CANTON INDUSTRIAL CORPORATION
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made effective as of the 4th day of
October, 1995 between The Canton Industrial Corporation, a Nevada corporation
(the "Corporation"), and Xxxxx X. Xxxxxxx (the "Executive"), all parties'
principal place of business being 000 Xxxx 000 Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx,
Xxxx 00000.
WITNESSETH
The Executive is the Chief Financial Officer/Secretary/Treasurer of the
Corporation and possesses an intimate knowledge of the business and affairs of
the Corporation. The Corporation recognizes the Executive's contribution to the
growth and success of the Corporation and desires to assure to the Corporation
the continued benefits of the Executive's expertise and knowledge. The
Executive, in turn, desires to continue in full-time employment with the
Corporation on the terms provided herein.
Accordingly, in consideration of the mutual covenants and representations
contained herein, the parties hereto agree as follows:
1. Employment of Executive.
1.1. Duties and Status.
(a) The Corporation hereby engages the Executive as an
Executive employee for the period (the "Employment Period") specified in Section
4, and the Executive accepts such employment, on the terms and conditions set
forth in this Agreement. During the Employment Period, the Executive shall
exercise such authority and perform such executive duties as are commensurate
with the authority being exercised and duties being performed by the Executive
for the Corporation immediately prior to the effective date of this Agreement,
provided, however, that Executive shall not with out her written consent be
assigned duties that are materially inconsistent with her training, experience
and abilities nor to an executive position which is materially inconsistent with
this criteria.
(b) During the Employment Period, the Executive shall (i)
render such services to the Corporation and its affiliates as are reasonably
required by the Board of Directors of the Corporation and as may be required by
virtue of the office(s) and positions Executive holds subject to the standards
and criteria set forth herein, and (ii) accept such additional office or offices
to which he may be elected by the Board of Directors of the Corporation,
provided that the performance of the duties of such office or offices shall be
consistent with the scope of the duties provided for in subsection (a) of this
Section 1.1.
(c) The Executive will be required to perform the services and
duties provided for in subsection (a) of this Section 1.1 only at the location
where the Executive was employed immediately prior to the effective date of this
Agreement or such other location of the principal executive offices of the
Corporation in the current metropolitan area as the Board of Directors of the
Corporation may designate, unless Executive receives additional compensation to
move to another location, including payment for all expenses associated with
said move.
1.2. Compensation and General Benefits. As compensation for her
services under This Agreement, the Executive shall be compensated as
follows:
(a) The Corporation shall pay the Executive an annual salary
of $67,500.00. Two-thirds (2/3) of the annual salary ($45,000) is payable in
cash simultaneously with the bi-weekly payroll of the Corporation. One-third
(1/3) of the annual salary ($22,500) is payable in shares of The Canton
Industrial Corporation stock issued on a monthly basis. The stock received by
the Executive shall be issued pursuant to applicable exemptions from
registration, and/or made available pursuant to a Form S-8 registration and
shall be valued at the average bid price for the ten pay period preceding the
end of the month during which the Executive serves as such, or the closing bid
price for the quarter, whichever is lower, fractional shares shall be rounded up
to the nearest whole share. The Executive shall also be entitled to other
bonuses as
they become available, to be reviewed by the Board of Directors. The annual
salary of the Executive shall be subject to normal periodic review on a
bi-annual basis, by the Board of Directors.
(b) The Executive shall be eligible to participate in such
profit-sharing, bonus, incentive, or any other transactions in which an employee
of the Corporation receives, or may receive, additional compensation, including,
but not limited to, receipt of stock in other organizations (such as the 504
incentives type of compensation, etc.), and performance award programs which
provide opportunities to receive compensation which are the greater of
opportunities (i) then provided by the Corporation to executives, and or other
employees with reasonably comparable authority and duties (and in any event not
lesser than those provided to executives or regular employees with junior
authority or duties), or (ii) available to the Executive immediately prior to
the effective date of this Agreement.
(c) The Executive shall be entitled to receive employee
benefits, if available, including, without limitation, pension, disability,
group life, sickness, accident and health insurance programs and split-dollar
life insurance programs, and prerequisites provided by the Corporation to
executives which are the greater of the employee benefits and prerequisites (i)
then provided by the Corporation to executives with comparable authority or
duties (and in any event not lesser than those provided to executives with
junior authority or duties), or (ii) available to the Executive immediately
prior to the effective date of this Agreement, all in accordance with
Corporation's Employee Manual. Additionally, the Executive shall have additional
paid vacation time as follows: first year of employment two weeks, one to two
years three weeks; three or more years four weeks. The Executive will only be
available for 4 hours on Fridays.
2. Competition; Confidential Information. The Executive and the
Corporation recognize that due to the nature of her prior association with the
Corporation and of her engagements hereunder, and the relationship of the
Executive to the Corporation, both in the past and in the future hereunder, the
Executive has had access to and has acquired, will have access to and will
acquire, and has assisted in and may assist in developing, confidential and
proprietary information relating to the business and operations of the
Corporation and its affiliates, including, without limiting the generality of
the foregoing, information with respect to their present and prospective
products, systems, customers, agents, processes, and sales and marketing
methods. The Executive acknowledges that such information has been and will
continue to be of central importance to the business of the Corporation and its
affiliates and that disclosure of it to or its use by others could cause
substantial loss to the Corporation. The Executive and the Corporation also
recognize that an important part of the Executive's duties will be to develop
good will for the Corporation and its affiliates through her personal contact
with customers, agents and others having business relationships with the
Corporation and its affiliates, and that there is a danger that This good will,
a proprietary asset of the Corporation and its affiliates, may follow the
Executive if and when her/her relationship with the Corporation is terminated.
The Executive accordingly agrees as follows:
2.1. Non-Competition.
(a) Except for reasons as stated in subsection 2.1 (b), during
the Employment Period and for a period of two years thereafter the Executive
will not, directly or indirectly, either individually or as owner partner,
agent, employee, consultant or otherwise, except for the account of and on
behalf of the Corporation or their affiliates, engage in any activity
competitive with the business of the Corporation or its affiliates, nor will
she, in competition with the Corporation or its affiliates, solicit or otherwise
attempt to establish for herself or any other person, firm or entity, any new
business relationships with any person, firm or corporation which is, at the
time this Agreement is entered into, or during her time in office, a customer or
employee of the Corporation or one of its affiliates.
(b) Executive may accept employment by a competitor or client
of the Corporation , if two times the Executive's annual compensation is paid to
the Corporation by the competitor, or client. Prior to the Executive accepting
such position Executive shall give at least two weeks notice unless otherwise
agreed by the Corporation and Executive. All others provisions set forth in 2.1
(a) shall remain in effect irrespective of this exception.
(c) Nothing in this Section 2 shall be construed to prevent
the Executive from owning, as an investment, not more than 15% of a class of
equity securities issued by any competitor of the Corporation or its affiliates
and publicly traded and registered under Section 12 of the Securities Exchange
Act of 1934.
2.2. Trade Secrets. The Executive will keep confidential any trade
secrets or confidential or proprietary information of the Corporation and
its affiliates, which are now known to her or which hereafter may become
known to her,
as a result of her employment or association with the Corporation and shall not
at any time directly or indirectly disclose any such information to any person,
firm or corporation, or use the same in any way other than in connection with
the business of the Corporation or its affiliates during and at all times after
the expiration of the Employment Period. For purposes of this Agreement, "trade
secrets or confidential or proprietary information" means information unique to
the Corporation or any of its affiliates which has a significant business
purpose and is not known or generally available from sources outside the
Corporation or any of its affiliates, or typical of industry practice.
3. Corporation's Remedies for Breach. It is recognized that damages in
the event of breach of paragraph 2 by the Executive would be difficult, if not
impossible, to ascertain, and it is, therefore, agreed that the Corporation, in
addition to and without limiting any other remedy or right it may have, shall
have the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any breach, and the Executive hereby waives
any and all defenses he may have on the ground of lack of jurisdiction or
competence of the court to grant such an injunction or other equitable relief.
3.1. Payment for Termination. Should the Corporation terminate the
Executive's employment during the term of this agreement without sufficient
cause as defined herein, the Executive shall be entitled to thirty (30) days of
full compensation due to her under this contract with the Corporation, including
issuance of such stock in The Canton Industrial Corporation, along with the
appropriate percentages of any transactions closed by the Corporation to which
the Executive would otherwise been eligible to receive through continued
employment, all of which together constitute "compensation" for the purposes of
this paragraph. All compensation due normally payable in cash is payable in cash
on the day of termination, all compensation due normally payable in stock shall
be delivered within fifteen (15) days of termination. The stock issued will be
valued pursuant to paragraph 1.2(a).
4. Employment Period; Certain Rights.
4.1 Duration. The Employment Period shall commence on the date of this
Agreement and shall continue for one year . The Employment Period may be renewed
from year to year by agreement executed in writing prior to each such
anniversary.
4.2 Termination. This Agreement may be terminated at will by either
party. Executive is required to give two weeks notice, unless subsequently
agreed to by the Corporation. The Corporation shall be subject to section 3.1 in
the event the Executive is terminated without cause, and shall pay no severance
for termination with cause.
(a) Disability/Retirement. If, as a result of the Executive's
incapacity due to physical or mental illness or infirmity, the
Executive shall have been absent from the full-time performance of her
employment duties with the Corporation for forty-five (45) consecutive
days during the term of this agreement the Corporation reserves the
right to terminate this agreement.
(b) Cause. Termination by the Corporation of the Executive's
employment for "cause" shall mean termination upon:
(I) the continued failure by the Executive to perform
substantially all of her duties with the Corporation (other
than any such failure resulting from incapacity due to
physical or mental illness, or infirmity or any such actual or
anticipated failure after issuance of a Notice of Termination)
within a reasonable period of time after a written demand for
substantial performance is delivered to you by the
Corporation, which demand specifically identifies the manner
in which the Corporation believes that the Executive has not
substantially performed her duties. For purposes of this
paragraph "a reasonable period of time" means a period of not
less then 10 working days, nor more than 20 working days.
5. Indemnity. The Corporation agrees to indemnify and hold harmless the
Executive from and against any and all losses, claims, damages, expenses,
liabilities, or actions to which the Executive may become subject, and will
provide a legal defense at no cost to the Executive, or should a conflict arise
between a defense available to the Corporation and another Defendant and the
Executive, the Corporation shall reimburse the Executive for any legal or other
expenses reasonably incurred by him in connection with investigating or
defending any claims or actions, whether or not resulting in liability,
insofar as such losses, claims, damages, expenses, liabilities, including any
and all costs, fees, attorneys fees, or judgments entered against him, and agree
to defend said Executive from all causes of action which may be initiated
against the Executive as a result of her position with the Corporation, and or
the performance of her duties with the Corporation, or any of its' affiliates or
subsidiaries, including, but not limited to, all outstanding withholding taxes,
state taxes, unpaid corporate obligations, litigation, administrative
investigations, existing or future claims of any nature.
6. Successors; Binding Agreement.
(a) The Corporation will require any successor (whether direct or
indirect, by purchase, merger consolidation or otherwise; to all or
substantially all of the business and/or assets of the Corporation to
expressly assume and agree to perform this Agreement in the same manner
and to the same extent that the Corporation would be required to
perform it if no such succession had taken place. Failure of the
Corporation to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the
Corporation in the same amount and on the same terms as set forth in
section (3) of this Agreement.
(b) This Agreement shall bind and inure to the benefit of and be
enforceable by the Corporation and the Executive and our respective
personal or legal representatives, executors, administrators,
successors, assigns, heirs, distributees, devisees and legatees. If the
Executive should die while any amount would still be payable to her
hereunder if she had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms
of this Agreement in accordance with the most recent beneficiary
designation which the Executive may have executed and delivered to the
Corporation after the date of this Agreement, and in the absence of any
such designation, the payments shall be made to her estate.
(c) If the Executive's employment is continued with a successor
(whether directly or indirectly) to all or substantially all of the
business and assets of the Corporation and such successor assumes the
obligations of the Corporation under this Agreement, the Executive will
not be entitled to any severance benefits under this Agreement solely
by reason of the assumption of this Agreement and the termination of
her employment with the Corporation in connection with such succession.
7. Enforcement of Agreement. The Corporation will not at any time contest
the validity or enforceability of this Agreement.
8. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement (except that all notices to the Corporation shall be directed to the
attention of its President) or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that any notice
of change in address shall be effective only upon receipt.
9. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by you and an authorized officer of the Corporation. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not expressly set forth in This Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Utah. All references to sections of the Code shall be deemed also
to refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under
federal, state, or local law.
10. Prior Agreements. This Agreement contains the entire understanding
between the parties hereto with respect to the terms and conditions of the
Executives employment and severance benefits and supersedes any prior agreement
between the Corporation (or any predecessor of the Corporation) and the
Executive with respect to the subject matter hereof.
If there is any discrepancy or conflict between this Agreement and any plan,
policy or program of the Corporation regarding any term or condition of
severance benefits, the language of this Agreement shall govern.
11. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
12. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
13. Binding Agreement. This Agreement shall be effective as of the date
hereof and shall be binding upon and inure to the benefit of the Executive, her
heirs, personal and legal representatives, guardians and permitted assigns. The
rights and obligations of the Corporation under this Agreement shall inure to
the benefit of and shall be binding upon any successor or assignee of the
Corporation.
14. Entire Agreement. This Agreement constitutes the entire understanding
of the Executive and the Corporation with respect to the subject matter hereof
and supersedes any and all prior understandings written or oral. This Agreement
may not be changed, modified, or discharged orally, but only by an instrument in
writing signed by the parties.
IN WITNESS WHEREOF, the parties have executed, sealed and delivered this
Agreement as of the date first above written.
ATTEST: The Canton Industrial Corporation
By: /s/ Xxxxxxx Xxxxxx, CEO
WITNESS: /s/ Xxxxxxx X. Xxxxxx 11/10/95 Executive: /s/ Xxxxx Xxxxxxx 11/10/95
