AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is
made and entered into as of September 1, 1998 but is effective as of April 30,
1998 (the "Effective Date"), between Peregrine Industries, Inc., a Florida
corporation (the "Company"), whose principal place of business is 000 Xxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxx 00000 and Xxxxxx X. Xxxx, an individual
(the "Employee"), who resides at 0000 Xxx Xxxxx, Xxxxx Xxxxxxxxxx, XX 00000.
WHEREAS, the Company is engaged in the manufacture and distribution of
heat pump pool heaters and is presently expanding its manufacturing and
distribution to include both a single unit heat pump which functions as a
residential air conditioner, hot water heater and swimming pool heater and a
residential central air conditioning unit (collectively, the "Business
Activities"); and
WHEREAS, the Company desires to employ the Employee and the Employee
desires to be in the employ of the Company; and
WHEREAS, the Company has established a valuable reputation and goodwill
in its business, with expertise in all aspects of the Business Activities; and
WHEREAS, the Employee has created and established, at least in part,
and is in possession of, the manner, methods, trade secrets and other
confidential information pertaining to the Company's Business Activities.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Company and the Employee do hereby agree as follows:
1. Recitals. The above recitals are true, correct, and are herein
incorporated by reference.
2. Employment. The Company hereby employs the Employee, and the
Employee hereby accepts employment, upon the terms and conditions hereinafter
set forth.
3. Authority and Power During Employment Period.
a. Duties and Responsibilities. During the term of this Agreement, the
Employee shall serve as Chief Financial Officer and Treasurer of the Company and
shall have such responsibilities and duties as are customarily undertaken by
individuals in similar positions.
b. Time Devoted. Throughout the Term of the Agreement, the Employee
shall devote substantially all of the Employee's business time and attention to
the business and
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affairs of the Company consistent with the Employee's position with the Company,
except for reasonable vacations and except for illness or incapacity.
4. Term. The Term of employment hereunder will commence on the
Effective Date as set forth above and end three (3) years from the Effective
Date, subject to such additional one (1) year extensions (the "Renewal Term(s)")
as the parties may agree to be exercisable by written notice given the by the
Employee to the Company at least 45 days before the expiration of the Term or
the Renewal Term, as the case may be, unless this Agreement shall have been
terminated pursuant to Section 6 of this Agreement.
5. Compensation and Benefits.
a. Salary. The Employee shall be paid a base salary (the "Base
Salary"), payable weekly, at an annual rate of Fifty Thousand Dollars
($50,000).At the sole discretion of the Board of Directors, Employee's Base
Salary may be increased during the term of this Agreement in the event of a
"material change" in the scope of Employee's duties. For the purposes of this
Agreement, "material change" shall mean a significant expansion of the Company's
business and operations^, a material diversification of the Company's Business
Activities, one or more acquisitions or other similar long-term, permanent
occurrences which would result in the Employee undertaking additional
responsibilities for the Company. Notwithstanding anything contained herein, the
possible amount of and timing of any increase in the Base Salary is solely
within the discretion of the Board of Directors, with the Employee abstaining
from such vote, and there are no understandings, commitments, assurances or
guarantees the Board of Directors will vote to increase the Base Salary during
the term of this Agreement.
b Options.
i. Employee shall be granted 10,000 options (the "Initial Options")
to purchase shares of the Company's Common Stock at an exercise price of $1.00
per share, which such options are granted under the Company's 1998 Stock Option
Plan and pursuant to the form of Option attached hereto as Exhibit A and
incorporated herein by such reference. Such options shall be exercisable from
the date of vesting and shall vest (i) 5,000 options on May 1, 1998, (ii) 2,500
options on May 1, 1999, and (iii) the remaining 2,500 options on May 1, 2000.
The Initial Options shall expire May 1, 2002.
ii. Provided Employee shall be in the employ of Company, Employee
shall be granted on May 1, 1999 options for 5,000 shares, which such options
shall be granted under the Company's 1998 Stock Option Plan and pursuant to the
form of Option attached hereto as Exhibit A and incorporated herein by such
reference. Such options (the "Additional Options") shall be granted at Fair
Market Value (as hereinafter defined), shall be exercisable for a period of five
years from the vesting date, and shall vest (i) 1,667 options on May 1, 2000,
(ii) 1,667 options on May 1, 2001, and (iii) the remaining 1,666 options on May
1, 2002. The Additional Options shall expire five years from the date of
vesting.
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iii. Provided Employee shall be in the employ of Company, Employee
shall be granted on May 1, 2000 options for 5,000 shares, which such options
shall be granted under the Company's 1998 Stock Option Plan and pursuant to the
form of Option attached hereto as Exhibit A and incorporated herein by such
reference. Such options (the "Additional Options") shall be granted at Fair
Market Value (as hereinafter defined), shall be exercisable for a period of five
years from the vesting date, and shall vest (i) 1,667 options on May 1, 2001,
(ii) 1,667 options on May 1, 2002, and (iii) the remaining 1,666 options on May
1, 2003. The Additional Options shall expire five years from the date of
vesting.
iv. In the event of (i) a sale of all or substantially all of the
assets of the Company; or (ii) a merger, stock exchange or other form of
business combination (the "Business Combination") the result of which being that
the shareholders of the Company, giving proforma effect to the pending private
placement of 1,000,000 shares of Common Stock will own, after the consummation
of such Business Combination, less that 49% of the then issued and outstanding
voting securities of the Company, then, in such event, on the effective date of
either the sale of all or substantially all of the Company's assets or a
Business Combination, all Initial Options and Additional Options not theretofore
vested shall immediately vest at the then current Fair Market Value of the
Company's Common Stock.
v. For the purposes of this Agreement, "Fair Market Value" shall be
equal to the closing price of the Company's Common Stock as reported on the OTC
Bulletin Board or the primary exchange on which the Company's Common Stock shall
be quoted. In the absence of a public trading market for the Company's Common
Stock, Fair Market Value shall be equal to the book value of a share of the
Company's Common Stock as reported in the audited financial statements of the
Company.
c. Employee Benefits. The Employee shall be entitled to participate in
all benefit programs of the Company currently existing or hereafter made
available to executive and/or salaried employees, including, but not limited to,
stock option plans, pension and other retirement plans, group life insurance,
hospitalization, surgical and major medical coverage, sick leave, salary
continuation, vacation and holidays, long-term disability, and other fringe
benefits.
d. Vacation. During each fiscal year of the Company, the Employee shall
be entitled to two (2) weeks vacation per year. Employee shall evidence
reasonable judgment with regard to appropriate vacation scheduling.
e. Business Expense Reimbursement. During the Term of employment, the
Employee shall be entitled to receive proper reimbursement for all reasonable,
out of-pocket expenses incurred by the Employee (in accordance with the policies
and procedures established by the Company) in performing services hereunder,
provided the Employee properly accounts therefor.
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6. Consequences of Termination of Employment.
a. Disability. In the event of the Employee's disability, the Employee
shall be entitled to compensation in accordance with the Company's disability
compensation practice for its senior officers. "Disability," for the purposes of
this Agreement, shall be deemed to have occurred in the event (A) the Employee
is unable by reason of sickness or accident, to perform the Employee's duties
under this Agreement for an aggregate of 90 days in any 12-month period or 45
consecutive days, or (B) the Employee has a guardian of the person or estate
appointed by a court of competent jurisdiction. Termination due to disability
shall be deemed to have occurred upon the first day of the month following the
determination of disability as defined in the preceding sentence.
b. Termination by the Company for Cause.
i. Nothing herein shall prevent the Company from terminating
Employee for "Cause," as hereinafter defined. The Employee shall continue to
receive salary only for the period ending with the date of such termination as
provided in this Section 6(b). Any rights and benefits the Employee may have in
respect of any other compensation shall be determined in accordance with the
terms of such other compensation arrangements or such plans or programs.
ii. "Cause" shall mean (A) committing or participating in an
injurious act of fraud, gross neglect, misrepresentation, embezzlement or
dishonesty against the Company; (B) committing or participating in any other
injurious act or omission wantonly, willfully, recklessly or in a manner which
was grossly negligent against the Company, monetarily or otherwise; (C) engaging
in a criminal enterprise involving moral turpitude; (D) an act or acts (1)
constituting a felony under the laws of the United States or any state thereof;
or (2) if applicable, loss of any state or federal license required for the
Employee to perform the Employee's material duties or responsibilities for the
Company; or (E) any assignment of this Agreement by the Employee in violation of
Section 13 of this Agreement.
iii. Notwithstanding anything else contained in this Agreement, this
Agreement will not be deemed to have been terminated for Cause unless and until
there shall have been delivered to the Employee a notice of termination stating
that the Employee committed one of the types of conduct set forth in this
Section 6(b) contained in this Agreement and specifying the particulars thereof
c. Voluntary Termination. Notwithstanding anything contained herein to
the contrary, this Agreement may be terminated at any time upon the mutual
written consent of the Company and the Employee.
d. Termination by the Company Other Than For Cause. The foregoing
notwithstanding, the Company may terminate the Employee's employment for
whatever reason it deems appropriate; provided, however, that in the event such
termination is not
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based on Cause, as provided in Section 6(b) above, the Company may terminate
this Agreement upon giving 30 days' prior written notice to the Employee. During
such 30 day period, the Employee shall continue to perform the Employee's duties
pursuant to this Agreement, and the Company shall continue to compensate the
Employee in accordance with this Agreement. Upon expiration of such 30-day
period, the Company shall tender to the Employee an amount equal to eleven (11)
months' then current Base Salary under this Agreement.
7. Non-Disclosure of Information.
a. Non-Disclosure of Information. The Employee acknowledges that the
Company's trade secrets, private or secret processes, methods and ideas, as they
exist from time to time, customer lists and information concerning the Company's
Business Activities, including products, services, training methods,
development, technical information, marketing activities and procedures, credit
and financial data concerning the Company (the "Proprietary Information") are
valuable, special and unique assets of the Company, access to and knowledge of
which are essential to the performance of the Employee hereunder. In light of
the highly competitive nature of the industry in which the Company's Business
Activities are conducted, the Employee agrees that all Proprietary Information,
heretofore or in the future obtained by the Employee as a result of the
Employee's association with the Company, shall be considered confidential.
In recognition of this fact, the Employee agrees that the Employee,
during the Restricted Period, will not use or disclose any of such Proprietary
Information for the Employee's own purposes or for the benefit of any person or
other entity or organization (except the Company) under any circumstances unless
such Proprietary Information has been publicly disclosed generally or, unless
upon written advice of legal counsel reasonably satisfactory to the Company, the
Employee is legally required to disclose such Proprietary Information. Documents
(as hereinafter defined) prepared by the Employee or that come into the
Employee's possession during the Employee's association with the Company are and
remain the property of the Company, and when this Agreement terminates, such
Documents shall be returned to the Company at the Company's principal place of
business, as provided in the Notice provision (Section 9) of this Agreement.
b. Documents. "Documents" shall mean all original written, recorded, or
graphic matters whatsoever, and any and all copies thereof, including, but not
limited to: papers; books; records; tangible things; correspondence;
communications; telex messages; memoranda; work-papers; reports; affidavits;
statements; summaries; analyses; evaluations; client records and information;
agreements; agendas; advertisements; instructions; charges; manuals; brochures;
publications; directories; industry lists; schedules; price lists; client lists;
statistical records; training manuals; computer printouts; books of account,
records and invoices reflecting business operations; all things similar to any
of the foregoing however denominated. In all cases where originals are not
available, the term "Documents" shall also mean identical copies of original
documents or nonidentical copies thereof.
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c. Restrictive Period. The "Restrictive Period" shall be deemed to be
during the Term or Renewal Term of this Agreement and for a period of twelve
(12) months following termination of this Agreement.
d. Business Activities. "Business Activities" shall be deemed to
include the Business Activities the Company in which the Company is currently
engaged, as well as any additional activities which the Company or any of its
affiliates may engage in during the term of this Agreement.
e. Covenants as Essential Elements of this Agreement. It is understood
by and between the parties hereto that the foregoing covenants contained in
Section 7(a) are essential elements of this Agreement, and that but for the
agreement by the Employee to comply with such covenants, the Company would not
have agreed to enter into this Agreement. Such covenants by the Employee shall
be construed to be agreements independent of any other provisions of this
Agreement. The existence of any other claim or cause of action, whether
predicated on any other provision in this Agreement, or otherwise, as a result
of the relationship between the parties shall not constitute a defense to the
enforcement of such covenants against the Employee. In the event Employee shall
be in violation of the aforementioned restrictive covenants, the time limitation
thereof with respect to the defaulting party shall be extended for a period of
time equal to the period of time during which breach or breaches should occur;
and in the event Company should require or seek relief from breach in any court
or other tribunal, any covenant shall be extended for a period of time equal to
the pendency of such proceeding, including appeals thereof.
f. Survival After Termination of Agreement. Notwithstanding anything to
the contrary contained in this Agreement, the covenants in Section 7(a) shall
survive the termination of this Agreement and the Employee's employment with
Company.
g. Remedies.
i. The Employee acknowledges and agrees that the Company's remedy at
law for a breach or threatened breach of any of the provisions of Section 7(a)
herein would be inadequate and the breach shall be per se deemed as causing
irreparable harm to the Company. In recognition of this fact, in the event of a
breach by the Employee of any of the provisions of Section 7(a), the Employee
agrees that, in addition to any remedy at law available to the Company,
including, but not limited to monetary damages, all rights of the Employee to
payment or otherwise under this Agreement and all amounts then or thereafter due
to the Employee from the Company under this Agreement may be terminated and the
Company, without posting any bond, shall be entitled to obtain, and the Employee
agrees not to oppose the Company's request for equitable relief in the form of
specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available to the
Company.
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ii. The Employee acknowledges that the granting of a temporary
injunction, temporary restraining order or permanent injunction merely
prohibiting the use of Proprietary Information would not be an adequate remedy
upon breach or threatened breach of Section 7(a) and consequently agrees, upon
proof of any such breach, to the granting of injunctive relief prohibiting any
form of competition with the Company. Nothing herein contained shall be
construed as prohibiting the Company from pursuing any other remedies available
to it for such breach or threatened breach.
8. Withholding. Anything to the contrary notwithstanding, all payments
required to be made by the Company hereunder to the Employee or the Employee's
estate or beneficiaries shall be subject to the withholding of such amounts, if
any, relating to tax and other payroll deductions as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation. In
lieu of withholding such amounts, the Company may accept other arrangements
pursuant to which it is satisfied that such tax and other payroll obligations
will be satisfied in a manner complying with applicable law or regulation.
9. Notices. Any notice required or permitted to be given under the
terms of this Agreement shall be sufficient if in writing and if sent postage
prepaid by registered or certified mail, return receipt requested; by overnight
delivery; by courier; or by confirmed telecopy, in the case of the Employee to
the Employee's last place of business or residence as shown on the records of
the Company, or in the case of the Company, to its principal office as set forth
in the first paragraph of this Agreement, or at such other place as it may
designate.
10. Waiver. Unless agreed in writing, the failure of either party, at
any time, to require performance by the other of any provisions hereunder shall
not affect its right thereafter to enforce the same, nor shall a waiver by
either party of any breach of any provision hereof be taken or held to be a
waiver of any other preceding or succeeding breach of any term or provision of
this Agreement. No extension of time for the performance of any obligation or
act shall be deemed to be an extension of time for the performance of any other
obligation or act hereunder.
11. Completeness and Modification. This Agreement constitutes the
entire understanding between the parties hereto superseding all prior and
contemporaneous agreements or understandings among the parties hereto concerning
the Agreement. This Agreement may be amended, modified, superseded or canceled,
and any of the terms, covenants, representations, warranties or conditions
hereof may be waived, only by a written instrument executed by the parties or,
in the case of a waiver, by the party to be charged.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute but one agreement.
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13. Binding Effect/Assignment. This Agreement shall be binding upon the
parties hereto, their heirs, legal representatives, successors and assigns. This
Agreement shall not be assignable by the Employee but shall be assignable by the
Company in connection with the sale, transfer or other disposition of its
business or to any of the Company's affiliates controlled by or under common
control with the Company.
14. Governing Law. This Agreement shall become valid when executed and
accepted by Company. The parties agree that it shall be deemed made and entered
into in the State of Florida and shall be governed and construed under and in
accordance with the laws of the State of Florida. Anything in this Agreement to
the contrary notwithstanding, the Employee shall conduct the Employee's business
in a lawful manner and faithfully comply with applicable laws or regulations of
the state, city or other political subdivision in which the Employee is located.
15. Further Assurances. All parties hereto shall execute and deliver
such other instruments and do such other acts as may be necessary to carry out
the intent and purposes of this Agreement.
16. Headings. The headings of the sections are for convenience only and
shall not control or affect the meaning or construction or limit the scope or
intent of any of the provisions of this Agreement.
17. Survival. Any termination of this Agreement shall not, however,
affect the ongoing provisions of this Agreement which shall survive such
termination in accordance with their terms.
18. Severability. The invalidity or unenforceability, in whole or in
part, of any covenant, promise or undertaking, or any section, subsection,
paragraph, sentence, clause, phrase or word or of any provision of this
Agreement shall not affect the or enforceability of the remaining portions
thereof.
19. Enforcement. Should it become necessary for any party to institute
legal action to enforce the terms and conditions of this Agreement, the
successful party will be awarded reasonable attorneys' fees at all trial and
appellate levels, expenses and costs.
20. Independent Legal Counsel. The parties have either (i) been
represented by independent legal counsel in connection with the negotiation and
execution of this Employment Agreement, or (ii) each has had the opportunity to
obtain independent legal counsel, has been advised that it is in their best
interests to do so, and by execution of this Employment Agreement has waived
such right.
21. Construction. This Agreement shall be construed within the fair
meaning of each of its terms and not against the party drafting the document.
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THE EMPLOYEE ACKNOWLEDGES THAT THE EMPLOYEE HAS READ ALL OF THE TERMS
OF THIS AGREEMENT, UNDERSTANDS THE AGREEMENT, AND AGREES TO ABIDE BY ITS TERMS
AND CONDITIONS.
IN WITNESS WHEREOF, the parties have executed this Agreement as of date
set forth in the first paragraph of this Agreement.
Witness: THE COMPANY:
--------------------------------- PEREGRINE INDUSTRIES, INC.
--------------------------------- By:
-------------------------------------
Xxxxxxx X. Xxxxxxxxx, President
Witness: THE EMPLOYEE
---------------------------------
--------------------------------- -----------------------------------------
Xxxxxx X. Xxxx
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