EXHIBIT 10.13
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated this 22nd day of February, 1999 between
American International Industries, Inc., a Nevada corporation, currently having
its principal place of business at 000 Xxxxxx Xxxx, Xxxxx, Xxxxx 00000 (the
"Company"), and Xxxx X. Xxxxx, III (the "Executive") an individual.
WHEREAS, the Company desires to employ Executive and Executive desires to
be employed by the Company, as a Chief Financial Officer of the Company.
WHEREAS, the Executive is willing to enter into an agreement with the
Company upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and covenants herein
contained, the parties hereto agree as follows:
1. Term of Agreement. Subject to the terms and conditions hereof, the
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term of employment of the Executive under this Employment Agreement shall be for
the period commencing on the date hereof (the "Commencement Date) and
terminating on February 21, 2002, unless sooner terminated as provided in
accordance with the provisions of Section 5 hereof. (Such term of employment is
herein sometimes called the "Employment Term.")
2. Employment. As of the Commencement Date, the Company hereby agrees to
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employ the Executive as Chief Financial Officer of the Company, and the
Executive hereby accepts such employment and agrees to perform his duties and
responsibilities hereunder in accordance with the terms and conditions
hereinafter set forth.
3. Duties and Responsibilities. Executive shall serve as Chief Financial
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Officer during the Employment Term. Executive shall report to and be subject to
the direction of the Directors of the Company and shall perform duties which are
consistent with his current title and position as Chief Financial Officer of the
Company and such other duties as may be assigned to him from time to time by the
Directors which are consistent with his position of management and leadership.
During the Employment Term, Executive shall devote his full time, skill, energy
and attention to the business of the Company and shall perform his duties in a
diligent, trustworthy, loyal and businesslike manner.
4. Compensation and Benefits During the Employment Term:
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(a) The Executive's base compensation shall be at the rate of $8,500
per month, for the term of this Agreement, payable in regular semi-
monthly installments in accordance with the Company's practice for its
executives, less applicable withholding for income and employment
taxes as required by law and other deductions as to which the
Executive shall agree. Such base compensation shall be subject to
increases as and when determined by the Company's Directors at their
sole discretion.
(b) In addition to the Executive's base compensation, Executive will
be entitled to a bonus as determined by the Company's Directors.
(c) The Executive shall be granted a Stock Option for 100,000 shares
of the Company's common stock at $0.19 per share for 3 years (3/1/99-
3/1/2002).
(d) The Executive shall be entitled to reimbursement of all
reasonable, ordinary and necessary business related expenses incurred
by him in the course of his duties and upon compliance with the
Company's procedures.
(e) The Executive shall be entitled to an allowance for continuing
education and professional license renewal (5 eight hour courses at
$150+$750, license $250) total $1,000 per year.
5. Termination. A termination of this agreement is either (1) for death
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or disability under Section 5 (a) or 5 (b); (2) with cause under Section 5 (c);
or for good reason under Section 5 (d). All other terminations which may occur
shall constitute a breach of this agreement.
(a) The Company shall have the right to terminate the employment of
the Executive under this Agreement for disability in the event
Executive suffers an injury, illness or incapacity of such character
as to substantially disable him from performing his duties without
reasonable accommodation by the Company hereunder for a period of more
than sixty (60) consecutive days upon the Company giving at least
thirty (30) days written notice of termination; provided, however,
that if the Executive is eligible to receive disability payments
pursuant to a disability policy paid for by the Company, the Executive
shall assign such benefits to the Company for all periods as to which
he is receiving full payment under this agreement.
(b) This agreement shall terminate upon the death of Executive.
(c) The Company may terminate this agreement at any time because of
(i) Executive's material breach of any term of this agreement, (ii)
the willful engaging by the Executive in misconduct which is
materially injurious to the Company, monetarily or otherwise;
provided, in each case, however, that the Company shall not terminate
this Agreement pursuant to this Section 5(c) unless the Company shall
first have delivered to the Executive, a notice which specifically
identifies such breach or misconduct and the Executive shall not have
cured the same within fifteen (15) days after receipt of such notice,
(iii) Executive's gross negligence in the performance of his duties or
(iv) the failure of Executive to perform his essential duties or
comply with reasonable directions of the Directors.
(d) The Executive may terminate his employment for "Good Reason" if:
(i) he is assigned, without his express written consent, any
duties inconsistent with his positions, duties, responsibilities,
authority and status with the Company as of the date hereof, or a
change in his reporting responsibilities
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or titles as in effect as of the date hereof;
(ii) his compensation is reduced;
(iii) (1) the Company shall file a petition for bankruptcy or re-
organization under the federal bankruptcy statues or an
involuntary petition is filed against the Company and not removed
or withdrawn within thirty (30) days or (2) the Company does not
pay any material amount of compensation due hereunder and then
fails either to pay such amount within the ten (10) day notice
period required for termination hereunder or to contest in good
faith said notice. Further, if such contest is not resolved within
thirty (30) days the Company shall submit such dispute to
arbitration, under Section 7.
6. Revealing of Trade Secrets, etc. Executive acknowledges the interest
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of the Company in maintaining the confidentiality of information related to its
business and shall not at any time during the Employment Term or thereafter,
directly or indirectly, reveal or cause to be revealed to any person or entity
the supplier lists, customer lists or other confidential business information of
the Company; provided, however, that the parties acknowledge that it is not the
intention of this paragraph to include within its subject matter (a) information
not proprietary to the Company, (b) information which is then in the public
domain, or (c) information required to be disclosed by law.
7. Arbitration. If a dispute should arise regarding this agreement, all
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claims, disputes, controversies, differences or other matters in question
arising out of this relationship shall be settled finally, completely and
conclusively by arbitration of a single arbitrator in Xxxxxx County, Texas, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (the "Rules"). Arbitration shall be initiated by written demand.
This agreement to arbitrate shall be specifically enforceable only in the
District Court of Xxxxxx County, Texas. A decision of the arbitrator shall be
final, conclusive and binding on the Company and the Executive, and judgement
may be entered in the District Court of Xxxxxx County, Texas, for enforcement
and other benefits. On appointment, the arbitrator shall then proceed to decide
the arbitration subjects in accordance with the Rules. Any arbitration held in
accordance with this paragraph shall be private and confidential and no person
shall be entitled to attend the hearings except the arbitrator, Executive,
Executive's attorneys, and an designated representatives of the Company and
their respective attorneys. The matters submitted for arbitration, the hearings
and proceedings and the arbitration award shall be kept and maintained in
strictest confidence by Executive and the Company and shall not be discussed,
disclosed or communicated to any persons. On request of any party, the record
of the proceeding shall be sealed and may not be disclosed except insofar, and
only insofar, as may be necessary to enforce the award of the arbitrator and any
judgement enforcing an award. The prevailing party shall be entitled to recover
reasonable and necessary attorneys' fees and costs from the non-prevailing
party.
8. Covenants Not to Compete.
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(a) Executive's Acknowledgment. Executive agrees and acknowledges that
in order to assure the Company that it will retain its value as a going
concern, it is necessary that Executive undertake not to utilize his
special knowledge of the business and his relationships with customers
and suppliers to compete with the Company.
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Executive further acknowledges that:
(i) the Company is and will be engaged in the business;
(ii) Executive will occupy a position of trust and confidence
with the Company prior to the date of this agreement and,
during such period and Executive's employment under this
agreement, Executive has, and will become familiar with the
Company's trade secrets and with other proprietary and
confidential information concerning the Company;
(iii) the agreements and covenants contained in this Section 8 are
essential to protect the Company and the goodwill of the
business; and
(iv) Executive's employment with the Company has special, unique
and extraordinary value to the Company and the Company would
be irreparably damaged if Executive were to provide services
to any person or entity in violation of the provisions of
this agreement.
(b) Competitive Activities. Executive hereby agrees that for a period
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commencing on the date hereof and ending one year following the later
of (i) termination of Executive's employment with the Company for
whatever reason, and (ii) the conclusion of the period, if any, during
which the Company is making payments to Executive, he will not,
directly or indirectly, as employee, agent, consultant, stockholder,
director, co-partner or in any other individual or representative
capacity, own, operate, manage, control, engage in, invest in or
participate in any manner in, act as a consultant or advisor to, render
services for (alone or in association with any person, firm,
corporation or entity), or otherwise assist any person or entity (other
than the Company) that engages in or owns, invests in, operates,
manages or controls any venture or enterprise that directly or
indirectly engages or proposes in engage in the business of the
manufacturing, distribution or sale of (i) products manufactured,
distributed, sold or licensed by the Company at the time of termination
or (ii) products proposed at the time of such termination to be
manufactured, distributed, sold or licensed by the Company within sixty
(60) miles of the Company's operations (the "Territory"); provided,
however, that nothing contained herein shall be construed to prevent
Executive form investing in the stock of any competing corporation
listed on a national securities exchange or traded in the over-the-
counter market, but only if Executive is not involved in the business
of said corporation and if Executive and his associates (as such term
is defined in Regulation 14(A) promulgated under the Securities
Exchange Act of 1934, as in effect on the date hereof), collectively,
do not own more than an aggregate of two percent of the stock of such
corporation ("Permitted Investments"). With respect to the Territory,
Executive specifically acknowledges that the Company has conducted the
business throughout those areas comprising the Territory and the
Company intends to continue to expand the business throughout the
Territory.
9. Opportunities. During his employment with the Company, and for one year
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thereafter,
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Executive shall not take any action which might divert from the Company any
opportunity learned about by him during his employment with the Company
(including without limitation during the Employment Term) which would be within
the scope of any of the businesses then engaged in or planned to be engaged in
by the Company.
10. Survival. In the event that this Agreement shall be terminated, then
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notwithstanding such termination, the obligations of Executive pursuant to
Sections 6 and 8 of this agreement shall survive such termination.
11. Contents of Agreement, Parties in Interest, Assignment, etc. This
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Agreement sets forth the entire understanding of the parties hereto with respect
to the subject matter hereof. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective heirs, representatives, successors and assigns of the parties hereto,
except that the duties and responsibilities of Executive hereunder which are of
a personal nature shall neither be assigned nor transferred in whole or in part
by Executive. This Agreement shall not be amended except by a written
instrument duly executed by the parties.
12. Severability. If any term or provision of this Agreement shall be held
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to be invalid or unenforceable for any reason, such term or provision shall be
ineffective to the extent of such invalidity or unenforceability without
invalidating the remaining terms and provisions hereof, and this Agreement shall
be construed as if such invalid or unenforceable term or provision had not been
contained herein.
13. Notices. Any notice, request, instruction or other document to be
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given hereunder by any party to the other party shall be in writing and shall be
deemed to have been duly given when delivered personally or five (5) days after
dispatch by registered or certified mail, postage prepaid, return receipt
requested, to the party to whom the same is so given or made:
If to the Company addressed to:
American International Industries, Inc.
000 Xxxxxx Xxxx
Xxxxx, Xxxxx 00000
with a copy to:
Xxxxxx & Xxxxxxxxx, P.C.
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
If to Executive addressed to:
Xxxx X. Xxxxx, III
00000 Xxx 0, #0000
Xxxxxxx, XX 00000
or to such other address as the one party shall specify to the other party in
writing.
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14. Counterparts and Headings. This agreement may be executed in one or
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more counterparts, each of which shall be deemed an original and all which
together shall constitute one and the same instrument. All headings are inserted
for convenience of reference only and shall not affect the meaning or
interpretation of this agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
American International Industries, Inc.
By: /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx, Chairman & C.E.O.
EXECUTIVE
By: /s/ Xxxx X. Xxxxx, III
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Xxxx X. Xxxxx, III
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