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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): DECEMBER 2, 1999
N-VIRO INTERNATIONAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 0-21802 34-1741211
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
3450 W. CENTRAL AVENUE, SUITE 328
TOLEDO, OHIO 43606
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (419) 535-6374
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ITEM 5. OTHER ITEMS
On February 15, 2000, N-Viro International Corporation ("the Company")
completed an employment agreement, effective December 2, 1999, with J. Patrick
Nicholson, Chairman of the Board of Directors and Chief Executive Officer,
incorporated by reference herein as Exhibit 99.1.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
N-VIRO INTERNATIONAL CORPORATION
Dated: March 23, 2000 By: /s/ James K. McHugh
----------------------------- ------------------------
James K. McHugh
Chief Financial Officer
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EXHIBIT 99.1
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EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Employment Agreement") is made
and entered into as of the 2 day of December, 1999 (the "Execution Date"), by
and between N-Viro International Corporation, a Delaware corporation (the
"Company"), and J. Patrick Nicholson, an individual ("Employee"). N-Viro
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company owns and licenses the N-Viro Process, a
patented technology to treat and recycle wastewater sludge and other bio-organic
wastes, utilizing certain alkaline and mineral by-products produced by cement,
lime, electric utilities and other industries (such activities, together with
all other activities of the Company and its subsidiaries or affiliates, as
conducted at or prior to the termination of this Employment Agreement, and any
future activities reasonably related thereto which are contemplated by the
Company and/or its subsidiaries at the termination of this Employment Agreement
identified in writing by the Company to Employee at the date of such
termination, are hereinafter collectively referred to as the "Business
Activities");
WHEREAS, the Company desires to employ Employee upon the terms
and subject to the terms and conditions set forth in this Employment Agreement;
and,
WHEREAS, Employee desires to be employed by the Company upon
the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual
promises, covenants and conditions herein contained and for other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto intending to be legally bound hereby agree as
follows:
Section 1. Employment. During the Employment Period (as
herinafter defined), the Company shall employ Employee, and Employee shall
accept employment with the Company, all upon the terms and subject to the
conditions set forth in this Employment Agreement.
Section 2. Capacity and Duties. Employee shall be employed in
the capacity of Chairman of the Board and Chief Executive Officer of the Company
and its subsidiaries and affiliates and shall have such other duties,
responsibilities and authorities as are assigned to him by the Board of
Directors of the Company (the "Board") so long as such additional duties,
responsibilities and authorities are consistent with Employee's position and
level of authority as Chairman of the Board and Chief Executive Officer of the
Company. Employee shall report directly to the Board. Subject to the control of,
the and the general policies and guidelines established by, the Board and except
as otherwise herein provided, Employee shall devote all of his business time,
best efforts and attention to promote and advance the business of the Company
and its subsidiaries and affiliates and to perform diligently and faithfully all
the duties, responsibilities and obligations of Employee to be performed by him
under this Employment Agreement. So long as Employee is
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employed or hired by the Company as an employee or consultant, the Company shall
use its best efforts to cause the Nominating Committee of the Board or the
Board, if there is no Nominating Committee of the Board, to nominate Employee
for reelection as a director of the Company for a three year term upon
expiration of his current, or then current term as a director of the Company
and, if so nominated, Employee shall consent to serve as a director if elected.
During the Employment Period, Employee shall not be employed in any other
business activity, whether or not such activity is pursued for gain, profit or
other pecuniary advantage; provided, however, that this restriction shall not be
construed as preventing Employee from (i) investing his personal assets in a
business which does not compete with the Company or its subsidiaries or with any
other company or entity affiliated with the Company, where the form or manner of
such investment will not require services of any significance on the part of
Employee in the operation of the affairs of the business in which such
investment is made and in which his participation is solely that of a passive
investor or advisor or (ii) being engaged in those activities listed on Exhibit
2 attached hereto; provided further, however, that the activities described in
clause (ii) of this sentence shall not unreasonably interfere with Employee's
performance of his obligations under this Employment Agreement.
Section 3. Term of Employment. The term of employment of
Employee by the Company pursuant to this Employment Agreement shall be for the
period (the "Employment Period") commencing on the Execution Date and ending on
July 20, 2002 or such earlier date that Employee's employment is terminated in
accordance with the provisions of this Employment Agreement (the "Termination
Date").
Section 4. Place of Employment. Employee's principal place of
work shall be located at the principal offices of the Company in the Toledo,
Ohio area. The Company and Employee acknowledge that Employee's principal place
of work is consistent with the extensive national and international business
travel which may be required of Employee in connection with the performance of
his duties, responsibilities and authorities under this Agreement.
Section 5. Compensation. During the Employment Period, subject
to all the terms and conditions of this Employment Agreement and, except as
otherwise provided in Section 10, as compensation for all services to be
rendered by Employee under this Employment Agreement, the Company shall pay to
or provide Employee with the following:
5.01 Base Salary. Subject to increase as provided in
this Section 5.01, the Company shall pay to Employee a base
annual salary (the "Base Salary") at the rate of at least One
Hundred Forty-Four Thousand Dollars ($144,000) per year from
the Commencement Date through December 31, 1999, payable at
such intervals (at least monthly) as salaries are paid
generally to other executive officers of the Company. On or
before January 1, 2000 and on or before each January 1
thereafter during the Employment Term, Employee's Base Salary
shall be reviewed by the Board and increased to an amount
determined in good faith by the Board based upon a complete
review of Employee's performance under this Employment
Agreement during the prior year and the growth and
profitability of the Company and Employee's contributions
thereto, which review shall be communicated in writing to
Employee.
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5.02 Cash Bonus. At the sole and exclusive discretion
of the Board, the Company shall pay to Employee an annual cash
bonus (the "Cash Bonus") in an amount determined in good faith
by the Board based upon a complete review of Employee's
performance under this Employment Agreement during the prior
year and the growth and profitability of the Company and
Employee's contribution thereto. Any Cash Bonus payable to
Employee pursuant to this Section 5.02 shall be payable, if at
all, on or before March 31, of each year during the Employment
Period based upon Employee's performance for the prior
calendar year.
5.03 Other Benefits. The Company shall provide
Employee with the other benefits specified on Exhibit 5.03
attached hereto.
5.04 Stock Option. The Company shall grant to
Employee the sole and exclusive right and option to purchase
Fifty Thousand (50,000) shares of the Common Stock, par value
$.01 per share, of the Company (the "Company Common Stock") at
a price per share equal to the closing sale price of the
Company Common Stock on the Execution Date as reported on the
NASDAQ Small Caps Market, and upon the terms and subject to
the conditions set forth in the form of Stock Option Agreement
attached hereto as Exhibit 5.04 (the "Stock Option
Agreement"), which the Company and Employee shall each execute
and deliver to the other as of the Execution Date.
Section 6. Adherence to Standards. Employee shall comply with
the written policies, standards, rules and regulations of the Company from time
to time established for all executive officers of the Company.
Section 7. Review of Performance. The Board shall periodically
review and evaluate the performance of Employee under this Employment Agreement
with Employee.
Section 8. Expenses. The Company shall reimburse Employee for
all reasonable, ordinary and necessary expenses (including, but not limited to,
automobile and other business travel and customer entertainment expenses)
incurred by him in connection with his employment hereunder; provided, however,
Employee shall render to the Company a complete and accurate accounting of all
such expenses in accordance with the substantiation requirements of Section 274
of the Internal Revenue Code of 1986, as amended (the "Code"), as a condition
precedent to such reimbursement.
Section 9. Termination with Cause by the Company. This
Employment Agreement may be terminated with Cause (as hereinafter defined) by
the Company provided that the Company shall (i) give Employee the Notice of
Termination (as hereinafter defined) and (ii) pay Employee his annual base
salary through the Termination Date (as hereinafter defined) at the rate in
effect at the time the Notice of Termination is given plus any bonus or
incentive compensation which has been earned or has become payable pursuant to
the terms of any compensation or benefit plan as of the Termination Date, but
which has not yet been paid.
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Section 10. Termination without Cause by the Company or for or
not for Good Reason by Employee. This Employment Agreement may be terminated by
(i) the Company by reason of the death or Disability (as hereinafter defined) of
Employee, (ii) the Company without Cause by giving Employee a notice of
termination, (iii) Employee for Good Reason (as hereinafter defined) and (iv)
Employee not for Good Reason after giving Employer a Nature of Termination sixty
(60) days prior to the date of such termination. In the event of termination of
this Employment Agreement under this Section 10, the Company shall pay Employee
his Base Salary through the Termination Date at the rate in effect at the time
of the Termination Date plus any bonus or incentive compensation which has been
earned or has become payable pursuant to the terms of any compensation or
benefit plan as of the Termination Date, but which has not yet been paid. In the
event of termination of this Employment Agreement under this Section 10 by the
Company (other than by reason of the death or Disability of Employee) or by
Employee for Good Reason and such termination is on or prior to July 20, 2002,
the Company shall continue to pay to Employee, in addition to the other benefits
specifically provided for in this Section, his Base Salary through July 20,
2002, as if this Employment Agreement had not been terminated. In the event of
termination of this Employment Agreement under this Section 10 by the Company by
reason of the death or Disability of Employee, or without Cause or after July
20, 2002 by Employee for Good Reason, the Company shall provide medical and
hospitalization coverage comparable to that provided by the Company as of the
Termination Date to Employee and his spouse for their respective lives. This
Section 10 shall not be interpreted so as to limit any benefits to which
Employee, as a terminated employee of the Company, or his family may be entitled
under the Company's life insurance, medical, hospitalization or disability plans
following his Termination Date or under applicable law.
Section 11. Consulting Agreement. If Employee is still acting
as an executive officer of the Company on July 20, 2002 under this Employment
Agreement, then Employee and the Company shall enter into a Consulting Agreement
in the form of Exhibit 12 attached hereto (the "Consulting Agreement"), which
Consulting Agreement shall be effective as of the Termination Date.
Section 12. Definitions. In addition to the words and terms
elsewhere defined in this Employment Agreement, certain capitalized words and
terms used in this Employment Agreement shall have the meanings given to them by
the definitions and descriptions in this Section 12 unless the context or use
indicates another or different meaning or intent, and such definition shall be
equally applicable to both the singular and plural forms of any of the
capitalized words and terms herein defined. The following words and terms are
defined terms under this Employment Agreement.
12.01 "Disability" shall mean a physical or mental
illness which, in the judgment of the Company after
consultation with the licensed physician attending Employee,
impairs Employee's ability to substantially perform his duties
under this Employment Agreement as an employee and as a result
of which he shall have been absent from his duties with the
Company on a full-time basis for three (3) consecutive months.
12.02 A termination with "Cause" shall mean a
termination of this Employment Agreement (i) by reason of a
good faith determination
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by the Board that Employee (A) failed to substantially perform
his duties with the Company (other than a failure resulting
from his incapacity due to physical or mental illness) after a
written demand for substantial performance has been delivered
to him by the Board, which demand specifically identifies the
manner in which the Board believes he has not substantially
performed his duties and Employee has failed to substantially
perform as requested within a reasonable time, (B) has engaged
in conduct the consequences of which are materially adverse to
the Company, monetarily or otherwise, (C) is found guilty of
fraud, dishonesty or other acts of gross misconduct or
misfeasance in the performance of his duties under this
Employment Agreement, by a court of competent jurisdiction
whose decision is final and non-appealable (D) is found to be
an alcoholic or under the influence of drugs or other similar
substance while performing his duties under this Employment
Agreement or (E) is convicted of a felony or (ii) because the
Company makes an assignment for the benefit of creditors,
files a voluntary petition in bankruptcy, is involuntarily
adjudicated to bankrupt, is liquidated or dissolved or sells
substantially all of its assets. No act, or failure to act, on
Employee's part shall be grounds for termination with Cause
unless he has acted or failed to act with an absence of good
faith or without a reasonable belief that his action or
failure to act was in or at least not opposed to the best
interests of the Company. Notwithstanding the foregoing,
Employee shall not be deemed to have been terminated with
Cause unless there shall have been delivered to him a copy of
a resolution duly adopted by the affirmative vote of not less
than a majority of the entire membership of the Board
(exclusive of Employee) at a meeting of the Board called and
held for the purpose of terminating Employee (after reasonable
notice to Employee and opportunity for him, together with his
counsel, to be heard before the Board), finding that in the
good faith opinion of the Board, Employee failed to perform
his duties or engaged in conduct in the manner or of the type
set forth above in the first sentence of this Section 12.02
and specifying the particulars thereof in detail.
12.03 "Good Reason" shall mean the occurrence of any
of the following events without Employee's prior express
written consent: (i) except as otherwise contemplated in this
Employment Agreement, any material change in Employee's
status, title, authorities or responsibilities (including
reporting responsibilities) under this Employment Agreement
which represents a demotion from such status, title, position
or responsibilities (including reporting responsibilities);
the assignment to him of any duties or work responsibilities
which are materially inconsistent with his status, title,
position or work responsibilities set forth in this Employment
Agreement or which are materially inconsistent with the
status, title, position or work responsibilities of a Chairman
of the Board, Chief Executive Officer of a publicly traded
corporation; or any removal of Employee from, or failure to
appoint, elect, reappoint or reelect Employee to, any of such
positions, except in connection with the termination of his
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employment with Cause, or as a result of his death or
Disability; provided, however, that no change in title,
authorities or responsibilities customarily attributable
solely to the Company ceasing to be a publicly traded
corporation shall constitute Good Reason hereunder; (ii) the
relocation of the principal office of the Company or the
reassignment of Employee to a location more than thirty (30)
miles from Toledo, Ohio; (iii) the failure by the Company to
continue in effect any incentive, bonus or other compensation
plan in which Employee participates, unless an equitable
arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to the failure to continue
such plan, or the failure by the Company to continue
Employee's participation therein, or any action by the Company
which would directly or indirectly materially reduce his
participation therein or reward opportunities thereunder;
provided, however, that Employee continues to meet all
eligibility requirements thereof; (iv) the failure by the
Company to continue in effect any employee benefit plan
(including any medical, hospitalization, life insurance or
disability benefit plan in which Employee participates), or
any material fringe benefit or prerequisite enjoyed by him
unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to
the failure to continue such plan, or the failure by the
Company to continue Employee's participation therein, or any
action by the Company which would indirectly or indirectly
materially reduce his participation therein or reward
opportunities thereunder, or the failure by the Company to
provide him with the benefits to which he is entitled under
this Employment Agreement; provided, however, that Employee
continues to meet all eligibility requirements thereof; (v)
any other material breach by the Company of any provision of
this Employment Agreement; (vi) the failure of the Company to
obtain a satisfactory agreement from any successor or assign
of the Company to assume and agree to perform this Employment
Agreement, as contemplated in Section 23; (vii) any purported
termination of Employee's employment which is not effected
pursuant to a Notice of Termination satisfying the
requirements of this Employment Agreement; and for purposes of
this Employment Agreement, no such purported termination shall
be effective; or (viii) any Change of Control (as hereinafter
defined) of the Company.
12.04 Change of Control. "Change of Control" shall be
deemed to have occurred when: (i) securities of the Company
representing 50% or more of the combined voting power of the
Company's then outstanding voting securities are acquired
pursuant to a tender offer or an exchange offer by a person or
entity which is not a wholly-owned subsidiary of the Company
or any of its affiliates; (ii) a merger or consolidation is
consummated in which the Company is a constituent corporation
and which results in less than 50% of the outstanding voting
securities of the surviving or resulting entity being owned by
the then existing stockholders of the Company; (iii) a sale is
consummated by the Company of substantially all of
<PAGE> 7
the Company's assets to a person or entity which is not a
wholly-owned subsidiary of the Company or any of its
affiliates; or (iv) during any period of two consecutive
years, individuals who, at the beginning of such period,
constituted the Board cease, for any reason, to constitute at
least a majority thereof, unless the election or nomination
for election for each new director was approved by the vote of
at least two-thirds of the directors then still in office who
were directors at the beginning of the period.
12.05 Notice of Termination. "Notice of Termination"
shall mean a written notice which shall indicate the specific
termination provision in this Employment Agreement relied upon
and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
Employee's employment under the provision so indicated;
provided, however, no such purported termination shall be
effective without such Notice of Termination; provided
further, however, any purported termination by the Company or
by Employee shall be communicated by a Notice of Termination
to the other party hereto in accordance with Section 3 of this
Employment Agreement.
Section 13. Fees and Expenses. The Company shall pay all legal
fees and related expenses (including the costs of experts, evidence and counsel)
incurred by Employee as a result of a contest or dispute over Employee's
termination of employment if such contest or dispute is resolved in Employee's
favor.
Section 13. Notices. For the purposes of this Employment
Agreement, notices and all other communications provided for in the Employment
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or sent by certified mail, return receipt requested,
postage prepaid, or by expedited (overnight) courier with established national
reputation, shipping prepaid or billed to sender, in either case addressed to
the respective addresses last given by each party to the other (provided that
all notices to the Company shall be directed to the attention of the Board with
a copy to the Secretary of the Company) or to such other address as either party
may have furnished to the other in writing in accordance herewith. All notices
and communication shall be deemed to have been received on the date of delivery
thereof, on the third business day after the mailing thereof, or on the second
day after deposit thereof with an expedited courier service, except that notice
of change of address shall be effective only upon receipt.
Section 14. Life Insurance. The Company may, at any time after
the execution of this Employment Agreement, apply for and procure as owner and
for its own benefit, life insurance on Employee, in such amounts and in such
form or forms as the Company may determine. Employee shall, at the request of
the Company, submit to such medical examinations, supply such information, and
execute such documents as may be required by the insurance company or companies
to whom the Company has applied for such insurance. Employee hereby represents
that to his knowledge he is in excellent physical and mental condition and is
not under the influence of alcohol, drugs or similar substance. Currently, the
Company is paying the premium on a $650,000 life insurance policy insuring the
life of Employee and the Company shall continue to pay such premium until the
policy is paid in full.
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Section 15. Proprietary Information and Inventions. Employee
understands and acknowledges that:
15.01 Trust. Employee's employment creates a
relationship of confidence and trust between Employee and the
Company with respect to certain information applicable to the
business of the Company and its subsidiaries and affiliates
(collectively, the "Group") or applicable to the business of
any licensee, vendor or customer of any of the Group, which
may be made known to Employee by the Group or by any licensee,
vendor or customer of any of the Group or learned by Employee
during the Employment Period.
15.02 Proprietary Information. The Group possesses
and will continue to possess information that has been
created, discovered, or developed by, or otherwise become
known to, the Group (including, without limitation,
information created, discovered, developed or made known to by
Employee during the period of or arising out of his employment
by the Company) or in which property rights have been or may
be assigned or otherwise conveyed to the Group, which
information has commercial value in the business in which the
Group is engaged and is treated by the Group as confidential.
Except as otherwise herein provided, all such information is
hereinafter called "Proprietary Information", which term, as
used herein, shall also include, but shall not be limited to,
data, functional specifications, computer programs, know-how,
research, patents, inventions, discoveries, processes,
procedures, formulae, technology, improvements, developments,
designs, marketing plans, strategies, forecasts, new products,
unpublished financial statements, budgets, projections,
licenses, prices, costs, and customer, supplier and potential
acquisition candidates lists. Notwithstanding anything
contained in this Employment Agreement to the contrary, the
term "Proprietary Information" shall not include (i)
information which is in the public domain, (ii) information
which is published or otherwise becomes part of the public
domain through no fault of Employee, (iii) information which
Employee can demonstrate was in Employee's possession at the
time of disclosure and was not acquired by Employee directly
or indirectly from any of the Group on a confidential basis,
(iv) information which becomes available to Employee on a
non-confidential basis from a source other than any of the
Group and which source, to the best of Employee's knowledge,
did not acquire the information on a confidential basis or (v)
information required to be disclosed by any federal or state
law, rule or regulation or by any applicable judgment, order
or decree or any court or governmental body or agency having
jurisdiction in the premises.
All Proprietary Information shall be the sole property of the Group and their
respective assigns. Employee assigns to the Company any rights Employee may have
or acquire in such Proprietary Information. At all times, both during Employee's
employment by the Company and after its termination, Employee shall keep in
strictest confidence and trust all
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Proprietary Information, and Employee shall not use or disclose any Proprietary
Information without the written consent of the Group, except as may be necessary
in the ordinary course of performing Employee's duties as an employee of the
Company.
Section 16. Inventions. Any and all inventions, conceptions,
processes, discoveries, improvements, patent rights, letter patents, programs,
copyrights, trademarks, trade names and applications therefor, in the United
States and other countries, whether patentable or not, and any and all rights
and interest in, to and under the same, that are conceived, made, acquired, or
possessed by Employee, alone or with other employees, during the term of this
Employment Agreement, or within two (2) years thereafter shall become the
exclusive property of the Company and shall at all times and for all purposes be
regarded as acquired and held by Employee in a fiduciary capacity for the sole
benefit of the Company, and the Employee hereby assigns and agrees to assign the
same to the Company without further compensation. Employee agrees that, upon
request, he will promptly make all disclosures, execute all applications,
assignments or other instruments and perform all acts whatsoever necessary or
desired by the Company to vest and confirm in it, its successors, assigns and
nominees, fully and completely, all rights and interests created or contemplated
by this Section.
Section 17. Surrender of Documents. Employee shall, at the
request of the Company, promptly surrender to the Company or its nominee any
Proprietary Information or document, memorandum, record, letter or other paper
in his possession or under his control relating to the operation, business or
affairs of the Group.
Section 18. Prior Employment Agreements. Employee represents
and warrants that Employee's performance of all the terms of this Employment
Agreement and as an employee of the Company does not, and will not, breach any
agreement to keep in confidence proprietary information acquired by Employee in
confidence or in trust prior to Employee's employment by the Company. Employee
has not entered into, and shall not enter into, any agreement, either written or
oral, which is in conflict with this Employment Agreement or which would be
violated by Employee entering into, or carrying out his obligations under, this
Employment Agreement.
Section 19. Restrictive Covenant. Employee acknowledges and
recognizes Employee's possession of Proprietary Information and the highly
competitive nature of the business of the Group and, accordingly, agrees that in
consideration of the premises contained herein Employee will not, during the
period of Employee's employment by the Company and for a period of two (2) years
following the Termination Date, (i) directly or indirectly engage in any
Business Activities in the world, whether such engagement shall be as an
employer, officer, director, owner, employee, consultant, stockholder, partner
or other participant in any Business Activities, (ii) assist others in engaging
in any Business Activities in the manner described in the foregoing clause (i),
or (iii) induce employees of the Company to terminate their employment with the
Company or engage in any Business Activities in the world; provided, however,
that the ownership of the outstanding capital stock of a corporation whose
shares are traded on a national securities exchange or on the over-the-counter
market shall not be deemed engaging in any Business Activities.
Section 20. Remedies. Employee acknowledges and agrees that
the Company's remedy at law for a breach or a threatened breach of the
provisions herein would be inadequate, and in recognition of this fact, in the
event of a breach or threatened breach
<PAGE> 10
by Employee of any of the provisions of this Employment Agreement, it is agreed
that the Company shall be entitled to, equitable relief in the form of specific
performance, a temporary restraining order, a temporary or permanent injunction
or any other equitable remedy which may then be available, without posting bond
or other security. Employee acknowledges that the granting of a temporary
injunction, a temporary restraining order or other permanent injunction merely
prohibiting Employee from engaging in any Business Activities would not be an
adequate remedy upon breach or threatened breach of this Employment Agreement,
and consequently agrees upon any such breach or threatened breach to the
granting of injunctive relief prohibiting Employee from engaging in any
activities prohibited by this Employment Agreement. No remedy herein conferred
is intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to any other remedy given hereunder
now or hereinafter existing at law or in equity or by statute or otherwise.
Section 21. Successive Employment Notice. Within five (5)
business days after the Termination Date, Employee shall provide notice to the
Company of Employee's next intended employment. If such employment is not known
by Employee at such date, Employee shall notify the Company immediately upon
determination of such information. Employee shall continue to provide the
Company with notice of Employee's place and nature of employment and any change
in place or nature of employment during the period ending two (2) years after
the Termination Date. Failure of Employee to provide the Company with such
information in an accurate and timely fashion shall be deemed to be a breach of
this Employment Agreement and shall entitle the Company to all remedies provided
for in this Employment Agreement as a result of such breach.
Section 22. Successors. This Employment Agreement shall be
binding on the Company and any successor to any of its businesses or assets.
Without limiting the effect of the prior sentence, the Company shall use its
best efforts to require any successor or assign (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Employment Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or assignment had
taken place. As used in this Employment Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor or assign to its business
and/or assets as aforesaid which assumes and agrees to perform this Employment
Agreement or which is otherwise obligated under this Agreement by the first
sentence of this Section 22, by operation of law or otherwise.
Section 23. Binding Effect. This Employment Agreement shall
inure to the benefit of and be enforceable by Employee's personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Employee should die while any amounts would still be
payable to him hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Employment Agreement to Employee's estate.
Section 24. Modification and Waiver. No provision of this
Employment Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by Employee and
such officer as may be specifically designated by the Board. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this
<PAGE> 11
Employment Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.
Section 25. Headings. Headings used in this Agreement are for
convenience only and shall not be used to interpret or construe its provisions.
Section 26. Waiver of Breach. The waiver of either the Company
or Employee of a breach of any provision of this Employment Agreement shall not
operate or be construed as a waiver of any subsequent breach by either the
Company or Employee.
Section 27. Amendments. No amendments or variations of the
terms and conditions of this Employment Agreement shall be valid unless the same
is in writing and signed by all of the parties hereto.
Section 28. Severability. The invalidity or unenforceability
of any provision of this Employment Agreement, whether in whole or in part,
shall not in any way affect the validity and/or enforceability of any other
provision herein contained. Any invalid or unenforceable provision shall be
deemed severable to the extent of any such invalidity or unenforceability. It is
expressly understood and agreed that while the Company and Employee consider the
restrictions contained in this Employment Agreement reasonable for the purpose
of preserving for the Company the good will, other proprietary rights and
intangible business value of the Company if a final judicial determination is
made by a court having jurisdiction that the time or territory or any other
restriction contained in this Employment Agreement is an unreasonable or
otherwise unenforceable restriction against Employee, the provisions of such
clause shall not be rendered void but shall be deemed amended to apply as to
maximum time and territory and to such other extent as such court may judicially
determine or indicate to be reasonable.
Section 29. Governing Law. This Employment Agreement shall be
construed and enforced pursuant to the laws of the State of Ohio.
Section 30. Arbitration. Any controversy or claim arising out
of or relating to this Employment Agreement or any transactions provided for
herein, or the breach thereof, other than a claim for injunctive relief shall be
settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (the "Rules") in effect at the time demand
for arbitration is made by any party. The evidentiary and procedural rules in
such proceedings shall be kept to the minimum level of formality that is
consistent with the Rules. One arbitrator shall be named by the Company, a
second shall be named by Employee and the third arbitrator shall be named by the
two arbitrators so chosen. In the event that the third arbitrator is not agreed
upon, he or she shall be named by the American Arbitration Association.
Arbitration shall occur in Toledo, Ohio or such other location agreed to by the
Company and Employee. The award made by all or a majority of the panel of
arbitrators shall be final and binding, and judgment may be entered in any court
of law having competent jurisdiction. The award is subject to confirmation,
modification, correction, or vacation only as explicitly provided in Title 9 of
the United States Code. The prevailing party shall be entitled to an award of
pre- and post-award interest as well as reasonable attorneys' fees incurred in
connection with the arbitration and any judicial proceedings related thereto.
Section 31. Counterparts. This Employment Agreement may be
executed in more than one (1) counterpart and each counterpart shall be
considered an original.
<PAGE> 12
Section 32. Exhibits. The Exhibits attached hereto are
incorporated herein by reference and are an integral part of this Employment
Agreement.
Section 33. Sections. Unless the context requires a different
meaning, all references to "Sections" in this Agreement shall mean the Section
of this Agreement.
Section 34. Publicity. Press releases and other publicity
materials relating to the transactions contemplated by this Employment Agreement
shall be released by the parties hereto only after review and with the consent
of the other party; provided, however, that if legal counsel for the Company
advises the Company that disclosure of this Employment Agreement is required
under applicable federal or state securities laws, then the Company shall be
permitted to make such disclosure in the form recommended by such legal counsel
without the prior consent of Employee.
IN WITNESS WHEREOF, this Employment Agreement has been duly
executed by the Company and Employee in four (4) counterparts as of the date
first above written.
N-VIRO INTERNATIONAL CORPORATION
By /s/ Terry J. Logan
------------------------
/s/ J. Patrick Nicholson
------------------------
J. Patrick Nicholson
<PAGE> 13
EXHIBIT 12 TO EMPLOYMENT AGREEMENT
----------------------------------
CONSULTING AGREEMENT
--------------------
This Consulting Agreement (the "Consulting Agreement") is made
and entered into as of the ____ day of ___________, _____ by and between N-Viro
International Corporation, a Delaware corporation (the "Company"), and J.
Patrick Nicholson, an individual ("Consultant").
N-Viro
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, this Consulting Agreement is being entered into
pursuant to Section 35 of the Employment Agreement made and entered into as of
the ____ day of ____________, _______, by and between the Company and Consultant
(the "Employment Agreement");
WHEREAS, the Company desires to engage Consultant as a
consultant to the Company upon the terms and subject to the conditions set forth
in this Consulting Agreement; and,
WHEREAS, Consultant desires to be hired as a consultant to the
Company upon the terms and subject to the conditions set forth in this
Consulting Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual
promises, covenants and conditions herein contained and for other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto intending to be legally bound hereby agree as
follows:
Section 1. Definitions. Unless otherwise defined in this
Consulting Agreement, the capitalized terms and words used in this Consulting
Agreement shall have the meanings ascribed thereto in the Employment Agreement.
Section 2. Engagement. The Company engages Consultant, and
Consultant hereby accepts engagement with the Company, as a consultant, all upon
the terms and subject to the conditions set forth in this Consulting Agreement.
Section 3. Consulting Services. Consultant is engaged as a
consultant to the Board of Directors of the Company (the "Board") on all matters
relating to the general business and affairs of the Company. Consultant shall
report directly to the Chief Executive Officer of the Company. Consultant shall
devote such of his business time, best efforts and attention to promote and
advance the business of the Company and its subsidiaries and affiliates as
reasonably requested, from time to time, by the Chief Executive Officer;
provided, however, that such time, efforts and attention shall be done during
normal business hours and shall not unreasonably interfere with Consultant's
other business and/or personal activities; provided further, however, Consultant
shall devote a minimum of 120 business days as a Consultant to the Company
during each calendar year of the Consulting Period (hereinafter defined) with
such minimum business days prorated for any partial calendar year during the
Consulting Period.
<PAGE> 14
Section 4. Term of Engagement. The term of engagement of
Consultant by the Company pursuant to this Consulting Agreement shall be for the
period (the "Consulting Period") commencing on (the "Consulting Commencement
Date") and ending on July 20, 2015 or such earlier date that Consultant's
engagement is terminated in accordance with the provisions of this Consulting
Agreement (the "Consulting Termination Date").
Section 5. Fee. During the Consulting Period, subject to all
the terms and conditions of this Consulting Agreement and as compensation for
all consulting services to be rendered by Consultant to the Company under this
Consulting Agreement, the Company shall pay to or provide Consultant with the
following:
5.01 Base Fee. The Company shall pay to Consultant a
base fee (the "Base Fee") at the rate of One Thousand Dollars
($1,000) per day for each full or partial day that Consultant
provides consulting service to the Company under this
Consulting Agreement, which fee shall be payable at such
intervals (at least monthly) as salaries are paid generally to
executive officers of the Company.
5.02 Other Benefits. The Company shall provide
Consultant with the other benefits specified on Exhibit 5.02
attached hereto.
Section 6. Expenses. The Company shall reimburse Consultant
for all reasonable, ordinary nd necessary expenses (including, but not limited
to, automobile and other business travel and customer entertainment expenses)
incurred by him in connection with his engagement hereunder; provided, however,
Consultant shall render to the Company a complete and accurate accounting of all
such expenses in accordance with the substantiation requirements of Section 274
of the Internal Revenue Code of 1986, as amended (the "Code"), as a condition
precedent to such reimbursement.
Section 7. Notices. For the purposes of this Consulting
Agreement, notices and all other communications provided for in the Consulting
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or sent by certified mail, return receipt requested,
postage prepaid, or by expedited (overnight) courier with established national
reputation, shipping prepaid or billed to sender, in either case addressed to
the respective addresses last given by each party to the other (provided that
all notices to the Company shall be directed to the attention of the Board with
a copy to the Secretary of the Company) or to such other address as either party
may have furnished to the other in writing in accordance herewith. All notices
and communication shall be deemed to have been received on the date of delivery
thereof, on the third business day after the mailing thereof, or on the second
day after deposit thereof with an expedited courier service, except that notice
of change of address shall be effective only upon receipt.
Section 8. Life Insurance. The Company may, at any time after
the execution of this Consulting Agreement, apply for and procure as owner and
for its own benefit, life insurance on Consultant, in such amounts and in such
form or forms as the Company may determine. Consultant shall, at the request of
the Company, submit to such medical examinations, supply such information, and
execute such documents as may be required by the insurance company or companies
to whom the Company has applied for such insurance. Consultant hereby represents
that to his knowledge he is in excellent
<PAGE> 15
physical and mental condition and is not under the influence of alcohol, drugs
or similar substance.
Section 9. Proprietary Information and Inventions. Consultant
understands and acknowledges that:
9.01 Trust. Consultant's engagement creates a
relationship of confidence and trust between Consultant and
the Company with respect to certain information applicable to
the business of the Company and its subsidiaries and
affiliates (collectively, the "Group") or applicable to the
business of any licensee, vendor or customer of any of the
Group, which may be made known to Consultant by the Group or
by any licensee, vendor or customer of any of the Group or
learned by Consultant during the Consulting Period.
9.02 Proprietary Information. The Group possesses and
will continue to possess information that has been created,
discovered, or developed by, or otherwise become known to, the
Group (including, without limitation, information created,
discovered, developed or made known to by Consultant during
the period of or arising out of his employment by the Company)
or in which property rights have been or may be assigned or
otherwise conveyed to the Group, which information has
commercial value in the business in which the Group is engaged
and is treated by the Group as confidential. Except as
otherwise herein provided, all such information is hereinafter
called "Proprietary Information", which term, as used herein,
shall also include, but shall not be limited to, data,
functional specifications, computer programs, know-how,
research, patents, inventions, discoveries, processes,
procedures, formulae, technology, improvements, developments,
designs, marketing plans, strategies, forecasts, new products,
unpublished financial statements, budgets, projections,
licenses, prices, costs, and customer, supplier and potential
acquisition candidates lists. Notwithstanding anything
contained in this Consulting Agreement to the contrary, the
term "Proprietary Information" shall not include (i)
information which is in the public domain, (ii) information
which is published or otherwise becomes part of the public
domain through no fault of Consultant, (iii) information which
Consultant can demonstrate was in Consultant's possession at
the time of disclosure and was not acquired by Consultant
directly or indirectly from any of the Group on a confidential
basis, (iv) information which becomes available to Consultant
on a non-confidential basis from a source other than any of
the Group and which source, to the best of Consultant's
knowledge, did not acquire the information on a confidential
basis or (v) information required to be disclosed by any
federal or state law, rule or regulation or by any applicable
judgment, order or decree or any court or governmental body or
agency having jurisdiction in the premises.
All Proprietary Information shall be the sole property of the Group and their
respective assigns. Consultant assigns to the Company any rights Consultant may
have or acquire in
<PAGE> 16
such Proprietary Information. At all times, both during Consultant's engagement
by the Company and after its termination, Consultant shall keep in strictest
confidence and trust all Proprietary Information, and Consultant shall not use
or disclose any Proprietary Information without the written consent of the
Group, except as may be necessary in the ordinary course of performing
Consultant's duties as a consultant to the Company.
Section 10. Inventions. Any and all inventions, conceptions,
processes, discoveries, improvements, patent rights, letter patents, programs,
copyrights, trademarks, trade names and applications therefor, in the United
States and other countries, whether patentable or not, and any and all rights
and interest in, to and under the same, that are conceived, made, acquired, or
possessed by Consultant, alone or with employees of the Company, during the
Consulting Period or within two (2) years thereafter shall become the exclusive
property of the Company and shall at all times and for all purposes be regarded
as acquired and held by Consultant in a fiduciary capacity for the sole benefit
of the Company, and the Consultant hereby assigns and agrees to assign the same
to the Company without further compensation. Consultant agrees that, upon
request, he will promptly make all disclosures, execute all applications,
assignments or other instruments and perform all acts whatsoever necessary or
desired by the Company to vest and confirm in it, its successors, assigns and
nominees, fully and completely, all rights and interests created or contemplated
by this Section.
Section 11. Surrender of Documents. Consultant shall, at the
request of the Company, promptly surrender to the Company or its nominee any
Proprietary Information or document, memorandum, record, letter or other paper
in his possession or under his control relating to the operation, business or
affairs of the Group.
Section 12. Prior Employment Agreements. Consultant represents
and warrants that Consultant's performance of all the terms of this Consulting
Agreement and as a consultant to the Company does not, and will not, breach any
agreement to keep in confidence proprietary information acquired by Consultant
in confidence or in trust prior to Consultant's employment by the Company.
Consultant has not entered into, and shall not enter into, any agreement, either
written or oral, which is in conflict with this Consulting Agreement or which
would be violated by Consultant entering into, or carrying out his obligations
under, this Consulting Agreement.
Section 13. Restrictive Covenant. Consultant acknowledges and
recognizes Consultant's possession of Proprietary Information and the highly
competitive nature of the business of the Group and, accordingly, agrees that in
consideration of the premises contained herein Consultant will not, during the
period of Consultant's employment by the Company and for a period of two (2)
years following the Consulting Termination Date, (i) directly or indirectly
engage in any Business Activities in the world, whether such engagement shall be
as an employee, officer, director, owner, Consultant, consultant, stockholder,
partner or other participant in any Business Activities, (ii) assist others in
engaging in any Business Activities in the manner described in the foregoing
clause (i), or (iii) induce employees of the Company to terminate their
employment with the Company or engage in any Business Activities in the world;
provided, however, that the ownership of the outstanding capital stock of a
corporation whose shares are traded on a national securities exchange or on the
over-the-counter market shall not be deemed engaging in any Business Activities.
<PAGE> 17
Section 14. Remedies. Consultant acknowledges and agrees that
the Company's remedy at law for a breach or a threatened breach of the
provisions herein would be inadequate, and in recognition of this fact, in the
event of a breach or threatened breach by Consultant of any of the provisions of
this Consulting Agreement, it is agreed that the Company shall be entitled to
equitable relief in the form of specific performance, a temporary restraining
order, a temporary or permanent injunction or any other equitable remedy which
may then be available, without posting bond or other security. Consultant
acknowledges that the granting of a temporary injunction, a temporary
restraining order or other permanent injunction merely prohibiting Consultant
from engaging in any Business Activities would not be an adequate remedy upon
breach or threatened breach of this Consulting Agreement, and consequently
agrees upon any such breach or threatened breach to the granting of injunctive
relief prohibiting Consultant from engaging in any activities prohibited by this
Consulting Agreement. No remedy herein conferred is intended to be exclusive of
any other remedy, and each and every such remedy shall be cumulative and shall
be in addition to any other remedy given hereunder now or hereinafter existing
at law or in equity or by statute or otherwise.
Section 15. Successive Employment Notice. Within five (5)
business days after the Consulting Termination Date, Consultant shall provide
notice to the Company of Consultant's next intended employment. If such
employment is not known by Consultant at such date, Consultant shall notify the
Company immediately upon determination of such information. Consultant shall
continue to provide the Company with notice of Consultant's place and nature of
employment and any change in place or nature of employment during the period
ending two (2) years after the Consulting Termination Date. Failure of
Consultant to provide the Company with such information in an accurate and
timely fashion shall be deemed to be a breach of this Consulting Agreement and
shall entitle the Company to all remedies provided for in this Consulting
Agreement as a result of such breach.
Section 16. Successors. This Consulting Agreement shall be
binding on the Company and any successor to any of its businesses or assets.
Without limiting the effect of the prior sentence, the Company shall use its
best efforts to require any successor or assign (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Consulting Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or assignment had
taken place. As used in this Consulting Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor or assign to its business
and/or assets as aforesaid which assumes and agrees to perform this Consulting
Agreement or which is otherwise obligated under this Agreement by the first
sentence of this Section 16, by operation of law or otherwise.
Section 17. Termination. This Consulting Agreement may be
terminated by (i) the Company with Cause (as said term is defined in the
Employment Agreement by substituting the words "Consulting Agreement" for
"Employment Agreement"), (ii) the Company by reason of the death or Disability
of Consultant or (iii) Consultant by giving sixty (60) days prior written notice
to the Company of his intent to terminate this Consulting Agreement, which
notice sets forth the Consulting Termination Date.
<PAGE> 18
Section 18. Binding Effect. This Consulting Agreement shall
inure to the benefit of and be enforceable by Consultant's personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Consultant should die while any amounts would still be
payable to him hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Consulting Agreement to Consultant's estate or other beneficiary designated in
writing by Consultant.
Section 19. Modification and Waiver. No provision of this
Consulting Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by Consultant and
such officer as may be specifically designated by the Board. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Consulting Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
Section 20. Headings. Headings used in this Agreement are for
convenience only and shall not be used to interpret or construe its provisions.
Section 21. Waiver of Breach. The waiver of either the Company
or Consultant of a breach of any provision of this Consulting Agreement shall
not operate or be construed as a waiver of any subsequent breach by either the
Company or Consultant.
Section 22. Amendments. No amendments or variations of the
terms and conditions of this Consulting Agreement shall be valid unless the same
is in writing and signed by all of the parties hereto.
Section 23. Severability. The invalidity or unenforceability
of any provision of this Consulting Agreement, whether in whole or in part,
shall not in any way affect the validity and/or enforceability of any other
provision herein contained. Any invalid or unenforceable provision shall be
deemed severable to the extent of any such invalidity or unenforceability. It is
expressly understood and agreed that while the Company and Consultant consider
the restrictions contained in this Consulting Agreement reasonable for the
purpose of preserving for the Company the good will, other proprietary rights
and intangible business value of the Company if a final judicial determination
is made by a court having jurisdiction that the time or territory or any other
restriction contained in this Consulting Agreement is an unreasonable or
otherwise unenforceable restriction against Consultant, the provisions of such
clause shall not be rendered void but shall be deemed amended to apply as to
maximum time and territory and to such other extent as such court may judicially
determine or indicate to be reasonable.
Section 24. Governing Law. This Consulting Agreement shall be
construed and enforced pursuant to the laws of the State of Ohio.
Section 25. Arbitration. Any controversy or claim arising out
of or relating to this Consulting Agreement or any transactions provided for
herein, or the breach thereof, other than a claim for injunctive relief shall be
settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (the "Rules") in effect at the time demand
for arbitration is made by any party. The evidentiary and procedural rules in
such proceedings shall be kept to the minimum level of formality that is
consistent with the Rules. One arbitrator shall be named by the Company, a
second shall be named by Consultant and the third arbitrator shall be named by
the two arbitrators so chosen. In the event that the third arbitrator is not
agreed upon, he or she shall be named
<PAGE> 19
by the American Arbitration Association. Arbitration shall occur in Toledo, Ohio
or such other location agreed to by the Company and Consultant. The award made
by all or a majority of the panel of arbitrators shall be final and binding, and
judgment may be entered in any court of law having competent jurisdiction. The
award is subject to confirmation, modification, correction, or vacation only as
explicitly provided in Title 9 of the United States Code. The prevailing party
shall be entitled to an award of pre- and post-award interest as well as
reasonable attorneys' fees incurred in connection with the arbitration and any
judicial proceedings related thereto.
Section 26. Counterparts. This Consulting Agreement may be
executed in more than one (1) counterpart and each counterpart shall be
considered an original.
Section 27. Exhibits. The Exhibits attached hereto are
incorporated herein by reference and are an integral part of this Consulting
Agreement.
Section 28. Sections. Unless the context requires a different
meaning, all references to "Sections" in this Agreement shall mean the Section
of this Agreement.
Section 29. Publicity. Press releases and other publicity
materials relating to the transactions contemplated by this Consulting Agreement
shall be released by the parties hereto only after review and with the consent
of the other party; provided, however, that if legal counsel for the Company
advises the Company that disclosure of this Consulting Agreement is required
under applicable federal or state securities laws, then the Company shall be
permitted to make such disclosure in the form recommended by such legal counsel
without the prior consent of Consultant.
Section 30. Independent Contractor. Consultant shall be deemed
to be an independent contractor with respect to the Company and not an employee
and Consultant shall be responsible for all federal, state and local taxes as a
result of the receipt of the Base Fee paid to Consultant by the Company,
including, but not limited to, unemployment , income and withholding taxes.
Section 31. Change in Control. This Consulting Agreement may
be terminated by Consultant at anytime after a Change of Control by delivering
to the Company a written notice that shall indicate the effective date of such
termination with such notice communicated to the Company in accordance with
Section 13 of the Employment Agreement. In the event of the termination of this
Consulting Agreement by Consultant pursuant to this Section, the Company shall
(i) pay to Consultant his Base Fee through July 15, 2015, and if this Consulting
Agreement had not been terminated, with the Base fee being calculated at an
annual rate equal to the Base Fee payable to Consultant during the calendar year
immediately preceding the year of termination, and (ii) provide Consultant with
the other benefits specified in Section 5.02.
<PAGE> 20
IN WITNESS WHEREOF, this Consulting Agreement has been duly
executed by the Company and Consultant in four (4) counterparts as of the date
first above written.
N-VIRO INTERNATIONAL CORPORATION
By
------------------------------
Terry J. Logan, President
---------------------------------
J. Patrick Nicholson
<PAGE> 21
EXHIBIT 5.02 TO CONSULTING AGREEMENT
OTHER BENEFITS
--------------
The benefits referenced in Section 5.02 of the Consulting
Agreement are as set forth below:
1. Medical. All life, health and other medical benefits
provided to Consultant and his spouse while Consultant was an employee of the
Company for the joint lives of Consultant and his spouse. This coverage shall
include Medicare coverage after the age of 65.
2. Expenses. Expense reimbursement for those types of expenses
reimbursed to Consultant while he was an employee of the Company including the
providing of a car to Consultant and the payment of sixty percent (60%) of all
dues and special assessments at Inverness Club.
3. Office. An office at the Company with part-time secretarial
and administrative assistance from an administrative assistant acceptable to
Consultant.
4. Life Insurance. The payment by the Company of all premiums
on the $650,000 life insurance policy insuring the life of Consultant until such
life insurance policy becomes a paid-up policy.
