EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, dated March 29, 1996, is by and between Pyramid
Stores, Inc. (the "Company") and Xxxx X. Xxxxxxx ("Employee").
The Company desires to employ the Employee on a full time basis and the
Employee desires to be so employed by the Company.
Therefore, in consideration of the mutual covenants contained herein, the
parties agree as follows:
ARTICLE I
EMPLOYMENT DUTIES AND BENEFITS
SECTION 1.1 EMPLOYMENT. The Company hereby agrees to employ the Employee
in an executive capacity, which initially shall be as President, and the Employ-
ee agrees to be so employed, all subject to the terms and provisions of this
Agreement. Employee shall report for work on April 22, 1996, and salary shall
begin on that date.
SECTION 1.2 DUTIES AND RESPONSIBILITIES. The Employee is employed
pursuant to the terms of this Agreement. Employee shall devote his entire
working time, attention, and energies to the business of the Company. The
Employee agrees to serve in such office as he is appointed to by the Company's
Board of Directors and agrees to perform such responsibilities and duties as
may be determined and assigned to him by the Board of Directors of the Company.
SECTION 1.3 VACATIONS. The Employee shall be entitled each year to three
weeks vacation in accordance with the established practices of the Company now
or hereafter in effect for personnel in executive capacities during which time
the Employee's compensation shall be paid in full.
SECTION 1.4 COMPANY EXPENSES. The Employee is authorized to incur
reasonable expenses relating to his employment and which are for the benefit of
the Company. The Company will reimburse the Employee for all such expenses upon
the presentation by the Employee, from time to time, of an itemized account of
such expenditures. Any material expenditures, however, shall be subject at all
times to the prior approval of the Board of Directors. A vehicle owned by
either the Company or one of its subsidiaries will be generally available for
Employee's use.
SECTION 1.5 HEALTH INSURANCE. Premiums relating to the Group Health
Insurance in effect at Xxxxxx Oil & Butane Co., Inc. or Pyramid Stores, Inc.
at the time of employment will be paid 100% by the Company.
ARTICLE II
COMPENSATION
SECTION 2.1 BASIC SALARY. Except as otherwise provided herein, the Company
shall pay to the Employee an annual base salary during the term of this Agree-
ment equal to Eighty Thousand Dollars ($80,000.00) payable monthly.
SECTION 2.2 ANNUAL BONUS. The Company shall pay Employee an annual bonus
of 5% of each EBITDA dollar over "Base EBITDA" up to a maximum of 50% of your
annual base salary. At any time, bonus dollars may be exchanged for a share of
equity based on 85% of the market price of Meteor Industries' or Pyramid's com-
mon stock (if it becomes a public company) at the time you give the Company
written notice of your intent to exchange bonus dollars for stock. Base
EBITDA shall be calculated for Pyramid from April 1, 1995 - March 31, 1996
which is estimated to be approximately $1,800,000 to $2,000,000. Regarding
future acquisitions by Pyramid, base EBITDA for the purpose of calculating
the annual bonus, shall be equal to 85% of historical pro forma EBITDA of the
company acquired. Such annual bonus shall be paid based on calendar year per-
formance and calculated after the Company's year end audit is complete. The
Company shall have the option of paying such bonus over a 60 days period of
time after it is calculated.
SECTION 2.3 OPTIONS. Employee shall be granted pursuant to the option
agreements attached hereto, Incentive Stock Options to purchase up to 50,000
shares at an exercise price of $3.50 per share of Meteor Industries, Inc. and
50,000 shares of Pyramid Stores, Inc. at an exercise price of $3.00 per share
(assuming 1,5000,000 shares outstanding). Such Pyramid Stores, Inc. options
shall be exercisable only after Pyramid Stores, Inc. becomes a publicly traded
Company and its shares are registered with the Securities and Exchange
Commission.
ARTICLE III
TERM OF EMPLOYMENT AND TERMINATION
SECTION 3.1 TERM. This Agreement shall be for a period of three (3) years
commencing the date hereof, subject, however, to termination at any time as
provided in this Article. This Agreement shall be renewed automatically for
succeeding periods of one year on the same terms and conditions as contained in
this Agreement unless either party shall, at least thirty days prior to the
expiration of any employment period, give written notice of the intention to
terminate this Agreement. This Agreement shall continue to govern the rights
and duties of the parties during any extension period.
SECTION 3.2 TERMINATION. The Employee's employment hereunder may be
terminated without any breach of this Agreement under the following
circumstances:
(a) DEATH. The Employee's employment hereunder shall terminate
upon his death.
(b) DISABILITY. If, as a result of the Employee's incapacity due
to physical or mental illness, the Employee shall have been absent from his
duties hereunder on a full-time basis for the entire period of three consecutive
months, the Company may terminate the Employee's employment hereunder.
(c) CAUSE. The Company may terminate the Employee's employment here-
eunder, without prior notice, for Cause. For purposes of this Agreement, the
Company shall have "Cause" to terminate the Employee's employment hereunder
upon (i) the failure by the Employee to perform the duties assigned to him by
the Company's Board of Directors, or (ii) the engaging by the Employee in
misconduct which is materially injurious to the Company, monetarily, or other
wise or (iii) the violation by the Employee of the provisions of Article IV.
(d) TERMINATION WITHOUT CAUSE; SEVERANCE PAY. The Company may
terminate Employee's employment without cause upon prior written notice and
payment of six months base salary. Any accrued vacation and bonuses earned
through the termination date shall be paid within 30 days after termination.
(e) TERMINATION BY THE EMPLOYEE. The Employee may terminate his
employment hereunder only upon ninety (90) days prior written notice.
SECTION 3.3 COMPENSATION UPON TERMINATION OR DURING DISABILITY
(a) During the first thirty (30) day period that the Employee fails
to perform his duties hereunder as a result of incapacity due to physical or
mental illness ("disability period"), the Employee shall continue to receive his
full salary at the rate then in effect for such period, provided that payments
so made to the Employee during the disability period shall be reduced by the sum
of the amounts, if any, payable to the Employee at or prior to the time of any
such payment under disability benefit plans of the Company and which were not
previously applied to reduce any such payment.
(b) If the Employee's employment is terminated by his death, the
Company shall pay to the Employee's spouse, or if he leaves no spouse, to his
estate, Employee's full salary and accrued bonuses through the date of death.
(c) If the Employee's employment shall be terminated with or
without cause, the Company shall be obligated to pay the Employee his full
salary through the date of termination at the rate in effect at the time of
termination.
ARTICLE IV
CONFIDENTIALITY AND NON-COMPETE
SECTION 4.1 It is understood that Employee will acquire and be informed of
special and confidential business methods and processes used by and belonging to
the Company, including, methods, procedures, and software and other computer
related materials developed or used by the Company in connection with its
activities, as well as information relating to the business of the Company,
including information regarding acquisition candidates, potential customers,
customer lists, price lists and other confidential information. Employee agrees
that all such information constitutes a valuable and unique asset of the Company
and is in the nature of trade secrets and is the sole property of the Company.
Employee will keep confidential, and will not use, reproduce, copy or disclose
to any other person or firm, any information relating to such methods and
processes, or the names and business of customers, or accounts, analyses,
systems, flow charts, programs, edit procedures, or any other matters concerning
any work done by the Company for its customers or done in an effort to solicit
or obtain customers; nor will Employee furnish to any other person or firm any
information, correspondence, records, programs, systems, or other documents or
processes used by the Company; nor will Employee advise, discuss or in any way
assist any other person or firm (including customers or former customers of the
Company) in obtaining or learning about any of the foregoing in this Section.
Employee agrees that upon termination of employment under this Agreement, he
shall surrender promptly to the Company any and all trade secrets business
related telephone, address and business card lists or data base, customer lists
and any confidential information which he may possess and that such trade
secrets, lists and information shall be and remain the sole property of the
Company. All of the terms of this Section shall remain in full force and effect
both during the continuation of employment of Employee by the Company and after
the termination of employment for any reason.
SECTION 4.2 Employee will devote substantially all his business time and
effort to and give undivided loyalty to the Company. Commencing on the date of
this Agreement, he will not engage in any way whatsoever, directly or indirect-
ly, in any business that is competitive with the Company, nor solicit or in
any other manner work for or assist any business which is competitive to the
Company.
SECTION 4.3 During the term of this Agreement, Employee will undertake no
planning for or organization of any business activity competitive with the work
he performs as an employee of the Company, and Employee will not combine or
discuss with other employees of the Company for the purposes of organization of
any such competitive business activity.
SECTION 4.4 Employee agrees to execute any and all documents and take any
and all other actions necessary or desirable for the assignment to the Company
of all of his interests in any patents or patentable ideas developed by him,
alone or in conjunction with others, in the course of his employment by the
Company. Employee agrees with the Company that any and all investments,
discoveries, improvements, designs, methods, systems, developments, "know-how,"
ideas, suggestions, devices, trade secrets, and processes (hereinafter
collectively referred to as "Discoveries"), whether patentable or not, which are
discovered, disclosed to or otherwise obtained by the Employee during his or her
term of employment is confidential, proprietary information and is the sole and
absolute property of the Company. Employee agrees to disclose promptly and
voluntarily to the Company all such discoveries. Any discoveries which Employee
discloses or offers to third parties, publishes or are implemented by Employee
or disclosed in a patent application filed by the Employee within three months
following termination of employment will be presumed, unless proven otherwise by
Employee, to have been originated or made during the period of Employee's
employment and thereby, are subject to the provisions of this Agreement.
SECTION 4.5 The parties acknowledge that Employee will acquire much
knowledge and information concerning the business of the Company as the result
of his employment by the Company. The parties further acknowledge that the
scope of business in which the Company is engaged as of the date of execution
of this Employment Agreement, is a limited scope with a limited market and in
which few companies can successfully compete. Competition by Employee in
that business after this Agreement is terminated would severely injure the
Company no matter where in New Mexico or Colorado such competition occurred.
Accordingly,Employee agrees that for a period of two years from the termina-
tion of this Agreement, he shall not directly or indirectly, whether as an
owner, stockholder, partner, employee or otherwise, compete with the Company
or any affiliate of the Company anywhere within New Mexico or Colorado. The
period, the geographical area and the scope of the restrictions on Employee's
activities are divisible so that if any provision of the restriction is
invalid, that provision shall automatically be modified to the extent
necessary to make it valid. The provisions of this article shall be in
addition to any other similar agreements entered into by the Company and the
Employee and shall not serve to supplant or reduce the effect of such other
agreements.
SECTION 4.6 The parties hereto agree and acknowledge that many of the
rights conveyed by this Agreement are of a unique and special nature and that
the Company will not have an adequate remedy at law in the event of failure of
Employee to abide by its terms and conditions, nor will money damages adequately
compensate for such injury. It, therefore, is agreed between the parties that
in the event of breach by Employee of Employee's agreements contained in this
Article IV, the Company shall have the rights, among other rights, to damages
sustained thereby and to an injunction to restrain Employee from the prohibited
acts. Employee agrees that the terms of this Article shall be construed as
independent of any other agreements between the parties and shall survive the
termination of his employment and Employee shall be bound by its terms at all
items subsequent to the termination of his employment for so long a period as
the Company continues to conduct the same business or businesses as it was
conducting during the period of this Agreement. The existence of any claim
or cause of action of Employee against the Company, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforce-
ment by the Company of Employee's covenants in this Article. Nothing herein
contained shall in any way limit or exclude any and all other rights granted
by law or equity to the Company.
ARTICLE V
GENERAL MATTERS
SECTION 5.1 COLORADO LAW. This Agreement shall be governed by the laws of
the State of Colorado.
SECTION 5.2 NO WAIVER AND NOTIFICATION. No provision of this Agreement may
be waived except by an agreement in writing signed by the waiving party. A
waiver of any term or provision shall not be construed as a waiver of any other
term or provision.
SECTION 5.3 AMENDMENt. This Agreement may be amended, altered or revoked
at any time, in whole or in part, by filing with this Agreement a written
instrument setting forth such changes, signed by all of the parties.
SECTION 5.4 TEXT TO CONTROL. The headings of articles and sections are
included solely for convenience of reference. If any conflict between any
heading and the text of this Agreement exists, the text shall control.
SECTION 5.5 SEVERABILITY. If any provision of this Agreement is declared
by any court of competent jurisdiction to be invalid for any reason, such
invalidity shall not affect the remaining provisions. On the contrary, such
remaining provisions shall be fully severable, and this Agreement shall be
construed and enforced as if such invalid provisions never had been inserted in
the Agreement.
SECTION 5.6 ENTIRE AGREEMENT. This Agreement contains, and its terms
constitute, the entire agreement of the parties, and it may be amended only by
a written document signed by both parties to this Agreement.
SECTION 5.7 ATTORNEYS FEES. In the event either party hereto finds it
necessary to employ legal counsel or to bring an action at law or other
proceedings against the other party to enforce any of the terms, covenants, or
conditions hereof, the party prevailing in any such action or other proceedings
shall be paid all reasonable attorney's fees by the other party as well as
courts costs.
SECTION 5.8 NOTICE. For the purposes of this Agreement, notices, demands
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States registered mail, return receipt requested,
postage prepaid, address as follows:
If to the Employee: Xxxx X. Xxxxxxx
000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
If to the Company: Pyramid Stores, Inc.
000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except the notices of change of address shall be
effective only upon receipt.
SECTION 5.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
The parties have executed this Agreement on the date first written above.
PYRAMID STORES, INC.
By:/s/ Xxxxxx X. Xxxxx
EMPLOYEE:
/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
