EMPLOYMENT AGREEMENT
This Employment Agreement, effective as of August 1st, 2001 (the "Agreement"),
is entered into by and between TEXXON, INC., a Oklahoma corporation (the
"Company"), principal offices at 0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxxx, 00000, and XXXXXXX X. XXXXX III ("Xxxxx"). In consideration of the
mutual covenants and conditions contained in this Agreement, the parties agree
to the following:
WITNESSETH
Whereas, the Employee has agreed to perform services for and on behalf of
the Company, as well as to devote his time, attention and energies to the
business of the Company during the term of this Agreement; and
Whereas, the Company and the Employee have mutually agreed upon the
remuneration the Employee shall receive from the Company as an employee during
the term of this Agreement; and
Whereas, the Company and the Employee have agreed it is in their best
interest to set forth in this Agreement the specific manner in which such
remuneration is to be paid the Employee by the Company; and
Whereas, it is the intention of both the Company and the Employee that this
Agreement be entered into with strict adherence to the definition of Employee
Benefit Plan as set forth in Rule 405 of the Securities Act of 1933, as amended;
Whereas the parties agree that any portion of this Agreement which conflicts
with the Company's Articles of Incorporation or By-Laws shall be void and the
rest of this Agreement shall remain effective.
Whereas, the Company represents that by executing this contract that they have
taken all necessary steps to have the legal authority to bind the Company;
Whereas, the Employee recognizes that he is an affiliate of the Company and that
any and all securities acquired under this Agreement are subject to the same
resale limitations that applied to the Company.
Whereas, the parties acknowledge the following inside and/or related
transactions:
On July 17, 2001, Xxxxx purchased 1,000,000 shares of common stock at $0.001 per
share. The shares were issued pursuant to an exemption from registration under
Section 4(2) of the Securities Act of 1933, as amended.
Now, Therefore, the Company hereby agrees to employ Xxxxx as its Employee, and
Xxxxx agrees to be employed by the Company upon the terms and conditions
hereinafter set forth.
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ARTICLE 1
DUTIES AND COMPENSATION
1.01 Term of Employment and Duties. The Company and Xxxxx agree that for the
period commencing on August 1st, 2001 and terminating on August 1, 2002
(the "Termination Date"), the Company shall employ Xxxxx and Xxxxx shall
perform duties ("duties") for the Company as Chief Executive Officer and
President of the Company as set forth in the Company's Articles of
Incorporation and Bylaws and shall report to the Company's Board of
Directors (the "Board").
1.02 Commitment to the Company. During the term of this Agreement, Xxxxx shall
devote such working time, attention and energies to the business of the
Company, as is necessary or appropriate for the performance of his duties
as Chief Executive Officer and President of the Company. However, this
commitment shall not be construed as preventing Xxxxx from participating in
other businesses or from investing Xxxxx'x personal assets in such form or
manner as may occasionally require substantial time on the part of Xxxxx 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.
1.02.1 SEC Reporting. Xxxxx shall be responsible for the Company's substantive
and financial reporting requirements of the Securities Exchange Act of 1934
as amended. Xxxxx is specifically allowed to hire any and all professionals
necessary to assist this process.
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. Xxxxx shall receive a salary of $120,000.00 per year,
payable in 24 semi-monthly installments. Each January the Board shall
review Xxxxx'x salary and shall make such increases in salary, as it
considers appropriate. Xxxxx'x salary during the term of this Agreement
shall never be less than $120,000.00 per year. Effective at the beginning
of each calendar year Xxxxx 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 Xxxxx shall be entitled to
participate in all executive bonuses, as the Board, in its sole discretion,
shall determine. During such period as Xxxxx is the sole director the
fairness of the bonus shall be opined by an independent third party,
shareholder vote or as set forth in the Company by-laws.
(c) Fringe Benefits. During the term of this Agreement the Company shall
provide to Xxxxx 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 Xxxxx'x
employment under this Agreement; and (ii) paid vacation and sick leave, as
determined by industry standards.
(d) Reimbursement of Expenses. (i) During the term of this Agreement the
Company shall pay directly or reimburse Xxxxx for all reasonable and
necessary travel, entertainment, or other related expenses incurred by him
in carrying on his duties and responsibilities under this Agreement. In
addition, the Company shall furnish Xxxxx with a cellular telephone and
suitable office space and
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facilities for the performance of his duties. (ii) During the term of this
Agreement the Company shall pay for Xxxxx'x membership dues in professional
organizations and for any seminars and conferences related to Company
business.
(e) License to the Technology. Upon commencement of this employee
agreement, the company shall xxxxx Xxxxx a complete license to the
technology assignable to Xxxxx as an individual without the assessment of
any fees for the license. This license is non-revocable even in the event
of termination or dissolution of this agreement.
1.05 Assistance of Xxxxx. Xxxxx agrees to assist the Company during any and all
investigatory matters, threatened or pending litigation during and after
his employment. After employment assistance shall not be required in
matters to which he is personally a party or which he has written opinion
and advise of counsel that the same would be personally damaging.
1.06 (a) Indemnification. Xxxxx shall be indemnified by the Company for all
legal expenses and all liabilities incurred in connection with any
proceeding involving him by reason of his 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 Oklahoma.
(b) Payment of Expenses. In the event of any action, proceeding or claim
against Xxxxx arising out of his serving or having served in a capacity
specified in Section 1.01 above, which in Xxxxx'x sole judgment requires
him to retain counsel (such choice of counsel to be made by Xxxxx with the
prior consent of the Company, which may not unreasonably withhold its
consent) or otherwise expend his personal funds for his defense in
connection therewith, the Company shall pay for or reimburse Xxxxx for all
reasonable attorney's fees and expenses and other costs associated with
Xxxxx'x defense of such action as such fees and costs are incurred.
1.07 Director and Officer Liability Insurance. The Company shall provide
reasonable D&O and/or Warranty and Representations insurance coverage for
Xxxxx. The terms and extent of such insurance shall be dictated by industry
standard and circumstance.
ARTICLE II
TERMINATION OF EMPLOYMENT
2.01 Termination Procedure. Either party to this Agreement may terminate Xxxxx'x
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 Xxxxx'x 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 Xxxxx'x death. If this
Agreement is terminated as a result of Xxxxx'x death, the Company shall pay
to Xxxxx'x estate, not later than the 30th day following his death, a lump
sum severance payment consisting of (1) Xxxxx'x salary and accrued salary
through the date of his death, (2) all amounts Xxxxx would have been
entitled to upon termination of his employment under the Company's employee
benefit plans and (3) a pro rata amount of bonus Xxxxx was eligible to
receive under any Company bonus plan.
2.03 Disability. The Company shall have the right to terminate this Agreement if
Xxxxx incurs a permanent disability during the term of his employment under
this Agreement. For purposes of this Agreement, "Permanent Disability"
shall mean inability of Xxxxx to perform the services required
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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
Xxxxx has a permanent disability, such dispute shall be submitted to a
physician mutually agreed upon by Xxxxx or his 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 Xxxxx'x ability to
perform his 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 Xxxxx shall
contain a different definition of "permanent disability." If Xxxxx'x
employment under this Agreement is terminated by the Company because he has
a permanent disability, the Company shall pay Xxxxx, not later than the
30th day following the date of termination, a lump sum severance payment
consisting of (1) Xxxxx'x salary through the date of his termination, (2)
all amounts Xxxxx is entitled to upon termination of employment under the
Company's employee benefit plans, (3) Xxxxx'x undiscounted salary through
the Termination Date, or if greater for a period of 24 months, and (4) a
pro rata amount of bonus he 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 Xxxxx'x employment "for cause" the Company shall
pay Xxxxx, not later than the 30th day following the date of termination, a
lump sum severance payment consisting of (1) Xxxxx'x salary and accrued
salary through the date of his termination and (2) all amounts Xxxxx is
entitled to upon termination of employment under the Company's employee
benefits plans.
2.05 Termination Without Cause. If the Company terminates Xxxxx'x employment for
any reason other than for cause as that term is defined in section 2.04,
the Company shall pay Xxxxx, not later than the 30th day following the date
of termination, a lump sum severance payment consisting of (1) Xxxxx'x
salary and accrued salary through the date of his termination, (2) all
amounts Xxxxx is entitled to upon termination of employment under the
Company's employee benefits plans, (3) Xxxxx'x undiscounted salary through
the Termination Date, or if greater for a period of 24 months, and (4) a
pro rata amount of bonus he is eligible to receive under any Company bonus
program.
2.06 Resignation. If Xxxxx resigns from his employment under this Agreement
other than for a reason of change of control as defined in section 2.07,
the Company shall pay Xxxxx, not later than the 30th day following the
effective date of his resignation, a lump sum severance payment consisting
of (1) Xxxxx'x salary through the date of his termination, (2) all amounts
Xxxxx is entitled to upon termination of employment under the Company's
employee benefit plans, (3) Xxxxx'x undiscounted salary for a period of 90
days after his resignation and (4) a pro rata amount of bonus he is
eligible to receive under any Company bonus program. Xx. Xxxxx'x accrued
salary shall be paid within thirty days if the Company has available funds,
if the Company does not have said funds then the accrued salary shall be
paid in a reasonable time after his severance in no case shall that time
period extend over six months.
2.07 Change of Control. Xxxxx shall have the right to resign from his 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
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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 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 Xxxxx exercises his right to
terminate his employment following a Change of Control, he shall receive,
not later than the 30th day following the date of termination, a lump sum
severance payment consisting of (1) Xxxxx'x salary through the date of his
termination, (2) all amounts Xxxxx is entitled to upon termination of
employment under the Company's employee benefits plans, (3) Xxxxx'x
undiscounted salary through the Termination Date, or if greater for a
period of 24 months and (4) a pro rata amount of bonus he is eligible to
receive under any Company bonus program.
2.08 Mitigation. Xxxxx shall have no obligation to mitigate any damages or
payments made to him 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 Xxxxx would cause Xxxxx 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 Xxxxx 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 Xxxxx and the Company.
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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 Xxxxx'x employment by the Company for any reason, he shall
promptly return to the Company all such records and documents in his
possession or under his control. Xxxxx shall have the right to retain
copies of Company records and documents that he believes are reasonably
necessary for him to retain to be able to exercise his rights under the
Indemnification Provisions of this Agreement. He will further be allowed to
retain any records or documents that are reasonably necessary for him to
utilize the license to the technology granted by the execution 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 Xxxxx, or by Xxxxx 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.
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.
4.07.1 Governing Law. This Agreement has been executed in and shall be governed
by the laws of the State of Oklahoma.
4.07.2. Assignment. This Agreement shall be assignable and binding upon any
purchasers or successors in interest of the Company.
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.
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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 TEXXON. 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 Xxxxx'x Attorney's Fees and Expenses in Advance in Connection
with this Agreement. If the Company brings a suit against Xxxxx in
connection with this Agreement or if Xxxxx brings suit against the Company
in connection with this Agreement, the Company shall pay Xxxxx'x reasonable
attorney's fees and expenses as incurred as limited by Oklahoma law. 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 Xxxxx for
his 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.
IN WITNESS WHEREOF, the parties to this Agreement have executed this
Agreement effective this 1st day of August 2001.
XXXXXXX X. XXXXX III TEXXON, INC.
/s/ Xxxxxxx X. Xxxxx III /s/ Xxxx X. Xxxxxxx
------------------------------------- -----------------------------------
Xxxxxxx X. Xxxxx III, an Individual By: Xxxx X. Xxxxxxx
Treasurer and Secretary
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