EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made, entered into, and
effective as of February 15, 2000, ("Effective Date"), by and between Industrial
Rubber Innovations, Inc., a Florida corporation (the "Company") and Richard E.
Frasch, Jr. ("Employee").
RECITALS
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WHEREAS, the Company desires to benefit from Employee's expertise and
employ Employee and Employee is willing to accept such employment.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the parties hereto hereby agree as follows:
AGREEMENT
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1. Term and Duties.
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The Company hereby employs Employee as Chief Executive Officer as of the
Effective Date for a period of two (2) years, at which time this Agreement shall
terminate unless extended by mutual agreement of the parties. Employee shall
faithfully and diligently perform all professional duties and acts as may be
reasonably requested of Employee by the Company or its officers consistent with
the function of a Chief Executive Officer in this or a similar company.
2. Duties.
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Employee shall have supervision and control over, and responsibility for,
the general management and operation of the Company and shall have such other
powers and duties as may from time to time be prescribed by the Board of
Directors, provided that such duties are reasonable and customary for a Chief
Executive Officer. Employee will perform Employee's services to the best of
Employee's ability. Employee agrees throughout the term of this Agreement to
devote sufficient time, energy and skill to the business of the Company and to
the promotion of the best interests of the Company. Employee will be provided
with appropriate equipment, secretarial help, supplies, and other facilities and
services suitable to Employee's position and adequate for the performance of his
duties in the discretion of the Board of Directors.
3. Compensation.
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3.1 Subject to the termination of this Agreement as provided herein,
the Company shall compensate Employee for his services as follows (collectively
referred to as the "Compensation"):
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(a) Employee shall receive a monthly salary ("Salary") equal to Six Thousand
Dollars ($6,000.00) per month for the first six (6) months following the
Effective Date, and a monthly salary equal to Seven Thousand Five Hundred
Dollard ($7,500) per month thereafter. The Salary shall be payable in
semi-monthly installments in accordance with the Company's practices, less
normal payroll deductions.
(b) In addition to the Salary set forth above, Employee shall be granted
options to acquire an aggregate of 500,000 shares of the Company's common stock
at a price of $0.50 per share, vesting at the rate of one-twenty fourth (1/24)
per month for a period of twenty four (24) months, or until this Agreement is
terminated. Any options which have vested as of the time of termination of this
Agreement shall remain the property of Employee. All options shall be
exercisable for a period of three (3) years from the date hereof.
3.2 Employee shall accrue vacation time beginning in Year 1 of this
Agreement at the rate of two (2) weeks per year. Employee shall be allowed a
customary number of paid sick days in accordance with Company policy.
3.3 In addition to the Compensation set forth above, the Company shall
periodically review Employee's performance and services rendered with a view to
paying discretionary bonuses based upon above-average or outstanding performance
for a prior period. Any such bonuses approved by the Company shall be paid to
Employee within 30 days of the grant thereof.
4. Disclosure of Confidential Information.
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4.1 Employee shall not, during the term of this Agreement and
thereafter, communicate, divulge, or use for the benefit of himself or any other
person, partnership, association, or corporation, either directly or indirectly,
any information or knowledge concerning the Company and any information,
including but not limited to pricing schedules, customer lists, communication
techniques, invoicing, and billing which may be communicated to Employee by the
Company during the term of this Agreement.
4.2 Employee agrees that any and all customer lists, pricing schedules,
products, formulas, inventions, schematics, techniques, and goods created by
Employee while rendering services to Company shall be considered the property of
the Company which shall own all rights and interest in the same.
4.3 Employee covenants and agrees that during the term of this
Agreement he will not do any act, or fail to do any act, the result of which may
be prejudicial or injurious to the business and goodwill of the Company.
5. Expenses.
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The Company shall reimburse Employee for all reasonable business related
expenses incurred by Employee in the course of his normal duties on behalf of
the Company. In reimbursing Employee for expenses, the ordinary and usual
business guidelines and documentation requirements shall be adhered to by the
Company and Employee. Any expenses which, individually or in the aggregate,
exceed Five Hundred Dollars ($500.00) must be consented to by the Company in
writing prior to being incurred by Employee.
<PAGE>
6. Termination.
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6.1 Termination by the Company. The Company reserves the right to
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terminate this Agreement at any time for "cause". For the purposes of this
Agreement, an event or occurrence constituting "cause" shall include, but not be
limited to:
6.1.1 Employee's failure or refusal, after notice thereof, to perform
specific directives of the Board of Directors of the Company, when such
directives are consistent with the scope and nature of the Employee's duties and
responsibilities as set forth herein or the commission of any intentional tort
by the Employee against the Company, or any breach by the Employee of any of the
covenants set forth in paragraphs 4 or 9 of this Agreement;
6.1.2 Drunkenness or use of drugs which interferes with the performance of
Employee's obligations under this Agreement, continuing after notice thereof;
6.1.3 Any act of dishonesty or moral turpitude by the Employee which
constitutes a crime under the laws of the place where the act was committed;
6.1.4 Any willful or intentional act by Employee which, although not a
crime, is of such impropriety or magnitude that it substantially adversely
affects the business and the reputation of the Company.
In the event Employee is terminated for cause as defined herein, Employee
shall not be entitled to any bonus, termination or severance payment of any
sort.
6.2 Termination upon Death or Disability. This Agreement shall be
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terminated upon the death of the Employee or, at the Company's discretion, if
the Employee suffers any physical or mental disability that would prevent the
performance of his duties under this Agreement. Such a termination, in the case
of disability, shall be effected by giving thirty (30) days written notice of
termination to Employee.
6.3 Termination with Notice. This Agreement may be terminated by
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either the Employee or the Company, with or without cause, by giving the other
party at least thirty (30) days notice in advance. In the event that this
Agreement is terminated by the Company prior to the completion of the term of
employment pursuant to this paragraph, Employee shall be entitled to
compensation earned by and vested in him prior to the date of termination as
provided for in this Agreement, computed pro-rata up to and including that date,
plus ninety (90) days of Salary. In the event this Agreement is terminated by
the Employee, Employee shall be entitled to compensation earned by and vested in
him prior to the date of termination.
<PAGE>
6.4 Termination in the Event of Lack of Financing. In the event the
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Company is not able to obtain a minimum of Five Hundred Thousand Dollars
($500,000) in debt or equity financing during the first six (6) months following
the Effective Date, then either the Company or the Employee may terminate this
Agreement, with or without cause, during the thirty (30) day period immediately
following the end of said six (6) month period. In the event of termination
pursuant to this paragraph 6.4, Employee shall not be entitled to any bonus,
termination or severance payment of any sort.
7. Binding Effect.
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This Agreement shall be binding upon and inure to the benefit of the
parties hereto their respective devisees, legatees, heirs, legal
representatives, successors, and permitted assigns. The preceding sentence
shall not affect any restriction on assignment set forth elsewhere in this
Agreement.
8. Notices.
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All notices provided for in this Agreement shall be in writing signed by
the party giving such notice, and delivered personally or sent by overnight
courier or messenger or sent by registered or certified mail (air mail if
overseas), return receipt requested, or by telex, facsimile transmission,
telegram or similar means of communication. Notices shall be deemed to have
been received on the date of personal delivery, telex, facsimile transmission,
telegram or similar means of communication, or if sent by overnight courier or
messenger, shall be deemed to have been received on the next delivery day after
deposit with the courier or messenger, or if sent by certified or registered
mail, return receipt requested, shall be deemed to have been received on the
third business day after the date of mailing. Notices shall be sent to the
addresses set forth below:
If to the Company:
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Industrial Rubber Innovations, Inc.
6801 McDivitt Drive
Bakersfield, CA 93313
Facsimile (661) 833-8088
Attn: Dave Foran
With a copy to:
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Cutler Law Group
610 Newport Center Drive, Suite 800
Newport Beach, CA 92660
Attn: Brian A. Lebrecht, Esq.
Facsimile No.: (949) 719-1988
If to the Employee:
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Richard E. Frasch, Jr.
______________________
______________________
______________________
Facsimile No.: (___) ___-____
<PAGE>
9. Assignment.
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Subject to all other provisions of this Agreement, any attempt to assign or
transfer this Agreement or any of the rights conferred hereby, by judicial
process or otherwise, to any person, firm, company, or corporation without the
prior written consent of the other party, shall be invalid, and may, at the
option of such other party, result in an incurable event of default resulting in
termination of this Agreement and all rights hereby conferred.
10. Choice of Law.
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This Agreement and the rights of the parties hereunder shall be governed by
and construed in accordance with the laws of the State of California including
all matters of construction, validity, performance, and enforcement and without
giving effect to the principles of conflict of laws.
11. Jurisdiction.
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The parties submit to the jurisdiction of the Courts of the State of
California or a Federal Court empaneled in the State of California, County of
Kern, for the resolution of all legal disputes arising under the terms of this
Agreement, including, but not limited to, enforcement of any arbitration award.
12. Entire Agreement.
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Except as provided herein, this Agreement, including exhibits, contains the
entire agreement of the parties, and supersedes all existing negotiations,
representations, or agreements and all other oral, written, or other
communications between them concerning the subject matter of this Agreement.
There are no representations, agreements, arrangements, or understandings, oral
or written, between and among the parties hereto relating to the subject matter
of this Agreement that are not fully expressed herein.
13. Severability.
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If any provision of this Agreement is unenforceable, invalid, or violates
applicable law, such provision, or unenforceable portion of such provision,
shall be deemed stricken and shall not affect the enforceability of any other
provisions of this Agreement.
14. Captions.
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The captions in this Agreement are inserted only as a matter of convenience
and for reference and shall not be deemed to define, limit, enlarge, or describe
the scope of this Agreement or the relationship of the parties, and shall not
affect this Agreement or the construction of any provisions herein.
<PAGE>
15. Counterparts.
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This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which shall together constitute one and
the same instrument.
16. Modification.
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No change, modification, addition, or amendment to this Agreement shall be
valid unless in writing and signed by all parties hereto.
17. Waiver.
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No waiver of any breach, covenant, representation, warranty or default of
this Agreement by any party shall be considered to be a waiver of any other
breach, covenant, representation, warranty or default of this Agreement.
18. Interpretation
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The terms and conditions of this Agreement shall be deemed to have been
prepared jointly by all of the Parties hereto. Any ambiguity or uncertainty
existing hereunder shall not be construed against any one of the drafting
parties, but shall be resolved by reference to the other rules of interpretation
of contracts as they apply in the State of California.
19. Attorneys' Fees.
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Except as otherwise provided herein, if a dispute should arise between the
parties including, but not limited to arbitration, the prevailing party shall be
reimbursed by the non-prevailing party for all reasonable expenses incurred in
resolving such dispute, including reasonable attorneys' fees.
20. Taxes.
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Any income taxes required to be paid in connection with the payments due
hereunder, shall be borne by the party required to make such payment. Any
withholding taxes in the nature of a tax on income shall be deducted from
payments due, and the party required to withhold such tax shall furnish to the
party receiving such payment all documentation necessary to prove the proper
amount to withhold of such taxes and to prove payment to the tax authority of
such required withholding.
21. Not for the Benefit of Creditors or Third Parties.
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The provisions of this Agreement are intended only for the regulation of
relations among the parties. This Agreement is not intended for the benefit of
creditors of the parties or other third parties and no rights are granted to
creditors of the parties or other third parties under this Agreement. Under no
circumstances shall any third party, who is a minor, be deemed to have accepted,
adopted, or acted in reliance upon this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the Effective Date.
"Company" "Employee"
Industrial Rubber Innovations, Inc. Richard E. Frasch, Jr.
/s/ Dave Foran /s/ Richard E. Frasch, Jr.
________________________________ ________________________________
By: Dave Foran
Its: Acting President
