EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is effective the 23rd day of
September, 2000, by and between Diversified Product Inspections Inc., a
corporation with offices at 3 East Main Street Oak Ridge TN 37830 (the
"Employer") and Dean Madden residing at 1439 Crestwood Dr Louisville TN 37777
(the "Employee").
WITNESSETH:
WHEREAS, Employer desires to engage the services of Employee upon the terms
set forth herein; and
WHEREAS, Employee desires to be employed by Employer and to appropriately
memorialize the terms and conditions of such employment.
NOW THEREFORE, in consideration of the mutual promises, covenants and
conditions contained herein and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties agree as
follows:
1. BASIC EMPLOYMENT PROVISIONS
(a) Employment and Term. Employer hereby agrees to employ Employee
(hereinafter referred to as the "Employment") as Chief Financial Officer of
Employer (the "Position") and Employee agrees to be employed by Employer in
such Position for a period of (1) year ending on the 1st day of October,
2001 (the "Termination Date"), unless terminated earlier as provided herein
(the "Employment Period").
(b) Duties. Employee in the Position will be subject to the direction and
supervision of the Board of Directors (the "Board") and will have those
duties and responsibilities that are assigned to him during his Employment
Period by the Board consistent with the position, provided that the Board
will not assign any greater duties or responsibilities to the Employee than
are necessary for the Employee's faithful and adequate performance of the
duties and responsibilities assigned. The parties expressly acknowledge
that the Employee will devote all of Employee's business time and attention
to the transaction of the Employer's business as is reasonably necessary to
discharge Employee's responsibilities hereunder. Employee agrees to perform
faithfully the duties assigned to the best of Employee's ability.
2. COMPENSATION
(a) During the Employment Period, Employer will provide to Employee as
basic compensation for the services to be rendered by Employee hereunder.
The initial amount of such basic compensation will be Seventy Five Thousand
shares of DPI,INC. common stock (75,000.00 ) per year. Such compensation
will be
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reviewed as appropriate by the Board of the Employer and may be increased
in the Board's sole discretion based upon the performance of the Employee.
Said stock will be issued and held by Don Mintmire, Esq in escrow with a
equal amount to be earned per month by employee. The stock will be released
to the employee at the end of this agreement. ( October 1,2001)
During the Employment Period, Employee may be eligible to receive any additional
salary, bonus or other compensations as may be determined in the Board's sole
discretion.
3. TERMINATION
(a) Death or Disability. This Agreement will terminate automatically upon
the death or total disability of Employee. For the purpose of this
Agreement, "total disability" will be deemed to have occurred if Employee
will have been unable to perform the assigned duties due to mental or
physical incapacity for a period of three (3) consecutive months or for any
sixty (60) working days out of a six (6) month consecutive period.
(b) Cause. Employer may terminate the employment o Employee under this
Agreement for Cause. For the purpose of this Agreement, "cause" will be
deemed to be any felony convictions, fraud, dishonesty, competition with
Employer, unauthorized use of any of Employer's trade secrets or
confidential information, or failure to properly perform the duties
assigned to Employee, in the reasonable judgment of Employer.
(c) Without Cause. Except in the case of change of control as defined
herein, in which case subparagraph (d) will apply, Employer may terminate
the employment of Employee under this Agreement with written notice to
Employee (the "W/C Notice").
(d) Change of Control. Upon change of control of Employer, Employer may
terminate this Agreement. For the purpose of this Agreement, "change of
control" will mean a change in the control of Employer of a nature that
would be required to be reported in response to (1) Item 1 of Form 8K; (2)
Item 5(f) of Schedule 14A of Regulation 14A; or (3) any other rule of
regulation as promulgated by the Securities and Exchange Commission.
(e) Voluntary Termination by Employee. Employee ma terminate this Agreement
with six (6) month written notice to Employer (the "V/T Notice").
4. COMPENSATION UPON TERMINATION
(a) Death or Disability. If the Employment Period is terminated pursuant to
the provisions of Section 3(a) above, the following will be payable:
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(1) In the case of death, no further compensation will be payable to
Employee, except that Employee's estate, heir or beneficiaries, as
applicable, will be entitled, to receive Employee's then current
compensation for the lesser (i) three (3) months from the date of
death or (ii) for the balance of the Employment Period.
(2) In the case of disability, no further compensation will be payable
to Employee, except that Employee will be entitled, in addition to any
other benefits specifically provided to Employee under any benefit
plan, to receive Employee's then current compensation for the lesser
of (i) three (3) months from the date of the disability or (ii) for
the balance of the Employment Period.
(b) Termination for Cause. If the Employment of Employee under this
Agreement is terminated for cause pursuant to the provisions of Section
3(b) above, no further compensation will be paid to Employee after the date
of termination and all benefits will cease at that time.
(c) Termination Without Cause. If the Employment o Employee under this
Agreement is terminated pursuant to Section 3(c) above, Employee will be
entitled to continue to receive from Employer the then current basic
compensation hereunder for a period of one year (1) years from the date of
the W/C Notice, such amount to be paid in accordance with the payroll
practices of Employer.
(d) Termination due to Change of Control. If the Employment of Employee
under this Agreement is terminated pursuant to Section 3(d) above,
(1) in the event that Employer's new management offers Employee a
position, Employee will have thirty (30) days from the date the
position is offered to decide where to accept or not. If Employee
accepts, this Agreement will be terminated and all compensation will
be in accordance with the new agreement. If the Employee rejects the
offered position, Employee will be entitled to receive within sixty
(60) days from the date of change of control, a lump sum equal to the
Employee's then current compensation for the greater of (i) (24)
months or (ii) for the balance of the Employment Period, and further
will be entitled to receive the benefits to which Employee would
otherwise be entitled pursuant to Section 2(c) above the greater of
(i) twelve (12) months or (ii) for the balance of the Employment
period from the date of the change of control;
(2) in the event that the Employe s new management does not offer
Employee a position, Employee will be entitled to receive within sixty
(60) days from the date of change of control, a lump sum equal to the
Employee's then current salary for the greater of (i) thirty six (12)
months or (ii) for the balance of the Employment ; and
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(3) upon a change of control of the Employer, all warrants outstanding
will vest and employee will have one hundred and eighty (180) days to
exercise said warrants.
(e) Termination Due to Voluntary Termination by Employee. If the Employee
voluntarily terminates the Employee's Employment pursuant to the provisions of
Section 3(e) above, Employee will be entitled to receive the then current
compensation of Employee for the greater of (i) six (6) months from the date of
the V/T Notice or (ii) for the period from the date of the V/T Notice through
the last day on which Employee remains in the Position.
5. EXPENSE REIMBURSEMENT
Upon submission of properly documented expense account reports,
Employer will reimburse Employee for all reasonable business, travel and
entertainment expenses incurred by Employee in the course of his Employment with
Employer.
6. ASSIGNMENT
This Agreement and all of the provisions hereof will be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns, but neither this Agreement nor any of the rights,
interests or obligations hereunder will be assigned by any of the parties
hereto, except that this Agreement all of the provisions hereof may be assigned
by Employer to any successor to all or substantially all of its assets (by
merger or otherwise) and may otherwise be assigned upon the prior written
consent of Employee.
7. CONFIDENTIAL INFORMATION
(a) Non-Disclosure. During the Employment Period o at any time thereafter,
irrespective of the time, manner or cause of the termination of this
Agreement, Employee will not directly or indirectly reveal, divulge,
disclose or communicate to any person or entity, other than authorized
officers, directors and employees of the Employer, in any manner
whatsoever, any Confidential Information (as hereinafter defined) of
Employer without the prior written consent of the Board.
(b) Definition. As used herein, "Confidential Information" means
information disclosed to or known by Employee as a direct or indirect
consequence of or through the Employment about Employer or its respective
businesses, products and practices, which information is not generally
known in the business in which Employer is or may be engaged. However,
Confidential Information will not include under any circumstances any
information with respect to the foregoing matters which is (i) available to
the public from a source other than Employee, (ii) released in writing by
Employer to the public or to persons who are not under a similar obligation
of confidentiality to Employer and who are not parties to this Agreement,
(iii) obtained by Employee from a third party not under a similar
obligation of confidentiality to Employer, (iv) required to be disclosed by
any court process or any government or agency or department of any
government, or (v) the subject of a written waiver executed by Employer for
the benefit of Employee.
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(c) Return of Property. Upon termination of the Employment, Employee will
surrender to Employer all Confidential information, including without
limitation, all lists, charts, files, disks, tapes, programs, program and
system manuals and documentation, schedules, reports, financial statements,
books and records of the Employer, and all copies thereof, and all other
property belonging to the Employer will be accorded reasonable access to
such Confidential Information subsequent to the Employment Period for any
proper purpose as determined in the reasonable judgment of Employer.
8. AGREEMENT NOT TO COMPETE
(a) Employee agrees:
(a) To give the Board six (6) month's written advance notice of voluntary
termination of Employment with Employer. Such notice will include
Employee's future employment or self-employment intentions, identification
of the prospective employer and the general nature of the prospective
employment or self-employment, if known. Employer will continue to pay the
then current salary to Employee in accordance with paragraph 4(e) above.
(2) To participate in an exit interview conducted by a member of the
personnel department of Employer and/or by a representative of Employer, at
the time of or prior to the termination of Employment with Employer.
(3) That for two (2) years following the termination of the Employment,
Employee will promptly notify Employer of any change in the identification
of Employee's employer or the nature of such employment or of
self-employment.
(4) Subject to the conditions hereinafter stated, Employee will not, within
two (2) years of leaving the employ of Employer, engage or enter into
employment by, or into self-employment or gainful occupation as, a
Competing Business (as hereinafter defined) or act directly or indirectly
as an advisor, consultant, sales agent, as defined herein or broker for a
Competing Business. As used herein, "Competing Business" means a business
that is engaged in the manufacture, sale or other disposition of a product
or service or has under development a product or service that is in direct
competition with a product or service, whether existing or under
development, of the Employer. Employee acknowledges that Employer does not
have an adequate remedy at law in the event Employee violates this
provision and, therefore, Employee agrees that, in such an event, Employer
will be entitled to seek equitable relief, including but not limited to,
injunctive relieve and to withhold all payments due to Employee hereunder
pending a judicial determination of whether Employee has violated this
Agreement.
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(b) Employer further agrees:
(1) That within fifteen (15) business days after receiving
identification of the prospective employer, the nature of the
employment or self-employment pursuant to Paragraph 8(a)(1) above, or
any change therein pursuant to Paragraph 8(a)(3) above, Employer will
advise Employee as to whether such employment constitutes a Competing
Business as defined in Paragraph 8(a)(4) above.
(2) In the event Employer advises Employee that such employment
constitutes a Competing Business, Employee agrees not to accept such
employment offer from a prospective Employer or be self-employed
provided Employer forwards to Employee at the end of each of the
twenty-four (24) successive calendar months following the month in
which Employment by Employer terminates, a check in the amount equal
to one-half (1/2) of the monthly salary of Employee (exclusive of
extra compensation of any kind) as of the Termination Date. Provided,
however, that all payments due under this Paragraph 8(b)(2) will not
be required during any periods that Employee is receiving payments
under either Paragraphs 4(a) or 4(c).
(c) The provisions of 8(a)(2) - 8(a)(4) and 8(b) will apply whether
the termination is voluntary or involuntary and for whatever reason.
In addition, 8(a)(1) will apply in the case of a voluntary termination
by Employee.
9. WAIVER OF AGREEMENT NOT TO COMPETE
The Employer, based on the facts revealed to it by the Employee regarding
the new employment and in its discretion upon written notification to Employee,
may at any time waive or elect not to enforce the provisions of Paragraph
8(a)(4), in which event the obligations of Paragraph 8(b)(2) above will
thereafter not apply.
10. AGREEMENT NOT TO SOLICIT EMPLOYEES
Employee agrees that, for a period of two (2) years following the
termination of the Employment Period, Employee will not, on behalf of any
business, engage in a business competitive with Employer, solicit or induce, or
in any manner attempt to solicit or induce, either directly or indirectly, any
key person employed by, or any agent of Employer, to terminate such employment
or agency, as the case may be, with Employer. In the event of violation hereof,
Employer may terminate any payments due to Employee hereunder.
11. NO VIOLATION
Employee hereby represents and warrants to Employer that the execution,
delivery and performance of this Agreement or the passage of time, or both, will
not conflict with, result in a default, right to accelerate or loss of rights
under any provision of any agreement or understanding to which the Employee or,
to the best knowledge of Employee, any of Employee's affiliates are a party or
by which Employee, or to the best knowledge of Employee, Employee's affiliates
may be found or affected.
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12. CAPTIONS
The captions, headings and arrangements used in this Agreement are for
convenience only and do not in any way affect, limit or amplify the provisions
hereof.
13. NOTICES
All notices required or permitted to be given hereunder will be in writing
and will be deemed delivered, whether or not actually received, two (2) days
after being deposited in the United States mail, postage prepaid, registered or
certified mail, return receipt requested, addressed to the other address as such
party may designate by notice:
Employer: Diversifed Product Inspections, Inc
/s/ John Van Zyll
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Employee: Dean Madden
/s/ Dean Madden
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14. INVALID PROVISIONS
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws, such provisions will be fully
severable, and this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part of this Agreement;
the remaining provisions of this Agreement will remain in full force and effect
and will not be affected by the illegal, invalid or unenforceable provision or
by its severance of this Agreement In lieu of each such illegal, invalid or
unenforceable provision, there will be added automatically as part of this
Agreement, a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
15. ENTIRE AGREEMENT; AMENDMENTS
This Agreement contains the entire agreement of the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, if any, relating to the subject matter hereof, including the
Prior Agreement, which is fully replaced hereby. This Agreement may be amended,
in whole or in part only, by an instrument in writing setting forth the
particulars of such amendment and duly executed by an officer of Employer
expressly authorized by the Board to do so and by Employee.
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16. WAIVER
No delay or omission by any party hereto to exercise any right or power
hereunder will impair such right or power to be construed as a waiver thereof. A
waiver by any of the parties hereto of any of the covenants to be performed by
any other party or any breach thereof will not be construed to be a waiver of
any succeeding breach thereof or of any other covenant herein contained. Except
as otherwise expressly set forth herein, all remedies provided for in this
Agreement will be cumulative and in addition to and not in lieu of any other
remedies available to any party at law, in equity or otherwise.
17. COUNTERPARTS
This Agreement may be executed in multiple counterparts, each of which will
constitute an original, and all of which together will constitute one and the
same agreement.
18. GOVERNING
This Agreement will be construed and enforced according to the laws of the
Tennessee
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement effective as of the date first above written.
EMPLOYER: EMPLOYEE:
Diversified Product Inspections, Inc Dean Madden
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By: /s/ John Van Zyll /s/ Dean Madden
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