CENTRA INDUSTRIES, INC.
KEY EMPLOYEES EMPLOYMENT AGREEMENT
Agreement made as of January 1, 2002, by and between Xxxx Xxxxx, residing at 00
Xxxxxxxx Xx. Xxxxxxxxx, XX 00000 ("Employee") and Centra Industries, Inc., a
Delaware corporation with offices at Xxx Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxx 00000 (the "Company"), which shall be effective as of January 1, 2002
("Effective Date").
In consideration of the respective covenants and agreements of the parties
herein contained, the parties hereto agree as follows:
1. GENERAL
1.1 DEFINITIONS.
A. "BENEFITS" shall mean all the fringe benefits approved by the Board from time
to time and established by the Company for the benefit of employees generally
and/or for key employees of the Company as a class, provided, however, that at a
minimum Employee shall receive four weeks paid vacation, plus an additional five
paid personal days, family, medical and dental insurance and a Company provided
automobile (including maintenance and repairs). The Company's Board of Directors
shall have approved the terms of any automobile lease arranged for the
Employee's benefit.
B. "BOARD" shall mean the Board of Directors of the Company, as the context
shall appear, together with an executive committee thereof (if any), as the same
may be constituted from time to time.
C. "CEO" shall mean the individual having responsibility to the Board for
direction and management of all operations of the Company and who reports and is
accountable only to the Chairman and the Board.
D. "DISABILITY" shall mean a written determination by a physician mutually
agreeable to the Company and Employee (or, in the event of Employee's total
physical or mental disability, Employee's legal representative) that Employee is
physically or mentally unable to perform in a professional manner substantially
all of the material duties under this Agreement and that such disability can
reasonably be expected to continue for a period of one hundred and eighty (180)
consecutive days or for shorter periods aggregating one hundred and eighty (180)
days in any twelve (12) month period.
E. "EMPLOYEE" shall mean Xxxx X. Xxxxx and, where the context requires, his
heirs, personal representatives and permitted successors and assigns.
F. The "COMPANY" shall mean Centra Industries, Inc., a Delaware corporation,
together with such subsidiaries of said corporation as may from time to time
exist.
G. "FISCAL YEAR" shall mean the fiscal year of the Company beginning on the 1st
day of January in each year and ending on the 31st day of December in each year.
H. "CAUSE" for termination shall mean (i) Employee's indictment for a felony
involving a crime of moral turpitude, insurance fraud, dishonesty or breach of
trust, or (ii) acts of Employee which, in the reasonable judgment of the Board,
constitute fraud on the part of Employee in connection with his or her duties
under this Agreement, including but not limited to misappropriation or
embezzlement in the performance of duties as an employee of the Company, or
(iii) Employee willfully engaging in conduct materially injurious to the Company
and in violation of the convenants contained in Section 2.
J. "PERFORMANCE RELATED REASONS" for termination shall mean a determination, in
the reasonable judgment of the Board, that the Employee has failed to progress
satisfactorily towards the objectives set forth in the business plan as endorsed
by the Employee (which will not be unreasonably withheld) and that failure is,
in material part, due to errors or shortcomings in his or her management.
Performance Related Reasons shall not mean nor include termination arising out
of legitimate differences of opinion between Employee and the Board vis-a-vis
strategic direction or failure to agree on material changes in the strategic
direction or substantive changes in the business plan not approved by Employee.
K. "TERRITORY" initially shall mean the States of Arkansas, Texas, Missouri,
Louisiana, Mississippi, Illinois and Oklahoma.
1.2 EMPLOYMENT. On and subject to the terms of this Agreement the Company
employs the Employee. All prior employment agreements between the Company and
the Employee are terminated effective with the parties' execution of this
Agreement, provided that the Company and Employee shall be obligated to make
payment of amounts due under such former employment agreement. It is the
parties' intention to have the terms of this Agreement integrate with the terms
of the former employment agreement so the transition is seamless between the
two.
2. POSITION. RESPONSIBILITIES AND TERM OF EMPLOYMENT.
2.1 POSITION. Employee shall serve as Chief Executive Officer of the Company,
and in such additional management position(s) as the Board shall designate. In
this capacity Employee shall, subject to the direction of the Board, serve the
Company by performing such duties and carrying out
such responsibilities as are normally related, in accordance with the standards
of the industry to the position of CEO. The Board shall elect Employee to the
office of Vice Chairman and CEO of the Company and its subsidiaries (and such
other office, if any, as shall be denominated that of the CEO of the Company or
such subsidiary in the Company's or such subsidiaries By-laws or other
constituent instruments).
2.2 BEST EFFORTS COVENANT. Employee will devote his or her full professional and
business time and best efforts to the performance of his duties for, and in the
business and affairs of, the Company and any subsidiaries and affiliates of the
Company.
2.3 EXCLUSIVITY COVENANT. Except with the written consent of the Board, Employee
will not undertake or engage in any other employment, occupation or business
enterprise other than a business enterprise in which Employee does not actively
participate. Further, Employee agrees not to acquire, assume or participate in,
directly or indirectly, any position, investment or interest in the Territory
adverse or antagonistic to the Company, its business or prospects, financial or
otherwise, or subject to Section 2.5 below, in competition with the Company, or
take any action towards any of the foregoing.
2.4 CONFIDENTIAL INFORMATION. Employee will not disclose to any other person or
entity (except as required by applicable law or in connection with the
performance of his or her duly authorized responsibilities hereunder), or use
for his or her own benefit, any confidential information of the Company obtained
by him or her incident to his or her employment with the Company during the
period of his or her employment. The term Confidential information" includes,
without limitation, financial information, business plans, prospects and
opportunities which have been discussed or considered by management of the
Company, but does not include any information which has become public other than
on account of Employee's failure to comply with the provisions of this Section
2.4.
2.5 OWNERSHIP OF SHARE IN COMPETING FIRMS. The provisions of this Section 2
shall not prevent Employee from owning any shares of any competitor of the
Company so long as such shares do not constitute more than 2% of the outstanding
equity of such competitor.
2.6 RECORDS FILES. All records, files, drawings, documents, equipment and the
like relating to the business of the Company which are prepared or used by
Employee during the term of his or her employment under this Agreement shall be
and shall remain the sole property of the Company.
2.7 NON-COMPETITION CLAUSE. If Employee voluntarily terminates his or her
employment with the Company or if the Employee's employment is terminated for
Cause or Performance Related Reasons, he or she will not, for a period of twelve
(12) months thereafter, seek or obtain employment with a firm which directly
competes with the Company's business activities as conducted in the Territory on
the date on which Employee terminates nor will he solicit any of the Company's
employees to leave and seek employment with another firm. It is stipulated that
both the twelve (12) month term of this provision and the scope of territory are
reasonable, but a court of competent jurisdiction may alter the same to the
appropriate standard of reasonableness.
2.8 EQUITABLE RELIEF. Employee acknowledges that his or her services to the
Company are of a unique character which give them a special value to the
Company. Employee further recognizes that violations by Employee of any one or
more of the provisions of this Section 2 may give rise to losses or damages for
which the Company cannot be reasonably or adequately compensated in an action at
law and that such violations may result in irreparable and continuing harm to
the Company. Employee agrees, therefore, that in addition to any other remedy
which the Company may have at law and equity, the Company shall be entitled to
injunctive relief to restrain any violation, actual or threatened, by Employee
of the provisions of this Agreement. In the event of a breach by the Employee of
any of the provisions of Section 2, the Company shall be entitled to an
injunction restraining the Employee therefrom. Nothing shall be construed as
prohibiting the Company from pursuing any other available remedies for such
breach, including the recovery of damages from the Employee.
2.9 NO VIOLATION OF RIGHTS OF THIRD PARTIES. Employee represents and agrees that
performance of all the terms of this Agreement and as an employee of Company
does not and will not breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by Employee prior to his or her
employment with Company, and Employee confirms that he or she will not disclose
to Company, or induce Company to use, any confidential or proprietary
information or material belonging to any previous employer or third party to
whom he or she owes a duty of confidentiality. Employee further warrants that in
the course of performing services for Company's benefit under this Agreement,
Employee will use only skills and knowledge based on experience and information
which is generally known and used by persons with training and experience which
is common knowledge in the industry.
3. COMPENSATION.
3.1 BASE SALARY. Subject to the provisions of this Section 3.1, the Company
shall pay to Employee for the services to be rendered hereunder a base salary at
an annual rate of One Hundred Thirty Five Thousand Dollars ($135,000), plus such
bonuses (if any) as shall be awarded in the discretion of the Board pursuant to
Section 3.2. The base salary may be increased on an annual basis by the Board in
its discretion.
Employee's salary shall be payable in periodic installments in accordance with
the Company's usual practice for similarly situated employees of the Company and
subject to all required withholdings for income taxes, FICA, Medicaid, etc.
3.2 INCENTIVE COMPENSATION. In addition to the base salary, Employee shall be
entitled to receive payments under the Company's executive incentive
compensation and/or bonus programs (as in effect from time to time), if any, in
such amounts as are determined by the Board to be appropriate for similarly
situated employees of the Company.
3.3 PARTICIPATION IN BENEFITS. Employee shall be entitled to all Benefits on the
Effective Date for as long as such Benefits may remain in effect or any
substitute or additional Benefits are made available in the future to similarly
situated employees of the Company, subject to and on a basis consistent with the
terms, conditions and overall administration of such Benefits. Except as
provided in Section 4.4, Benefits paid to Employee shall not be deemed to be in
lieu of other Compensation to Employee hereunder as described in this Section 3.
3.4 EXPENSES. During the term of his employment hereunder, Employee shall be
entitled to receive reimbursement for all reasonable expenses incurred by him or
her (in accordance with the policies and procedures established by the Company)
in performing services hereunder.
4. TERM AND TERMINATION.
4.1 TERM. The term of employment and this Agreement shall be three years and
shall be automatically extended on a year to year basis after expiration of the
initial three-year term unless either party shall have given the other notice of
an intent not to extend not less than 90 days before the end of the current
term.
4.2 VOLUNTARY TERMINATION AND TERMINATION BY COMPANY FOR OTHER THAN CAUSE OR
PERFORMANCE RELATED REASONS. If the Employee voluntarily terminates or the
Company terminates the employment of Employee and termination is not for Cause
or for Performance Related Reasons, the Company shall have the option to retain
the Employee as a consultant at an amount equal to the Employee's annual base
salary (as defined in Section 3.1) in effect on the date of such termination for
a term specified by the Company at such time, but not exceeding twelve (12)
months. As such a consultant, Employee shall perform advisory services as
requested by the Chief Executive Officer or the Board up to twenty (20) hours
per month. If the Company exercises its option under this Section 4.2 to retain
the Employee as s consultant, then the non-competition provisions of Section 2.7
shall apply during such retainer period, mutatis mutandis. In addition, the
provisions of Sections 2.4, 2.6, 2.8 and 5 of this Agreement shall be applicable
to Employee during such consulting period..
4.3 TERMINATION BY THE COMPANY FOR CAUSE. Except as otherwise provided herein,
if the Company shall terminate the employment of Employee for Cause or
Performance Related Reasons, this Agreement (except for Sections 2.4, 2.6, 2.7
and 2.8) shall terminate and there shall be no obligation pursuant to this
Agreement to make any further payments of the Compensation described in Section
3, except for such remaining payments of base salary under Section 3.1 relating
to periods during which Employee was employed by the Company, in addition to
Benefits which are required by applicable law to be continued and reimbursement
of expenses under Section 3.4.
4.4 TERMINATION ON ACCOUNT OF THE EMPLOYEE'S DISABILITY. If Employee ceases to
perform services for the Company because he is suffering from a medically
determinable disability and is therefore incapable of performing such services,
the Company may terminate Employee's employment, but shall continue to pay
Employee an amount equal to one-half of Employee's base salary at the salary
rate in effect on the date of Employee's cessation of services by reason of
disability for a period of 12 months, less any amounts paid to Employee as
Workers Compensation, Social Security Disability benefits (or any other
disability benefits paid to Employee as Federal, state or local disability
benefits) and any amounts paid to Employee as disability payments under any
disability plan or program maintained by the Company and providing benefits to
Employee. In lieu of any such payments by the Company, the Company may deliver
to the Employee a disability insurance policy with benefits at least equal to
the current base salary for one year; the Company shall pay the premium for any
such insurance.
4.5 TERMINATION UPON EMPLOYEE'S DEATH. In the event of Employee's death during
the term of this Agreement, the Agreement shall be terminated but the Employee's
estate shall be paid any earned but unpaid salary to the date of death, together
with a pro rata share of any incentive compensation for the year in which
Employee's death occurred and reimbursement of expenses under Section 3.4.
5. MISCELLANEOUS.
5.1 ASSIGNMENT. This Agreement and the rights and obligations of the parties
hereto shall bind and inure to the benefit of each of the parties hereto and
shall also bind and inure to the benefit of any successor or successors of the
Company in a reorganization, merger or consolidation and any assignee of all or
substantially all of the Company's business and properties, but, except as to
any such successor or assignee of the Company, neither this Agreement nor any
rights or benefits hereunder may be assigned by the Company or Employee.
5.2 GOVERNING LAW. This Agreement shall be construed in accordance with and
governed for all purposes by the laws of the State of Arkansas. Any dispute or
controversy under this Agreement shall be resolved in the Superior Court,
Washington County, Arkansas; the parties hereby submit to the jurisdiction and
venue of such court.
5.3 INTERPRETATION. In case any one or more of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Agreement, but this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein.
5.4 NOTICES. Any notice required or permitted to be given hereunder shall be
effective when received and shall be sufficient if in writing and if personally
delivered or sent by facsimile, certified or registered air mail, return receipt
requested, to the party to receive such notice at its address set forth at the
end of this Agreement or at such other address as a party may by notice specify
to the other.
5.5 AMENDMENT AND WAIVER. This Agreement may not be amended, supplemented or
waived except by a writing signed by the party against which such amendment or
waiver is to be enforced. The waiver by any party of a breach of any provision
of this Agreement shall not operate to, or be construed as a waiver of, any
other breach of that provision nor as a waiver of any breach of another
provision.
5.6 SURVIVAL OF RIGHTS AND OBLIGATIONS. All rights and obligations of Employee
or the Company arising during the term of this Agreement shall continue to have
full force and effect after the termination of this Agreement.
5.7 COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which is an original, but all of which together shall constitute one and
the same instrument. Facsimile signatures are acceptable, provided an original
manually signed copy is delivered within a reasonable time after a facsimile is
sent.
EXECUTION
Upon execution below by both parties, this Agreement will enter into full force
and effect as of January 1, 2002.
CENTRA INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxxxxxx
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Xxxx X Xxxxxxxxx
/s/ Xxxx X. Xxxxx (Employee)
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Xxxx Xxxxx
