EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of this 31st day of
September, 1996, by and between DELTA ENVIRONMENTAL, INC., a Delaware
corporation (the "Corporation") and ▇▇▇▇ ▇. ▇▇▇ ("▇▇▇").
A. The Corporation wishes to employ ▇▇▇ as its Chief Executive
Officer.
▇. ▇▇▇ is willing to be employed by the Corporation on the terms
and conditions set forth below.
The Corporation and ▇▇▇ agree as follows:
1. Employment. The Corporation will employ ▇▇▇ as its Chief
Executive Officer. ▇▇▇ will also serve as Chairman of the
Board of Directors of the Corporation, and in such other
capacities as the Corporation shall reasonably deem necessary.
▇▇▇ will perform such duties as may be required of him by the
Corporation under and subject to the instruction, direction
and control of the Board of Directors of the Corporation.
2. Devotion to Employment. ▇▇▇ accepts employment with the
Corporation on the terms and conditions of this Agreement, and
will be a full time employee of the Corporation in his
position as set forth in paragraph 1, provided, however that
nothing herein shall be construed to prevent ▇▇▇ from making
and supervising personal investments, or from being involved
in the ownership and management of businesses in which he
currently fulfills such roles. During the term of this
Agreement, ▇▇▇ shall not be actively engaged in any other
business activity which will in any way impair his ability to
properly meet his obligations to the Corporation or represent
any activity competitive with the Corporation or detrimental
to its business. ▇▇▇ agrees to comply with the reasonable
policies, standards and regulations of the Corporation from
time to time established.
3. Compensation and Benefits. The Corporation agrees to pay ▇▇▇
compensation for his services as follows:
3.1 Base Salary and Override. The Corporation will pay
▇▇▇ an annual base salary, subject to withholding taxes and other normal payroll
deductions as follows:
(a) Until December 31, 1996, ▇▇▇ will not be paid a
salary, but the Corporation will pay or reimburse ▇▇▇
for expenses under Section 3.3 below;
(b) Beginning January 1, 1996, $100,000 per year until
gross revenues of the Corporation (completed from the
date of this Agreement) exceed $5,000,000;
(c) (i) $150,000 per year; plus
EXHIBIT 14
(ii) an override equal to nine-tenths of one percent
(0.9%) of gross revenue of the Corporation, payable
quarterly within 30 days after the end of each
quarter.
3.2 Benefits. During the term of this Agreement, ▇▇▇ shall be
entitled to such medical, dental, disability, life insurance and other benefits
and perquisites, if any, no less favorable than such as are afforded to any
other senior executive of the Corporation, subject to applicable waiting periods
and other conditions. ▇▇▇ shall be entitled to four weeks of vacation in each
employment year.
3.3 Business Expenses. The Corporation will pay or reimburse
▇▇▇ for all transportation, hotel and other expenses reasonably incurred by ▇▇▇
on business trips and for all other ordinary and reasonable out-of-pocket
expenses actually incurred by him in the conduct of the business of the
Corporation against itemized vouchers submitted with respect to any such
expenses approved in accordance with customary procedures.
4. Stock Options. In consideration of ▇▇▇'▇ employment hereunder,
the Corporation will ▇▇▇▇▇ ▇▇▇ the option to purchase 500,000 shares of the
Corporation's Common Shares at a price of $.3333 per share for a term of five
years. Other specific terms of the option shall be set forth in a separate Stock
Option Agreement, which may be issued under an Incentive Stock Option Plan.
5. Term. The term of this Agreement shall commence October 1,
1996, and shall continue for a term of three (3) years and three (3) months,
ending on December 31, 1999, unless sooner terminated as provided herein. The
term of this Agreement shall automatically extend for successive periods of one
(1) year each, unless the Corporation or ▇▇▇ gives notice of termination to the
other on or before December 31 of the year two (2) years prior to the end of the
original term, or any extended term, as the case may be. For example, notice of
termination must be given by December 31, 1997 for the term to end on December
31, 1999.
6. Termination.
6.1 Termination Events. This Agreement shall terminate prior
to the end of its term: (a) upon the death of ▇▇▇, or (b) if ▇▇▇ fails, because
of illness or incapacity, to render the services contemplated by this Agreement
for a period of six consecutive months. The Corporation may terminate this
Agreement prior to the end of its term for cause, upon notice to ▇▇▇ by the
Corporation.
6.2 Continuation of Override. In the event of termination
either prior to or at the end of its term (except only for termination by the
Corporation for cause), and if ▇▇▇ is then being paid an override under Section
3. 1 (b)(ii) above, for a period of ten (10) years after the termination date,
the Corporation will continue to pay ▇▇▇ an override equal to one-half of one
percent (0. 5 %) of gross revenues from sales to all accounts existing at the
termination date. Payments shall be made quarterly within 30 days after the end
of each quarter.
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7. Protection of Confidential Information-, Non-Competition.
7.1 Confidential Information. ▇▇▇ warrants that he is not
subject to any restriction on his executing and performing this Agreement, and
acknowledges that:
(a) As a result of his employment by the Corporation, ▇▇▇ will
obtain secret and confidential information concerning the business of
the Corporation and its Affiliates, including, without limitation,
financial information, patents and other proprietary rights, trade
secrets and "know-how," customers, and certain business methodologies
("Confidential Information").
(b) The Corporation and its Affiliates will suffer substantial
damage which will be difficult to compute if, during the period of his
employment with the Corporation or thereafter, ▇▇▇ should divulge
Confidential Information or, thereafter, ▇▇▇ should enter a business
competitive with those of the Corporation.
(c) The provisions of this Agreement are reasonable and
necessary for the protection of the business of the Corporation and its
Affiliates.
7.2 Maintain Confidentiality. ▇▇▇ agrees that he will not at
any time, either during the term of this Agreement or thereafter, divulge to any
person or entity any Confidential Information obtained or learned by him as a
result of his employment with the Corporation or any of its Affiliates, except
(a) in the course of performing his duties hereunder, (b) with the Corporation's
express written consent; (e) to the extent that any such information is in the
public domain other than as a result of ▇▇▇'▇ breach of any of his obligations
hereunder; or (d) where required to be disclosed by court order subpoena or
other government process. If ▇▇▇ shall be required to make disclosure pursuant
to the provisions of clause (d) of the preceding sentence, ▇▇▇ promptly, but in
no event more than 72 hours after learning of such subpoena, court order, or
other government process, shall notify, by personal delivery or by electronic
means, confirmed by mail, the Corporation and, at the Corporation's expense, ▇▇▇
shall: (i) take all reasonably necessary steps required by the Corporation to
defend against the enforcement of such subpoena, court order or other government
process, and (ii) permit the Corporation to intervene and participate with
counsel of its choice in any proceeding relating to the enforcement thereof.
7.3 Records. Upon termination of his employment with the
Corporation, ▇▇▇ will promptly deliver to the Company all original memoranda,
notes, records, reports, manuals, drawings, blueprints, formula and other
documents relating to the business of the Corporation and its Affiliates and all
property associated therewith, which he may then possess or have under his
control; provided, however, that ▇▇▇ shall be entitled to retain copies of such
documents reasonably necessary to document his financial relationship (both past
and future) with the Corporation.
7.4 Non-Compete. During the term of this Agreement and the
18-month period following the termination of ▇▇▇'▇ employment with the
Corporation under the terms of
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this Agreement, ▇▇▇, without the prior written permission of the Corporation,
shall not, anywhere in the United States of America, directly or indirectly, (a)
enter into the employ of or render any services to any person, firm or
corporation engaged in any business which is a 'Competitive Business' (as
defined below); (b) engage in any Competitive Business for his own account; (c)
become associated with or interested in any Competitive Business as an
individual, partner, shareholder, creditor, director, officer, principal, agent,
employee, trustee, consultant, advisor or in any other relationship or capacity;
(d) employ or retain, or have or cause any other person or entity to employ or
retain, any person who was employed or retained by the Corporation in the
six-month period prior to the termination of ▇▇▇'▇ employment; or (e) solicit,
interfere with, or endeavor to entice away from the Corporation, for the benefit
of a Competitive Business, any of its customers or other persons with whom the
Corporation has a contractual relationship. However, nothing in this Agreement
shall preclude ▇▇▇ from investing his personal assets in the securities of any
corporation or other business entity which is engaged in a Competitive Business
if such securities are traded on a national stock exchange or in the over
the-counter market and if such investment does not result in his beneficially
owning, at any time, more than 1 % of the publicly-traded equity securities of
such Competitive Business.
7.5 Injunctive Relief. If ▇▇▇ breaches, or threatens to
breach, any of the provisions of Sections 8.2, 8.3 or 8.4, the Corporation shall
have the right and remedy to have the provisions of this Agreement specifically
enforced by any court having equity jurisdiction, it being acknowledged and
agreed by ▇▇▇ that the services being rendered hereunder to the Corporation are
of a special, unique and extraordinary character and that any such breach or
threatened breach will cause irreparable injury to the Corporation and that
money damages will not provide an adequate remedy in the Corporation.
7.6 Modification of Scope. If any provision of Section 8.2 or
8.4 is held to be unenforceable because of the scope, duration or area of its
applicability, the tribunal making such determination shall have the power to
modify such scope, duration, or area, or all of them, and such provision or
provisions shall then be applicable in such modified form.
8. Definitions. As used in this Agreement:
8.1 "Affiliate" shall mean any entity that, directly or
indirectly, is controlled by, controlling, or under common control with the
Corporation.
8.2 "Competitive Business" shall mean a business which is
directly competitive with any business engaged in by the Corporation.
9. Notices. All notices provided for by this Agreement shall be made in
writing and shall be deemed given when (a) personally delivered to the party
entitled to receive it; (b) transmitted by electronic means; or (c) mailed first
class mail, by certified mail, return receipt requested, addressed to the person
entitled to it at the address set forth below (or at such other address as may
have been designated by written notice). The notice shall be deemed to be
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received on the date of its actual delivery or electronic transmission to the
party entitled thereto, or three days after mailing. If sent to the Corporation,
notices shall be delivered to:
DELTA ENVIRONMENTAL, INC.
c/o Capital West Securities ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ Centre, Suite B-252
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and, if sent to ▇▇▇, notices shall be delivered to:
▇▇▇▇ ▇. ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Marked "Personal and Confidential"
10. Assignment. The rights and benefits of the Corporation under this
Agreement shall be transferable, and all covenants and agreements hereunder
shall inure to the benefit of and be enforceable by, its successors and assigns.
▇▇▇ may not assign this Agreement, but it shall inure to the benefit of and be
binding upon his heirs and legal representatives.
11. Arbitration. In the event of any dispute between the parties as to
the interpretation of any of the terms and provisions of this agreement, the
matter shall be submitted to arbitration in the following manner:
Either party shall serve written notice upon the other party
that they desire to submit the dispute to arbitration and within fifteen (15)
days of the date of any such written notice each party shall appoint an
arbitrator within ten (10) days thereafter the two arbitrators so selected shall
appoint a third. In the event either party shall fail to appoint an arbitrator
within such fifteen-day period or if the two arbitrators so appointed shall fail
to select a third within such ten-day period, then a judge of the Superior Court
of Maricopa County or such other court as may have jurisdiction thereover shall
appoint such arbitrator. The three arbitrators shall determine the controversy
in accordance with the Rules of the American Arbitration Association and a
decision of the majority of the arbitrators shall bind and be conclusive upon
the parties.
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The parties shall pay the expense of arbitration in the manner determined by the
arbitrators and judgment upon the award rendered by the arbitrators may, if
permissible, be entered in any court having jurisdiction.
12. Miscellaneous.
12.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Arizona.
12.2 Waiver. No waiver or modification of this Agreement shall
be valid unless in writing and duly executed by the party to be charged
therewith. Waiver by either party hereto of any breach or default by the other
party of any of the terms and provisions of this Agreement shall not operate as
a waiver of any other breach or default, whether similar to or different from
the breach or default waiver.
12.3 Severability. All agreements, provisions,
representations, warranties and covenants contained herein are severable, and in
the event that any one or more of them shall be held to be invalid, illegal or
unenforceable in any respect by any court of competent jurisdiction, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected thereby, and this Agreement shall be
interpreted as if such invalid, illegal or unenforceable agreements, provisions
or covenants were not contained herein.
12.4 Entire Agreemnt. This Agreement, together with the Stock
Option Agreement being executed between the parties, constitutes and embodies
the full and complete understanding and agreement of the parties hereto
provided, and supersedes all prior understandings or agreements, whether oral or
in writing.
The parties have executed this Agreement the day and year first set
forth above. DELTA ENVIRONMENTAL, INC. ▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇
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▇▇▇▇ ▇. ▇▇▇
Its: President
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