Exhibit 99.2
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement) is entered into this
2nd day of July, 1998 by and between UNITED XXXXXXX CORPORATION, a
Colorado corporation (the "Company" or "Employer") and Xxxxxxx X.
Pakrosnis, an individual residing at 0000 Xxxxx Xxxxx, Xxxxxxxx,
XX 00000.
WHEREAS, the Company is willing to employ the Employee and
the Employee is willing to be employed by the Company on the
terms, covenants and conditions set forth herein; and
WHEREAS, the Company and the Employee desire to define in
this Agreement, the rights, duties and obligations of the
employment agreed to between the parties;
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained in this Agreement and specifically in
consideration of the employment of the Employee by the Company for
the compensation and upon the terms set forth herein, the parties
agree as follows:
1. TERM. Subject to the provisions for termination as
hereinafter provided, the Company hereby agrees to
employ the Employee and the Employee agrees to be
employed by the Company, for a term of three (3) years
beginning on July 6, 1998.
2. DUTIES OF EMPLOYEE.
A. The Employee agrees to perform the services
provided herein to the best of his ability and to
the satisfaction of the Board of Directors of the
Company. The Employee shall devote his full time,
attention, energies and best efforts to providing
said services to the Company.
B. The Company hereby employs and engages the
Employee in the position of Vice President and
Chief Financial Officer (Principal Accounting
Officer). Specific job responsibilities to be
rendered by Employee are outlined in Exhibit 1
attached hereto, subject to the reasonable
assignment by the Chief Executive Officer of
additional or different duties, so long as the
nature of same shall be consistent with and
appropriate to an executive position of no lesser
than that of other executives reporting directly
to the Company's Chief Executive Officer.
3. COMPENSATION.
A. (i) As compensation for the full and faithful
performance of the services to be rendered by the
Employee to the Company as set forth in Section 2
hereof, the Company shall pay the Employee a base
salary of $120,000 for the period from July 6,
1998 through December 31, 1998 and for each
subsequent one-year period (subject to Sections 3
(c) and 6) thereafter.
(ii) As additional compensation and consideration
for entering into this Agreement, the Employer
shall (a) grant to Employee on August 3, 1998 a
non-qualified stock option award with immediate
vesting pursuant to the United Xxxxxxx Corporation
1998 Long-Term Incentive Plan ("1998 LTIP") to
purchase 72,500 shares of common stock of Employer
with an exercise price equal to the fair market
value of the common stock utilizing the rules
defined by Section 7(h) of the 1998 LTIP, and (b)
make cash payments of $20,000 upon execution of
this Agreement and $20,000 within 30 days from the
execution of this Agreement.
B. Said salary shall be payable in twelve (12) equal
monthly installments in accordance with the
Company's normal payroll practices, and subject to
withholding of taxes as required by law.
C. Employee's base salary shall be reviewed at least
annually, commencing with a review during the
month of March, 1999 and may be adjusted from time
to time in the sole discretion of the Board of
Directors of the Company, but in no event will it
be adjusted to an amount lower than $120,000 per
year.
D. Employee shall receive an annual cash bonus of 25%
of base compensation based on the Employee's
performance of the duties set forth in Section 2,
which may be amended from time to time. Employer
agrees that the annual bonus for the six (6 )
month period ending December 31, 1998 of $30,000
shall be guaranteed and shall be paid within 60
days of the end of the calendar year. Each
successive annual bonus awarded to Employee shall
also be paid within 60 days of the end of the
calendar year.
E. Employee shall receive an additional performance
bonus in cash, common stock of the Company,
options to purchase common stock of the Company,
or any combination of cash, common stock and
options, with the method of payment to be at the
discretion of the Board of Directors of the
Company if the Company's performance goals,
established from time to time by the Board, are
met. The parties agree that the goals for the
first six (6) months of this Agreement are as
stated in Exhibit 2. The performance bonus is to
be paid within 60 days of the end of the calendar
year.
4. BENEFITS AND EXPENSES. During the term of this
Agreement, the Company shall provide to the Employee:
A. Reimbursement of all ordinary and reasonable
business-related expenses incurred during the
performance of the services set forth in Section 2
hereof upon submission of receipts for the same.
All such expenses are subject to the approval of
the Company. Reimbursement for automobile mileage
will be at the rate currently prescribed by the
Internal Revenue Service.
B. Twenty (20) days paid vacation per calendar year
in accordance with the Company's vacation policy
to be taken at such time or times and for such
duration as Employee shall determine in accordance
with the Company policy provided that such
vacation shall not interfere with the material
performance of the services set forth in Section
2. Employee shall not be entitled to carry over
any unused portion of vacation into a subsequent
year.
C. Hospitalization and major medical insurance,
consistent with the Company's group policies, for
Employee and his immediate family, upon such terms
as are provided to employees of the Company
generally, which may be modified by the Company
from time to time.
D. Life insurance on Employee's life with a death
benefit equal to three (3) times Employee's base
compensation.
E. The Company agrees to provide to Employee the
additional fringe benefits available to salaried
employees of the Company generally, which may be
modified by the Company from time to time.
5. COVENANTS OF EMPLOYEE. The Employee agrees and
acknowledges that certain of the Company's services
are proprietary in nature and shall have been marketed
through the use of customer lists, trade secrets,
methods of operation and other confidential
information possessed by the Company and disclosed in
confidence to the Employee (hereinafter the "Trade
Secrets or Confidential Information) which may not
have been accessible to other persons in the trade.
Trade Secrets and Confidential Information shall not
include: (i) any information in the public domain,
(ii) any information received unsolicited from a third
party under no obligation of secrecy, or (iii) any
information known by Employee prior to entering into
this Agreement. The Employee also acknowledges that
he will have substantial and ongoing contact with the
Company's clients and will thereby gain knowledge of
client's needs and preferences, sources of information
and other valuable information necessary for the
success of the Company's business. The Employee
therefore covenants and agrees as follows:
A. He will not at any time take any action or make
any statement that could discredit the reputation
of the Company or its services or products.
B. During the term of this Agreement and for a period
of one (1) year following termination of
Employee's employment with the Company for any
reason, the Employee shall not:
(i) Solicit or accept business directly or
indirectly from any client of the Company
which does business within a five hundred
(500) mile radius of any facility owned or
operated by the Company;
(ii) Except as may be required by law, disclose,
divulge, discuss, copy or otherwise use or
suffer to be used in any manner, in
competition with, or contrary to the
interests of the Company, the Trade Secrets
or Confidential Information or any other
confidential information of or pertaining to
the Company or its services, disclosed to or
obtained by the Employee during the term of
this Agreement. The Employee further agrees
that he shall not, either during the term of
this Agreement or at any time subsequent
thereto, use, disclose or otherwise reveal
any of the Trade Secrets or Confidential
Information to any person, either directly or
indirectly, whether or not for compensation
or remuneration, except as necessary while
performing services on behalf of the Company;
(iii) Own, manage, advise, counsel, assist or
engage in the ownership, management or
control of, or be employed or engaged by or
otherwise affiliated or associated as a
consultant, independent contractor or
otherwise, directly or indirectly, with any
other corporation, partnership,
proprietorship, or other business entity, or
otherwise engage in any business which
competes with or is similar in nature to a
business in which the Company is engaged, and
from which the Company derives more than 5%
of its revenue, within a five hundred (500)
mile radius of any facility owned or operated
by the Company; and
(iv) In conjunction with 5 (B) (iii), solicit,
induce, aid or suggest to any of the
employees, officers, agents, or consultants
of the Company or other persons having a
substantial contractual relationship with the
Company, to leave such employ, cease any
consulting relationship with the Company, or
terminate such contractual relationship with
the Company.
C. Employee recognizes that the foregoing items are
material to this Agreement and that the failure to
abide by such terms shall constitute, sufficient
Cause for Termination of Employment as provided in
Section 6 hereof.
D. Employee agrees and understands that the remedy at
law for any breach of this Section 5 will be
inadequate and that damages flowing from such
breach are not readily susceptible to being
measured in monetary terms. Accordingly, in the
event that the Company shall institute any action
or proceeding to enforce the provisions of this
Agreement, the Employee hereby waives the claim or
defense therein that the Company has an adequate
remedy at law. Nothing in this Section 5 shall be
deemed to limit the Company's remedies at law or
in equity for breach by the Employee of any of the
provisions of this Section 5 which may be pursued
by the Company.
E. Employee shall not create or suffer to be created,
without the express prior written consent of the
Company, any mortgage, pledge, lien or encumbrance
of any kind whatsoever against or upon any
property of the Company, or make any contract or
create any obligation, liability or debt of any
kind, in the name of or binding upon the Company
without its prior written consent other than in
the ordinary course of business.
F. Employee agrees that, upon termination or
employment with the Company for any reason
whatsoever, Employee will immediately return to
Company all papers, books, price lists and price
information, lists of sources of supply, customer
lists, processes, inventions, mailing lists,
employee lists and resumes, computer print-outs,
manuals, sales literature, Employee's copies of
customer invoices, quotations, purchase orders,
any copies of the foregoing or any documents or
notes containing excerpts from the foregoing and
all other documents, data, equipment, and products
belonging to or related to the business of the
Company which may be in Employee's possession. If
any such information has been electronically
stored, Employee shall return all disks, or other
storage media, containing such information and
shall permanently delete such information from the
computer hard drive, or other non removable
storage device, or any computer owned or
controlled by Employee after providing the Company
a copy of the information.
G. Employee agrees to assign and hereby assigns to
Company all of Employee's right, title and
interest, if any, in and to all inventions,
improvements, patents, trademarks, copyrights, and
trade names, which during the period of Employee's
employment by Company,
Employee has obtained, made or conceived or may
hereafter make or conceive, either solely or
jointly with others, in the course of such
employment, within the scope of the Company's
business, work or investigations, or with use of
the Company's time, employees, material or
facilities, or relating to or suggested by work or
problems arising in Company's business of which
Employee has been or may become aware by reason of
Employee's employment. Employee agrees that
Employee will execute, acknowledge and deliver all
papers, documents, assignments and other
information as may be required by Company to
obtain any patents, trademarks, copyrights, trade
names or other registrations or applications in
the name of the Company.
H. Employee agrees that the remedy at law for any
breach by Employee of the covenants set forth in
the foregoing sections 5A, B, C, D, E, F, or G is
inadequate and the Company, in addition to having
an action at law for damages, shall be entitled to
injunctive relief to enforce these covenants.
6. TERMINATION.
A. The Employee and the Company specifically agree
that the employment of the Employee may terminate
only upon the occurrence of any one or more of the
following events:
(i) The cessation of the business of the Company,
either voluntary or involuntarily;
(ii) The merger, consolidation, reorganization or
dissolution of the Company;
(iii) Death or permanent disability of the
Employee, including but not limited to a
physical or mental disability which renders
Employee incapable of effectively and
efficiently performing his duties hereunder,
for a consecutive period of sixty (60) days
or for an aggregate of one hundred twenty
(120) days or more during any twelve month
period;
(iv) For "Cause," which means:
(a) an act or acts of dishonesty on the
Employee's part or conviction of any
felony, or any crime involving moral
turpitude or entering into a treatment
program in lieu of such conviction;
(b) any material violation by the Employee of
his responsibilities, duties or
obligations hereunder, or failure to
perform his duties as reasonably
instructed by the Board of Directors of
the Company. Employee shall be notified
in writing of any such alleged failure to
perform and shall be given a reasonable
time frame in which to remedy his failure
before he is terminated for cause under
this provision;
(c) engaging by Employee in conduct which is
demonstrably and materially injurious to
the Company, monetarily or otherwise,
including but not limited to, any
material misrepresentation related to the
performance of his duties;
(d) any material breach by Employee of this
Agreement. Employee shall be notified in
writing of any such alleged failure to
perform and shall be given a reasonable
time frame in which to remedy his failure
before he is terminated for cause under
this provision;
(e) material breach by Employee of any of his
obligations contained in the Company
handbook for Employees, or such other
document or collection of documents which
set forth Company policy. Employee shall
be notified in writing of any such
alleged failure to perform and shall be
given a reasonable time frame in which to
remedy his failure before he is
terminated for cause under this
provision; and
(v) By either party upon thirty (30) days written
notice.
B. Company shall give Employee thirty (30) days prior
written notice of termination of employment.
Company shall have the option: (i) to retain the
services of the Employee for said thirty (30)
days, or (ii) compensate Employee for the number
of days less than thirty (30) days he received
notice at the then current salary rate for
Employee.
C. Except as provided in 6 (E), upon termination of
the employment of Employee or any reason
whatsoever whether or not the termination is
determined to be for Cause and to protect Trade
Secrets and Confidential Information, the Employee
shall be entitled to no further salary or other
compensation, and the Company shall have no
further obligations under this Agreement, and
except that portion of any unpaid salary accrued
and earned by the Employee hereunder up to the
date of termination.
D. Upon termination of the employment of Employee for
any reason whatsoever, whether or not the
termination is determined to be for Cause under
this Section, this Agreement shall continue in
full force and effect with respect to Employee's
covenants and agreements set forth in Section 5
above, including the obligations to refrain from
competition with the Company, to refrain from
soliciting agents of the Company, and to protect
Trade Secrets and Confidential Information.
E. Upon termination of Employee by the Employer
without Cause, pursuant to Sections 6A(i), 6A(ii)
or 6A(v), upon "Constructive Termination" of
Employee through a material reduction in duties
and responsibilities or by breach of this
Agreement by Employer, Employer shall pay Employee
severance pay equal to three (3) times the sum of
1) his base salary in effect at the time of
termination, and 2) the bonuses of Employee for
the prior calendar year. Employee understands and
agrees that payment pursuant to this Section 6E
shall constitute liquidated damages and Employee
shall have no right to any other compensation from
Employer in connection with this Agreement. The
compensation payable under this provision may be
made in cash or in common stock of the Employer.
The Employer shall have the discretion to choose
cash or Employer common stock for 25% of the
payment made under this Section 6E and the
Employee shall have the discretion to be paid
either in cash or Employer common stock for the
remaining 75%. Employer common stock shall be
valued at the date of payment annually to
Employee. The compensation under this Section 6E
shall be paid in equal annual installments payable
once every twelve months beginning no later than
three (3) months following the date of termination
of Employee's employment. In addition, to the
extent that Employee has been granted (i) stock
options, stock appreciation rights or other equity
instruments of Employer under the terms of a stock
option, stock appreciation rights or other similar
program as may be implemented by the Company, all
such options, rights or equity instruments which
have not vested shall become fully vested and
exercisable by Employee without restrictions upon
termination, and/or (ii) shares of restricted
common stock, all such shares shall become
unrestricted and free and clear of all liens or
other encumbrances upon termination.
7. NOTICES. All notices, demands and other
communications given under this Agreement shall be in
writing and shall be deemed effective with hand
delivered or mailed by certified mail, return receipt
requested, postage prepaid to the following addresses:
If to Employee:
Xxxxxxx X. Pakrosnis
0000 Xxxxx Xxxxx
Xxxxxxxx, Xxxx 45 i4O
If to Company:
United Xxxxxxx Corporation
000 Xxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
or at such other addresses as the parties may
designate in writing.
8. ENTIRE CONTRACT. This Agreement constitutes the
entire understanding and agreement between the Company
and the Employee with regard to all matters contained
herein. This Agreement may be amended, supplemented
or interpreted at any time by written instrument duly
executed by all parties.
9. ASSIGNMENT. This Agreement shall not be assignable by
the Employee without the prior written consent of the
Company. This Agreement shall, to the extent not
limited hereby, inure to the benefit of and be
enforceable by the parties hereto, and their
respective heirs, representatives, successors and
assigns.
10. WAIVER. Any consent by any party to, or waiver of a
breach of any provision of this Agreement by the
other, whether express or implied, shall not
constitute a consent to, waiver of, or excuse for any
breach of any other provision or subsequent breach of
the same provision.
11. LEGAL CONSTRUCTION. In case any one of more of the
provisions contained in this Agreement shall for any
reason be held invalid, illegal or unenforceable in
any respect, that invalidity, illegality or
unenforceability shall not effect any other provision
of this Agreement, and this Agreement shall be
construed as of the invalid, illegal or unenforceable
provision had never been contained in it.
12. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the law of the state
of Ohio.
IN WITNESS WHEREOF, the parties have signed this
Agreement on the date first above written.
EMPLOYEE:
/s/ Xxxxxxx X. Pakrosnis
Xxxxxxx X. Pakrosnis
UNITED XXXXXXX CORPORATION
By: /s/ X.X. Xxxxx
X.X. Xxxxx
CEO & Chairman of the Board
