EMPLOYMENT AGREEMENT
This Employment Agreement, effective as of January 3, 2001 (the "Agreement"), is
entered into by and between MAXXON, INC., a Nevada corporation (the "Company"),
the principal offices of which are located at 0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000,
Xxxxx, Xxxxxxxx, 00000, and XXXXXX XXXXXXX ("Xxxxxxx"). In consideration of the
mutual covenants and conditions contained in this Agreement, the parties agree
to the following:
ARTICLE 1
DUTIES AND COMPENSATION
1.01. Term of Employment and Duties. The Company and Xxxxxxx agree that for
the period commencing on January 3, 2001, and terminating on January 3,
2002 (the "Termination Date"), the Company shall employ Xxxxxxx and
Xxxxxxx shall perform duties ("duties") for the Company as Financial
Reporting Manager and shall report to the Company's President.
1.02. Commitment to the Company. During the term of this Agreement, Xxxxxxx
shall devote such working time, attention and energies to the business
of the Company, as is necessary or appropriate for the performance of
her duties as Financial Reporting Manager. However, this commitment
shall not be construed as preventing Xxxxxxx from participating in
other businesses or from investing Vincent's personal assets in such
form or manner as may require occasional or incidental time on the part
of Xxxxxxx in the management, conservation and protection of such
investments and provided that such investments or business cannot be
construed as being competitive or in conflict with the business of the
Company.
1.03. Renewal of Term. Upon each Termination Date this Agreement shall renew
and continue in effect for an additional two-year period, and each
successive Termination Date shall thereafter be designated as the
"Termination Date" for all purposes under this Agreement.
1.04. (a) Compensation. Xxxxxxx shall receive a salary of $100,000.00 per
year, payable in 24 semi-monthly installments. Each January the
President shall review Vincent's salary and shall make such increases
in salary as he considers appropriate. Vincent's salary during the term
of this Agreement shall never be less than $100,000.00 per year.
Effective at the beginning of each calendar year Xxxxxxx shall be
entitled to at least an increase in salary that is equal to the
percentage increase in the Consumer Price Index during the previous
calendar year.
(b) Bonus. During the term of this Agreement Xxxxxxx shall be entitled
to participate in all bonuses as the President, in its sole discretion,
shall determine.
(c) Fringe Benefits. During the term of this Agreement the Company
shall provide to Xxxxxxx each of the following: (i) all reasonable and
customary executive "fringe benefits," including, but not limited to,
participation in pension plans, profit-sharing plans, employee stock
ownership plans, stock option plans (whether statutory or not), stock
appreciation rights plans, hospitalization insurance, medical
insurance, dental insurance, disability insurance, life insurance, and
such other benefits that are granted to or provided for executives now
in the employ of the Company or that may be granted to or provided for
them during the term of Vincent's employment under this Agreement; and
(ii) paid vacation and sick leave, as determined by the President.
(d) Reimbursement of Expenses. (i) During the term of this Agreement
the Company shall pay directly or reimburse Xxxxxxx for all reasonable
and necessary travel, entertainment, or other
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related expenses incurred by her in carrying on her duties and
responsibilities under this Agreement. In addition, the Company shall
xxxxxxx Xxxxxxx with a cellular telephone and suitable office space
and facilities for the performance of her duties. (ii) During the term
of this Agreement the Company shall pay for Vincent's membership dues
in professional organizations and for any seminars and conferences
related to Company business.
1.05 (a) Indemnification. Xxxxxxx shall be indemnified by the Company for
all legal expenses and all liabilities incurred in connection with any
proceeding involving her by reason of her being or having been an
officer, director, employee, or agent of the Company to the fullest
extent permitted by the laws of the State of Nevada.
(b) Payment of Expenses. In the event of any action, proceeding or
claim against Xxxxxxx arising out of her serving or having served in a
capacity specified in Section 1.01 above, which in Vincent's sole
judgment requires her to retain counsel (such choice of counsel to be
made by Xxxxxxx with the prior consent of the Company, which may not
unreasonably withhold its consent) or otherwise expend her personal
funds for her defense in connection therewith, the Company shall pay
for or reimburse Xxxxxxx for all reasonable attorney's fees and
expenses and other costs associated with Vincent's defense of such
action as such fees and costs are incurred.
ARTICLE II
TERMINATION OF EMPLOYMENT
2.01. Termination Procedure. Either party to this Agreement may terminate
Vincent's employment under this Agreement by giving the other party
written notice of the intent to terminate at least thirty days prior to
the proposed termination date except as set out in section 2.02. A
decision by the Company to terminate Vincent's employment under this
Agreement shall require an affirmative vote of more than 66-2/3% of the
Board except as set out in Section 2.02.
2.02. Death. This Agreement shall terminate on the date of Vincent's death.
If this Agreement is terminated as a result of Vincent's death, the
Company shall pay to Vincent's estate, not later than the 30th day
following her death, a lump sum severance payment consisting of (1)
Vincent's salary and accrued salary through the date of her death, (2)
all amounts Xxxxxxx would have been entitled to upon termination of her
employment under the Company's employee benefit plans and (3) a pro
rata amount of bonus Xxxxxxx was eligible to receive under any Company
bonus plan.
2.03. Disability. The Company shall have the right to terminate this
Agreement if Xxxxxxx incurs a permanent disability during the term of
her employment under this Agreement. For purposes of this Agreement,
"Permanent Disability" shall mean inability of Xxxxxxx to perform the
services required hereunder due to physical or mental disability which
continues for either (i) a total of 180 working days during any
12-month period or (ii) 150 consecutive working days. In the event
that either party disputes whether Xxxxxxx has a permanent disability,
such dispute shall be submitted to a physician mutually agreed upon by
Xxxxxxx or her legal guardian and the Company. If the parties are
unable to agree on a mutually satisfactory physician, each shall
select a reputable physician, who, together, shall in turn select a
third physician whose determination of Vincent's ability to perform
her job duties shall be conclusive and binding to the parties.
Evidence of such disability shall be conclusive notwithstanding that a
disability policy or clause in an insurance policy covering Xxxxxxx
shall contain a different definition of "permanent disability." If
Vincent's employment under this Agreement is terminated by the Company
because she has a permanent disability, the Company shall pay Xxxxxxx,
not later than the 30th day following the date of termination, a lump
sum severance payment consisting of (1) Vincent's salary through the
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date of her termination, (2) all amounts Xxxxxxx is entitled to upon
termination of employment under the Company's employee benefit plans,
(3) Vincent's undiscounted salary through the Termination Date, or if
greater for a period of 24 months, and (4) a pro rata amount of bonus
she is eligible to receive under any Company bonus program.
2.04. Termination With Cause. The Company shall have the right to terminate
this Agreement for cause. For purposes of this Agreement, "for cause"
shall exclusively be defined to mean (a) conviction of a felony which
is materially detrimental to the Company, (b) proof beyond a
reasonable doubt of the gross negligence or willful misconduct which
is materially detrimental to the Company, or (c) proof beyond a
reasonable doubt of a breach of a fiduciary duty which is materially
detrimental to the Company. If the Company terminates Vincent's
employment "for cause" the Company shall pay Xxxxxxx, not later than
the 30th day following the date of termination, a lump sum severance
payment consisting of (1) Vincent's salary and accrued salary through
the date of her termination and (2) all amounts Xxxxxxx is entitled to
upon termination of employment under the Company's employee benefits
plans.
2.05. Termination Without Cause. If the Company terminates Vincent's
employment for any reason other than for cause as that term is defined
in section 2.04, the Company shall pay Xxxxxxx, not later than the 30th
day following the date of termination, a lump sum severance payment
consisting of (1) Vincent's salary and accrued salary through the date
of her termination, (2) all amounts Xxxxxxx is entitled to upon
termination of employment under the Company's employee benefits plans,
(3) Vincent's undiscounted salary through the Termination Date, or if
greater for a period of 24 months, and (4) a pro rata amount of bonus
she is eligible to receive under any Company bonus program.
2.06. Resignation. If Xxxxxxx resigns from her employment under this
Agreement other than for a reason of change of control as defined in
section 2.07, the Company shall pay Xxxxxxx, not later than the 30th
day following the effective date of her resignation, a lump sum
severance payment consisting of (1) Vincent's salary and accrued salary
through the date of her termination, (2) all amounts Xxxxxxx is
entitled to upon termination of employment under the Company's employee
benefit plans, (3) Vincent's undiscounted salary for a period of 90
days after her resignation and (4) a pro rata amount of bonus she is
eligible to receive under any Company bonus program.
2.07. Change of Control. Xxxxxxx shall have the right to resign from her
employment under this Agreement if there is a change of control. For
purposes of this Agreement a Change of Control shall be deemed to have
occurred if any of the following occur: (i) at any time during any
period of 12 consecutive months, at least a majority of the directors
serving on the Board ceases to consist of individuals who have served
continuously on such Board since the beginning of such 12 month
period, unless the election of directors during such period, or
nomination for election by the shareholders of the Company, was
approved by a vote of at least two-thirds of the members of such Board
at such time still in office and who shall have served continuously on
such Board since the beginning of such 12-month period by reason of
death or disability; or (ii) a merger or consolidation occurs to which
the Company is a party unless following such merger or consolidation
(A) more than 50% of the then outstanding shares of voting capital
stock of the corporation surviving such merger or resulting from such
consolidation is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the
beneficial owners of the outstanding voting capital stock of the
Company immediately prior to such merger or consolidation in
substantially the same proportions as their ownership, immediately
prior to such merger or consolidation, of the outstanding voting
capital stock of the Company, and (B) at least a majority of the
members of the Board surviving such merger or resulting from such
consolidation were members of the Board immediately prior to such
merger
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or consolidation; or (iii) the sale of all, or substantially all, of
the assets of the Company; or (iv) a person or entity who is not an
owner of voting capital stock of the Company as of the date of this
Agreement acquires more than 50% of the voting capital stock of the
Company. Notwithstanding the foregoing, however, a Change of Control
shall not be deemed to have occurred upon the consummation of an
Initial Public Offering of the capital stock of the Company. If
Xxxxxxx exercises her right to terminate her employment following a
Change of Control, she shall receive, not later than the 30th day
following the date of termination, a lump sum severance payment
consisting of (1) Vincent's salary through the date of her
termination, (2) all amounts Xxxxxxx is entitled to upon termination
of employment under the Company's employee benefits plans, (3)
Vincent's undiscounted salary through the Termination Date, or if
greater for a period of 24 months, and (4) a pro rata amount of bonus
she is eligible to receive under any Company bonus program.
2.08. Mitigation. Xxxxxxx shall have no obligation to mitigate any damages
or payments made to her under Article II of this Agreement.
2.09. Excess Parachute Payments. In the event that payment of the amounts
this Agreement requires the Company to pay Xxxxxxx would cause Xxxxxxx
to be the recipient of an excess parachute payment (within the meaning
of Section 280G(b) of the Internal Revenue Code of 1986), the amount of
the payments to be made to Xxxxxxx pursuant to this Agreement shall be
reduced to an amount equal to one dollar less than the amount that
would cause the payments hereunder to be excess parachute payments. The
manner in which such reduction occurs, including the items of payment
and amounts thereof to be reduced, shall be agreed to by Xxxxxxx and
the Company.
ARTICLE III
RESTRICTIONS DURING AND AFTER EMPLOYMENT
3.01. Company Records and Documents. All Company-related records and
documents are considered to be the exclusive property of the Company.
Upon the termination of Vincent's employment by the Company for any
reason, she shall promptly return to the Company all such records and
documents in her possession or under her control. Xxxxxxx shall have
the right to retain copies of Company records and documents that she
believes are reasonably necessary for her to retain to be able to
exercise her rights under the Indemnification Provisions of this
Agreement.
ARTICLE IV
MISCELLANEOUS
4.01. Notice. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by certified mail
by the Company to the residence of Xxxxxxx, or by Xxxxxxx to the
Company's principal office.
4.02. Further Assurances. Each party agrees to perform any further acts and
to execute and deliver any further documents that may be reasonably
necessary to carry out the provisions of this Agreement.
4.03. Severability. In the event that any of the provisions, or portions
thereof, of this Agreement are held to be unenforceable or invalid by
any court of competent jurisdiction, the validity and enforceability
of the remaining provisions or portions thereof, shall not be affected
thereby.
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4.04. Construction. Whenever used herein, the singular number shall include
the plural, and the plural number shall include the singular.
4.05. Headings. The headings contained in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning of
any of the provisions contained herein.
4.06. Multiple Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original but all
of which together shall constitute one and the same instrument.
4.07. Governing Law. This Agreement has been executed in and shall be
governed by the laws of the State of Oklahoma.
4.08. Inurement. Subject to the restrictions against transfer or assignment
as herein contained, the provisions of this Agreement shall inure to
the benefit of, and shall be binding on, the assigns, successors in
interest, personal representatives, estates, heirs and legatees of each
of the parties hereto.
4.09. Waivers. No waiver of any provision or condition of this Agreement
shall be valid unless executed in writing and signed by the party to be
bound thereby, and then only to the extend specified in such waiver. No
waiver of any provision or condition of this Agreement shall be
construed as a waiver of any other provision or condition of this
Agreement, and no present waiver of any provision or condition of this
Agreement shall be construed as a future waiver of such provision or
condition.
4.10. Amendment. This Agreement may be amended only by a written document
signed by the parties and stating that the document is intended to
amend this Agreement.
4.11. Disputes. In any dispute or proceeding to construe this Agreement, the
parties expressly consent to the exclusive jurisdiction of state and
federal courts in Tulsa County, Oklahoma, the principal place of
business for Maxxon. The prevailing party in any suit brought to
interpret this Agreement shall be entitled to recover reasonable
attorney's fees and expenses in addition to any other relief to which
it is entitled.
4.12. Payment of Vincent's Attorney's Fees and Expenses in Advance in
Connection with this Agreement. If the Company brings a suit against
Xxxxxxx in connection with this Agreement or if Xxxxxxx brings suit
against the Company in connection with this Agreement, the Company
shall pay Vincent's reasonable attorney's fees and expenses as
incurred. If a determination is made in a court of competent
jurisdiction in favor of the Company, then the Company shall be
entitled to be reimbursed by Xxxxxxx for her attorney's fees and
expenses which were paid by the Company.
4.13. Execution. Each party to this Agreement hereby represents and warrants
to the other party that such party has full power and capacity to
execute, deliver and perform this Agreement.
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IN WITNESS WHEREOF, the parties to this Agreement have executed this Agreement
effective this 3rd day of January, 2001.
XXXXXX XXXXXXX MAXXON, INC.
/s/ XXXXXX XXXXXXX /s/ XXXXXXX XXXXX
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XXXXXX XXXXXXX, an Individual By: Xxxxxxx X. Xxxxx
President and Chief Executive Officer
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