EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is effective as of October 1, 2006 (the "Effective Date"), and is entered into by and between Envirokare Tech, Inc., a Nevada corporation with offices at 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), and Xxxxxx X. Xxxxxxxxx, an independent contractor ("Contractor"), residing at 209 East 56 Street, Apt. 5G, Xxx Xxxx, Xxx Xxxx 00000, Xxxxxx Xxxxxx of America.
R E C I T A L S
WHEREAS, by entering into this Agreement, the terms of Contractor's employment with the Company shall be governed by the terms and conditions of this Agreement and any prior agreement between Contractor and the Company or any of the Company's affiliated entities relating to Contractor's employment with the Company or any of its affiliated entities shall be superseded by the terms of this Agreement except to the extent set forth herein, provided however, that any compensation due the Contractor for the period prior to this document shall be subject to the terms of a separate agreement.
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto agree as follows:
A G R E E M E N T
- Employment. As of the Effective Date, the Company hereby employs Contractor to serve in the capacity of President and Chief Operating Officer of the Company and Contractor hereby accepts such employment and agrees to perform the services described herein in the manner and for the period and upon the terms and conditions set forth in this Agreement. The Company's Board of Directors (the "Board") may provide other designations of title to the Contractor by the written mutual consent of the Board of Directors and the Contractor.
- Position and Duties. Contractor agrees to perform the duties and functions of President and Chief Operating Officer to the best of his ability as assigned by the Chairman of the Board of Directors. Contractor shall endeavor through the devotion of his time, energy and attention to execute his duties in a professional manner with competence and integrity.
- Service with the Company. As President and Chief Operating Officer, Contractor shall be in charge of and principally responsible for the management, supervision and operations of the business of the Company and shall assist the Chairman of the Company in his monitoring of the activities of LRM and the maintenance of good business relations with Nova. Contractor's responsibilities shall include (a) assisting in and conducting due diligence in connection with the selection and designation of Envirokare Composite Corporation ("Composite")officers and directors; (b) the preparation of the Company annual budget and the final review and decision making in connection with any and all Company loans; (c) the preparation and timely filing of all Securities and Exchange reports; and (d) the providing of input for the Company's annual business plan and assisting the Company Chairman in its submission for consideration by the Board of Directors of the Company. Contractor shall serve as a member of the Board of Directors of the Company and, if, as and when requested by the Board of Directors to do so, shall also serve as an officer or director of Composite and an employee of LRM. The Company shall not relocate the place of Contractor's employment to any location more than one hundred miles from his current home and residence in New York City unless he shall otherwise agree, but he shall from time to time travel within the United States and abroad in connection with the business of the Company to the extent required.
- Performance of Duties.
Contractor agrees to render his services hereunder faithfully and to
the best of his ability and to devote his full time, attention and efforts
to the Business. Contractor represents to the Company that on the date
of this Agreement he is not under and has no contractual or other commitments
that may be inconsistent or conflict with his obligations as described
in this Agreement, and that he will not render or perform services for
any other corporation, firm, entity or person which are or may be deemed
inconsistent or in conflict with the provisions of this Agreement.
The term of this agreement shall be twenty four (24) months.
- Employment Compensation And Benefits.
- Base Salary. Contractor's initial base salary shall be at the annual rate of One Hundred Sixty Thousand Dollars ($160,000) per year for the term hereof (the "Base Salary"), which shall be payable at least as frequently as weekly and not subject to deductions and withholding taxes. The Company, on the basis of Contractor's performance and the Company's financial success and progress, shall review this salary level at least annually. All deferred compensation and interest is due and payable to the Contractor 24 months from the date of this agreement or sooner subject to any termination provisions herein. Deferred compensation will accrue interest at an annual rate two percentage points (2%) above the prime lending rate as published in the Wall Street Journal (compounded quarterly). The relevant deferred amount and all interest so accrued thereon shall be a secured general obligation of the Company, due and payable according to the terms herein.
- Incentive Compensation. As additional compensation to provide incentives for Contractor to extend efforts which will assist in increasing the profits of the Company, Contractor shall be eligible to receive incentive compensation based on achieving individual and organizational performance objectives in accordance with the terms and conditions of the Company's management compensation plan as may be modified from time to time.
- Expense Reimbursement. The Company shall reimburse Contractor for all reasonable amounts actually expended at the Contractor's discretion in the course of performing his duties for the Company. Contractor will tender receipts or written accounts describing the amounts and purpose of the expense to the Company.
- Other Benefits. As an independent contractor, no benefits other than those described herein are offered to the contractor under this agreement. No dental, life insurance, disability, pension or 401K benefits are offered herein.
- Contractor shall during the term of this Agreement be provided with the use of a cell phone, car allowance in the amount of ($400.00) per month and such other equipment and services as are reasonably necessary to perform his duties. The Company shall reimburse Contractor for his current medical insurance.
- Authority: Contractor's authority including without limitation his authority to bind Company to contracts, instruments and expenditures of any kind and to dispose of or encumber Company assets shall not be less than that specified or incidental to the Company's By-Laws as presently in effect. Company hereby authorizes Contractor with operating expense approval authority for up to $50,000 per expense item and capital expense approval authority for up to $25,000 per capital item.
- Insurance/Indemnification:
Company will maintain Directors and Officers liability insurance for
the benefit of Contractor, throughout the term of this agreement, in
amounts considered prudent for publicly traded companies of like size
and engaging in similar businesses as the Company. Board of Directors
agrees to hold harmless the Contractor for any liabilities created or
ensuing from his conduct of business on the Company's behalf.
Company will provide contractor with written proof of insurance at the
time of execution of this agreement.
- Termination.
- At Will. The Company shall employ Contractor at will, and either Contractor or the Company may terminate Contractor's employment with the Company at any time and for any reason, without "Cause" or "Reason" (as hereinafter defined) by giving 60 days written notice and subject to the obligations defined in Section 8 herein.
- The Company may at any time immediately terminate the employment of the Contractor under this agreement for "Cause" (as hereinafter defined), upon sixty (60) days written notice. For purposes of this agreement, the term "Cause" shall mean gross or willful misconduct leading to his being convicted of a non-misdemeanor felony in a U.S. court of law. "Cause" shall not include unsatisfactory performance of duties except as provided above. The Contractor may at any time immediately terminate his employment under this agreement for "Reason" (as hereinafter defined) upon sixty (60) days written notice. For purposes of this agreement the term "Reason" shall mean (i) a material breach by the Company of any term of this agreement, (ii) any event of bankruptcy or insolvency in respect of the Company (iii) any reduction in Contractor's compensation or position or the duties or authority of the Contractor to a level less than customary to the office of President of an industrial corporation (subject to the terms of the Company's By-Laws as presently in effect), (iv) any change in control as defined in Section 7 herein (v) Contractor's death or disability as defined in Section 6(c) below.
- "Disability" shall mean a physical or mental incapacity as a result of which Contractor becomes unable to continue the performance of his responsibilities for the Company and its affiliated companies and which, at least six (6) months after its commencement, is determined to be total and permanent by a physician agreed to by the Company and Contractor, or in the event of Contractor's inability to designate a physician, his legal representative. In the absence of agreement between the Company and Contractor, each party shall nominate a qualified physician and the two physicians so nominated shall select a third physician who shall make the determination as to Disability.
- Return of Materials.
In the event of any termination of Contractor's employment for any reason
whatsoever, Contractor shall promptly deliver to the Company all Company
property, including, but not limited to, documents, data, and other
information pertaining to Confidential Information, as defined below.
Executive shall not take with him any documents or other information,
or any reproduction, summary or excerpt thereof, containing or pertaining
to any Confidential Information.
- Change in Control.
- Statement
of Purpose. The Company believes that it is in the best interest of
the Company and its stockholders to xxxxxx Contractor's objectivity
in making decisions with respect to any pending or threatened Change
in Control of the Company and to ensure that the Company will have the
continued dedication and availability of Contractor, notwithstanding
the possibility, threat or occurrence of a Change in Control. The Company
believes that these goals can best be accomplished by alleviating certain
of the risks and uncertainties with regard to Contractor's financial
and professional security that would be created by a pending or threatened
Change in Control and that inevitably would distract Contractor and
could impair his ability to objectively perform his duties for and on
behalf of the Company. Accordingly, the Company believes that it is
appropriate and in the best interest of the Company and its stockholders
to provide to Contractor compensation arrangements upon a Change in
Control that lessen Contractor's financial risks and uncertainties and
that are reasonably competitive with those of other corporations. The
purpose of this provision is to provide that, in the event of a "Change
in Control," Contractor may become entitled to receive certain
additional compensation, as described herein, in the event of his termination
under specified circumstances.
- Definition
of Change in Control. As used in this Agreement, the phrase "Change
in Control" shall mean:
- The
acquisition (other than from the Company) by any person, entity or "group,"
within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (excluding,
for this purpose, the Company or its subsidiaries, or any executive
benefit plan of the Company or its subsidiaries which acquires beneficial
ownership of voting securities of the Company), of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of twenty-five percent (25%) or more of either the then-outstanding
shares of common stock or the combined voting power of the Company's
then-outstanding voting securities entitled to vote generally in the
election of directors; or
- Individuals
who, as of the date hereof, constitute the Board of Directors of the
Company (as of the date hereof the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board of Directors
of the Company, provided that any person becoming a director subsequent
to the date hereof whose election, or nomination for election by the
Company's stockholders, is or was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest
relating to the election of the Directors of the Company) shall be,
for purposes of this Agreement, considered as though such person were
a member of the Incumbent Board; or
- Approval by the stockholders of the Company of a reorganization, merger or consolidation with any other person, entity or corporation, other than
- The
acquisition (other than from the Company) by any person, entity or "group,"
within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (excluding,
for this purpose, the Company or its subsidiaries, or any executive
benefit plan of the Company or its subsidiaries which acquires beneficial
ownership of voting securities of the Company), of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of twenty-five percent (25%) or more of either the then-outstanding
shares of common stock or the combined voting power of the Company's
then-outstanding voting securities entitled to vote generally in the
election of directors; or
- Statement
of Purpose. The Company believes that it is in the best interest of
the Company and its stockholders to xxxxxx Contractor's objectivity
in making decisions with respect to any pending or threatened Change
in Control of the Company and to ensure that the Company will have the
continued dedication and availability of Contractor, notwithstanding
the possibility, threat or occurrence of a Change in Control. The Company
believes that these goals can best be accomplished by alleviating certain
of the risks and uncertainties with regard to Contractor's financial
and professional security that would be created by a pending or threatened
Change in Control and that inevitably would distract Contractor and
could impair his ability to objectively perform his duties for and on
behalf of the Company. Accordingly, the Company believes that it is
appropriate and in the best interest of the Company and its stockholders
to provide to Contractor compensation arrangements upon a Change in
Control that lessen Contractor's financial risks and uncertainties and
that are reasonably competitive with those of other corporations. The
purpose of this provision is to provide that, in the event of a "Change
in Control," Contractor may become entitled to receive certain
additional compensation, as described herein, in the event of his termination
under specified circumstances.
- a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of another entity) more than fifty percent (50%) of the combined voting power of the voting securities of the Company or such other entity outstanding immediately after such merger or consolidation, or
- a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person acquires twenty-five percent (25%) or more of the combined voting power of the Company's then outstanding voting securities; or
- approval by the stockholders
of the Company of a plan of complete liquidation of the Company or an
agreement for the sale or other disposition by the Company of all or
substantially all of the Company's assets.
- Severance Payments
- In the event that (A) the Company shall at anytime terminate the agreement without "Cause", or (B) the Contractor shall terminate the agreement for "Reason" (within three days) pay and provide to the Contractor in cash all accrued deferred salary and interest and an amount equal to six (6) months of the "base salary" defined in Section 5(a) plus the expenses as outlined in 5 (e) for a six (6) month period. Contractor will be also entitled to receive any pro rata bonus payment that would otherwise be due to contractor for the current fiscal year. Contractor will also be entitled to additional compensation under specific circumstances of Change of Control as defined in section (7) above.
- In the event that (A) the Company shall at anytime terminate the agreement for "Cause" or the Contractor shall terminate the agreement without "Reason" then and in each such case the Company shall immediately (within three days) pay the Contractor of all accrued compensation plus interest.
- If this agreement is
terminated as a result of a Change of Control event, the Contractor
shall receive additional cash compensation equal to one (1.0) times
the Contractor's annual Compensation rate at the time of the Change
of Control event. Such payment being due and payable on the date of
the Change of Control event.
- All rights of Contractor
to compensation under the terms of this Section 8 are absolute with
no requirement to mitigate damages.
- The effective termination
date, in all cases, shall be the date sixty (60) days after written
notification to the Contractor or the Company.
- In the event of termination
of this agreement due to the Contractor's death or disability, the
compensation due to the Contractor at that time shall be due and payable
to the Contractor's heirs and/or successors.
- Nondisclosure of Confidential Information. Contractor acknowledges that during the term of his employment with the Company, he will have access to and become acquainted with information of a confidential, proprietary or secret nature which is or may be either applicable to, or related in any way to, the present or future business of the Company, the research and development or investigation of the Company, or the business of any customer of the Company ("Confidential Information"). For example, Confidential Information includes, but is not limited to, devices, secret inventions, processes and compilations of information, records, specifications, designs, plans, proposals, software, codes, marketing and sales programs, financial projections, cost summaries, pricing formula, and all concepts or ideas, materials or information related to the business, products or sales of the Company and its customers and vendors. Contractor shall not disclose any Confidential Information, directly or indirectly, or use such information in any way, either during the term of this Agreement or at any time thereafter, except as required in the course of employment with the Company. Contractor also agrees to comply with the Company's policies and regulations, as established from time to time for the protection of its Confidential Information, including, for example, executing the Company's standard confidentiality agreements. This section shall survive termination of this Agreement.
- Non-Solicitation. Contractor agrees that so long as he is employed by the Company and for a period of six (6) months after termination of his employment for any reason, he shall not (a) directly or indirectly solicit, induce or attempt to solicit or induce any employee of the Company or any of its affiliated companies to discontinue his employment with the Company; (b) usurp any opportunity of the Company or any of its affiliated companies of which Executive became aware during his tenure at the Company or which is made available to him on the basis of the belief that Contractor is still employed by the Company; or (c) directly or indirectly solicit or induce or attempt to influence any person or business that is an account, customer or client of the Company or any of its affiliated companies to restrict or cancel the business of any such account, customer or client with the Company or any of its affiliated companies. This section shall survive termination of this Agreement.
- Successors.
- This Agreement is personal
to Contractor, and without the prior written consent of the Company
shall not be assignable by Contractor other than by will or the laws
of descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by contractor's legal representatives.
- The rights and obligations
of the Company under this Agreement shall inure to the benefit of and
shall be binding upon the successors, heirs and assigns of the Company.
- Governing Law. This
Agreement is made and entered into in the State of New York. Internal
laws of New York State shall govern its validity and interpretation
in the performance by the parties hereto of their respective duties
and obligations hereunder.
- Modifications. This
Agreement may be amended or modified only by an instrument in writing
executed by all of the parties hereto.
- Entire Agreement.
Except as otherwise set forth herein, this Agreement supersedes any
and all prior written or oral agreements between Contractor and the
Company. This Agreement contains the entire understanding of the
parties hereto with respect to the terms and conditions of Contractor's
employment with the Company; provided, however, that this Agreement
is not intended to supersede any agreements that Contractor may previously
have entered into regarding the protection of trade secrets and confidential
information.
- Dispute Resolution. Any
controversy or dispute between the parties involving the construction,
interpretation, application or performance of the terms, covenants,
or conditions of this Agreement or in any way arising under this Agreement
(a "Covered Dispute") shall be subject to resolution under
the Laws of the State of New York.
- Notices. Any
notice or communications required or permitted to be given to the parties
hereto shall be delivered personally or be sent by United States registered
or certified mail, postage prepaid and return receipt requested, and
addressed or delivered as follows, or at such other addresses the
party addressed may have substituted by notice pursuant to this Section:
To the Company: Envirokare Tech, Inc.
000
Xxxxxxxxx Xxxxxx
00xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
To Contractor: Xxxxxx X. Xxxxxxxxx
000 Xxxx 00 Xxxxxx Xxx. 0X
Xxx Xxxx, Xxx Xxxx 00000
- Captions. The captions of this
Agreement are inserted for convenience and do not constitute
a part hereof.
- Severability. In case any one
or more of the provisions contained in this Agreement shall
for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but this Agreement
shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein and there shall be deemed substituted
for such invalid, illegal or unenforceable provision such other provision
as will most nearly accomplish the intent of the parties to the extent permitted
by the applicable law. In case this Agreement, or any one or more
of the provisions hereof, shall be held to be invalid, illegal or unenforceable
within any governmental jurisdiction or subdivision thereof, this
Agreement or any such provision thereof shall not as a consequence
thereof be deemed to be invalid, illegal or unenforceable in any other governmental
jurisdiction or subdivision thereof.
- Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall together constitute one in the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered effective as of the day and year first written above.
CONTRACTOR ENVIROKARE TECH, INC.
/s/ Xxxxxx X. Xxxxxxxxx /s/
Dr. Xxxxxxxx Xxxxxx
Xxxxxx X. Xxxxxxxxx Dr. Xxxxxxxx
Xxxxxx
Chairman CEO
Date: September 29, 2006