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Exhibit 99.6 EMPLOYMENT AGREEMENT
This employment agreement ("Agreement") is made and entered
into as of this date by and Exhaust Technologies, Inc., a
Washington corporation ("Corporation"), and Xxxxxxx Xxxxxxxx.
("Executive").
WHEREAS, the Corporation and the Executive desire that the
term of this Agreement begin upon receipt of a minimum of
$1,000,000 in proceeds from HSBC Bank, after deduction of Castle
Securities compensation ("Effective Date"); and
WHEREAS, the Corporation desires to employ the Executive as
its Vice President of Research and Development and Executive is
willing to accept such employment by the Corporation, on the
terms and subject to the conditions set forth in this Agreement.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
Section 1. Duties.
During the term of this Agreement, the Executive agrees to
be employed by and to serve the Corporation as its Vice President
of Research and Development and the Corporation agrees to employ
and retain the Executive in such capacities. In such capacity,
the Executive shall render such managerial, administrative and
other services as are customarily associated with or incident to
such position and shall perform such other duties and
responsibilities for the Corporation as the Corporation may
reasonably require, consistent with such position. The Executive
shall devote a substantial portion of her business time, energy,
and skill to the affairs of the Corporation as the Executive
shall report to the Corporation's board of directors.
The Corporation shall not appoint any individual to whom the
Executive shall report, or who shall have the right to supervise
the Executive, provided, however, that the Corporation's board of
directors may appoint one or more members of the board of
directors to coordinate the reporting from the Executive to the
board of directors. In the event that the Corporation changes
the Executive's title, working conditions or specifies duties so
that the Executive's powers and duties are diminished or reduced,
or include powers, duties or working conditions which are not
generally consistent with the title of Vice President of Research
and Development, or if the Corporation changes the reporting
relationship so that the Executive reports to another officer or
employee, other than the Corporation's board of directors as a
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whole, then at any time thereafter, at the Executive's option and
upon thirty days notice, and provided that such changes shall not
have been rescinded or corrected to the reasonable satisfaction
of the Executive within said thirty day period, the Executive
shall have the right to terminate the employment relationship,
and in such event, the employment shall be deemed to have been
terminated by the Corporation without cause.
Section 2. Term of Employment.
2.1 Definitions. For the purposes of this Agreement the
following terms shall have the following meanings:
2.1.1 "Termination For Cause" shall mean termination
by the Corporation of the Executive's employment by the
Corporation by reason of the Executive's willful dishonesty
towards, fraud upon, or deliberate injury or attempted injury to
the Corporation, or by reason of the Executive's willful material
breach of this Agreement which has resulted in material injury to
the Corporation.
2.1.2 "Termination Other Than For Cause" shall mean
termination by the Corporation of the Executive's employment by
the Corporation (other than in a Termination for Cause) and shall
include constructive termination of the Executive's employment by
reason of material breach of this Agreement by the Corporation,
such constructive termination to be effective upon notice from
the Executive to the Corporation of such constructive
termination.
2.1.3 "Voluntary Termination" shall mean termination
by the Executive of the Executive's employment other than
(i) constructive termination as described herein, (ii)
"Termination Upon a Change in Control," and (iii) termination by
reason of the Executive's death or disability as described
herein.
2.1.4 "Termination Upon a Change in Control" shall
mean a termination by the Executive of the Executive's employment
with the Corporation within 120 days following a "Change in
Control."
2.1.5 "Change in Control" shall mean (i) the time that
the Corporation first determines that any person and all other
persons who constitute a group (within the meaning of subsection 13(d)(3)
of the Securities Exchange Act of 1934 ("Exchange Act")) have
acquired direct or indirect beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) of twenty percent
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(20%) or more of the Corporation's outstanding securities, unless
a majority of the "Continuing Directors" approves the acquisition
not later than ten (10) business days after the Corporation makes
that determination, or (ii) the first day on which a majority of
the members of the Corporation's board of directors are not
"Continuing Directors."
2.1.6 "Continuing Directors" shall mean, as of any
date of determination, any member of the Corporation's board of
directors of the Corporation who (i) was a member of that board
of directors on January 31, 2001, (ii) has been a member of that
board of directors since inception of the Corporation, or (iii)
was nominated for election or elected to the Corporation's board
of directors with the affirmative vote of the greater of a
majority of the Continuing Directors who were members of the
Corporation's board of directors at the time of such nomination
or election.
2.2 Initial Term. The term of employment of the Executive
by the Corporation shall be for a period of three years beginning
with Effective Date ("Initial Term"), unless terminated earlier
pursuant to this Agreement. At any time prior to the expiration
of the Initial Term, the Corporation and the Executive may by
mutual written agreement extend the Executive's employment under
the terms of this Agreement for such additional periods as they
may agree.
2.3 Termination For Cause. Termination For Cause may be
effected by the Corporation at any time during the term of this
Agreement and shall be effected by written notification to the
Executive. Upon Termination For Cause, the Executive shall
promptly be paid all accrued salary, bonus compensation to the
extent earned, vested deferred compensation (other than pension
play or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any benefits under any
plans of the Corporation in which the Executive is a participant
to the full extent of the Executive's rights under such plans,
accrued vacation pay and any appropriate business expenses
incurred by the Executive in connection with her duties
hereunder, all to the date of termination, but the Executive
shall not be paid any other compensation or reimbursement of any
kind, including without limitation, Severance Compensation.
2.4 Termination Other Than For Cause. Notwithstanding
anything else in this Agreement, the Corporation may effect a
Termination Other Than For Cause at any time upon giving written
notice to the Executive of such termination.
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Upon any Termination Other Than For Cause, the Executive shall
promptly be paid all accrued salary, bonus compensation to the
extent earned, vested deferred compensation (other than pension
plan or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any benefits under any
plans of the Corporation in which the Executive is a participant
to the full extent of the Executive's rights under such plans
(including accelerated vesting, if any, of awards granted to the
Executive under the Corporation's stock option plan), accrued
vacation pay and any appropriate business expenses incurred by
the Executive in connection with her duties hereunder, all to the
date of termination, and all Severance Compensation provided, but
no other compensation or reimbursement of any kind.
2.5 Termination by Reason of Disability. If, during the
term of this Agreement, the Executive, in the reasonable judgment
of the Corporation's board of directors, has failed to perform
her duties under this Agreement on account of illness or physical
or mental incapacity, and such illness or incapacity continues
for a period of more than three consecutive months, the
Corporation shall have the right to terminate the Executive's
employment hereunder by written notification to the Executive and
payment to the Executive of all accrued salary, bonus
compensation to the extent earned, vested deferred compensation
(other than pension plan or profit sharing plan benefits which
will be paid in accordance with the applicable plan), any
benefits under any plans of the Corporation in which the
Executive is a participant to the full extent of the Executive's
rights under such plans, accrued vacation pay and any appropriate
business expenses incurred by the Executive in connection with
her duties hereunder, all to the date of termination, with the
exception of medical and dental benefits which shall continue
through the expiration of this Agreement, but the Executive shall
not be paid any other compensation or reimbursement of any kind,
including without limitation, Severance Compensation.
2.6 Death. In the event of the Executive's death during
the term of this Agreement, the Executive's employment shall be
deemed to have terminated as of the last day of the month during
which her death occurs and the Corporation shall promptly pay to
her estate or such beneficiaries as the Executive may from time
to time designate all accrued salary, bonus compensation to the
extent earned, vested deferred compensation (other than pension
plan or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any benefits under any
plans of the Corporation in which the Executive is a participant
to the full extent of the Executive's rights under such plans,
accrued vacation pay and any appropriate business expenses
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incurred by the Executive in connection with her duties
hereunder, all to the date of termination, but the Executive's
estate shall not be paid any other compensation or reimbursement
of any kind, including without limitation, Severance
Compensation.
2.7 Voluntary Termination. In the event of a Voluntary
Termination, the Corporation shall promptly pay all accrued
salary, bonus compensation to the extent earned, vested deferred
compensation (other than pension plan or profit sharing plan
benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of the Corporation in which
the Executive is a participant to the full extent of the
Executive's rights under such plans, accrued vacation pay and any
appropriate business expenses incurred by the Executive in
connection with her duties hereunder, all to the date of
termination, but no other compensation or reimbursement of any
kind, including without limitation, Severance Compensation.
2.8 Termination Upon a Change in Control. In the event of
a Termination Upon a Change in Control, the Executive shall
immediately be paid all accrued salary, bonus compensation to the
extent earned, vested deferred compensation (other than pension
plan or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any benefits under any
plans of the Corporation in which the Executive is a participant
to the full extent of the Executive's rights under such plans
(including accelerated vesting, if any, of any awards granted to
the Executive under the Corporation's Stock Option Plan), accrued
vacation pay and any appropriate business expenses incurred by
the Executive in connection with her duties hereunder, all to the
date of termination, and all Severance Compensation, but no other
compensation or reimbursement of any kind.
2.9 Notice of Termination. The Corporation may effect a
termination of this Agreement pursuant to the provisions of this
Section upon giving thirty (30) days' written notice to the
Executive of such termination. The Executive may effect a
termination of this Agreement pursuant to the provisions of this
Section upon giving thirty (30) days' written notice to the
Corporation of such termination.
Section 3. Salary, Benefits and Bonus Compensation.
3.1 Base Salary. As payment for the services to be
rendered by the Executive as provided in Section 1 and subject to
the terms and conditions of Section 2, the Corporation agrees to
pay to the Executive a "Base Salary" for the twelve (12) calendar
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months beginning the Effective Date at the rate of $75,000 per
annum payable in 12 equal monthly installments.
3.2 Additional Compensation. The Executive shall not
be paid additional compensation during the term of this
agreement.
3.3 Additional Benefits. During the term of this
Agreement, the Executive shall be entitled to the following
fringe benefits:
3.3.1 Executive Benefits. The Executive shall be
eligible to participate in such of the Corporation's benefits and
deferred compensation plans as are now generally available or
later made generally available to executive officers of the
Corporation, including, without limitation, the Corporation's
Stock Option Plan, profit sharing plans, annual physical
examinations, dental and medical plans, personal catastrophe and
disability insurance, financial planning, retirement plans and
supplementary executive retirement plans, if any. For purposes
of establishing the length of service under any benefit plans or
programs of the Corporation, the Executive's employment with the
Corporation will be deemed to have commenced on the Effective
Date.
3.3.2 Vacation. The Executive shall be entitled to
two (2) weeks of vacation during each year during the term of
this Agreement and any extensions thereof, prorated for partial
years.
3.3.3. Medical Insurance. For the term of this
Agreement and any extensions thereof, the Corporation shall at
its expense procure and keep in effect a Preferred Plan of
medical insurance through Medical Service Corporation of
Washington/Premera Blue Cross.
3.3.4 Life Insurance. For the term of this Agreement
and any extensions thereof, the Corporation shall at its expense
procure and keep in effect term life insurance on the life of the
Executive payable to the in the aggregate amount of $500,000 with
the Corporation being the beneficiary thereof. Further, the cost
of such insurance will be paid by the Corporation.
3.3.5 Automobile Allowance. For the term of this
Agreement and any extensions thereof the Corporation will
reimburse the Executive for mileage accumulated upon his motor
vehicle while being used for corporate matters..
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3.3.6 Reimbursement for Expenses. During the term of
this Agreement, the Corporation shall reimburse the Executive for
reasonable and properly documented out-of-pocket business and/or
entertainment expenses incurred by the Executive in connection
with her duties under this Agreement.
Section 4. Severance Compensation.
4.1 Severance Compensation in the Event of a Termination
Upon a Change in Control. In the event the Executive's
employment is terminated in a Termination Upon a Change in
Control, the Executive shall be paid as severance compensation
("Severance Compensation") her Base Salary (at the rate payable
at the time of such termination), for a period of twelve (12)
months from the date of such termination. Said Severance
Compensation shall be paid regardless of Executive being employed
by a new employer during such period. Notwithstanding anything
in this Section to the contrary, the Executive may in the
Executive's sole discretion, by delivery of a notice to the
Corporation within thirty (30) days following a Termination Upon
a Change in Control, elect to receive from Compensation a lump
sum Severance Compensation payment by bank cashier's check equal
to the present value of the flow of cash payments that would
otherwise be paid to the Executive pursuant to this Section. The
Executive shall also be entitled to an accelerated vesting of any
awards granted to the Executive under the Corporation's Stock
Option Plan to the extent provided in the stock option agreement
entered into at the time of grant. The Executive shall continue
to accrue retirement benefits and shall continue to enjoy any
benefits under any plans of the Corporation in which the
Executive is a participant to the full extent of the Executive's
rights under such plans, including any perquisites provided under
this Agreement, though the remaining term of this Agreement.
4.2 Severance Compensation in the Event of a Termination
Other Than for Cause. In the event the Executive's employment is
terminated in a Termination Other Than for Cause, the Executive
shall be paid as Severance Compensation her Base Salary (at the
rate payable at the time of such termination), for a period of
twelve (12) months from the date of such termination, on the
dates specified in Section 3.1. Said Severance Compensation will
be paid regardless of Executive being employed by a new employer
during such period. Notwithstanding anything in this Section to
the contrary, the Executive may in the Executive's sole
discretion, by delivery of a notice to the Corporation within
thirty (30) days following a Termination Upon a Change in
Control, elect to receive from Compensation a lump sum Severance
Compensation payment by bank cashier's check equal to the present
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value of the flow of cash payments that would otherwise be paid
to the Executive pursuant to this Section. The Executive shall
also be entitled to an accelerated vesting of any awards granted
to the Executive under the Corporation's Stock Option Plan to the
extent provided in the stock option agreement entered into at the
time of grant. The Executive shall continue to accrue retirement
benefits and shall continue to enjoy any benefits under any plans
of the Corporation in which the Executive is a participant to the
full extent of the Executive's rights under such plans, including
any perquisites provided under this Agreement, though the
remaining term of this Agreement.
4.3 No Severance Compensation Upon Other Termination. In
the event of a Voluntary Termination, Termination For Cause,
termination by reason of the Executive's death or disability as
described herein, the Executive or her estate shall not be paid
any Severance Compensation.
4.4 Limit on Aggregate Compensation Upon a Change in
Control. Notwithstanding anything else in this Agreement, solely
in the event of a Termination Upon a Change in Control, the
amount of Severance Compensation paid to the Executive, but
exclusive of any payments to the Executive in respect of any
stock options then held by the Executive (or any compensation
deemed to be received by the Executive in connection with the
exercise of any stock options at any time) or by virtue of the
Executive's exercise of a Limited Right under the Option Plan
upon a Change in Control, shall not include any amount that the
Corporation is prohibited from deducting for federal income tax
purposes by virtue of subsection 280G of the Internal Revenue Code or any
successor provision.
Section 5. Outside Activities of Executive.
The Corporation acknowledges that the Executive has
commitments and business activities not related to the
Corporation. There shall be no restriction on the Executive's
ability to fulfill such commitments or engage in such business
activities, provided that during the term of the Executive's
employment under this Agreement, the Executive devotes at lease
80% of his time to corporate matters.
Nothing in this Agreement shall preclude the Executive from
devoting time during reasonable periods required for investing
personal assets and/or those of family members in such form or
manner that will not violate this Agreement and these activities
will be permitted so long as they do not materially adversely
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affect the performance of the Executive's duties and obligations
to the Corporation.
Section 6. Payment Obligations.
The Corporation's obligation to pay the Executive the
compensation and to make the arrangements provided herein shall
be unconditional, and the Executive shall have no obligation
whatsoever to mitigate damages hereunder. If litigation after a
Change in Control shall be brought to enforce or interpret any
provision contained herein, the Corporation, to the extent
permitted by applicable law and the Corporations' articles of
incorporation and bylaws, hereby indemnifies and will pay the
Executive for the Executive's reasonable attorneys' fees and
disbursements incurred in such litigation.
Section 7. Confidentiality.
The Executive agrees that all confidential and proprietary
information relating to the Corporation's business shall be kept
and treated as confidential both during and after the term of
this Agreement, except as may be permitted in writing by the
Corporation's board of directors or as such information is within
the public domain or comes within the public domain without any
breach of this Agreement.
Section 8. Withholdings.
All compensation and benefits to the Executive hereunder
shall be reduced by all federal, state, local and other
withholdings and similar taxes and payments required by
applicable law.
Section 9. Indemnification.
In addition to any rights to indemnification to which the
Executive is entitled to under the Corporation's articles of
incorporation and bylaws, the Corporation shall indemnify the
Executive at all times during and after the term of this
Agreement to the maximum extent permitted under Washington
Business Corporation Act or any successor provision thereof and
any other applicable state law, and shall pay the Executive's
expenses in defending any civil or criminal action, suit, or
proceeding in advance of the final disposition of such action,
suit or proceeding, to the maximum extent permitted under such
applicable state laws.
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Section 10. Notices.
Notice under this Agreement shall be in writing and shall be
effective when actually delivered. If mailed, notice shall be
deemed effective 48 hours after mailing as registered or
certified mail, postage prepaid, directed to the other party at
the address set forth below or such other address as the party
may indicate by written notice to the other:
_______________________ ___________________
_______________________ ___________________
Section 11. Time.
Time is of the essence of this Agreement.
Section 12. No Release.
Both parties agree that the termination of this Agreement or
the expiration of the term of this Agreement shall not release
either party from any obligations under Sections this Agreement.
Section 13. Survival.
Any of the terms and covenants contained in this Agreement
which require the performance of either party after Termination
shall survive such Termination.
Section 14. Waiver.
Failure of either party at any time to require performance
of any provision of this Agreement shall not limit the party's
right to enforce the provision, nor shall any waiver of any
breach of any provision be a waiver of any succeeding breach of
any provision or a waiver of the provision itself for any other
provision.
Section 15. Assignment.
Except as otherwise provided within this Agreement, neither
party hereto may transfer or assign this Agreement without prior
written consent of the other party.
Section 16 Law Governing.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington.
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Section 17. Attorney Fees.
In the event a suit or action is brought by any party under
this Agreement to enforce any of its terms, or in any appeal
therefrom, it is agreed that the prevailing party shall be
entitled to reasonable attorneys fees to be fixed by the trial
court and/or appellate court.
Section 18. Presumption.
This Agreement or any section thereof shall not be construed
against any party due to the fact that said Agreement or any
section thereof was drafted by said party.
Section 19. Computation of Time.
In computing any period of time pursuant to this Agreement,
the day of the act, event or default from which the designated
period of time begins to run shall be included, unless it is a
Saturday, Sunday or a legal holiday, in which event the period
shall begin to run on the next day which is not a Saturday,
Sunday or a legal holiday, in which event the period shall run
until the end of the next day thereafter which is not a Saturday,
Sunday or legal holiday.
Section 20. Titles and Captions.
All article, section and paragraph titles or captions
contained in this Agreement are for convenience only and shall
not be deemed part of the context nor affect the interpretation
of this Agreement.
Section 21. Pronouns and Plurals.
All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine, neuter, singular or plural as
the identity of the Person or Persons may require.
Section 22. Entire Agreement.
This Agreement contains the entire understanding between and
among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this
Agreement.
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Section 23. Prior Agreements.
This document is the entire, final and complete agreement of
the parties and supersedes and replaces all prior or existing
written and oral agreements.
Section 24. Agreement Binding.
This Agreement shall be binding upon the heirs, executors,
administrators, successors and assigns of the parties hereto.
Section 25. Savings Clause.
If any provision of this Agreement, or the application of
such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of
such provision to persons or circumstances other than those as to
which it is held invalid, shall not be affected thereby.
Section 26. Separate Counsel.
The parties acknowledge that Executive has not been
represented in this transaction by counsel and the Corporation
has been represented by Xxxxxx X. Xxxxxx, Attorney and Counselor
at Law.
IN WITNESS WHEREOF, the parties have executed this
Agreement, the _____ day of ___________________, 2000.
Corporation
EXHAUST TECHNOLOGIES, INC..
BY: ______________________
Title_________________
Attest:
[Seal]
__________________________
Executive
__________________________
Xxxxxxx Xxxxxxxx