EMPLOYMENT AGREEMENT
(Xxxxxxx X. Xxxxxxx)
AGREEMENT effective as of July 1, 1998 between LODESTAR ENERGY, INC.
("Employer"), and Xxxxxxx X. Xxxxxxx ("Employee").
W I T N E S S E T H:
WHEREAS Employer desires to employ Employee on the terms hereof, and
Employee desires to accept employment on such terms;
In consideration of the mutual covenants herein contained, the parties
hereto hereby agree as follows:
1. Terms and Duties.
Commencing as of the effective date hereof and continuing until April 1,
2002, and thereafter from year to year unless sooner terminated as herein
provided (the "Employment Term"), the Employer hereby employs the Employee
as its Vice President-Finance and Chief Financial Officer. The Employee hereby
accepts such employment and agrees to devote all of his business time and his
best efforts to the business of Employer and as may be necessary to perform
his duties in accordance with the policies and budgets established from time
to time by Employer and its Board of Directors and President. During the
Employment Term, the Employee will not have any other employment.
2. Compensation.
For Employee's services hereunder Employer shall pay to Employee
(a) a salary at the rate of One Hundred & Fifty Thousand ($150,000)
Dollars per year (or such greater amount as Employer may from time to time
determine), payable periodically in accordance with Employer's usual executive
payroll payment
procedures; plus
(b) an annual bonus of Thirty Five Thousand ($35,000) Dollars for each
fiscal year (ending October 31th,) provided that
(i) Employee achieves to Employer's satisfaction the performance
objectives established by Employer.
(ii) Employee is in the active employment of Employer, and actually
engaged in performing his duties, at the close of such fiscal year,
and
(iii) Employer's financial statements for such year, as prepared by its
independent public accountants, show a positive net income.
Such annual bonus for each year shall be payable within 30 days after the
Employer's accountants have completed preparation of the Employer's financial
statement for such year. The determination of such accountants as to the amount
of the net operating income, as shown in such statements, shall be conclusive on
the parties. Eligibility for this executive performance based bonus does not
affect Employee's participation in the other benefit programs available to all
salaried employees.
3. Place of Employment.
The Employee's regular place of employment during the Employment Term shall
be at the principal executive office of the Employer in Lexington, Kentucky.
4. Travel; Expenses.
The Employee shall engage in such travel as may reasonably be required in
connection with the performance of his duties.
All reasonable travel and other expenses incurred by the Employee (in
accordance
with the policies and the budget of the Employer established from time to time)
in carrying out his duties hereunder will be reimbursed by the Employer on
presentation to it of expense accounts and appropriate documentation in
accordance with the customary procedures of the Employer for reimbursement of
executive expenses.
5. Early Termination of Employment Term on Disability or Death.
(a) If during the Employment term, the Employee fails because of
illness or other incapacity (including incapacity because of substance abuse) to
render to the Employer the services required of him hereunder for a period of
two months (during which the Employer shall continue the Employee's compensation
at the rates herein provided), the Employer may, in its discretion, give one
month notice of termination of the Employment Term (during which the Employee's
compensation shall likewise be continued), and if the Employee shall not resume
full performance of his duties within such one month period, the Employment Term
shall terminate at the expiration thereof, provided that any such termination
shall not affect the right of the Employee (or his estate) to continue to
receive benefits under any disability insurance plan covering the Employee which
is in effect at the date of termination.
(b) The Employment Term shall end upon the death of the Employee.
(c) In the event of termination for disability or death, the Employer shall
pay the
Employee the Thirty Five Thousand ($35,000) Dollars annual bonus provided for in
Section 2(b) prorated for the period from the start of the fiscal year to date
of termination, provided that the requirement of Sub-Sections 2(b)(i) and ( iii)
have been met for such fiscal year.
6. Confidentiality; Competition.
(a) For the purposes hereof, all confidential information about the business
and affairs of the Employer (including, without limitation, business plans, real
and personal property leases, financial, engineering and marketing information
and information about costs, mining and processing methods, suppliers and
customers) constitute "Employer
Confidential Information." Employee acknowledges that he will have access to and
knowledge of Employer Confidential Information, and that improper use or
revelation of same by the Employee during or after the termination of his
employment by the Employer could cause serious injury to the business of the
Employer. Accordingly, the Employee agrees that he will forever keep secret and
inviolate all Employer Confidential Information which comes into his possession,
and that he will not use the same for his own private benefit, or directly or
indirectly for the benefit of others, and that he will not disclose such
Employer Confidential Information to any other person except as necessary in
pursuance of his duties.
(b) The Employee agrees that during the Employment Term as extended, if
extended, but in any event until April 1, 2002, ("Non-Competition Period"), the
Employee will not (whether as an officer, director, partner, proprietor,
investor, associate, employee, consultant, adviser, public relations or
advertising representative or otherwise), directly or indirectly, be engaged in
the business of coal mining. For purposes of the preceding sentence, the
Employee shall be deemed to be engaged in any business which any person for whom
he shall perform services is engaged. Nothing herein contained shall be deemed
to prohibit the Employee from owning, as a passive investment, a security of any
issuer which is not a supplier, vendor, customer or competitor of the Employer.
(c) Within the terms of this Agreement, it is intended to limit disclosure
and competition by the Employee to the maximum extent permitted by law. If it
shall be finally determined by any court of competent jurisdiction ruling on
this Agreement that the scope or duration of any limitation contained in this
paragraph 7 is too extensive to be legally enforceable, then the parties hereby
agree that the scope and duration (not greater than that
provided for herein) of such limitation shall be the maximum scope and duration
which shall be legally enforceable and the Employee hereby consents to the
enforcement of such limitation as so modified.
(d) The Employee acknowledges that any violation by him of the
provisions of this paragraph 7 could cause serious and irreparable damages to
the Employer. He further acknowledges that it might not be possible to measure
such damages in money. Accordingly, the Employee further acknowledges that, in
the event of a breach or threatened breach by him of the provisions of this
paragraph 7, the Employer may seek, in addition to any other rights or remedies,
including money damages, an injunction or restraining order, restraining the
Employee from doing or continuing to do or perform any acts constituting such
breach or threatened breach.
7. Benefits.
The Employer agrees to provide to the Employee the benefits available to all
salaried employees.
8. Employee's Representation.
Employee hereby represents to the Employer that he has full lawful right and
power to enter into this Agreement and carry out his duties hereunder, and that
same will not constitute a breach of or default under any employment,
confidentiality, non-competition or other agreement by which he may be bound.
9. Default by Employee. If the Employee shall:
(i) commit an act of dishonesty against the Employer or fraud upon the
Employer; or
(ii) breach his obligations under this Agreement and fail to cure such
breach within five (5) days after written notice thereof; or
(iii) be convicted of a crime involving moral turpitude; or
(iv) fail or neglect diligently to perform his duties hereunder and
continue in his failure after written notice;
then, and in any such case, the Employer may terminate the employment of the
Employee hereunder and, in the event of any such termination, the Employee shall
no longer have any right to any of the benefits (including future salary
payments) which would otherwise have accrued after such termination.
10. Successors.
The rights, benefits, duties and obligations under this Agreement shall
inure to and be binding upon the Employer, its successors and assigns and upon
the Employee and his legal representatives, legatees and heirs. It is
specifically understood, however, that this Agreement may not be transferred or
assigned by the Employee. The Employer may assign any of its rights and
obligations hereunder to any subsidiary or affiliate of the Employer, or to a
successor or survivor resulting from a merger, consolidation, sale of assets or
stock or other corporate reorganization, on condition that the assignee shall
assume all of the Employer's obligations hereunder and it is agreed that such
successor or surviving corporation shall continue to be obligated to perform the
provisions of this Agreement.
11. Automatic Roll-over.
This Agreement shall automatically extend for an additional one-year period,
on each expiration date, unless either party shall have theretofore given at
least 30 days prior written notice of termination. Any extension shall be on the
terms in force immediately preceding
said extension, unless otherwise agreed in writing.
12. Notices.
Notices hereunder shall be in writing and shall be sent by telegraph or by
certified or registered mail, telecopy, or recognized overnight delivery service
(such as Federal Express) prepaid as follows:
To Employee: To Employer:
Xxxxxxx Xxxxxxx Lodestar Energy, Inc.
000 Xxxx Xxxx Xxxxxx--Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: President
with copy to:
The Renco Group, Inc.
00 Xxxxxxxxxxx Xxxxx-00xx Xxxxx
Xxx Xxxx, XX 00000
and shall be deemed to have been given when telecopied to the addressee or three
days after placed in the mail or the second business day following delivery to a
recognized overnight delivery service (such as Federal Express) or a telegraph
company, prepaid and properly addressed. Notices to the Employee may also be
delivered to him personally. Notices of change of address shall be given as
provided above, but shall be effective only when actually received.
13. Waiver.
The failure of either party to insist upon the strict performance of any of
the terms, conditions, and provisions of this Agreement shall not be construed
as a waiver or relinquishment of future compliance therewith, and said terms,
conditions, and provisions shall remain in full force and effect. No waiver of
any term or condition of this Agreement
on the part of the Employer shall be effective for any purposes whatsoever
unless such waiver is in writing and signed by the Employer.
14. Entire Agreement; Governing Law
There are no oral or written understandings concerning the Employee's
employment by Employer outside of this Agreement. This Agreement may not be
modified except by a writing signed by the parties hereto. This Agreement
supersedes any and all prior employment agreements or understandings. This
Agreement is made under and shall be construed in accordance with, the laws of
Kentucky applicable to agreements to be performed wholly within that state.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
EMPLOYER:
LODESTAR ENERGY, INC.
By /s/ Xxxx X. Xxxxxx
------------------------
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxx
