice of termination of this Agreement to Employee. For the
purpose of this Agreement, the Company shall have "cause" to terminate
Xxxxxxxx' employment hereunder upon Xxxxxxxx' (l) habitual drunkenness or
drug addiction or willful failure materially to perform and discharge his
duties and responsibilities hereunder, or (ii) misconduct that is
materially and significantly injurious to the Company, or (iii)
conviction of a felony involving the personal dishonesty of Xxxxxxxx or
moral turpitude, or (iv) conviction of Xxxxxxxx of any crime or offense
involving the property of the Company. Upon any such termination for
cause under this subparagraph 8(c), the Company shall pay Xxxxxxxx his
Base Salary through the date of termination, and the Company shall have
no further obligations under this Agreement.
(d) Termination Without Cause. The Company shall have the right to
terminate Xxxxxxxx 's employment under this Agreement at any time,
without cause, by giving Xxxxxxxx not less than sixty (60) days prior
written notice of such termination. Until the effective date of any such
termination, the Company shall continue to pay to Xxxxxxxx the full
compensation specified in this Agreement. In addition, on the effective
date of termination the Company shad pay to Xxxxxxxx the full amount of
all Base Salary to which Xxxxxxxx would otherwise have been paid
throughout the remaining term (including any successor term, if
applicable) of this Agreement.
9. Reimbursement of Legal Fees. The Company agrees to reimburse Xxxxxxxx
for reasonable attorneys fees, if any, incurred in connection with the
negotiation, preparation, and execution of this Agreement.
10. Application for Insurance. The Company at its option has the right to
obtain a "key-man" life insurance policy, at the Company's expense, with
the Company being the sole beneficiary of such policy. Xxxxxxxx hereby
agrees to undergo the necessary physical examinations and disclose any
pertinent disclaimers and information to obtain said policy.
11. Miscellaneous.
(a) Assignment and Binding Effect. The respective rights and
obligations of the parties under this Agreement shall be binding upon
the parties hereto and their heirs, executors, administrators,
successors, and assigns, including, in the case of the Company, any
other corporation or entity with which the Company may be merged or
otherwise combined or which may acquire all or substantially all of the
Company's assets and, in the case of Employee, his estate or other
legal representatives; provided that Xxxxxxxx may not assign his rights
hereunder without the prior written consent of the Company.
(b) Governing Law. This Agreement shall be governed as to its
validity, interpretation and effect by the laws of the State of Georgia.
(c) Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid, illegal, or unenforceable
for any reason, the remaining provisions and portions of this Agreement
shall remain in full force and effect to the fullest extent permitted by
law. Such invalid, illegal, or unenforceable provision(s) shall be deemed
modified to the extent necessary to make it (them) valid, legal and
enforceable.
(d) Entire Agreement; Amendments. This Agreement constitutes the
entire agreement and understanding of the Company and Xxxxxxxx with
respect to the terms of Xxxxxxxx 's employment with the Company and
supersedes all prior discussions, understandings, and agreements with
respect thereto.
(e) Captions. All captions and headings used herein are for
convenient reference only and do not form part of this Agreement.
(f) Waiver. The waiver of a breach of any term or provision of this
Agreement shall not operate as or be construed to be a waiver of any
other or subsequent breach or this Agreement.
(g) Notice. Any notice or communication required or permitted under
this Agreement shall be made in writing and shall be delivered by hand,
or mailed by registered or certified mail, return receipt requested,
first class postage prepaid, addressed as follows:
If to Xxxxxxxx:
Xxxxx X. Xxxxxxxx
3064 Intrepid Wake1
Xxxxxxxx, Xxxxxxx 00000
If to the Company:
Innovative Coatings Corporation
Suite 200
0000 Xxxx Xxxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attn: Chairman of the Board of Directors
(h) Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
Employee Innovative Coatings Corporation
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxx, Xx.
Xxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxx, Xx.
Its: Chairman of the Board
