EMPLOYMENT AGREEMENT
Exhibit
10.2
This EMPLOYMENT AGREEMENT (the
“Agreement”) dated as of June 1, 2009 between Xx. Xxxxxxxxx Xxxxxxxxxx (“CEO”),
and UTEC Inc., a Nevada Corporation (“the Company”) and its wholly and/or
partially-owned subsidiaries and affiliates, now owned or to be acquired in the
future by The Company (The Company, subsidiaries and affiliates being
hereinafter collectively referred to as the “Companies”), (Xx Xxxxxxxxx
Xxxxxxxxxx and UTEC Corporation being the “Parties” to this
Agreement).
WHEREAS, CEO has previously
been providing management services to manage the business and affairs of UTEC,
Inc., and its subsidiary, UTEC Corporation pursuant to the terms of an agreement
originally signed on July 1, 2008, and prior to that pursuant to the terms of a
management agreement (the “Red Stone Agreement”) dated December 8, 2006 and
further amended on January 11, 2007, with Red Stone Management Services LLC.
(“Red Stone”), a corporation owned by CEO,
AND WHEREAS, as of June 1,
2009 CEO wishes to enter into an agreement with UTEC Inc., and the Company
wishes to enter into an agreement with X. Xxxxxxxxxx as Managing Director and
Chief Executive Officer (“CEO”),
AND WHEREAS the parties agree
that this AGREEMENT dated June 1, 2009 will supersede all previous
agreements,
AND WHEREAS, the Board of
Directors of the Company (the “Board”) have unanimously agreed, and hereby
confirm, the appointment of Xx. Xxxxxxxxx Xxxxxxxxxx to serve as the Chief
Executive Officer and Managing Director of the Company, with authority to
perform the day-to-day management of the Company and its subsidiaries and
affiliates, now owned or to be acquired in the future.
NOW, THEREFORE, in
consideration of the foregoing, and of the mutual covenants and agreements
herein contained, the Parties agree as follows:
1. CEO
Duties.
a. With
support from the Secretary & Chairman or Co-Chairman, CEO shall operate and
manage the Companies according to guidelines provided by the Board from time to
time, and in so doing shall:
(i) Interact
with the Companies to establish operating goals, which will focus on
profitability, customer satisfaction, asset management and other related
benefits;
(ii) Monitor
operations and progress towards achieving the operating goals;
(iii) Recruit
and supervise the senior management team for the Companies, which appointments
shall be routinely approved by the Board.
(iv) Create,
develop and implement marketing plans for achievement of the operating goals at
the Companies;
(v) Provide
assistance in the recruitment, supervision and training of the employees of the
Companies.
(vi) Supervise
the accounting, human resources, management information services and
administrative services required of the Companies for the management of the
finances of the Companies, including, but not limited to, the establishment of
such lines of credit and other credit facilities as may be appropriate from time
to time for the Companies and the maintenance of books and records for the
Companies in accordance with generally accepted accounting principles and the
Companies’ requirements;
(vii)
Perform all such other duties and responsibilities as may be required from time
to time to operate the Companies in a businesslike manner pursuant to good
practices and in compliance with all applicable laws.
(viii) Provide
an annual forecast prior to year-end and obtain the approval of the Board for
the forecast, including anticipated capital outlays.
(ix)
Keep the Board advised of progress and
problems.
b.
CEO shall make, or cause to be made, annual, or more frequent, reports to the
Board concerning activities connected with the operation of Companies whenever
requested by the Companies or the Board. Such reports shall include, without
limitation, financial, market penetration, creditor relations, and customer
satisfaction reports.
2. Expenses. CEO shall reimbursed
for real, reasonable and customary costs and expenses incurred related to the
operation of the company and conducting business activities as well as all
travel expenses incurred while conducting the business of the Companies. All
requests for reimbursement of expenses shall be submitted in accordance with the
Companies’ expense reporting and reimbursement policies.
3. Benefits. In addition to a
salary, the Company will offer CEO participation in usual and normal employee
benefits, including social security benefits, health, accident and life
insurance (subject to CEO’s ability to qualify for such plans), annual paid
vacation, workers compensation, and such other benefits as may be established
from time to time by the Company appropriate to its executive employees. These
will be provided on a shared funding arrangement, which will be reviewed
annually. CEO’s entitlement to annual vacation beginning with each new calendar
year will be four weeks per year.
4. Remuneration. CEO shall be entitled
to an annual salary and bonus to a maximum of $300,000.00 per annum. The salary
and bonus shall be calculated as follows:
| a. | An annual salary payment of $200,000, payable in monthly installments in arrears and, | |
| b. | A bonus of 50% of the annual pre-tax earnings before depreciation and amortization as set forth in the Company’s annual audited financial statements, subject to a maximum payment of $100,000 in any one year. | |
| c. | A grant of stock options under the Employee & Director Stock Ownership Plan as approved from time to time by the Board, equal to at least twice the stock options granted to the next most senior employee of the company, generally expected to be the President of UTEC Corporation, and, | |
| d. | A grant of stock options under the Employee & Director Stock Ownership Plan for CEO’s service as a Director of the Company, on the same basis as stock options are granted to each other Director. |
All
benefits issued under sections 3b through 3d are irrevocable,
One-half
of the payments under section 3(b) may, under mutual agreement between the Board
and the CEO, be made in options for, or in shares of, the Company, subject to an
additional share allowance equal to 10% of the amount which would otherwise be
payable in cash.
The
Chairman or Co-Chairman will review CEO’s compensation annually in conjunction
with CEO’s annual performance review, and any recommendations for changes will
be made to the Board’s Compensation Committee for final approval.
5. Term. This Agreement shall
commence as of the date hereof, and shall continue for a period of three years
(“Initial Term”). Thereafter, the Agreement shall be automatically renewed for
successive three-year periods.
6. Termination. CEO’s employment may be
terminated by the Company in the event of;
| a. | CEO’s death, or, | |
| b. | CEO’s disability, such that CEO is unable to perform your duties on a full time basis for a period of six consecutive months as a result of incapacity or disability due to physical or mental illness, and you have failed to return to full time work within 30 days following written notice to do so, or, | |
| c. | Cause, which for purposes of this Agreement shall mean: |
| (i) | gross negligence, recklessness or willful misconduct in the performance of your duties hereunder; | |
| (ii) | a charge of fraud or embezzlement, or conviction for any crime involving violence or moral turpitude; | |
| (iii) | misuse, for personal gain or otherwise, of the assets of the company; | |
| (iv) | failure to devote the majority of CEO’s time and attention to the affairs of the company, pursuant to the terms of this Agreement |
7. Payment on
Termination. If this Agreement is
terminated by the Company “for Cause” prior to the end of the Initial Term, CEO
shall be entitled to the salary and bonus to which he would otherwise have
earned for the fiscal year in which the termination occurred, plus an amount
equal to the salary specified in section 3(a), prorated for the remaining
term of the Agreement. If this Agreement is not terminated for “Cause”, or if it
is terminated Upon Corporate Capital transactions, “CEO” shall be entitled to
receive compensation equal to the greater of (i) the period as enforced in
section ten (10) of this agreement or (ii) two (2) years, of remuneration
(salary plus bonus plus options) that would be payable hereunder in this
Agreement. A “Corporate Capital Change” shall be defined as the event that the
Company, its stockholders, or both, enter into a written agreement to dispose of
all or substantially all of the assets or stock of the Company by means of a
sale, merger, consolidation, reorganization, liquidation or similar transaction
(other than a reorganization, merger or consolidation effected solely to change
the Company’s name or state of incorporation), unless “CEO” accepts the position
of “CEO” for the new entity. In the event the Company, its stockholders, or both
terminate the “Corporate Capital Transaction” prior to successful completion,
the “CEO’s” rights hereunder, including the Executive’s rights to compensation,
shall be determined as if the Company and its stockholders had not entered into
the agreement to undertake the transaction.
8. Exculpation. CEO shall not be liable
to the Companies or any officer, director, employee, or shareholder of Companies
for honest mistakes of judgment, or for action or inaction, taken reasonably and
in good faith for a purpose that was reasonably believed to be in, or not
opposed to, the best interests of Companies, or for losses due to such mistakes,
action, or inaction. CEO may consult with counsel and accountants in respect of
any contemplated action or inaction, and be fully protected and justified in any
action or inaction that is taken in accordance with the advice or opinion of
such counsel or accountants.
9. Proprietary and
Confidential Information. As an executive manager
for the Company, CEO will be privy to proprietary information about the Company,
its Shareholders, and all aspects of its operations, plans and strategies. All
proprietary information shall be confidential and CEO agrees not to disclose it
to others, nor use it in any way for CEO’s own benefit.
10. Agreement Not to
Compete. The CEO does not have a
non-compete agreement. The company recognizes the CEO’s long record of novel
technology developments and
commercialization,
and recognizes that the CEO may from time to time develop systems outside the
technology area currently being developed by the Company in conjunction with
other groups either owned by CEO or in a consulting capacity. All such
developments will be the property of CEO.
11. General
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a.
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Indemnification.
The Company and it’s respective affiliates, representatives, shareholders,
parent(s) or subsidiary companies and respective directors, officers,
employees, agents, successors and assigns shall indemnify CEO from and
against any and all claims, orders, judgments, penalties, fines, remedies,
losses, liabilities, costs and expenses (including, but not limited to,
those arising directly or indirectly out of or related in any manner to
the death or injury of any person, injury/damage to property, court costs,
litigation expenses or attorneys fees) sustained, asserted or claimed by
any party as a result of, arising directly or indirectly from or related
in any manner to the management of the Companies or the performance of
CEO’s obligations under this Agreement.
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b.
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Governing
Law. THIS AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO, AND
THE ENTIRE RELATIONSHIP BETWEEN THE PARTIES RELATING HERETO, SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE
LAWS (BUT NOT THE RULES GOVERNING CONFLICTS OF LAWS) OF THE STATE OF
NEVADA. THE PARTIES AGREE THAT THIS AGREEMENT SHALL BE FULLY PERFORMABLE
IN XXXXX COUNTY, NEVADA.
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This
Agreement is entered into and is effective as of the date first writen
above.
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UTEC
Inc.
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By:
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/s/
Xxx Xxxxxxxxx
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Name:
Xxx Xxxxxxxxx
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Title:
Secretary & Co-Chairman
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By:
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Name:
Xxxxxxxxx Xxxxxxxxxx
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Title:
CEO
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