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EXHIBIT 10.2
EMPLOYMENT CONTRACT
LONE STAR INTERNATIONAL ENERGY INC., a Nevada corporation, whose address
is 000 Xxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxx 00000, hereinafter referred to
as Employer, and Xxxxxx X. Xxxxx, an individual whose address is 000 Xxxxx
Xxxxx, Xxxxxxxxxxx, Xxxxx 00000 hereinafter referred to as Employee.
WITNESSETH:
WHEREAS, Employer seeks to employ Employee as the President of Energy
Reclaim Refrigeration Inc., a wholly owned subsidiary, to assist in the
management of, promote, direct and supervise the company at the direction of
the Board of Directors.
WHEREAS, Employee is desirous of performing the services as President of
Energy Reclaim Refrigeration Inc., and is willing to commit to perform such
functions as directed by the Board of Directors.
NOW, THEREFORE, in consideration of the foregoing and mutual promises
herein set forth, the parties hereby agree as follows:
ARTICLE 1
TERM OF EMPLOYMENT/RENEWAL
Section 1.01. Specified Period. Employer hereby employs Employee and
Employee hereby accepts employment with Employer for a period of five (5) years
beginning on April 7, 1997 and terminating on April 6, 2002.
Section 1.02. Automatic Renewal. This agreement shall be renewed
automatically for succeeding terms of five (5) years unless either party gives
notice to the other at least one hundred and eighty (180) days prior to the
expiration of the current term.
Section 1.03. Employment Term Defined. As used herein, the phrase
"employment term" refers to the entire period of employment of Employee by
Employer hereunder, whether for the periods provided above, or whether
terminated earlier as herein provided or extended by mutual agreement between
Employer and Employee.
ARTICLE 2
DUTIES AND OBLIGATIONS OF EMPLOYEE
Section 2.01. General Duties. Employee shall serve as the President of
Energy Reclaim Refrigeration Inc., a wholly owned subsidiary, as may be
designated by the Board of Directors. In his capacity as President, Employee
shall do and perform all services, acts, or things necessary or advisable to
manage and conduct the business of Employer, including the development of
certain Patents owned by Employer, the creation of a manufacturing facility,
assist in the day to day management of corporate operations, assist in the
hiring and firing of all employees other than the officers elected by the Board
of Directors, subject at all times to the policies set forth by Employer's
Board of Directors, and the consent of the Board of Directors at such time only
when required by the terms of this contract.
Section 2.02. Matters Requiring Consent of Board of Directors.
Employee shall not, without specific approval of Employer's Board of Directors,
do or contract to do any of the following:
(a) Borrow on behalf of Employer during any one fiscal year an
amount in excess of
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Twenty Thousand Dollars ($20,000);
(b) Purchase capital equipment for amounts in excess of Ten
Thousand Dollars ($10,000) unless approved by the Board of
Directors;
(c) Sell any single capital asset of Employer having a market
value in excess of Fifty Thousand Dollars ($50,000) or a
total of capital assets during a fiscal year having a
market value in excess of One Hundred Thousand Dollars
($100,000);
(d) Terminate the services of any other officer of Employer or
hire any replacement of any officer whose services have
been terminated if that officer falls within the gambit of
one whose employment requires approval of the Board of
Directors; and
Section 2.03. Devotion to Employer's Business.
(a) Employee shall devote adequate time, ability, and
attention to the business of Employer during the term of
this contract when required.
(b) The expenditure of reasonable amounts of time for
educational, charitable, or professional activities shall
not be deemed a breach of this agreement if those
activities do not materially interfere with the services
required under this agreement and shall not require the
prior written consent of Employer's Board of Directors.
(c) This agreement shall not be interpreted to prohibit
Employee from making personal investments or conducting
private business affairs or private consulting or business
ventures if those activities do not materially interfere
with the services required under this agreement. However,
after this date, Employee shall not directly or indirectly
acquire a significant interest in any business competing
directly with the business of Employer. Employer
acknowledges that Employee has and intends to continue
other active business interests subject to the terms of
Sections 2.03 and 2.04.
Section 2.04. Competitive Activities. During the term of this
contract, Employee shall not, directly, either as an employee, employer,
consultant, agent, principal, partner, significant stockholder, corporate
officer, director, or in any other individual or representative capacity,
engage or participate in any business that is in direct competition with the
business of Employer.
Section 2.05. Trade Secrets.
(a) The parties acknowledge and agree that during the
term of this agreement and in the course of the
discharge of his duties hereunder, Employee shall
have access to and become acquainted with
information concerning the operation and processes
of Employer, including without limitation,
financial, personnel, sales, scientific and other
information that is owned by Employer and regularly
used in the operation of Employer's business, and
that such information constitutes Employer's trade
secrets.
(b) Employee specifically agrees that he shall not
knowingly or willfully misuse, misappropriate, or
disclose any such trade secrets, directly or
indirectly, to any other person or use them in any
way, either during the term of this agreement or at
any other time thereafter, except as is required in
the
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course of his employment hereunder or as requested
by a governmental agency with proper authority.
(c) Employee acknowledges and agrees that the sale or
unauthorized use or disclosure of any of Employer's
trade secrets obtained by Employee during the
course of his employment under this agreement,
including information concerning Employer's current
or any future and proposed work, services, or
products, the facts that any such work, services,
or products are planned, under consideration, or in
production, as well as any descriptions thereof,
constitute unfair competition. Employee promises
and agree not to engage in any unfair competition
with Employer during the term of this agreement.
(d) Employee further agrees that all files, records,
documents, drawings, specifications, equipment, and
similar items relating to Employer's business,
whether prepared by Employee or others, are and
shall remain exclusively the property of Employer
and that they shall be removed from the premises of
Employer only in the ordinary course of business
for Employee to perform the services under this
agreement.
Section 2.06. Services as Consultant. Following the employment term or
Employee's retirement, and if the employment term has not been terminated for
cause, Employee shall make his advice and counsel available to Employer for
such a period as Employer and Employee agree upon. The terms of such services
to be negotiated at such time as required. The parties agree that this advice
and counsel shall not entail full-time service and shall be consistent with
Employee's retirement status.
ARTICLE 3
OBLIGATIONS OF EMPLOYER
Section 3.01. General Description. Employer shall provide Employee
with the compensation, incentives, benefits, and business expense reimbursement
specified elsewhere in this agreement.
Section 3.02. Office and Staff. Employer shall provide Employee with
private office, full-time secretary, office assistants and equipment, supplies,
telephones, and other facilities and services suitable to Employee's position
and adequate for the performance of his duties. The location of offices and
suitability shall be as mutually agreed upon by the Board of Directors and
Employee from time to time.
Section 3.03. Indemnification of Losses of Employee. Employer shall
defend, indemnify, and hold harmless Employee from and against any loss,
liability, cost, or expense, including, but not limited to, all attorney's
fees, which may be incurred by Employee in connection with his employment,
affiliation or otherwise with Employer or its subsidiaries and affiliates. If
Employer has not adequately provided for such defense when required, Employee
shall be fully reimbursed for all reasonable cost of attorney(s) that may be
employed or retained for the defense and/or counsel of Employee.
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ARTICLE 4
COMPENSATION OF EMPLOYEE
Section 4.01. Annual Salary.
(a) As compensation for the services to be performed
hereunder, Employee shall receive a salary at the rate of
$250,000.00 per annum, payable not less than once per
month during the employment term.
(b) Employee may receive additional annual increases in salary
as may be determined by Employer's Board of Directors in
its sole discretion. Said annual increases to be based
upon the cost of living index for the Dallas/Ft. Worth
Metroplex area, but in no event shall any annual increase
be less than two percent (2%).
Section 4.02. Deferred Compensation. If Employee remains in the employ
of Employer until age 65, or on earlier retirement on mutual written consent of
both Employee and Employer, Employer agrees to pay to Employee additional
compensation, commencing with his first full month of retirement, at the annual
rate of eighty percent (80%) of the highest annual salary which he has received
up to age 65, payable in equal monthly installments on the last day of each
month during Employee's entire lifetime. If employee is disabled as referenced
in Paragraph 4.03, then he shall be considered having been employed per this
paragraph until age 65, at which time he shall be deemed qualified for
retirement and receive full benefits pursuant to section 4.02.
Section 4.03. Salary Continuation During Disability. In addition to
benefits that might be available under workers compensation laws, if Employee
for any reason whatsoever becomes disabled so that he is unable to perform all
the duties prescribed herein, Employer agrees to pay Employee eighty percent
(80%) of Employee's annual salary, payable in the same manner as provided for
the payment of salary herein, for the next fifteen (15) fiscal years. Should
Employee's disability arise out of the course and scope of employment or
related in any way (in the broadest definition), the salary continuation
provided for herein shall be at a rate of ninety percent (90%) of Employee's
salary until age 65. Employer shall have the option of satisfying these salary
continuation benefits by purchase of a disability or other insurance policy
providing equal or greater benefits to Employee. Employer is not relieved of
its obligations in the event of nonpayment by the issuer of any such insurance.
Section 4.04. Tax Withholding. Employer shall have the right to deduct
or withhold from the compensation due to Employee hereunder any and all sums
required for federal income and Social Security taxes and all state or local
taxes now applicable or that may be enacted and become applicable in the
future.
ARTICLE 5
EMPLOYEE BENEFITS
Section 5.01. Annual Vacation. Employee shall be entitled to fifteen
(15) working days vacation time each year without loss of compensation. In the
event that Employee is unable for any reason to take the total amount of
vacation time authorized herein during any year, he may accrue that time and
add it to vacation time for any following year OR may receive a cash payment
therefor in an amount equal to the amount of annual salary attributable to that
period of time. Additionally, for each year of this contract, five (5) working
days vacation shall be added to the annual vacation until a maximum of thirty
(30) working days are attained.
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Section 5.02. Illness. Employee shall be entitled to twenty (20) days
per year as sick leave with full pay. Sick leave may be accumulated up to a
total of one hundred (100) days which may be taken or the Employer will pay
Employee for sick days unused and accumulated upon termination.
Section 5.03. Automobile. Employer shall provide Employee with an
automobile to be utilized in the performance of his duties and responsibilities
to the company.
Section 5.04. Death Benefits. If Employee should die during the
employment term or after his retirement and if Employee has a surviving spouse
at that time, Employer agrees to pay the spouse the sum of Three Thousand
Dollars ($3,000.00) per month for five (5) years. If Employer does not have a
surviving spouse at the time of death, Employer agrees to pay Employee's
designee or estate the sum of One Hundred and Fifty Thousand Dollars
($150,000.00) within one hundred and eighty (180) days of certified proof of
death.
Section 5.05. Medical Coverage. Employer agrees to maintain insurance
and include Employee and eligible family members in the coverage of all
medical, major medical, hospital, dental, and eye care. Employer agrees to
maintain the coverage at a minimum of health benefits as set forth above to
cover all doctors, hospital, and associated cost minus a maximum annual Two
Thousand Five Hundred Dollar ($2,500.00) contribution by Employee, inclusive of
all Employee's dependents.
Section 5.06. Life Insurance.
(a) Employer agrees to obtain a life insurance policy on the
life of Employee if reasonably insurable in the face
amount of Two Hundred and Fifty Thousand Dollars
($250,000.00). Employer further agrees to make that
insurance policy payable to the beneficiary or
beneficiaries designated to Employee. Employer agrees to
pay all premiums on the policy during the term of
employment provided herein or any extension to this
agreement. At time of retirement, or disability, Employer
shall assign all rights and interest in the policy to the
Employee at no additional cost.
(b) Employee agrees to submit to a physical examination at any
time requested by Employer for the purpose of Employer's
obtaining "keyman" life insurance on the life of Employee
for the benefit of Employer; provided, however, that
Employer shall bear the entire cost of the examination and
any resulting insurance associated thereto.
ARTICLE 6
BUSINESS EXPENSES
Section 6.01. Use of Credit Card.
(a) All business expenses reasonably incurred by Employee in
promoting and supervising the business of Employer,
including expenditures for entertainment, gifts, and
travel, are to be paid for, insofar as possible, by the
use of credit cards in the name of Employer which will be
furnished to Employee and paid for by Employer.
(b) Employee shall document expenses to a reasonably
practicable extent.
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Section 6.02. Reimbursement of Other Business Expenses. Employer shall
promptly reimburse Employee for all other reasonable business expenses incurred
by Employee in connection with the business of Employer.
ARTICLE 7
TERMINATION OF EMPLOYMENT
Section 7.01. Termination for Cause.
(a) Employer reserves the right to terminate this agreement if
Employee willfully and substantially breaches or
habitually neglects the duties which he is required to
perform under the terms of this agreement and is so found
to have done so in a U.S. Court of law in accordance with
the laws of the State of Texas.
(b) Employer may at its option terminate this agreement for
the reasons stated in this section by giving thirty (30)
days written notice of intent to terminate to Employee
without prejudice to any other remedy to which Employer
may be entitled either at law, in equity, or under this
agreement subject to provisions in Section 8.01 c, d, and
e.
(c) The notice of intent to terminate required by this section
shall specify the grounds for the termination and shall be
supported by a statement of (all) relevant facts.
(d) Termination under this section shall be considered "for
cause" for the purposes of this agreement, if upheld by a
court of law as defined herein.
(e) If notification of intent to terminate is given to
Employee, than Employee shall have sixty (60) days after
the effective date of notice of intent to terminate to
cure any substantiated deficiency. If deficiency is
cured, then notice of intent shall be null and void at
such time. A sixty (60) day extension is automatically
given when and if requested by Employee, if more time is
required to substantiate or alleviate the cause for which
the original notice of intent to terminate was given.
Section 7.02. Termination Without Cause.
(a) This agreement shall be terminated upon the death of
Employee.
(b) Employee reserves the right to terminate this agreement
not less than twelve (12) months after Employee suffers
any physical or mental disability that would prevent the
performance of his duties under this agreement. Such a
termination shall be effected by given sixty (60) days'
written notice of termination to Employee. Termination
pursuant to this provision shall not prejudice Employee's
rights to continued compensation pursuant to Section 4.02
and 4.03 of this agreement.
(c) Termination under this section shall not be considered
"for cause" for the purposes of this agreement.
Section 7.03. Effect of Merger, Transfer of Assets, or Dissolution.
This agreement shall not be terminated by any merger, transfer, voluntary or
involuntary dissolution of Employer for any reason.
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Section 7.04. Employer Breach or Voluntary Termination.
Notwithstanding any provision of this agreement, if Employer breaches or
voluntarily terminates this agreement, and such breach or voluntary termination
is upheld by binding arbitration, the entire agreement will be considered fully
vested and employer shall pay Employee a minimum amount equal to four (4)
years' annual salary at the then current rate of compensation or the total
amount due under this contract whichever is greater within thirty (30) days.
Failure to pay within the time period shall cause an additional breach of the
contract and all sums due shall immediately accumulate interest to the total
sum due at the maximum interest rate allowable by the governing law.
Section 7.05. Termination by Employee. Employee may terminate his
obligations under this agreement by giving Employer at least six (6) months
notice in advance. If Employer does not wish Employee to remain for any
portion thereof then Employer must pay for same as if the Employee worked the
entire extent of the notice period.
Section 7.06. This agreement may be terminated forthwith by Employee in
the event that Employer is placed into receivership, bankruptcy, or insolvency
proceedings that are commenced by or against Employer, or if an assignment for
the benefit of creditors occurs, or upon the voluntary winding up or
liquidation of its business by Employer hereto, whether or not with the aid and
assistance of any court.
Section 7.07. Termination by Mutual Consent. Employment may be
terminated by the Board of Directors for any reason whatsoever, as long as this
agreement remains in effect for the duration of the term with no material
adverse changes to the Employee.
ARTICLE 8
GENERAL PROVISIONS
Section 8.01. Notices. Any notices to be given hereunder by either
party to the other shall be in writing and may be transmitted by personal
delivery or by mail, registered or certified, postage prepaid with return
receipt requested. Mailed notices shall be addressed to the parties at the
addresses appearing in the introductory paragraph of this agreement, but each
party may change that address by written notice in accordance with this
section. Notices delivered personally shall be deemed communicated as of the
date of acknowledged and signed receipt by the receiving party.
Section 8.02. Governing Law; Arbitration. This agreement, entered into
in Tarrant, County and shall be governed by the laws of the United States of
America and the State of Texas, without reference to conflict of law
principles. Any dispute or disagreement arising between Employer and Employee
in connection with any interpretation of the terms of this agreement or the
compliance or noncompliance therewith, or the validity or enforceability
thereof, which is not settled to the mutual satisfaction of Employer and
Employee within sixty (60) days (or such longer period as may be mutually
agreed upon) from the date that either party informs the other in writing that
such dispute or disagreement exists, shall be finally settled under the
Commercial Arbitration Rules of American Arbitration Association in effect on
the date that such notice is given. The arbitration proceedings shall be
conducted in Ft. Worth, Texas. The arbitration award shall be final and binding
upon the parties, and judgment may be entered thereon, upon the application of
either party, by any court having jurisdiction. Each party shall bear the cost
of preparing and presenting its case, and the cost of the arbitration,
including fees and expenses of the arbitrator(s), will be shared equally by the
parties unless the award otherwise provides.
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Section 8.03. If any action at law or in equity is necessary to enforce
or interpret the terms of this agreement, the prevailing party shall be
entitled to reasonable attorney's fees, costs, and necessary disbursements in
addition to any other relief to which that party may be entitled. This
provision shall be construed as applicable to the entire contract.
Section 8.04. General Terms and Conditions. This agreement supersedes
any and all other agreements, either oral or in writing, between the parties
hereto with respect to the employment of Employee by Employer and contains all
of the covenants and agreements between the parties with respect to that
employment in any manner whatsoever. Each party to this agreement acknowledges
that no representation, inducements, promises, or agreements, orally or
otherwise, have been made by any party, or anyone acting on behalf of any
party, which are not embodied herein, and that no other agreement, statement,
or promise not contained in this agreement shall be valid or binding on either
party.
Section 8.05. The provisions of this agreement Sections 3.03, 4.02,
4.03, 5.04, and 5.06, shall survive the termination of this agreement other
than if justified termination for cause pursuant to Section 7.01.
Section 8.06. Any consent required under this agreement shall not be
unreasonably withheld of delayed.
Section 8.07. Modifications. Any modification of this agreement will
be effective only if it is in writing and signed by the party to be charged.
Section 8.08. Effect of Waiver. The failure of either party to insist
on strict compliance with any of the terms, covenants, or conditions of this
agreement by the other party shall not be deemed a waiver of that term,
covenant, or condition, nor shall any waiver or relinquishment of any right or
power at any one time or times be deemed a waiver or relinquishment of that
right or power for all or any other times.
Section 8.09. Equitable Relief. Both parties agree that any breach of
this agreement by the other party may cause irreparable damage and that, in the
event of such breach, in addition to any and all remedies at law, such party
shall have the right to injunctive relief, specific performance, or other
equitable relief to prevent the continuous violations of these terms.
Section 8.10. Partial Invalidity. If any provision in this agreement
is held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining provisions shall nevertheless continue in full
force without being impaired or invalidated in any way.
Section 8.11. Sums Due Deceased Employee. If Employee dies prior to
the expiration of the term of his employment, any sums that may be due him from
Employer under this agreement as of the date of death shall be paid to
Employee's executors, administrators, heirs, personal representatives,
successors, and assigns.
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IN WITNESS WHEREOF, the parties hereto have executed this agreement to
be effective, valid, and binding upon the parties, their successors and assigns
as of April 7, 1997.
EMPLOYER:
LONE STAR INTERNATIONAL ENERGY, INC.
/s/ X. X. XXXXXXX
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X. X. Xxxxxxx, President
EMPLOYEE:
/s/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx