EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the 1st day of January 1994, by and between
Eco Soil Systems, Inc., a Nebraska Corporation (the "Corporation"), and Xxxxxxx
X. Xxxxx, of San Diego County, California, (Hereinafter called "Employee"),
W I T N E S S E T H :
WHEREAS, the Corporation desires to employ the Employee as its
Executive Vice President in accordance with the following terms, conditions and
provisions; and
WHEREAS, the Employee desires to perform such services for the
Corporation, all in accordance with the following terms, conditions and
provisions;
WHEREAS, Employee has purchased 25.000 shares of the Corporation's
stock and loaned the Company $250,000 through a demand note;
NOW THEREFORE, in consideration of the mutual covenants herein
contained, it is agreed as follows:
SECTION 1. EMPLOYMENT AND DUTIES.
The Corporation hereby employs Employee, and Employee hereby accepts
employment as the Corporation's Executive Vice President ("EVP") to perform the
duties of managing the Corporation, subject always to the control and direction
of the Board of Directors of the Corporation (the "Board of Directors") and the
Company's Chief Executive Officer. Employee shall devote his full time and best
efforts to the performance of services hereunder and to the advancement of the
corporation's business and affairs.
1.1 Employee will be responsible for the day to day operations of the
firm and will have direct control of the Company's sales and marketing and
operations functions. Employee will be responsible for the sales and marketing,
product development, systems and contract pricing department. Employee will also
play a key role in any capital raising activities undertaken by the Company.
1.2 Employee shall also perform such other duties, including
administrative duties, in connection with the Corporation's business as shall
from time to time be assigned to him by the Chief Executive Officer and the
Corporation's Board of Directors.
SECTION 2. COMPENSATION.
Employee shall receive as compensation for the full and faithful
performance of his obligations hereunder, including the performance of services
as an officer, director or member of any committee of the Board of Directors, a
salary, the amount of which shall be determined from time to time by the Board
of Directors, but the Employee's annual salary shall not be less than $75,000
paid in equal installments twice (2) per month. In addition to such salary, the
Corporation, in the sole discretion of its Board of Directors, may pay to the
Employee bonus compensation.
SECTION 3. TERM.
This Agreement shall commence and become effective on January 1, 1994
and, unless sooner terminated as provided in Section 12, shall end on December
31, 1996. The first year of employment under the term hereof shall end on
December 31, 1994, and each subsequent year of employment under the term hereof
shall commence on January 1, and end on the following December 31 within said
term.
Employee agrees that until the Company receives the proceeds from the
sale of additional shares of common stock or other securities, that payments of
his salary and other benefits for the period January 1, 1994 through March 31,
1994 will be deferred. Once the Company elects to break escrow and receives the
proceeds of the "new investment", employee will be paid the deferred
compensation that is due and will begin to be paid on a timely, normal basis his
monthly salary.
SECTION 4. STOCK OPTION.
That pursuant to this Employment Agreement, and pursuant to two (2)
Nonqualified Stock Option Agreements by and between the Company and Employee
attached hereto and incorporated herein the Employee shall be granted a stock
option to purchase shares of the Company's common stock on the terms and
conditions set forth in said Nonqualified Stock Option Agreement.
SECTION 5. EXPENSES.
The Corporation will reimburse Employee far reasonable expenses
incurred by Employee in connection with the business of the Corporation
according to policies promulgated from time to time by the Board of Directors
upon presentation by Employee of appropriate substantiation for such expenses.
SECTION 6. EMPLOYEE BENEFIT PLANS.
During the term of his employment, Employee shall be entitled to
participate in any employee benefit plan or plans established and maintained by
the Corporation for its employees, in accordance with the eligibility
requirements and other terms and provisions of such plan or plans. It being
understood that the Corporation is under no obligation to Employee to establish
or maintain any employee benefit plan in which Employee may participate, and
that the terms and provisions of any employee benefits plan of the Corporation
are matters solely within the exclusive province of the Board of Directors.
SECTION 7. VACATION AND TIME OFF.
Employee shall be entitled to four (4) weeks of vacation in each year
of employment under the terms of this Agreement without reduction salary. Unused
vacation time may not be carried over to future years of employment hereunder.
In addition, the Employee shall be entitled to such additional time off from
work, without loss of compensation, for attendance at professional meetings,
conventions and educational courses in accordance with the Corporation's general
policy in this regard, as from time to time determined by its Board of
Directors.
SECTION 8. INSURANCE.
Employee agrees that the Corporation, in the discretion of its Board of
Directors, may apply for and procure on its own behalf, life insurance on the
life of Employee, for the purpose of protecting the Corporation against loss
caused by the death of the Employee. Employee agrees to submit to medical
examination and to execute or deliver any documentation reasonably required by
the Corporation's insurer in order to effectuate such insurance.
SECTION 9. MEDICAL AND DENTAL COVERAGE.
During his employment, Employee and his family, if any, shall be
entitled to any executive or other medical and dental coverage provided by the
Corporation.
SECTION 10. LEAVE OF ABSENCE.
The Board of Directors may, from time to time, grant a leave of absence
to Employee. The Employee shall have no right under this Agreement to any
compensation during such period of leave of absence, unless the Board of
Directors fixes and determines an amount of compensation to be paid to Employee
during a period of leave of absence. If Employee fails to return to active
employment with Employer within fifteen (15) days after termination of a leave
of absence, Employee shall be deemed to have breached this Agreement as of the
end of said period of leave of absence.
SECTION 11. SICK LEAVE AND DISABILITY.
11.1 The Employee shall be entitled to ten (10) calendar days of sick
leave in each year of employment hereunder without loss of compensation. Unused
sick leave shall not be carried over to future years of employment under this
Agreement.
11.2 Notwithstanding any other provision of the Agreement, if Employee
is "totally disabled" (as that term is defined in Section 15) for an aggregate
of 120 calendar days in any one year of employment under the terms of this
Agreement, then the Corporation shall not be obligated to pay to Employee the
Compensation provided in this Agreement for any period of "total disability"
during such year in excess of 120 days.
SECTION 12. TERMINATION.
This Agreement, including the Corporation's obligation pursuant to
Section 2 hereof to pay compensation to the Employee, shall be terminated upon
the happening of any one of the following events:
(a) At any time by mutual agreement in writing between the
Corporation and the Employee;
(b) Upon the death of the Employee;
(c) At the Corporation's option, if Employee shall be "totally
disabled" for a continuous period of time in excess of nine
(9) months under the term of this Agreement. The Corporation's
said option shall be exercised by giving at least thirty (30)
days prior written notice thereof to Employee.
(d) At the option of either party hereunder after thirty (30) days
prior written notice given to the other party, in the event of
a breach of any term or provision of this Agreement by the
other party which has not been cured within said thirty (30)
day period.
(e) If the Corporation has "good cause" for termination of
Employee including, but not limited to, the breach of the
covenants of this Agreement or other acts which the Board of
Directors of the Corporation reasonably constitute just and
good cause for the termination of the Employee.
SECTION 13. PAYMENT DUE UPON TERMINATION.
If your employment is terminated prior to the last day of December,
1996, for any reason other than your death or disability, your employment has
been terminated for "good cause" or you have voluntarily resigned in
circumstances not covered by Paragraph 14 below, then you shall be entitled to
receive, at the date of termination, severance pay equal to six (6) months of
pay at your then base salary rate.
SECTION 14. CHANGE IN CONTROL.
(a) If you voluntarily leave the employ of the Company within six
(6) months after any "change of control" not approved by the
affirmative vote of the "Continuing Directors" within ten (10)
days after they become aware of the events in question, you
will be entitled to receive, on the day of such termination,
severance pay equal to six (6) months of pay at your base
salary calculated at the rate in effect during the last year
of your term of employment. The normal employee benefits
maintained by the Company for its full-time employees shall be
available to you for six (6) months after such termination.
(b) For purposes of this Agreement:
1. A "change of control" will occur when (x) any persona c()mr)any or
institution becomes directly or indirectly, the beneficial owner of
thirty percent (30%) or more of the common stock of the Company, (y)
the "Continuing Directors" cease for any reason to constitute a
majority of the Board of Directors of the Company, or (z) any change in
control occurs within the meaning of the proxy rules of the Securities
and Exchange Commission; provided, however, that if in the case of an
event referred to in clause (x) or (z), two thirds of the Continuing
Directors so determine, no change in control will be deemed to have
occurred.
2. The "Continuing Directors" are those members of the Board of Directors
of the Company on the date of this Agreement or elected as Directors
prior to the event in question.
3. Your rights under this paragraph are in lieu of your rights under
Paragraph 13 and any other rights you may have under this Agreement.
Accordingly, if you elect under Paragraph 14, you may not receive
compensation under 13 hereof.
4. The change of control definition will not apply if any person,
institution or company becomes -- with your approval -- the beneficial
owner of 30% or more of the common stock of the Company through the
sale of any additional common stock or other additional securities of
the Company.
SECTION 15. TOTAL DISABILITY.
For purposes of this Agreement, Employee shall be considered to be
"totally disabled" when he is considered to be totally disabled by any insurance
company used by the Corporation to provide disability benefits for the Employee,
and Employee shall continue to be considered "totally disabled" until such
insurance company ceases to recognize him as "totally disabled" for purposes of
disability benefits. If no such disability insurance policies are in force for
the benefit of Employee, or if for any reason an insurance company fails to make
a determination of the question of whether Employee is "totally disabled",
Employee shall be considered to be "totally disabled" if, because of mental or
physical illness or other cause, he is unable to perform the majority of his
usual duties on behalf of the Corporation. The existence of "total disability"
of Employee, the date it commenced, and the date it ceases, shall be determined
by the Board of Directors and the Employee. If, however, the parties cannot
agree, then any such determination shall be made after examination of Employee
by a medical doctor selected by the Board of Directors, and a medical doctor
selected by the Employee. If the medical doctors cannot agree, a third medical
doctor shall be selected by the two doctors and the conclusion of a majority of
said doctors shall be final and binding on the parties.
SECTION 16. COVENANT NOT TO COMPETE.
Employee hereby covenants and agrees that during his employment with
the Corporation, and for a period of one (l) year thereafter, he should not be
engaged either directly or indirectly, in any manner or capacity, whether as a
an adviser, principal, agent, partner, officer, director, employee, member of an
associations or otherwise, in any business or activity, or own beneficially, or
of record, five percent (5%) or more of the outstanding stock of any class of
equity securities in any corporation, in competition with the business or
activity of the Corporation.
16.1 It is understood that if Employee should breach aforesaid covenant
of noncompetition, the Corporation would suffer irreparable harm for which a
recovery of money damages would be an inadequate remedy. It is therefore agreed
that the Corporation shall be entitled, as a matter of right, in any court of
competent jurisdiction, to a mandatory injunction restraining and enjoining
Employee, pending litigation, as well as upon final determination thereof, from
attempting to violate or violating the aforesaid covenant of non-competition and
it is further agreed that the Corporation's right to such injunction relief
shall be cumulative with and in addition to any other rights, remedies or
actions which the Corporation may have against Employee.
SECTION 17. CONFIDENTIALITY.
17.1 Employee will in the course of his employment by the Corporation
have access to confidential or proprietary data or information of the
Corporation. Employee will not be at any time divulge or communicate to any
person (other than to a person bound by confidentiality obligations to the
Corporation similar to those contained in this Agreement) or use to the
detriment of the Corporation or for the benefit of any other person of such data
or information. The provisions of this Section 17.1 shall survive employee's
employment hereunder whether by the normal expiration of that employment or
otherwise. The term "confidential or proprietary data or information" as used in
this Agreement shall mean information not generally available to the public
including, without limitation, personnel information, financial information,
customer lists, supplier lists, trade secrets, secret processes, know-how,
computer data and programs, pricing, marketing and advertising data. The
Employee acknowledges and agrees that any confidential or propriety data or
information that Employee has heretofore acquired was received in confidence and
as a fiduciary with respect to the business of the Corporation.
17.2 All written materials, records and documents made by Employee or
coming into Employee's possession during the term of employment concerning any
products, processes, information or services used, developed, investigated or
considered by the Corporation, or otherwise concerning the business or affairs
of the Corporation, shall be the sole property of the Corporation and upon
termination of Employee's employment, or upon request by the Board of Directors
during Employee's employment, Employee shall promptly deliver the same to the
Corporation. In addition, upon termination of Employee's employment, Employee
shall deliver to the Corporation all other property of the Corporation in
Employee's possession or under Employee's control including, but not limited to,
financial statements, marketing and sales data and other document and all
Employer credit cards.
SECTION 18. NOTICE.
Any notice or other communication required or desired to be sent
pursuant to this Agreement shall be in writing, and shall be deemed to have been
duly given when delivered personally or when deposed in the mails, certified or
registered, return receipt requested, and with the proper postage prepaid,
addressed as follows:
If to the Corporation: Eco Soil Systems
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
If to the Employee: Xxxxxxx X. Xxxxx
00000 Xxxxx Xxxxxx
Xxx Xxxxx, XX 00000
or such other address as either party hereto may designate for itself or written
notice given to the other party from time to time in the manner herein and above
provided.
SECTION 19. WAIVER.
This Agreement shall not be modified or amended except by a further
written documents signed by Employee and approved by the Board of Directors. No
provisions hereof may be waived except by an Agreement in writing signed by the
waiving party. A waiver of any term of provision shall not be construed as a
waiver of any other term or provision.
SECTION 20. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall constitute one and the same instrument.
SECTION 21. ENTIRE AGREEMENT.
This Agreement contains the entire understanding between the parties
relating to the
SECTION 22. APPLICABLE LAW.
This Agreement shall be subject to and governed by the laws of the
State of Nebraska and all questions concerning the meaning and intention of the
terms of this Agreement and concerning the validity hereof and questions
relating to performance hereunder shall be adjudged and resolved in accordance
with the laws of that state.
SECTION 23. BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefits of the
parties hereto, and their respective heirs, successors, legal representatives
and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the 1st day of January, 1994.
ECO SOIL SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
And
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
