EX 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of the day of June 30, 2004,
by and between Xxxxxx Xxxxxx ("Employee") and RECLAMATION CONSULTING AND
APPLICATIONS, INC., a Colorado Corporation with its principal place of
business at 00000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxxx,
Xxxxxxxxxx 00000 ("Company").
1. RECITALS:
1.1 The company is in the business of manufacturing and marketing
asphalt, cement and related products release agents in liquid form that
are non-toxic, non-explosive and environmentally compatible, the
formulation and ingredients of which are confidential.
1.2 Employee has experience in the businesses conducted and to
be conducted by the Employer, or in related businesses, and desires
to be employed by the Company, and the Company desires to employee
the Employee, on the terms and conditions specified below
2. COVENANTS:
In consideration of the recitals and mutual covenants contained herein,
the parties agree that:
2.1 Employment. The Company will employ Employee to serve as
President with the duties listed and defined by the Company or the
Board, in connection with the Company's operations and Employee does
hereby accept such employment, all subject to the terms and provisions
of this Agreement. Employee represents that he is legally free to enter
into this agreement and that it does not conflict with any of his duties
or obligations to any other person and that he is not in any way restricted
by any duties or obligations to any other person from contributing his
knowledge and talents to the Company in performing his duties hereunder.
2.2 Term. This Agreement shall have an initial five-year term, which
shall be automatically renewed each year thereafter unless the Company,
upon thirty (30) days prior notice notifies Employee of its intent not to
renew the Agreement. Notwithstanding the foregoing, the Company or the
Employee may at any time terminate this Agreement and the employment
relationship on thirty (30) days prior notice to the other, with the
consequences hereinafter set forth.
2.3 Compensation. During the first twelve months of employment,
the Company agrees to compensate Employee (from the commencement of
this agreement) at the rate of not less than $135,200 per year base
compensation for the first year of employment. Thereafter, Employee's
annual compensation shall be increased by 20% on each anniversary date
of this agreement, provided that the Company reaches a minimum net
profit of $250,000. In no event shall Employee's minimum base
compensation be reduced below $135,200 per year. Such compensation
shall be payable monthly or on such more frequent basis as the Company
may establish.
2.4 Bonuses. An annual bonus will be paid to Employee, the amount
of which is based upon the Company's net profits and shall be
structured as follows:
RCAI % of Salary Salary Bonus
Net Profit Paid as Bonus Amount Amount
$250,000 10% $135,200 $13,500
$500,000 20% $135,200 $27,000
$750,000 30% $135,200 $40,500
$1,000,000 40% $135,200 $54,000
$1,250,000 50% $135,200 $67,500
$1,500,000 60% $135,200 $81,000
$1,750,000 70% $135,200 $94,500
$2,000,000 80% $135,200 $108,000
$2,250,000 90% $135,200 $121,000
$2,500,000 100% $135,200 $135,000
RCAI % of Salary Salary Bonus
Net Profit Paid as Bonus Amount Amount
$250,000 10% $162,240 $16,224
$500,000 20% $162,240 $32,448
$750,000 30% $162,240 $48,672
$1,000,000 40% $162,240 $64,898
$1,250,000 50% $162,240 $81,120
$1,500,000 60% $162,240 $97,344
$1,750,000 70% $162,240 $113,568
$2,000,000 80% $162,240 $129,792
$2,250,000 90% $162,240 $146,016
$2,500,000 100% $162,240 $162,240
RCAI % of Salary Salary Bonus
Net Profit Paid as Bonus Amount Amount
$250,000 10% $194,688 $19,468.80
$500,000 20% $194,688 $38,937.60
$750,000 30% $194,688 $58,406.40
$1,000,000 40% $194,688 $77,857.20
$1,250,000 50% $194,688 $97,344
$1,500,000 60% $194,688 $116,812.80
$1,750,000 70% $194,688 $136,281.60
$2,000,000 80% $194,688 $155,750.40
$2,250,000 90% $194,688 $175,219.20
$2,500,000 100% $194,688 $194,688
RCAI % of Salary Salary Bonus
Net Profit Paid as Bonus Amount Amount
$250,000 10% $233,625.60 $23,362.56
$500,000 20% $233,625.60 $46,727.12
$750,000 30% $233,625.60 $70,087.68
$1,000,000 40% $233,625.60 $93,450.24
$1,250,000 50% $233,625.60 $116,812.80
$1,500,000 60% $233,625.60 $140,175.36
$1,750,000 70% $233,625.60 $163,537.92
$2,000,000 80% $233,625.60 $186,900.48
$2,250,000 90% $233,625.60 $210,263.04
$2,500,000 100% $233,625.60 $233,625.60
RCAI % of Salary Salary Bonus
Net Profit Paid as Bonus Amount Amount
$250,000 10% $280,350.72 $28,035.07
$500,000 20% $280,350.72 $56,070.14
$750,000 30% $280,350.72 $84,105.21
$1,000,000 40% $280,350.72 $112,140.28
$1,250,000 50% $280,350.72 $140,175.36
$1,500,000 60% $280,350.72 $168,210.43
$1,750,000 70% $280,350.72 $196,245.49
$2,000,000 80% $280,350.72 $224,280.57
$2,250,000 90% $280,350.72 $252,315.64
$2,500,000 100% $280,350.72 $280,350.72
2.5 Stock Options. The option to purchase 1,500,000 shares of common
restricted stock in the Company has been granted in Employee's name. All
options shall expire 5-years from the vesting date. 1,500,000 of these
options have been carried over from Employee's previous Employment Agreement
with the Company. Options will be vested annually, subject to continued
employment, and released to Employee as per the schedule below. The
corresponding number of share options shall be vested to Employee at
the purchase values and on the dates indicated.
No. Options Date Available Exercise Price
500,000 January 15, 2002 $0.40 per share
500,000 January 15, 2003 $0.40 per share
500,000 January 15, 2004 $0.40 per share
Additional stock options shall be granted to Employee each year following
the above schedule on the anniversary date of this Agreement, the amount
and price of which to be determined solely by the Company.
2.6 Duties. Employee agrees to devote his energies to the business of
the Company and agrees to perform such reasonable responsibilities and
duties as may be assigned to him from time to time by the Company or by
the Company's board of directors, which shall be consistent with his
position as Executive Vice President. In no event shall the Employee
be precluded from activities in professional societies, or from lecturing
or writing in areas of his professional expertise for reasonable periods,
and Employee shall be entitled to retain fees, honoraria, publication
royalties and similar compensation paid as a result of such activities.
2.7 Additional Benefits. The Company agrees to reimburse Employee
promptly for or to pay on behalf of Employee, any reasonable expenses
heretofore or hereafter incurred by Employee (to the extent not paid by
others) in the furtherance of the goals of the Company upon submission
of a satisfactory accounting by Employee, and to provide Employee with
the following additional benefits:
2.7.1 A minimum of three weeks annual paid vacation. Vacation shall
accrue on a monthly basis or part thereof; however, once unused vacation
has accrued to a maximum of three weeks, accrual of additional vacation
shall cease until the balance of accrued vacation has been reduced below
six weeks. The Company will not cause the vacation accrual to cease by
withholding its approval of any of the Employee's vacation requests.
2.7.2 Any other standard benefits that may be established by the Company
or its affiliates for its employees.
2.8 Non-Disclosure of Confidential Information. It is understood that
employee will acquire and be informed of confidential technical and/or
business information used by and belonging to the Company ("Confidential
Information"), including Confidential Information as defined in the
Company's EMPLOYEE NON-DISCLOSURE AND NON-COMPETITION AGREEMENT.
Employee agrees that some or all of such Confidential Information is
in the nature of trade secrets and is the sole property of the Company.
Employee will keep confidential, and will not disclose to any third
person or entity, any Confidential Information without Employer's
consent and pursuant to the proceedings further defined in the
Company's EMPLOYEE NON-DISCLOSURE AND NON-COMPETITION AGREEMENT.
2.9 Confidentiality after Termination of Employment. Employee
agrees that upon termination of employment, he or she shall surrender
promptly to the Company any and all documents and property of the
Company, including, but not limited to: reports, drawings, manuals,
correspondence, customer lists and other Confidential Information
which he or she may possess, and all other materials and all copies
thereof relating in any way to the Company's business, or in any
way obtained by the Employee during the course of his employment,
and that he shall not retain any copies, notes or abstracts of the
foregoing. Employee further agrees that such documents, lists and
information shall be and remain the sole property of the Company.
All of the terms of paragraph 2.8 shall remain in full force and effect
both during the continuation of employment of Employee by the Company
and after the termination of employment for any reason.
2.10 Confidentiality. Employee agrees to execute standard Company
documents establishing the Employee's duties of confidentiality and
the rights of the Company to all inventions, trade secrets, etc.,
developed by the Employee in the course of his employment, namely the
EMPLOYEE NON-DISCLOSURE AND NON-COMPETITION AGREEMENT.
2.11 Non-Competition. Employee agrees that during the term of
his employment by Company, Employee will not engage in any way whatsoever,
directly or indirectly, in any business that is competitive with the Company
and its subsidiaries and affiliate operations, nor solicit or in any other
manner work for or assist any business which is competitive to the Company
and its subsidiaries and affiliate operations.
2.12 Non-Participation in Competitive Activities. During the term of
this agreement, Employee will undertake no planning for or organization
of any business activity competitive with the work he performs as an
Employee of the Company and its subsidiaries and affiliate operations, and
Employee will not combine or participate with other employees of the
Company and its subsidiaries and affiliate operations for the purpose of
organization of any such competitive business activity.
2.13 Assignment to Company of Proprietary Rights. Employee agrees
to execute any and all documents and take any and all other actions necessary
or desirable for the assignment to the Company and its subsidiaries and
affiliate operations of all of his interests in any Confidential Information,
trade secrets, copyrightable materials and patentable or patented ideas
developed by him, alone or in conjunction with others, in the course of
his employment by the Company.
2.14 Injunctive Relief. The parties hereto agree and acknowledge that
many of the rights conveyed by this Agreement are of a unique and special
nature and that the Company and its subsidiaries and affiliate operations
will not have an adequate remedy at law in the event of failure of Employee
to abide by its terms and conditions, nor will money damages adequately
compensate for such injury. It is, therefore, agreed between the parties
that in the event of breach by Employee of Employee's covenants contained
in this Agreement, the Company and its subsidiaries and affiliate operations
shall have the rights, among other rights, to damages sustained thereby and
to a preliminary or permanent injunction to restrain Employee from the
prohibited acts. Employee agrees that this Paragraph shall survive for
one year after the termination of his employment, and Employee shall be
bound by its terms for a period of one year subsequent to the termination
of his employment, providing that the Company and its subsidiaries and
affiliate operations continue to conduct the same business or businesses
as they were conducting during the period of this Agreement. Nothing
herein contained shall in any way limit or exclude any and all other
rights granted by law or equity to the Company and its subsidiaries and
affiliate operations.
2.15 Termination of Employment. If Employee's employment terminates or
is terminated, the rights and obligations of the parties shall depend upon
the reason for termination. Termination may occur for any one of the
following reasons: termination by the Company for cause, termination
by the Company without cause, termination by Employee without cause,
termination by Employee with cause, or termination of Employee by reason
of his death or long-term disability.
2.15.1 Termination by Company for Cause. In the event of termination
by the Company for cause, which shall consist only of specific actions
knowingly and intentionally taken by Employee to the specific material
detriment of the Company and not reasonably intended by him to benefit
the company, the Employee will receive all unpaid salary, bonuses, and
other benefits accrued through the last day of employment. Employee
agrees, if he is so terminated for cause, that, for a period of one
year following the termination of employment of the Employee, Employee
will not engage in any way whatsoever, directly or indirectly, in any
business that is competitive with the Company and its subsidiaries and
affiliates utilizing any Confidential Information acquired while
organizing, founding, or acting as an officer, director or employee
of the Company, its subsidiaries or affiliates, nor solicit customers,
investors, service providers, or strategic partners of the Company,
with the Company's, or its subsidiary's or affiliates' business whether
by interfering with or raiding their employees, or disrupting or interfering
with their relationships with customers, investors, service providers, or
strategic partners. Employee will have thirty days after termination by
the Company for cause to challenge the termination. Employee may challenge
the termination by the Company for cause by sending written notice
to that effect to the Company via registered or certified mail,
postmarked no later than 30-days from the date that employee received
notice from the Company that Employee was being terminated by the
Company for cause. The Company and Employee will each select an
arbitrator who will each review the facts surrounding the termination
and the challenge. The arbitrators will decide whether the Company was
justified in terminating the Employee for cause. If the arbitrators
cannot agree whether the Company was justified in terminating Employee for
cause, the arbitrators will select a third arbitrator who will make the
determination of whether the Company was justified in terminating the
Employee for cause. The arbitration proceeding shall be conducted in
accordance with the provisions of California's Arbitration act, Code
of Civil Procedure, Sections 1280, et seq. The Company and Employee
agree to abide by the decision of the arbitration.
If the arbitrators agree or if the third arbitrator determines, as
applicable, that the Company was not justified in terminating the
Employee for cause, within 72 hours of receiving the arbitration decision
that the termination by the Company for cause was not justified, the
Company will pay Employee back pay for all salaries and benefits from
the date of termination through the date of the arbitration decision.
The termination will then be treated as a termination by the Company
without cause, subject to the provisions of subparagraphs
2.15.2 Termination by Company without Cause. In the event of termination
by the Company without cause, i.e., an involuntary termination, or notification
by the Company of an intent not to renew the Agreement pursuant to
paragraph 2.2 of this Agreement, Employee shall be entitled to elect
to receive severance pay equal to 50% of the annual total compensation
in effect in the last month of employment, but in no cause less than $67,600
and will receive all unpaid salary, bonuses, and other benefits accrued
through the last day of employment.
2.15.3 Termination by Employee without Cause. In the event of termination
by Employee without cause, i.e., a voluntary termination, the Employee will
receive all unpaid salary, bonuses, and other benefits accrued through the
last day of employment. Employee agrees, if he so terminates without
cause, that, for a period of one year following the termination of employment
of the Employee, Employee will not engage in any way whatsoever, directly o
f indirectly, in any business that is competitive with the Company and its
subsidiaries and affiliates utilizing any Confidential Information acquired
while organizing, founding, or acting as an officer, director or employee of
the Company, its subsidiaries, or affiliates, nor solicit customers,
investors, service providers, or strategic partners of the Company, or
any of its subsidiaries or operating affiliates; or disrupt, damage,
impair or interfere with the Company's, or its subsidiary's or affiliates'
business whether by interfering with or raiding their employees, or
disrupting or interfering with their relationships with customers, investors,
service providers or strategic partners. Thereafter, he will be free to
so compete or participate with a competitor.
2.15.4 Termination by Employee with Cause. In the event of receipt of notice
of termination by Employee with cause, which shall consist only of a material
breach of the agreement by the Company including, without limitation,
nonpayment of salary or other compensation due, non-reimbursement of
business expenses, or failure to provide either health insurance allowance
or coverage or other benefits, the Company will have thirty days after
receipt of notice of termination by Employee to challenge the termination
by Employee with cause. The Company and Employee will each select an
arbitrator who will each review the facts surrounding the termination and
the challenge. The arbitrators will decide wither the Employee is
justified in terminating with cause. If the arbitrators cannot agree
whether the Employee is justified in terminating with cause, the arbitrators
will select a third arbitrator who will make the determination of whether
the Employee is justified in terminating with cause. The arbitration
proceeding shall be conducted in accordance with the provisions of
California's Arbitration act, Code of Civil Procedure, Sections 1280, et
seq. The Company and Employee agree to abide by the decision of the
arbitration.
If the arbitrators agree, or if the third arbitrator determines, as
applicable, that the Employee is justified in terminating with cause, or
if the Company fails to challenge the termination by the Employee with
cause within the thirty day period, the Employee shall be entitled to
elect to receive severance pay equal to 100% of the annual total
compensation in effect in the last month of employment, but in no
case less than
$135,200 and will receive all unpaid salary, bonuses, and other benefits
accrued through the last day of employment plus 30 days. If the
arbitrators agree, or if the third arbitrator determines, as applicable,
that the Employee is not justified in terminating with cause, the
termination will be treated as a termination by Employee without
cause, subject to the provisions of subparagraphs 2.15.3.
2.15.5 Termination by Death or Disability. In the event of termination
by reason of death of the Employee or the long-term disability of the
Employee, Employee shall be entitled to termination pay equal to three
month's pay plus three month's benefits, and will receive all unpaid
salary, bonuses, and other benefits accrued through the last day of
employment. All payments due under this paragraph will be made on the
date of termination of employment. For purposes of this section, the
Company may terminate the Employee due to long-term disability if the
Employee is unable to perform any of his duties for a period of ninety
consecutive days or more, for reasons of sickness or injury. Additionally,
in the event of the long-term disability of Employee, if Employee is
terminated by the Company and then subsequently recovers from the
disability, Employee will be free to compete in any way whatsoever,
directly or indirectly, in any business that is competitive with the
Company, and may solicit or in any other manner work for or assist
any business which is competitive to the Company.
2.15.6 Severance Pay. If Employee elects to receive the severance pay
provided for in subparagraph 2.15.2 or 2.15.4, whichever is applicable,
and that severance pay together with all other payments required by this
Agreement are paid to Employee in accordance with subparagraph 2.15.7,
Employee agrees that for a period of one year following the termination
of employment of the Employee, Employee will not engage in any way
whatsoever, directly or indirectly, in any business that is competitive
with the Company and its subsidiaries and affiliates utilizing any
Confidential Information acquired while organizing, founding, or acting
as an officer, director or employee of the Company, its subsidiaries or
affiliates, nor solicit customers, investors, service providers, or
strategic partners of the Company, or any of its subsidiaries or operating
affiliates; or disrupt, damage, impair or interfere with the Company's,
or its subsidiary's or affiliates' business whether by interfering with
or raiding their employees, or disrupting or interfering with their
relationships with customers, investors, service providers or strategic
partners.
If Employee elects not to receive such severance pay, Employee will be
free to compete in any way whatsoever, directly or indirectly, in any
business that is competitive with the Company, and may solicit or in
any other manner work for or assist any business which is competitive
to the Company.
2.15.7 Termination for any reason. In the event of termination for
any reason, all pay due under this Agreement except for severance pay
is payable by the Company on the last day of employment. Severance
pay, when applicable, will be paid as follows: one-half on the last
day of employment and the remaining payments in three equal monthly
installments payable on the first of months four through six.
2.16 Future Agreement. This Agreement and the documents referred to
herein contain the entire agreement of the parties relevant to the
subject matter hereof, and it may be amended only by a written document
signed by both Employee and Company.
2.17 Governing Law. The laws of California, without regard to
conflicts of laws principles thereof, shall govern this agreement.
2.18 Binding Effect. This Agreement shall inure to the benefit
of and be binding upon the heirs, successors and assigns of
the parties hereto.
EMPLOYEE:
[Print Name]
RECLAMATION CONSULTING AND APPLICATIONS, INC.
By:
Its.
