EXHIBIT 10.33
AGREEMENT
This Agreement ("Agreement"), made as of December 23, 1999, is by and
between North American Technologies Group, Inc., a Delaware corporation
("NATK"), and Xxx X. Xxxxxxxxxx, an individual resident of the State of Texas
("Xxxxxxxxxx").
WITNESSETH:
WHEREAS, NATK and Xxxxxxxxxx are party to a certain employment agreement
dated February 7, 1995 (the "Employment Agreement"); and
WHEREAS, NATK employed Xxxxxxxxxx as Chief Executive Officer ("CEO") and
President; and
WHEREAS, Xxxxxxxxxx was Chairman of the Board of Directors of NATK; and
WHEREAS, NATK and Xxxxxxxxxx desire to terminate their employment
relationship on mutually acceptable terms; and
WHEREAS, the parties desire to settle fully all matters arising out of or
relating in any manner to the Employment Agreement, as respects Xxxxxxxxxx'x
employment with and severance of employment from NATK;
NOW, THEREFORE, in consideration of the promises and conditions set forth
herein, the sufficiency of which hereby is acknowledged, and intending to be
legally bound, NATK and Xxxxxxxxxx agree as follows:
1. Definitions
As used in this Agreement, any reference to NATK shall include its
predecessors and successors and, in their capacities as such, all of its past,
present and future shareholders, directors, officers, employees,
representatives, attorneys, and assigns, as well as all NATK affiliates,
controlling corporations, divisions and subsidiaries; and any reference to
Xxxxxxxxxx shall include, in their capacities as such, his attorneys, heirs,
administrators, representatives, successors, agents and assigns.
2. Consideration
(a) NATK. NATK hereby agrees to provide Xxxxxxxxxx with the following
severance benefits:
(1) Salary continuation at the level in effect as of the date of this
Agreement until December 31, 1999, in an annual amount equal to
$189,927.40 less all applicable income tax and other
withholdings, and payable, at intervals consistent with NATK's
current payroll practices;
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(2) Continued life insurance benefits, if any, in the amounts
currently provided through December 31, 1999;
(3) Continued health care insurance coverage through December 31,
1999; and
(4) Reimbursement for all business expenses allowable under the
Employment Agreement incurred by Xxxxxxxxxx consistent with the
Company's existing policies.
No amounts in wage or fringe benefits received from employment or
otherwise by Xxxxxxxxxx shall offset in any manner the obligations of
NATK hereunder.
(b) Xxxxxxxxxx. Xxxxxxxxxx acknowledges that he has provided NATK with a
letter resigning as Chairman of the Board of Directors of NATK
effective on the date hereof. However, Xxxxxxxxxx may continue to act
as a director through NATK's 1999 annual meeting.
Xxxxxxxxxx agrees to continue his responsibilities as President and
CEO through a date mutually agreeable to the Company and Xxxxxxxxxx,
not later than January 22, 1999, and thereafter until March 31, 1999
will devote his full time and energy through such date to NATK's
business as an advisor, working in concert with NATK's Board of
Directors, with principal responsibility to perform a due diligence
review in connection with a potential acquisition of Brandywine
Compounding Company ("BCC") and/or complete construction and start -up
of Houston manufacturing facilities. Without limiting the generality
of the foregoing, Xxxxxxxxxx shall undertake any reasonable travel
requested by NATK's Board of Directors to BCC to complete his due
diligence of BCC. Notwithstanding the foregoing, Xx. Xxxxxxxxxx will
be permitted reasonable absences to pursue employment opportunities.
Post-March 31, 1999, Xxxxxxxxxx agrees to consult with NATK on an "as
needed"/"as available" basis for the remainder of 1999.
3. Stock Options
(a) Vesting of Unvested Portion of Existing Common Stock Options.
Unvested Options previously granted to Xxxxxxxxxx to purchase 11,111
NATK common stock, par value $0.001 per share ("Common Stock"), shall
vest on December 31, 1999 notwithstanding anything to the contrary in
the option agreement relating to such options.
(b) Repricing of Options to Purchase Common Stock. Notwithstanding the
terms of the Option Agreement originally dated February 7, 1995 and
amended on December 1, 1995 and July 10, 1997, Xxxxxxxxxx'x 55,555
existing options to purchase Common Stock shall be re-priced from
$9.00 to $4.50. All such options shall expire on June 30, 2006.
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4. Releases
(a) Xxxxxxxxxx. Xxxxxxxxxx hereby fully, irrevocably and
unconditionally releases and discharges NATK from any and all manner
of claims, complaints, demands, causes of action, obligations,
liabilities, and expenses (including attorneys, fees and costs), of
every kind, either at law or in equity, arising from Xxxxxxxxxx'x
employment with or severance of employment from NATK, including any
claim relating to the Employment Agreement, health benefit claims, or
any claim arising under any federal, state or local employment
discrimination or fair employment practices law, such as the Federal
Age Discrimination in Employment Act. It is expressly agreed and
understood that this release is a GENERAL RELEASE.
The parties agree, however, that this Agreement does not effect a
release or waiver by Xxxxxxxxxx of any rights to indemnification under
the Employment Agreement or the Certificate of Incorporation or By-
Laws of NATK or any pension or profit sharing benefits from NATK to
which he may be entitled under company policy, and the parties further
agree that to the extent that NATK makes any contribution to existing
profit sharing or 401(k) plans for the fiscal year ended December 31,
1999, Xxxxxxxxxx shall be entitled to a payment to his accounts, on
terms which are consistent with the terms of the payments to the
accounts of other NATK officers. In addition, and not in limitation
of the foregoing, Xxxxxxxxxx hereby forever releases and discharges
NATK from any liability or obligation to reinstate or reemploy him in
any employment capacity.
(b) NATK. NATK hereby fully, irrevocably and unconditionally
releases and discharges Xxxxxxxxxx from any and all manner of claims,
charges, complaints, demands, causes of action, contracts,
obligations, liabilities, and expenses (including attorneys' fees and
costs) of every kind, either at law or in equity, including any claim
relating to the Employment Agreement or Xxxxxxxxxx'x employment with
NATK, except for fraudulent or criminal conduct. NATK represents that
as of the date of this Agreement NATK has no knowledge of any
fraudulent or criminal conduct by Xxxxxxxxxx. It is expressly agreed
and understood that this release is a GENERAL RELEASE.
5. Covenant Not to Xxx
(a) Xxxxxxxxxx Covenant Not to Xxx. Xxxxxxxxxx represents and
warrants that he has not filed, nor has he assigned to any third
person, any complaints, charges or claims for relief against NATK with
any local, state or federal court or administrative agency.
Xxxxxxxxxx further agrees and covenants not to xxx or to bring, or
assign to any third person, any claims or charges against NATK with
respect to any matter arising before the date of this Agreement or
covered by the release set forth in paragraph 4 (a), above, and not to
assert against NATK in any
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action, suit, litigation or proceeding any matter arising before the
date of this Agreement or covered by the release set forth in
Paragraph 4 (a) above.
(b) NATK Covenant Not To Xxx. NATK represents and warrants that it
has not filed, nor has it assigned to any third person, any
complaints, charges or claims for relief against Xxxxxxxxxx with any
local, state or federal court or administrative agency. NATK further
agrees and covenants not to xxx or to bring, or assign to any third
person, any claims or charges against Xxxxxxxxxx with respect to any
matter arising before the date of this Agreement or covered by the
release set forth in paragraph 4 (b) above, and not to assert against
Xxxxxxxxxx in any action, suit, litigation or proceeding any matter
arising before the date of this Agreement or covered by the release
set forth in paragraph 4 (b) above.
6. Resignation
Xxxxxxxxxx shall resign as Chairman of the Board of Directors, President
and CEO of NATK effective as of a date mutually agreeable to the Company and
Xxxxxxxxxx, not later than January 22, 1999. Xxxxxxxxxx acknowledges that
effective as of such date, he resigns all positions that he holds with the NATK
Parties, except, however, that Xxxxxxxxxx may continue to serve as a director of
NATK through the 1999 Annual Meeting of the Stockholders of NATK, at which he
shall not seek re-election.
7. Confidentiality Agreement and Restrictive Covenants
(a) Confidential Information. Xxxxxxxxxx acknowledges that during the
course of his employment with NATK he had access to and was entrusted with NATK
confidential and proprietary information including, but not limited to,
information concerning sales processes and procedures; costs; general business
procedures and operations; proprietary formulae and manufacturing processes,
techniques and methods, sales and/or profits; financial matters; merchandising,
sales and marketing strategies and techniques; expansion plans; methods of doing
business or servicing customers; methods of pricing or charging for services;
business forms developed by or for NATK; form and content of proposals; reports
and analyses; names of suppliers, personnel, customers and potential customers;
advertising sources and potential advertising sources; bids; contracts;
proposals; software programs, however embodied; and information about or
belonging to customers, potential customers, suppliers or others ("Confidential
Information"). Except as permitted or directed by NATK's Board of Directors in
writing or as required by law, Xxxxxxxxxx shall not utilize, divulge, furnish or
make accessible to anyone any Confidential Information, for his profit or any
third party. Xxxxxxxxxx acknowledges that the above-described knowledge or
information constitutes a unique and valuable asset of the NATK Parties,
acquired at great time and expense by the NATK Parties, and that any disclosure
or other use of such knowledge or information other than for the sole benefit of
the NATK Parties, would be wrongful and would cause irreparable harm to the NATK
Parties.
(b) Restrictive Covenant. Xxxxxxxxxx shall not: (i) engage in any
business activity in direct or indirect competition with the Company and its
subsidiary, TIE-TEK, Inc. ("TIE-TEK"),
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for a period of five (5) years from the date hereof in TIE-TEK's proposed
business of manufacturing and marketing railroad cross-ties and other products
resulting from TIE TEK/NATK processes, such as marine lumber, A/C pads, etc. (as
determined as of the Effective Date of this Agreement); (ii) request directly or
indirectly, that any present or potential customer or supplier, cancel, limit or
postpone their business with NATK; or (iii) hire or solicit for employment,
directly or indirectly, or actively attempt to influence, any NATK employee or
independent contractor to terminate his relationship with NATK.
8. Standstill Agreement
For and in consideration of the mutual covenants and promises contained
herein, during the term of this Agreement, and for a period of five (5) years
thereafter, neither Xxxxxxxxxx nor any family member (defined for this purpose
to include his spouse and children) or company, partnership or trust in which
Xxxxxxxxxx (or such family member) owns five (5%) percent or more of its equity
or voting interests or for which Xxxxxxxxxx serves as an employee, agent,
officer, director, or partner will: (i) for the purposes of subparagraphs (ii)
or (iii) hereafter, acquire, offer to acquire, or agree to acquire, directly or
indirectly, by purchase or otherwise, any voting securities or direct or
indirect rights or options to acquire any voting securities of NATK; (ii) make,
or in any way participate, directly or indirectly, in any "solicitation" of
"proxies" to vote (as such terms are interpreted in the proxy rules of the
Securities and Exchange Commission), or seek to advise or influence any person
or entity with respect to the voting of any voting securities of NATK, or (iii)
form, join or in any way participate in a "group" within the meaning of Section
13 (d) (3) of the Securities Exchange Act of 1934 with respect to any voting
securities of NATK for the purpose of seeking to control the management, Board
of Directors or policies of NATK. Further, the parties acknowledge that NATK
would not have an adequate remedy at law for money damages in the event that
this covenant were not performed in accordance with its terms and therefore
Xxxxxxxxxx agrees that NATK shall be entitled to specific enforcement of the
terms hereof in addition to any other remedy to which it may be entitled, at law
or in equity.
9. Injunctive Relief.
Xxxxxxxxxx acknowledges that any breach by him of paragraphs 7 or 8 of this
Agreement would substantially and materially impair and irreparably harm NATK's
business and goodwill; that such impairment and harm would be difficult to
measure and, therefore, total compensation in solely monetary terms would be
inadequate. Xxxxxxxxxx therefore agrees that in the event of any breach or
threatened breach by him of paragraphs 7 or 8, NATK shall be entitled, in
addition to monetary damages or other remedies, to equitable relief, including
injunctive relief, and payment by Xxxxxxxxxx of all costs and expenses incurred
by NATK in enforcing said paragraph against Xxxxxxxxxx, including attorneys'
fees incurred by NATK.
10. Miscellaneous.
(a) Breach. The parties agree that in the event one party breaches any
part or parts of this Agreement, legal proceedings may be instituted against
that party for breach of contract. The
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nonprevailing party in such legal proceedings shall reimburse the prevailing
party for the reasonable costs and expenses, including attorneys, fees,
incurred.
(b) SEC Filings. NATK shall permit its counsel to assist Xxxxxxxxxx in
making any necessary filings with the Securities and Exchange Commission.
(c) References. NATK agrees that it will provide Xxxxxxxxxx with a letter
of reference substantially in the form attached hereto as Exhibit A.
(d) Non-Disparagement. NATK and Xxxxxxxxxx agree not to engage in any
conduct or make any statement that would disparage the other or their respective
business interests in any way.
(e) Announcement. A press release shall be prepared by NATK and
Xxxxxxxxxx jointly, announcing the mutual Severance Agreement to the public.
(f) Stockholders' Agreement and Removal of Legends From Share Certificates.
That certain Stockholders' Agreement dated as of April 5, 1996 by and among
NATK, Xxxxxxxxxx and the Management Stockholders named therein and the Investors
named therein, as amended to date, shall not apply to any Common Stock owned by
Xxxxxxxxxx from and after December 31, 1999. NATK will reissue a share
certificate representing certificate No. NAT-0979 free of any legend under the
Securities Act of 1933 ninety days after he ceases to be an officer or director
of NATK.
(g) Construction. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas. Any action arising out of or
relating to any of the provisions of this Agreement may be brought and
prosecuted only in the courts of, or located in, the State of Texas, and in the
event of such election the parties hereto consent to the jurisdiction and venue
of said courts.
(h) Captions. Captions herein are inserted for convenience, do not
constitute a part of this Agreement, and shall not be admissible for the purpose
of proving the intent of the parties.
(i) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and in pleading or
proving any provision of this Agreement it shall not be necessary to produce
more than one such counterpart.
(j) Entire Agreement. This Agreement contains and constitutes the entire
understanding and agreement between the parties hereto respecting the subject
matter hereof and supersedes and cancels all previous negotiations, agreements,
commitments, and writings in connection herewith. Neither of the parties hereto
has relied upon any representation made by or on behalf of the other party and
the same are not enforceable except to the extent set forth in writing in this
Agreement.
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(k) Attorney Review, Etc. Xxxxxxxxxx and NATK affirm that the only
consideration for signing this Agreement are the terms stated herein, and that
no other promises or agreements of any kind have been made to or with either of
them by any person or entity whatsoever to cause them to sign this Agreement.
Xxxxxxxxxx states and represents that he has been provided the opportunity for
at least seven days to review and consider this Agreement, that he fully
understands the meaning and intent of this Agreement and that he has had an
opportunity to discuss and review the terms of this Agreement fully with his
attorney. Xxxxxxxxxx further states and represents that he has carefully read
this Agreement, understands the contents hereof, freely and voluntarily assents
to all the terms and conditions hereof, and signs the same as his own free act.
IN WITNESS WHEREOF, all parties have set their hands and seals to this
Agreement as of the date written above.
Witness
/s/ Xxxx Xxxxxxx /s/ Xxx X. Xxxxxxxxxx
-------------------------------- -----------------------------------
Xxx X. Xxxxxxxxxx
Attest: NORTH AMERICAN TECHNOLOGIES
GROUP, INC.
/s/ Xxxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx
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