Contract
EXHIBIT
10.1
THIS
EMPLOYMENT AGREEMENT ("Agreement") is made as of the 14th day of March, 2007,
by
and between INDUSTRIAL ENTERPRISES OF AMERICA, INC., a Nevada corporation,
with
an office for the conduct of its business at 000 Xxxxx Xxx, Xxxxx 0000, Xxx
Xxxx, Xxx Xxxx 00000 (the "Company"), and XXXXXX X. XXXXXXX, an individual
residing at 0000 Xxxxxxxxx Xxxxx, Xx Xxxxxx, Xxxxxxxx 00000 (the
"Executive").
WHEREAS,
the Company desires to employ the Executive as President of Pitt Penn Oil Co.,
LLC and as Executive Vice President of the Company, and the Executive desires
to
be employed by the Company in such capacities; and
WHEREAS,
the parties hereto desire to enter into an agreement of employment mutually
beneficial to said parties, and for the purpose of defining the rights, duties
and obligations of each of the parties hereto.
NOW,
THEREFORE, for good and valuable consideration, the sufficiency and receipt
of
which is hereby acknowledged, the Company and the Executive agree as
follows:
1. Employment.
Upon
the terms and subject to the conditions of this Agreement, the Company hereby
employs the Executive and the Executive hereby accepts employment by the Company
on the terms and conditions hereinafter set forth.
2. Term.
Subject
to the provisions of Section 12 of this Agreement, Executive's employment shall
be for a period of three (3) years, commencing on April 1, 2007. Both parties
will meet 90 days prior to the expiration of this Agreement to discuss a
contract extension.
3. Executive's
Position, Duties and Authority.
3.1 Position.
The
Company shall employ the Executive, and the Executive shall serve as President
of Pitt Penn Oil Co., LLC and as Executive Vice President of the
Company.
3.2 Description.
The
Executive shall perform such duties and responsibilities on a full time basis
as
shall be reasonably assigned to the Executive by the Chief Executive Officer
of
the Company or his designee, and which are customarily incident to the
day-to-day operations of the Company’s manufacturing facilities.
3.3 Authority.
At all
times during the Term, the Executive shall report directly to the CEO of the
Company.
4. Services.
4.1 General.
The
Executive shall devote sufficient business time, labor, skill and energy to
the
business and affairs of the Company and to the duties and responsibilities
referred to in Section 3.2 of this Agreement.
4.2 Opportunities;
Investments.
The
Executive covenants and agrees that, during the Term, he shall inform the
Company of each business opportunity related to the business of the Company
or
any of the Company's subsidiaries or affiliates of which he becomes aware and
that he will not, directly or indirectly, exploit any such opportunity for
his
own account.
5. Location
of Employment.
Unless
the Executive consents otherwise in writing, the principal location for the
performance of his duties hereunder shall be in Xxxxxxxxx,
Pennsylvania.
6. Base
Salary/Bonuses and Relocation.
6.1 Base
Salary.
Beginning April 1, 2007, the Company shall, during the continuance of the
Executive's employment hereunder, pay to the Executive, and the Executive agrees
to accept, in consideration of his services, a salary (the "Base Salary") at
a
rate of TWO HUNDRED SEVENTY-FIVE THOUSAND AND NO/100THS DOLLARS ($275,000.00)
per year. Such salary shall be payable in accordance with the Company's normal
payroll practices, so long as the Executive's employment continues as provided
by this Agreement. Each calendar year thereafter, such annual Base Salary shall
be reviewed by the Board of Directors and such annual base salary shall increase
by an amount not less than the increase in the Consumer Price Index as published
by the U.S. Government multiplied by the then existing base salary.
6.2 Bonuses.
Commencing with the Term of this Agreement, each year the Executive shall be
eligible to a discretionary annual bonus (a “Bonus”), payable within ninety (90)
days after the end of the fiscal year in an amount to be determined by the
Board
of Directors in consideration for the Executive's performance.
6.3 Relocation.
The
Executive shall be entitled to receive a full relocation package to the
Xxxxxxxxx, Pennsylvania area including six (6) months of temporary living
expenses.
7. Stock
Grants and Options.
7.1 Stock
Grants.
Commencing with the Term of this Agreement, the Executive shall receive 10,000
restricted shares of Common Stock of the Company. On each of April 1, 2008
and
April 1, 2009, the Executive shall receive 10,000 additional shares of the
Company’s Common Stock.
7.2 Stock
Options.
Commencing with the Term of this Agreement, the Executive shall receive the
following options (collectively, the "Stock Options") to purchase shares of
the
Company's Common Stock as provided below:
(a) Stock
Options to purchase 100,000 shares of the Company’s Common Stock at $6.05 per
share which shall vest 1/3 each year over a three (3) year period pursuant
to
the Company’s 2004 Stock Option Plan.
(b) Each
calendar year the Board of Directors will review option grants and if decided
by
the Board of Directors, additional Stock Options will be issued to purchase
shares of the Company's Common Stock.
8. Deductions.
The
Company shall, in accordance with applicable law, deduct from the Base Salary
and all other cash amounts payable to the Executive by the Company under the
provisions of this Agreement, or, if applicable, to his estate, legal
representatives or other beneficiary designated in writing by the Executive,
all
social security taxes, all federal, state and municipal taxes and all other
charges and deductions which now or hereafter are required by law to be charges
on the compensation of the Executive or charges on cash benefits payable by
the
Company hereunder to his estate, legal representatives or other
beneficiary.
9. Expenses;
Vacation.
The
Company shall reimburse the Executive, upon production of reasonably detailed
accounts and vouchers or other reasonable evidence of payment by the Executive,
all in accordance with the Company's regular procedures in effect from time
to
time and in form suitable to establish the validity of such expenses for tax
purposes, all ordinary, reasonable and necessary travel, entertainment and
other
business expenses as shall be incurred by him in the performance of his duties
hereunder. During the Term of this Agreement, the Executive shall be entitled
to
twenty (20) days vacation annually with pay at the compensation in effect when
the vacation is taken.
10. Benefits
and Additional Benefits.
10.1 Benefits.
During
the Term, the Executive shall be eligible to participate in any pension or
profit-sharing plan or program of the Company now existing or hereafter
established, on terms no less favorable than those made available to other
senior executives of the Company.
10.2 Additional
Benefits.
The
Company shall provide the following additional benefits:
(a) The
Executive shall be entitled to receive such other benefits or rights as may
be
provided under any employment benefit plan provided by the Company that is
now
or hereafter will be reflected, including participation in life, medical,
disability and dental insurance plans at no cost.
(b) The
Executive shall have the choice to have the Company lease a car at Executive’s
discretion (i.e., Mercedes, BMW, Lexus) or receive $750.00 per month as a car
allowance. The Company shall pay all applicable insurance, maintenance, parking
fees, and all associated costs.
11. Confidential
Information.
All
records, papers, models, programs and other documents and those kept or made
by
the Executive relating to the business or affairs of the Company, the Company's
subsidiaries or affiliates, or any of the clients or customers of such entities
shall be and remain the property of the Company, and to the-extent available
shall be delivered by the Executive to the Company as may required, upon the
expiration or earlier termination of the Executive's employment by the
Company.
12. Termination.
12.1 Reasons
for Termination.
Notwithstanding the provisions of Sections 1 and 2 hereof, this Agreement may
be
terminated prior to the expiration of the Term by the Board of Directors of
the
Company upon the occurrence of any of the following events:
12.1.1 The
death
of the Executive; or
12.1.2 For
cause, which shall be if the Executive is convicted of a felony criminal offense
or the commission of an act of fraud on the Company.
12.2 Consequences
of Termination of this Agreement under Section 12.
(a) In
the
event that this Agreement is terminated in accordance with Section 12.1.1 above,
the Executive, his estate, legal representatives or designee shall be entitled
to receive, in full satisfaction of all obligations due to the Executive from
the Company hereunder, all accrued but unpaid Base Salary and any unpaid Bonus
in respect of a fiscal year ended prior to the Executive's death, and upon
payment of said sums the Company shall have no further obligations or
liabilities to the Executive hereunder. All outstanding stock options are
considered part of the estate of the Executive.
(b) In
the
event that this Agreement is terminated in accordance with Section 12.1.2 above,
the Company shall have no further obligations or liabilities to the Executive
hereunder.
13. Notices.
Any
notice, direction or instruction required or permitted to be given hereunder
shall be given in writing and may be given by telex, telegram, facsimile
transmission or similar method if confirmed by mail as herein provided; by
mail
if sent postage prepaid by registered mail, return receipt requested; or by
hand
delivery to any party at the address of the party set forth below. If notice,
direction or instruction is given by telex, telegram or facsimile transmission
or similar method or by hand delivery, it shall be deemed to have been given
or
made on the day on which it was given, and if mailed, shall be deemed to have
been given or made on the third business day following the day after which
it
was mailed. Any party may, from time to time, by like notice give notice of
any
change of address and in such event, the address of such party shall be deemed
to be changed accordingly.
(i) If
to the
Executive:
Xxxxxx
X.
Xxxxxxx
0000
Xxxxxxxxx Xxxxx
Xx
Xxxxxx, Xxxxxxxx 00000
(ii) If
to the
Company:
000
Xxxxx
Xxxxxx
Xxxxx
0000
Xxx
Xxxx,
XX 00000
14. General.
14.1 Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
internal laws of the State of Delaware, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws.
14.2 Captions.
The
section headings contained herein are for reference purposes only and shall
not
in any way affect the meaning or interpretation of this Agreement.
14.3 Entire
Agreement.
This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter hereof, and supersedes all prior agreements,
arrangements and understandings, written or oral, between or among the parties,
except as specifically provided herein. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any kind as
conditions or inducements to the execution hereof or in effect among the
parties. No custom or trade usage, nor course of conduct among the parties,
shall be relied upon to vary the terms hereof.
14.4 Successors
and Assigns.
This
Agreement, and the Executive's rights and obligations hereunder, may be assigned
by the Executive to a personal services company so long as such personal
services company executes a contract similar to this one that provides the
service of the Executive to the Company. The Executive may designate one or
more
beneficiaries to receive any amounts that would otherwise be payable hereunder
to the Executive's estate. This Agreement shall be binding on any successor
to
the Company whether by merger, consolidation, acquisition of all or
substantially all of the Company's assets or business or otherwise, as fully
as
if such successor were a signatory hereto, and the Company shall cause such
successor to, and such successor shall, expressly assume the Company's
obligations hereunder.
14.5 Amendments;
Waivers.
This
Agreement cannot be changed, modified or amended, and no provision or
requirement hereof may be waived, without consent in writing of the parties
hereto. However, in the event that the Company issues an Employee Directive
which amends or modifies any policy specifically identified and incorporated
into this Agreement, such policy automatically shall be deemed included as
part
of this Agreement without further consideration other than the continued
performance of this Agreement's material terms by the Company. The failure
of a
party at any time or times to require performance of any provision hereof shall
in no manner affect the right of such party at a later time to enforce the
same.
No waiver by a party of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
breach, or a waiver of the breach of any other term or covenant contained in
this Agreement.
14.6 Beneficiaries.
Whenever this Agreement provides for any payment to the Executive's estate,
such
payment may be made instead to such beneficiary or beneficiaries as the
Executive may have designated in a writing filed with the Company. The Executive
shall have the right to revoke any such designation and to re-designate a
beneficiary or beneficiaries by written notice to the Company (and any
applicable insurance company) to such effect.
14.7 Further
Assurances.
The
parties hereto agree that, after the execution of this Agreement, they will
make, do, execute or cause or permit to be made, done or executed all such
further and other lawful acts, deeds, things, devices, conveyances and
assurances in law whatsoever as may be required to carry out the true intention
and to give full force and effect to this Agreement.
14.8 Ability
to Fulfill Obligations.
Neither
the Company nor the Executive is a party to or bound by any agreement which
would be violated by the terms of this Agreement.
14.9 Severability.
Should
any provision of this Agreement be unenforceable or prohibited by any applicable
law, this Agreement shall be considered divisible as to such provision which
shall be inoperative, and the remainder of this Agreement shall be valid and
binding as though such provision were not included herein.
14.10 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed to be an original. It shall not be necessary when making proof of this
Agreement to account for more than one counterpart.
14.11 Survival
of Certain Provisions.
The
provisions of Sections 10, 11, and 12 shall, to the extent applicable, continue
in full force and effect notwithstanding the expiration or earlier termination
of this Agreement or of the Executive's employment in accordance with the terms
of this Agreement.
14.12 Arbitration
of Disputes.
Any
dispute or controversy between the parties relating to or arising out of this
Agreement or any amendment or modification hereof shall be determined by
arbitration in the City and State of New York by and pursuant to the rules
then
prevailing of the American Arbitration Association. The arbitration award shall
be final and binding upon the parties and judgment may be entered thereon by
any
court of competent jurisdiction. The service of any notice, process, motion
or
other document in connection with any arbitration under this Agreement or the
enforcement of any arbitration award hereunder may be effectuated either by
personal service upon a party or by certified mail duly addressed to him or
to
his executors, administrators, personal representatives, next of kin, successors
or assigns, at the last known address or addresses of such party or parties.
If
the Executive is the prevailing party on any issue in any such arbitration
proceeding, he shall be entitled to recover from the Company any actual expenses
for attorney's fees and disbursements incurred by him.
IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
By:
/s/
Xxxx Xxxxxxx
Name:
Xxxx
Xxxxxxx
Title:
Chief
Executive Officer and President
By: /s/
Xxxxxx X. Xxxxxxx
Name: Xxxxxx
X. Xxxxxxx
