EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT, dated the 1st day of October, 2004, and as amended on the 19 th day of
March, 2007 between American International Industries, Inc., a Nevada
corporation, currently having its principal place of business at 000 Xxxx
Xxxxxx, Xxxxx 000, Xxxxx, Xxxxx 00000 (the "Company"), and Xxxxxx Xxxx (the
"Executive").
WHEREAS,
the Company has benefited from the services of Executive for many years and
desires to formalize the terms of the employment of Executive pursuant to this
agreement ("Employment Agreement") and Executive desires to be employed by the
Company, as a Chief Executive Officer and President of the Company pursuant to
this Employment Agreement.
NOW,
THEREFORE, in consideration of the premises and covenants herein contained, the
parties hereto agree as follows:
1. Term of Agreement .
Subject to the terms and conditions hereof, the term of employment of the
Executive under this Employment Agreement shall be for the period commencing on
the date hereof (the "Commencement Date) and terminating on March 30, 2012,
subject to the provisions of this Employment Agreement. Such term of employment
is herein called the "Employment Term.")
2. Employment . As of
the Commencement Date, the Company hereby agrees to employ the Executive as
Chief Executive Officer and President of the Company, and the Executive hereby
accepts such employment and agrees to perform his duties and responsibilities
hereunder in accordance with the terms and conditions hereinafter set
forth.
3. Duties and Responsibilities
. Executive shall serve as Chief Executive Officer and President during
the Employment Term. Executive shall report to and be subject to the direction
of the board of directors of the Company, of which the Executive has served and
shall continue to serve as chairman and shall perform duties which are
consistent with his current title and position as Chief Executive Officer and
President of the Company and such other duties as may be assigned to him from
time to time by the board of directors which are consistent with his position of
management and leadership. During the Employment Term, Executive shall devote
his full time, skill, energy and attention to the business of the Company and
shall perform his duties in a diligent, trustworthy, loyal and businesslike
manner.
4. Compensation and Benefits
During the Employment Term :
- The
Executive’s base compensation shall be at the rate of $10,000 per month, for the
term of this Agreement, payable in regular semi-monthly installments in
accordance with the Company’s practice for its executives. At the election of
the Executive, his compensation may be payable in shares of the Company’s common
stock, registered on Form S-8 under the Securities Act of 1933 or such other
form as may be appropriate, or at the election of the Executive pursuant to an
exemption from registration under the Act. Cash compensation shall be less
applicable withholding for income and employment taxes as required by law and
other deductions as to which the Executive shall agree. Such base compensation
shall be subject to increases as and when determined by the Company’s board of
directors at its sole discretion. Any unpaid balance during the year shall be
adjusted and paid on or before each fiscal year end.
- In
addition to the Executive’s base compensation, Executive will be entitled to a
bonus as determined by the Company’s board of directors from time to time. In
addition, in the event of a change in control of the Company, resulting in
Executive ceasing to serve as the Company’s Chief Executive Officer, President
and Chairman, Executive shall be entitled to receive and the Company shall pay
to Executive within ninety (90) days of the change in control a sum equal to
five (5) years of the base salary then payable to Executive under this
Employment Agreement, and issue to Executive the shares underlying the common
stock purchase warrants provided in 4(d) below, based upon and adjusted exercise
price equal to par value of the shares at the date of the change in
control.
- The
Executive shall be entitled to reimbursement of all reasonable, ordinary and
necessary business related expenses incurred by him in the course of his duties
and upon compliance with the Company’s procedures.
- The
Executive shall be granted common stock purchase warrants, exercisable on a
cashless basis, for 144,000 shares per annum commencing on March 30, 2007 and on
each consecutive Xxxxx 00 xx for a
period of five (5) years, based upon an exercise price of $7.00 per share. The
warrants will provide for an expiration date two (2) years following each annual
grant, as set forth in the warrant agreement that will be attached to this
employment agreement.
- The
Company hereby ratifies the grant to Executive of common stock purchase options
to purchase 50,000 shares of common stock heretofore granted to Executive, which
are exercisable through September 30, 2005 at a price of $1.50 per share and are
exercisable on a cashless basis.
5. Termination . The
Company may terminate this Employment Agreement (1) for death or disability
under Section 5 (a) or 5 (b); (2) with "cause" as set forth under Section 5 (c);
or by the Executive for good reason as defined under Section 5 (d). All other
terminations which may occur shall constitute a breach of this Employment
Agreement.
(a) The
Company shall have the right to terminate the employment of the Executive under
this Employment Agreement for disability in the event Executive suffers an
injury, illness or incapacity of such character as to substantially disable him
from performing his duties without reasonable accommodation by the Company
hereunder for a period of more than one hundred and twenty (120) consecutive
days upon the Company giving at least thirty (30) days written notice of
termination; provided, however, that if the Executive is eligible to receive
disability payments pursuant to a disability policy paid for by the Company, the
Executive shall assign such benefits to the Company for all periods as to which
he is receiving full payment under this Employment Agreement.
(b) This
Employment Agreement shall terminate upon the death of Executive.
(c) The
Company may terminate this Employment Agreement at any time because of (i)
Executive's material breach of any term of this Employment Agreement, (ii) the
willful engaging by the Executive in misconduct which is materially injurious to
the Company, monetarily or otherwise; provided, in each case, however, that the
Company shall not terminate this Employment Agreement pursuant to this Section
5(c) unless the Company shall first have delivered to the Executive, a notice
which specifically identifies such breach or misconduct and the Executive shall
not have cured the same within thirty (30) days after receipt of such notice,
(iii) Executive’s gross negligence in the performance of his duties or (iv) the
failure of Executive to perform his essential duties or comply with reasonable
directions of the board of directors.
(d) The
Executive may terminate his employment for "Good Reason" if:
(i) he is
assigned, without his express written consent, any duties inconsistent with his
positions, duties, responsibilities, authority and status with the Company as of
the date hereof, or a change in his reporting responsibilities or titles as in
effect as of the date hereof;
(ii) his
compensation is reduced;
(iii) (1)
the Company shall file a petition for bankruptcy or re-organization under the
federal bankruptcy statues or an involuntary petition is filed against the
Company and not removed or withdrawn within thirty (30) days or (2) the Company
does not pay any material amount of compensation due hereunder and then fails
either to pay such amount within the ten (10) day notice period required for
termination hereunder or to contest in good faith said notice. Further, if such
contest is not resolved within thirty (30) days the Company shall submit such
dispute to arbitration, under Section 7.
6. Arbitration . If a
dispute should arise regarding this Employment Agreement, all claims, disputes,
controversies, differences or other matters in question arising out of this
relationship shall be settled finally, completely and conclusively by
arbitration of a single arbitrator in Xxxxxx County, Texas, in accordance with
the Commercial Arbitration Rules of the American Arbitration Association (the
"Rules"). Arbitration shall be initiated by written demand. This Employment
Agreement to arbitrate shall be specifically enforceable only in the District
Court of Xxxxxx County, Texas. A decision of the arbitrator shall be final,
conclusive and binding on the Company and the Executive, and judgement may be
entered in the District Court of Xxxxxx County, Texas, for enforcement and other
benefits. On appointment, the arbitrator shall then proceed to decide the
arbitration subjects in accordance with the Rules. Any arbitration held in
accordance with this paragraph shall be private and confidential and no person
shall be entitled to attend the hearings except the arbitrator, Executive,
Executive’s attorneys, and an designated representatives of the Company and
their respective attorneys. The matters submitted for arbitration, the hearings
and proceedings and the arbitration award shall be kept and maintained in
strictest confidence by Executive and the Company and shall not be discussed,
disclosed or communicated to any persons. On request of any party, the record of
the proceeding shall be sealed and may not be disclosed except insofar, and only
insofar, as may be necessary to enforce the award of the arbitrator and any
judgement enforcing an award. The prevailing party shall be entitled to recover
reasonable and necessary attorneys’ fees and costs from the non-prevailing
party.
7. Opportunities .
During his employment with the Company, and for one year thereafter, Executive
shall not take any action which might divert from the Company any opportunity
learned about by him during his employment with the Company (including without
limitation during the Employment Term) which would be within the scope of any of
the businesses then engaged in or planned to be engaged in by the
Company.
8. Survival . In the
event that this Employment Agreement shall be terminated, then notwithstanding
such termination, the obligations of Executive pursuant to Sections 7 of this
Employment Agreement shall survive such termination.
9. Contents of Employment
Agreement, Parties in Interest, Assignment . This Employment Agreement
sets forth the entire understanding of the parties hereto with respect to the
subject matter hereof. All of the terms and provisions of this Employment
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective heirs, representatives, successors and assigns of the parties
hereto, except that the duties and responsibilities of Executive hereunder which
are of a personal nature shall neither be assigned nor transferred in whole or
in part by Executive. This Employment Agreement shall not be amended except by a
written instrument duly executed by the parties.
10. Severability . If any
term or provision of this Employment Agreement shall be held to be invalid or
unenforceable for any reason, such term or provision shall be ineffective to the
extent of such invalidity or unenforceability without invalidating the remaining
terms and provisions hereof, and this Employment Agreement shall be construed as
if such invalid or unenforceable term or provision had not been contained
herein.
11. Notices . Any notice,
request, instruction or other document to be given hereunder by any party to the
other party shall be in writing and shall be deemed to have been duly given when
delivered personally or five (5) days after dispatch by registered or certified
mail, postage prepaid, return receipt requested, to the party to whom the same
is so given or made:
If to the
Company, addressed to:
American
International Industries, Inc.
000 Xxxx
Xxxxxx, Xxxxx 000
Xxxxx,
Xxxxx 00000
If to
Executive addressed to:
Xxxxxx
Xxxx
000
Xxxxxx Xxxx
Xxxxx,
Xxxxx 00000
or to
such other address as the one party shall specify to the other party in
writing.
12. Counterparts and Headings
. This Employment Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all which together shall
constitute one and the same instrument. All headings are inserted for
convenience of reference only and shall not affect the meaning or interpretation
of this Employment Agreement.
IN
WITNESS WHEREOF, the parties hereto have caused this Employment Agreement to be
duly executed and delivered as of the day and year first above
written.
American
International Industries, Inc.
By:_______________________________
Xxxxxx X.
Xxxxxxxxx, Vice President
Executive
By:________________________________
Xxxxxx
Xxxx
