Exhibit 10.2
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of October, 1998 by and between Tech
Laboratories, Inc., with its principal offices at 000 Xxxxxxx Xxx., Xxxxx
Xxxxxxx, XX 00000 (the "Company"), and Xxxxxxx X. Xxxxxxxx, residing at 00
Xxxxxxx Xxxxx Xxxxx, Xxxxxx, XX (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is currently employed by the Company in the capacity
of President and Chief Executive Officer ("CEO");
WHEREAS, the Company desires to insure the continuing benefit of the
services of the Executive, and,
WHEREAS, the Executive is willing to continue to render such services to
the Company on the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and for other good and valuable consideration, receipt and
sufficiency of which is hereby acknowledged by the parties hereto, the parties
hereto agree as follows:
1. Upon execution of this Agreement, all prior employment agreements, whether
written or oral, between the Executive and the Company, or any of its
parents, subsidiaries, affiliates, or predecessor constituent corporations,
are terminated and are of no further force and effect.
2. Subject to the terms and conditions hereinafter set forth, the Company
hereby employs the Executive, and the Executive hereby agrees to and enters
into the employ of the Company, or of affiliate any parent, subsidiary, of
affiliate of the Company as the company shall from time to time select, for
an employment term commencing as of the 1st day of October, 1998, and
continuing for a period of three years from such date (the "Term of
Employment"). At the end of the initial Term of Employment, this Agreement
shall automatically be renewed for an
additional three-year period; unless either party provides at least 180
days written notice of its decision not to renew their Term of Employment.
3. During the Term of Employment, the Executive shall render and perform such
services as President and CEO or such other executive officer of the
Company as may be assigned to him from time to time by the Board of
Directors. If the Executive is elected as a Director of the Company by the
Shareholders, he shall receive no additional compensation for serving as a
Director so long as he is employed by the Company on a full-time basis in
an executive position.
4. During the Term of Employment, the Executive shall devote his business
time, attention, skill, and efforts to the performance of his duties for
the Company, except for reasonable vacation and except for illness or
incapacity, but nothing in this Agreement shall preclude the Executive from
devoting reasonable periods for:
(a) Serving as a Director, trustee, or member of a committee of any
organization involving no conflicting interests with those of the
Company;
(b) Delivering lectures, fulfilling speaking engagements, teaching at
educational institutions or business organizations;
(c) Engaging in charitable and community activities; and
(d) Managing his personal investments;
Provided that such activities do not, individually or together, interfere
with the regular performance of his duties and responsibilities under this
Agreement. The Company shall pay all reasonable costs and expenses incurred
by the Executive in any undertaking under Subsections (a)-(c), inclusive,
above when participation in said activities provides direct or indirect
benefit to the Company.
5. For all services to be rendered by the Executive in any capacity during the
Term of Employment, including, without limitation, services as an
executive, officer, director or member of a
committee of the Company or its subsidiaries, divisions, and affiliates,
the Executive shall be paid as compensation such salary, payable in
accordance with the customary payroll practices of the Company (but in no
event less frequently than semi-monthly) as the Board of Directors of the
Company may determine and any bonus as the Board of Directors of the
Company may determine.
During the Term of Employment as set forth in this Agreement, it is agreed
that the compensation paid to the Executive shall be a base salary no less
than Seventy Five Thousand ($75,000) Dollars per annum until the Company
completes a financing of at least One Million Dollars in gross proceeds
(debt or equity), at which time the base salary shall become One Hundred
Twenty-Five Thousand ($125,000) Dollars per annum. It is acknowledged and
agreed that the Company has sold approximately $750,000 in an ongoing
finance, so that approximately $250,000 needs to be raised to reach the
$1,000,000 referred to in the previous sentence.
6. In addition, the Executive will receive a cash bonus of two percent (2%) of
the Company's sales in excess of $1,000,000 in each fiscal year that ends
during the Term of Employment, beginning with the fiscal year ending
December 31, 1998, which bonus will be paid on or before February 15 of
each year. The Company will grant to the Executive stock options to
purchase up to 100,000 shares of the Company's common stock at a price of
$.50 per share on October 1 of each year of this Agreement, beginning with
October 1 1998; and the Executive shall participate in any Company
incentive plan which may be established and modified by the Board of
Directors or shareholders from time to time. The Executive shall also be
entitled to reimbursement by the Company for reasonable expenses actually
incurred by him on its behalf in the course of his employment by the
Company, upon the presentation by the Executive, from time to time, of an
itemized account of such expenditures, together with said vouchers and
other receipts as the Company may require.
7. The Executive shall be entitled to vacations in accordance with the
Company's prevailing policy for its operating executives.
8. The rights of the Executive or any other person to the payment of
compensation or other benefits under this Agreement shall not be assigned,
transferred anticipated, conveyed, pledged, or encumbered except by will or
the laws of descent and distribution; nor shall any such right or interest
be in any manner subject to levy, attachment, execution, garnishment, or
any other seizure under legal, equitable, or other process for payment of
debts, judgements, alimony, or separate maintenance, or reached or
transferred by operation of law in the event of bankruptcy, insolvency, or
otherwise.
9. In the event of the Executive's involuntary termination of employment due
to circumstances beyond the control of the Company, or in the event of the
Executive's involuntary termination for any reason, other than for just
cause due to theft or fraud, the Executive shall be entitled to severance
compensation or benefits as provided in this paragraph 9. Nothing contained
herein, however, shall be construed so as to include absence or failure to
perform due to illness as a basis for termination.
(a) Subject to the provisions of paragraph 9(b) below, the Executive shall
be entitled (upon such involuntary termination of employment) to
immediate severance compensation equal to an amount equal to the
Executive's base salary for the remaining period of the Term of
Employment.
(b) The Executive shall be entitled (upon such involuntary termination of
employment), in addition to the severance compensation described in
paragraph 9(a) above, to the benefits described in paragraph 9(c)
below, as follows:
(c) The Executive will be eligible to continue to participate in the
following employee benefit plans (to the extent permissible therein)
for a period of one year from the date of such
involuntary termination of employment. Cost of such participation for
the Executive and eligible dependents shall be born by the Company,
provided the Executive continues to make all contributions required as
of the date of termination to maintain his eligibility;
Medical Insurance Plan.........................COBRA (Company paid)*
Dental Plan....................................COBRA (Company paid)*
* The Executive will have the option to continue this coverage for
an additional six months (beyond the twelve months paid by the
Company) by paying the full monthly premium.
10. Nothing contained herein shall in any way affect or interfere with the
Executive's rights or privileges under any qualified deferred compensation,
retirement, pension, profit sharing, bonus, insurance, hospitalization, or
other employee benefit plan, program or arrangement, now in effect or
hereafter adopted, in which the Executive is entitled to share or
participate as an employee of the Company.
11. During the Term of Employment, if Executive shall, for a period of more
than three (3) consecutive months or for periods aggregating more than
twelve (12) weeks in any fifty-two consecutive weeks, be unable to perform
the services provided for herein, as a result of illness or incapacity or a
physical, mental, or other disability of any nature, the Company may, upon
not less than thirty (30) days notice, terminate the Executive's employment
hereunder. The Executive shall be considered unable to perform the services
provided for herein if he is unable to attend to the normal duties required
of him. In such event, the Company shall pay to the Executive, or to his
legal representatives, base compensation as specified in paragraph 5,
hereof, for a period of twelve (12) months from the date of termination.
Upon completion of the termination payments provided for in this paragraph,
all of the Company's obligations to pay compensation under this Agreement
shall cease.
12. The Company makes no representations, guaranty, warranty, or other
assurance of any kind to the Executive or any other person regarding the
federal, state or local tax consequences of this Agreement or any payments
hereunder, and the company does not agree to indemnify the Executive or any
other person for any federal, state, or local taxes of any kind with
respect to payments hereunder.
13. This Agreement shall be binding upon and inure to the benefit of the
Company, its successors and assigns, and the Executive and his heirs,
executors, administrators, and legal representatives.
14. The Company will not consolidate or merge into or with another corporation
or entity, or transfer all or substantially all of its business and/or
assets to another entity, directly or indirectly, unless such other entity
(hereinafter referred to as the "Successor") shall assume this Agreement
and the obligations of the Company hereunder, and upon such assumption, the
Executive and the Successor shall become obligated to perform the terms and
conditions hereof. However, if during the first 180 days following any such
consolidation or merger, the Executive determines that he does not desire
to remain employed by the Successor or the Successor determines that the
services of the Executive are no longer required, such consolidation or
merger shall be deemed an involuntary termination of the Executive's
employment, and the Executive shall be paid an amount equal to his annual
base salary at the time of the consolidation or merger. This payment will
be made to the Executive in a single lump sum at the time of the
termination.
15. The Executive will not, at any time during the Term of Employment, or for a
period of one year after the voluntary termination of the Executive's
employment, directly or indirectly disclose or furnish any other person,
firm, or corporation any information relating to the Company or its parent,
subsidiaries, or affiliates with respect to technology of the Company's
products, methods of obtaining business, advertising products, customers or
supplies, or any confidential or
proprietary information acquired by the Executive during the course of his
employment by the Company or its parent, subsidiaries, or affiliates.
16. This Agreement constitutes the entire agreement between the parties hereto
relating to the subject matter set forth herein and supersedes any prior
oral and/or written agreements, understandings, negotiations, or
discussions of the parties. There are no warranties, representations or
agreements between the parties in connection with the subject matter
hereof, except as set forth or referred to herein. No supplement,
modification, waiver, or termination of this Agreement or any provision
hereof shall be binding unless executed in writing by the parties to be
bound thereby. Waiver of any of the provisions of this Agreement shall not
constitute a waiver of any other provision (whether or not similar), nor
shall such waiver constitute a continuing waiver unless otherwise
specifically provided.
17. The failure of either party at any time require performance by the other of
any provision hereof shall not affect in any way the full right to require
such performance at any time thereafter, nor shall the waiver by either
party of the breach of any provision hereof be taken or be held to be a
waiver of the provision itself.
18. Any notice or other communication required or permitted to be given under
or in connection with this Agreement shall be in writing, delivered in
person or by public telegram, or by mailing same, certified or registered
mail, postage prepaid, in an envelope addressed to the party to whom notice
is given, at the address given at the beginning of this Agreements, and
shall be effective upon receipt thereof. Each party shall be entitled to
specify a different address by giving notice as aforesaid to the other
party.
19. The invalidity or unenforceability of any paragraph, term, or provision
hereof shall in no way affect the validity or enforceability of the
remaining paragraphs, terms, or provisions hereof. In addition, in any such
event, the parties agree that it is their intention and agreement that any
such
paragraph, term or provision which is held or determined to be
unenforceable as written shall nonetheless be in force and binding to the
fullest extent permitted by law as though such paragraph, term or provision
had been written in such a manner and to such an extent as to be
enforceable under the circumstance. Without limiting the foregoing, with
respect to any restrictive covenant contained herein, if it is determined
that any such provision is excessive as to duration or scope, it is
intended that it nevertheless shall be enforced for such short duration, or
with such narrower scope, as will render it enforceable.
20. All of the terms and provisions of this Agreements shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, transferees, successors, and assigns.
21. This Agreement shall be governed and construed under the laws of the State
of New Jersey.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
entered into as of the date and year herein above first set forth.
Date: 10-20-98
Tech Laboratories, Inc.
Board of Directors
By: /s/ Louis Tomsiella
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Director
By: /s/ Xxxx X. Xxxxxxxx
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Director
By: /s/ Xxxxxxx Xxxxxxxx
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Director
By: /s/ Xxxxxxx X. Xxxxxxxx
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Director
By: /s/ Xxxxxxx X. Xxxxxxxx
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Executive
