EXHIBIT 10.12
EMPLOYMENT AGREEMENT
This Employment Agreement dated as of February 07, 2005 (hereinafter referred to
as "Agreement") is entered into by and among FuelNation Inc. (the "Company") and
Xxxxx X Xxxxxxxx III ("Executive"). WHEREAS, the Company employs Executive in
the capacity of Vice President and Chief Investor Relations Officer; and
WHEREAS, the Company and Executive desire to set forth in this Agreement all of
the terms and conditions of said employment, and to establish a mechanism to
resolve disputes relating to said employment;
NOW, THEREFORE, in consideration of the mutual promises and obligations
contained in this Agreement, the Company and Executive agree as follows:
1. TERM OF EMPLOYMENT. This Agreement is effective March 1, 2005 (the
"Effective Date"), and will continue, unless sooner terminated, until
March 1, 2008 (the "Initial Term"). Thereafter, the term of this
Agreement shall automatically be extended for successive one (1) year
periods ("Renewal Terms") unless either the Company or Executive gives
written notice to the other at least ninety (90) days prior to the end
of the Initial Term or Renewal Term, as the case may be, of its or his
intention not to renew the term of this Agreement. The Initial Term and
any Renewal Terms of this Agreement shall be collectively referred to
as the "Term."
2. DUTIES AND RESPONSIBILITIES. The Company hereby employs Executive as
Vice President and Chief Investor Relations Officer with such powers
and duties in that capacity as may be established from time to time by
the Company in its discretion. Executive will devote his entire time,
attention and energies to the Company's business. Executive, subject to
approval by the Company's Board of Directors, may in the future have
other business investments and participate in other business ventures
which may, from time to time, require portions of his time, but shall
not interfere with his duties hereunder. However, nothing in this
Agreement shall prevent Executive from passively investing in business
activities so long as such investments require no active participation
by Executive.
3. COMPENSATION.
(a) BASE SALARY. The Company will pay Executive an annualized base salary
of $125,000 until March 31, 2006 and $150,000 until March 31, 2007 and
$200,000 for the remainder of the Initial Term, less applicable
deductions, payable in installments according to the Company's normal
payroll practices ("Base Salary"). The Base Salary shall be reviewed at
least annually by the Company's Board of Directors, which may in its
discretion increase the Base Salary. Participation in deferred
compensation, discretionary bonus, retirement, stock option and other
employee benefit plans and in fringe benefits shall not reduce the Base
Salary payable to Executive under this Section 3(a).
(b) BONUSES: During the term of this Agreement, the Executive shall receive
an annual bonus from the Company, based on performance goals determined
at the beginning of each fiscal year by the Executive and Board of
Directors of the Company, in its good faith discretion.
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(c) VACATION. Executive shall be entitled to four (4) weeks of paid
vacation during each year of the Term, the time and duration thereof to
be determined by mutual agreement between Executive and the Company.
(d) STOCK OPTIONS. FuelNation shall grant to Executive stock options to
purchase an aggregate of 150,000 shares of common stock at prices to be
determined by the Board of Directors. The options shall vest in equal
installments on March 1, 2006, 2007 and 2008. The options will only
vest assuming that Executive remains employed by Company on the dates
that the options are to be deemed vested. There will be no "pro-rated"
vesting of any options for the period in which Executive ceases to be
employed by Company. Executive will have five (5) years to exercise all
vested options.
(e) AUTOMOBILE. The Company shall reimburse Executive with car expenses to
include monthly lease and insurance payments not to exceed $500 per
month commencing March 1, 2005 for the remaining term of his
employment.
(f) EXPENSES. The Company shall pay or reimburse the Executive for all
reasonable expenses which are actually incurred or paid by him in the
performance of his service hereunder.
(g) PARTICIPATION IN RETIREMENT AND EMPLOYEE BENEFIT PLANS; FRINGE
BENEFITS. Executive shall be entitled to participate in all plans of
FuelNation relating to stock options, stock purchases, pension, thrift,
profit sharing, life insurance, hospitalization and medical coverage,
disability, travel or accident insurance, education or other retirement
or employee benefits that FuelNation has adopted or may adopt for the
benefit of its senior executives. In addition, Executive shall be
entitled to participate in any other fringe benefits, such as club
dues, legal and tax planning expenses (up to $5,000 per year) and fees
of professional organization and associations, which are now or may
become applicable to the Company's senior executives, and any other
benefits which are commensurate with the duties and responsibilities to
be performed by Executive under this Agreement. Executive shall, during
the term of his employment hereunder, continue to be provided with
benefits at a level which shall in no event be less in any material
respect than the benefits available to the Executive immediately prior
to the date of this Agreement. Notwithstanding the foregoing, the
Company may terminate or reduce benefits under any benefit plans and
programs to the extent such reductions apply uniform to all senior
executives entitled to participate therein, and Executive's benefits
shall be reduced or terminated accordingly.
4. INABILITY TO PERFORM JOB DUTIES. In the event of Executive's death,
this Agreement and the Executive's salary and compensation shall
automatically end. If in the reasonable judgment of the Board of
Directors, based on independent medical advice, Executive becomes
unable to perform his employment duties during the term of this
Agreement as a result of mental or physical incapacity, illness or
disability, his compensation under this Agreement shall automatically
end until such time as Executive becomes able to resume his job duties
for the Company. In the event that Executive becomes unable to perform
his employment duties for a cumulative period of greater than twelve
(12) weeks within any span of twelve (12) months, this Agreement and
Executive's employment will be automatically terminated. In either
event, Executive will be immediately entitled to all accrued and unpaid
payments and benefits under Section 3 and the Company shall continue to
provide the Executive with those medical, life and disability insurance
benefits, if any, which are provided to the Executive on the last day
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of his employment by the Company for a period of one year following the
last day of employment with the Company.
5. TERMINATION BY COMPANY FOR CAUSE. The Company may terminate this
Agreement, and Executive's employment "for cause" at any time. As used
herein, "for cause" shall mean any one of the following: The conviction
of or a plea of guilty or nolo contendere by Executive to a felony;
Willful fraud or deceit of material fact by Executive in connection
with the performance of his duties hereunder; Commission of a serious
and willful violation of any of the Company's personnel policies,
including but not limited to violations of the Company's policies
against any form of harassment, which violation cannot be cured, or is
not cured within fifteen (15) days following (a) receipt by Executive
of a written notice specifying the factors or events constituting such
failure or refusal and (b) a reasonable opportunity to cure such
violation; or Failure of or refusal on the part of Executive to
substantially perform all of his duties hereunder as reasonably
requested by the Company, which failure or refusal shall not be cured
within fifteen (15) days following (a) receipt by Executive of a
written notice specifying the factors or events constituting such
failure or refusal, and (b) a reasonable opportunity for Executive to
correct such deficiencies. In the event the Company terminates
Executive's employment for Cause, Executive shall not be entitled to
severance, but will immediately be entitled to all accrued and unpaid
payments and benefits under Section 3.
6. TERMINATION OF AGREEMENT BY COMPANY WITHOUT CAUSE OR BY EXECUTIVE FOR
GOOD REASON. The Company may terminate this Agreement and Executive's
employment without Cause at any time upon sixty (60) days prior written
notice to Executive. The Executive may terminate this Agreement and
Executive's employment with Good Reason at any time upon sixty (60)
days prior written notice to the Company. "Good Reason" shall mean any
of the following if the same shall occur without Executive's express
prior written consent: (i) the failure by the Company to obtain the
assumption by operation of law or otherwise of this Agreement by any
entity which is the surviving entity in any merger or other form of
reorganization involving the Company or by any entity which acquires
all or substantially all of the Company's assets, or (ii) any other
material breach of this Agreement by the Company, which breach shall
not be cured within fifteen (15) days after written notice thereof to
the Company. If the Company terminates Executive's Employment without
Cause or Executive terminates his employment with the Company for Good
Reason, the Company will pay to Executive a severance payment of an
amount equal to 2.99 times his then-current Base Salary. In addition,
all unvested stock options owned by the Executive shall become fully
vested and exercisable at the date Executive's employment terminates,
and Executive shall have the right to exercise all vested, unexercised
stock options outstanding at the termination date (including the
accelerated options) in accordance with the terms of the plans and
agreements pursuant to which such options were issued. Executive shall
also immediately be entitled to all accrued and unpaid payments and
benefits under Section 3.
7. TERMINATION OF AGREEMENT BY EXECUTIVE. Executive may terminate this
Agreement and his employment with the Company without Good Reason upon
sixty (60) days prior written notice to the Company. Executive may be
required to perform his job duties and will be paid his regular salary
up to the date of the termination. At the option of the Company, the
Company may require Executive to terminate employment upon receiving
said sixty (60) days' notice from Executive of the termination of this
Agreement. In such event, the Company will pay to Executive an amount
equal to sixty (60) calendar days of his base salary. Executive will
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not be entitled to receive any other compensation or severance
allowance under this Agreement.
8. CHANGE OF CONTROL.
(a) For the purposes of this Agreement, a "Change of Control" shall be
deemed to have taken place if: (i) any person, including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (but excluding Executive and members of his family), becomes
the owner or beneficial owner of Company securities, after the date of
this Agreement, having 50% or more of the combined voting power of the
then outstanding securities of the Company that may be cast for the
election of directors of the Company (other than as a result of an
issuance of securities initiated by the Company, or open market
purchases approved by the Board, as long as the majority of the Board
approving the purchases is the majority at the time the purchases are
made), or (ii) the persons who were directors of the Company before
such transactions shall cease to constitute a majority of the Board, or
any successor to the Company, as the direct or indirect result of or in
connection with, any cash tender or exchange offer, merger or other
business combination, sale of assets or contested election, or any
combination of the foregoing transactions.
(b) During the remaining term hereof after the Change of Control Date, the
Company (or subsidiary) will (i) continue to pay Executive at not less
than the Base Salary on the Change of Control Date, (ii) pay Executive
bonuses in amounts not less in amount than those paid during the 12
month period preceding the Change of Control Date, and (iii) continue
employee benefit programs as to Executive at levels in effect on the
Change of Control Date (but subject to such reductions as may be
required to maintain such plans in compliance with applicable federal
law regulating employee benefit programs).
(c) If during the remaining term hereof after the Change of Control Date
(i) Executive's employment is terminated by the Company (or
subsidiary), or (ii) there shall have occurred a material reduction in
Executive's compensation or employment related benefits, or a material
change in Executive's status, working conditions, management
responsibilities or titles, and Executive voluntarily terminates his
relationship with the Company within 60 days of any such occurrence, or
the last in a series of occurrences, then Executive shall be entitled
to receive, a lump sum payment equal to the remainder of Executive's
Base Salary, but no less than 18 months of salary. Such amount will be
paid to Executive within 15 business days after his termination of
affiliation with the Company.
9. COOPERATION. Upon the termination of this Agreement for any reason,
Executive agrees to cooperate with the Company in effecting a smooth
transition of the management of the Company with respect to the duties
and responsibilities which Executive performed for the Company.
Further, after termination of this Agreement, Executive will furnish
such information and proper assistance to the Company as it may
reasonably require in connection with any prior business arrangements
in which Executive was involved, and any litigation to which the
Company is or may become party.
10. COVENANT NOT TO COMPETE. During the term of this Agreement, and for two
(2) years after its termination, Executive promises and agrees that
she/he will not enter into any employment or business relationship
(whether as a principal, agent, partner, employee, investor, owner,
consultant, board member or otherwise) with any company, business
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organization or individual whose primary business that is engaged in
the same or similar business as that conducted by the Company or with
any other business that competes with the Company. This Section 10 is
effective regardless of the reason for the termination of the Agreement
and regardless of whether the Agreement is terminated by the Executive
or the Company. This restrictive covenant may be assigned to and
enforced by any of the Company's assignees or successors. It is
expressly understood , however, that Employee has a relationship with
Invest-Trend, and a relationship with Equity. Employee is free to
simultaneously pursue these opportunities as long as these entities do
not compete in the Company's business and as long as the Employee
devotes at least 25 hours per week to the business of Company.
Employee, however, is not free to pursue other opportunities other than
these mentioned in this paragraph without the express written consent
of Company.
11. INDEMNIFICATION and HOLD HARMLESS. In the event that a claim arises out
of Employee's outside relationships, Employee agrees to indemnify
Company and hold it harmless from any such claim. Employee also agrees
that under such an event, Employee will reimburse Company its attorney
fees and costs used in defending such claim.
12. AGREEMENT NOT TO USE OR DISCLOSE TRADE SECRETS. During the term of this
Agreement and a period of five (5) years thereafter, Executive promises
and agrees that he/she will not disclose or utilize any trade secrets
acquired during the course of service with the Company and/or its
related business entities. As used herein, "trade secret" refers to the
whole or any portion or phase of any formula, pattern, device,
combination of devices, or compilation of information which is for use,
or is used, in the operation of the Company's business and which
provides the Company an advantage, or an opportunity to obtain an
advantage, over those who do not know or use it. "Trade secret" also
includes any scientific, technical, or commercial information,
including any design, list of suppliers, list of customers, as well as
pricing information or methodology, contractual arrangements with
vendors or suppliers, business development plans or activities, or
Company financial information. This Section 11 is effective regardless
of the reason for the termination of the Agreement and regardless of
whether the Agreement is terminated by the Executive, the Company or by
its own terms. This restrictive covenant may be assigned to and
enforced by any of the Company's assignees or successors.
13. AGREEMENT NOT TO USE OR DISCLOSE CONFIDENTIAL OR PROPRIETARY
INFORMATION. During the term of this Agreement and a period of two (2)
years thereafter, Executive promises and agrees that he/she will not
disclose or utilize any confidential or proprietary information
acquired during the course of service with the Company and/or its
related business entities, Executive shall not divulge, communicate,
use to the detriment of the Company or for the benefit of any other
person or persons, or misuse in any way, any confidential or
proprietary information pertaining to the business of the Company. Any
confidential or proprietary information or data now or hereafter
acquired by Executive with respect to the business of the Company
(which shall include, but not be limited to, information concerning the
Company's financial condition, prospects, technology, customers,
suppliers, methods of doing business and promotion of the Company's
products and services) shall be deemed a valuable, special and unique
asset of the Company that is received by Executive in confidence and as
a fiduciary. For purposes of this Agreement "confidential and
proprietary information" means information disclosed to Executive as a
consequence of or through his employment by the Company (including
information conceived, originated, discovered or developed by
Executive) prior to or after the date hereof and not generally known or
in the public domain, about the Company or its business. This Section
12 is effective regardless of the reason for the termination of the
Agreement and regardless of whether the Agreement is terminated by the
Executive, the Company or by its own terms. This restrictive covenant
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may be assigned to and enforced by any of the Company's assignees or
successors.
14. AGREEMENT NOT TO HIRE COMPANY EXECUTIVES. If Executive leaves the
employ of the Company or terminates this Agreement, Executive promises
and agrees that, during the two (2) years following his departure from
the Company, Executive will not, without the express written permission
of the Company, actively recruit or solicit employees of the company.
This Section 13 is effective regardless of the reason for the
termination of the Agreement and regardless of whether the Agreement is
terminated by the Executive, the Company or by its own terms. This
restrictive covenant may be assigned to and enforced by any of the
Company's assignees or successors.
15. INJUNCTIVE RELIEF. In recognition of the unique services to be
performed by Executive and the possibility that any violation by
Executive of Section 10, Section 12, Section 13 or Section 14 of this
Agreement may cause irreparable or indeterminate damage or injury to
Company, Executive expressly stipulates and agrees that the Company
shall be entitled, upon ten (10) days written notice to Executive, to
obtain an injunction from any court of competent jurisdiction
restraining any violation or threatened violation of this Agreement.
Such right to an injunction shall be in addition to, and not in
limitation of, any other rights or remedies the Company may have for
damages.
16. JUDICIAL MODIFICATION OF AGREEMENT. The Company and Executive
specifically agree that a court of competent jurisdiction (or an
arbitrator, as appropriate) may modify or amend Section 10, Section 11,
Section 12 or Section 13 of this Agreement if absolutely necessary to
conform with relevant law or binding judicial decisions in effect at
the time the Company seeks to enforce any or all of said provisions.
17. RESOLUTION OF DISPUTES BY ARBITRATION. Any claim or controversy that
arises out of or relates to Executive's employment, this Agreement, or
the breach of this Agreement, will be resolved by arbitration in Palm
Beach County in accordance with the rules of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator may be
entered in any court possessing jurisdiction over arbitration awards.
This Section shall not limit or restrict the Company's right to obtain
injunctive relief for violations of Section 9, Section 10, Section 11
or Section 12 of this Agreement directly from a court under Section 14
of this Agreement. Each party shall be required to bear its own costs
and attorney's fees incurred in any arbitration arising out of
Executive's employment, this Agreement, or the breach of this
Agreement.
18. TERMINATION OF CERTAIN PROVISIONS. The provisions of paragraph 10 and
14 shall no longer apply if the Company shall file a petition for
bankruptcy or if an involuntary petition is filed against the Company
that is not dismissed within 60 days.
19. ADEQUATE CONSIDERATION. Executive expressly agrees that the Company has
provided adequate, reasonable consideration for the obligations imposed
upon him in this Agreement.
20. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
between the parties, and supersedes any prior agreements or
understanding between the Company and Executive. This Agreement may be
amended only in writing, signed by both parties.
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21. LIMITED EFFECT OF WAIVER BY COMPANY. If the Company waives a breach of
any provision of this Agreement by Executive, that waiver will not
operate or be construed as a waiver of later breaches by Executive.
22. SEVERABILITY. If any provision of this Agreement is held invalid for
any reason, such invalidity shall not affect the enforceability of the
remainder of this Agreement.
23. ASSUMPTION OF AGREEMENT BY COMPANY'S SUCCESSORS AND ASSIGNS. At the
Company's sole option, the Company's rights and obligations under this
Agreement will inure to the benefit and be binding upon the Company's
successors and assigns. Executive may not assign his rights and
obligations under this Agreement.
24. APPLICABLE LAW. Executive and the Company agree that this Agreement
shall be subject to, and enforceable under, the laws of the State of
Florida.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement on March
14, 2005
COMPANY EXECUTIVE
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Xxxxx X. Xxxxxxxxx Xxxxx X Xxxxxxxx III
President
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