EMPLOYMENT AND CONSULTATION AGREEMENT
EMPLOYMENT AND CONSULTATION AGREEMENT made as of the 1st day of June,
2000, by and between BALTEK CORPORATION, a Delaware corporation with offices at
10 Fairway Court, Northvale, New Jersey 07647 (the "Company"), and Antonio Diaz
("Diaz"), residing at 15 Pennsylvania Avenue, Valley Cottage, New York 10989.
W I T N E S S E T H:
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WHEREAS, Diaz has been employed by the Company as Vice President -
Latin American Operations; and
WHEREAS, the Company and Diaz desire Diaz to continue his employment
with the Company as Vice President - Latin American Operations until December
31, 2001 and thereafter to act as a consultant to the Company, for the period
from January 1, 2002 to December 31, 2003, upon the terms and subject to the
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, Diaz and the Company agree as follows:
1. Employment. The Company agrees to continue to employ Diaz as Vice
President - Latin American Operations for the period from June 1, 2000 to
December 31, 2001 (the " Employment Period") and thereafter to retain Diaz as a
consultant for the period from January 1, 2002 to December 31, 2003 (the
"Consultation Period"), and Diaz agrees to continue in the employ of the Company
as Vice President - Latin American Operations during the Employment Period, and
thereafter to act as a consultant to the Company during the Consultation Period,
all upon and subject to the terms and conditions set forth in this Agreement. By
mutual written agreement of Diaz and the Company, the Consultation Period may be
extended beyond December 31, 2003.
2. Term. This Agreement shall commence on June 1, 2000 and shall
terminate on December 31, 2003, unless this Agreement is extended beyond
December 31, 2003 by mutual written agreement of Diaz and the Company (the
period from June 1, 2000 until the date this Agreement terminates being
hereinafter referred to as the "Term" of this Agreement).
3. Duties.
(a) During the Employment Period, Diaz shall be employed as Vice
President - Latin American Operations, of the Company, shall utilize his best
efforts to enhance the business of the Company and, subject to the supervision
of the Company's President and Chief Executive Officer (the "CEO") and the
Company's Board of Directors (the "Board"), shall be responsible for the general
and supervisory duties normally and customarily attendant to such position at
the Company and its divisions and subsidiaries. During the Employment Period,
unless the Board shall otherwise consent in writing, Diaz will, during the
regular business hours of the Company, devote his full time, energies, labor
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and skills to the business of the Company and to the duties and responsibilities
specified in this subparagraph (a) of this paragraph 3.
(b) During the Consultation Period, Diaz will consult with the Board,
the CEO and the other officers of the Company on a regular basis with respect to
the Latin American Operations of the Company, will render such other services
relating to the Latin American Operation of the Company as may from time to time
be requested of him by the Board or the CEO and will devote such time to such
consultation and other services as may be necessary. The consultation and other
services to be performed by Diaz during the Consultation Period may generally be
performed by Diaz from his residence in New York or Florida. Diaz may, however,
from time to time during the Consultation Period, be required by the Board or
the CEO to travel to the offices of the Company, or to Latin America or
elsewhere, in connection with the business of the Company.
4. Compensation. (a) In full consideration for all services to be per-
formed by Diaz for the Company and pursuant to this Agreement during the
Employment Period, the Company shall pay to Diaz, and Diaz agrees to accept, an
annual salary of two hundred fifteen thousand ($215,000) dollars (or such higher
amount as may be approved from time to time by the Board), payable in monthly
installments in accordance with the Company's customary payroll practices. The
Company shall annually review Diaz's salary to determine whether, and to what
extent, if any, such salary shall be adjusted. Any increase in Diaz's salary
shall be in the sole discretion of the Company. In addition to Diaz's salary,
the Company, as a special bonus to Diaz (the "Special Bonus") shall, as of
December 31, 2001, cancel the present indebtedness of Diaz to the Company in the
amount of twenty-five thousand ($25,000) dollars (the "Diaz Indebtedness").
(b) In full consideration for all services to be performed by Diaz for
the Company and pursuant to this Agreement during the Consultation Period, the
Company shall pay to Diaz, during the Consultation Period, and Diaz agrees to
accept, a consultation fee of nine thousand five hundred ($9,500) dollars per
month. During the Consultation Period Diaz will be an independent contractor and
not an employee of the Company, and will be solely responsible for the payment
of all income, FICA and other taxes payable with respect to such consultation
fee and the filing of all required tax returns.
(c) In addition to the salary and consultation fee referred to in
subparagraphs (a) and (b) of this paragraph 4, the Company shall reimburse Diaz
for all expenses reasonably incurred by Diaz in connection with the performance
of his duties under this Agreement and the business of the Company, in
accordance with the Company's usual policies and practices for expense
reimbursement. In the event Diaz is required to travel on business of the
Company during the Consultation Period, as provided in subparagraph (b) of
paragraph 3, Diaz may travel by air in business class and may stay in first
class hotels during such travel period.
5. Vacation. Diaz shall be entitled to four (4) weeks of paid vacation
during each twelve (12) months of the Employment Period, to be taken at times
mutually agreeable to Diaz and the Company. Any vacation not taken during the
twelve (12) months in which such vacation is earned may not be taken in any
subsequent period, but Diaz shall be entitled to be paid for up to two (2) weeks
of any earned vacation which is not taken during any twelve (12) month period.
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In the event Diaz's employment is terminated for any reason prior to the end of
the Employment Period, Diaz shall be paid for accrued vacation time, if any,
which has not been taken, calculated on a pro-rata basis, but in no event shall
such amount exceed more than four (4) weeks' salary.
6. Benefits. Throughout the Employment Period, Diaz shall be eligible
to participate in any pension, profit-sharing, stock option or similar plan or
program of the Company now existing or hereafter established and maintained for
the benefit of the Company's employees or executives generally, to the extent
that Diaz is eligible under the general provisions thereof. Diaz shall also be
entitled to participate during the Employment Period in any group insurance,
hospitalization, medical, health, accident, disability or similar plan or
program of the Company now existing or hereafter established for the benefit of
the Company's employees or executives generally, to the extent that Diaz is
eligible under the general provisions thereof. During the Consultation Period,
Diaz, as well as his wife, will continue to be covered, at the expense of the
Company, under any hospitalization or medical plan maintained by the Company for
its employees, to such extent and for such period of time as may be permitted
under the Consolidated Omnibus Budget Reconciliation Act of 1985 and the
regulations issued thereunder, as in effect at such time.
7. Company Car. To permit Diaz to perform his duties more effectively,
the Company shall, during the Term of this Agreement [and if this Agreement is
terminated under any of the circumstances described in subparagraph (f) of
paragraph 8 of this Agreement, until the end of the Consultation Period] lease
a suitable automobile for the use of Diaz, and reimburse Diaz for all expenses
of operating and maintaining such automobile, including, without limitation,
comprehensive and liability insurance, in accordance with the Company's policies
and practices for executive company cars.
8. Termination of Agreement.
(a) Notwithstanding any provisions to the contrary contained in this
Agreement, this Agreement may be terminated by the Company upon Diaz's death or
disability (as defined below) or for Cause (as defined below), and Diaz may
terminate this Agree ment for Good Reason (as defined below) upon sixty (60)
days' prior written notice to the Company.
(b) For purposes of this Agreement, "disability" shall mean that, for a
period of one hundred twenty (120) consecutive days or more, or for one hundred
eighty (180) days or more (even though not consecutive) within any three hundred
sixty (360) day period, Diaz is mentally or physically unable to perform the
essential duties of his position as Vice President - Latin America Operations
(notwithstanding reasonable accommodation by the Company as required by law), or
as a consultant to the Company, as the case may be, as evidenced by the written
certification of a qualified physician agreed to by the Company and Diaz or, in
the absence of such agreement, by a qualified physician selected by the
agreement of a qualified physician selected by the Company and a qualified
physician selected by Diaz.
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(c) For purposes of this Agreement, "Cause" shall mean: (i) the
conviction of Diaz for a felony by a federal or state court of competent
jurisdiction; or (ii) Diaz's failure either (A) to follow a direct substantive
written order, within the reasonable scope of Diaz's duties, from the CEO,
pursuant to authority from the Board, or (B) to adhere to any written policy or
guideline established by the Company from time to time, if such failure to
follow such order or adhere to such policy or guideline is not cured within
thirty (30) days after written notice to Diaz specifying such failure.
(d) For purposes of this Agreement, "Good Reason" shall mean any of the
following: (i) the assignment by the Company to Diaz, during the Employment
Period, of substantial duties significantly below the level of Diaz's position
as Vice President - Latin American Operations of the Company, as set forth in
subparagraph (a) of paragraph 3 of this Agreement; or (ii) the failure of the
Company to assign to Diaz, during the Employment Period, substantial duties and
responsibilities consistent with such position; or (iii) any reduction by the
Company during the Employment Period of Diaz's salary or benefits as set forth
in subparagraph (a) of paragraphs 4 or paragraph 6 of this Agreement (it being
understood that a reduction of benefits applicable to all executives of the
Company (including Diaz) shall not be deemed a reduction of Diaz's benefits for
purposes of this definition.
(e) In the event that Diaz's employment under this Agreement is termi-
nated during the Employment Period as a result of death, disability or for Cause
by the Company, or without Good Reason by Diaz, then the Company shall have no
further obligation or liability to Diaz under this Agreement, such that all
salary and benefits provided for in this Agreement (including, without
limitation, the Special Bonus) shall terminate simultaneously with such
termination, except for salary or fees and benefits earned and accrued through
the date of such termination.
(f) In the event that during the Employment Period the Company termi-
nates the employment of Diaz pursuant to this Agreement other than for Cause,
death or disability, or Diaz terminates his employment with the Company during
the Employment Period with Good Reason (i) the Company shall pay to Diaz, in
each month following such termination, until the end of the Employment Period,
an amount equal to one-twelfth of Diaz's annual salary in effect on the date of
termination, (ii) the Company shall cancel the Diaz Indebtedness, and (iii) if
such termination shall occur ninety (90) days or less prior to the end of a
fiscal year of the Company, the Company shall, in accordance with any exe cutive
compensation or incentive plan of the Company in effect at the time of such
termination, pay to Diaz any bonus and make on behalf of Diaz any profit sharing
plan contribution which the Company would otherwise have paid or made if Diaz
had remained in the employ of the Company through the end of such fiscal year.
(g) In the event that during the Consultation Period Diaz is terminated
as a consultant to the Company as a result of death, disability or for Cause by
the Company, or Diaz fails to act as a consultant to the Company at any time
during the Consultation Period for any other reason, then the Company shall have
no further obligation or liability to Diaz under this Agreement, such that all
fees and benefits provided for in this Agreement shall terminate simultaneously
with such termination or failure to act, except for fees and benefits earned and
accrued through the date of such termination or failure to act.
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(h) In the event that during the Consultation Period Diaz is terminated
as a consultant to the Company for any reason other than death, disability or
for Cause by the Company (i) the Company shall pay to Diaz, in each month
following such termination, until the end of the Consultation Period, the amount
of the monthly fee specified in subparagraph (b) of paragraph 4.
9. Covenants of Diaz.
(a) Diaz acknowledges that his employment by the Company has brought
him and will throughout the Term of this Agreement continue to bring him into
close contact with many confidential affairs of the Company, including
information about costs, profits, markets, sales, key personnel, pricing
policies, operational methods and other business affairs, methods and
information, including plans for future developments, not readily available or
generally known to the public. Diaz further acknowledges that the services to be
performed by him under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character, and that the Company currently
competes or intends to compete with other organizations that are located in all
of the states of the United States. In recognition of the foregoing, Diaz
covenants and agrees that:
(i) he will not during the Term of this Agreement or
following the expiration of this Agreement or the termination
of this Agreement for any reason (the date of such expiration
or termination being hereinafter referred to as the
"Termination Date") divulge, disclose, publish or use (other
than for the benefit of the Company) any matter relating to
the Company which is not publicly available and generally
known and will not intentionally disclose such matter to
anyone (other than to executives or employees of the Company
who are required to have knowledge of such matter), except
that Diaz may make such disclosure as may be required by law,
provided the Company is notified by Diaz in writing of such
requirement not less than ten (10) business days prior to the
date such disclosure is so required and the Company has not
obtained an order or ruling to prevent such disclosure;
(ii) he will deliver promptly to the Company at the
end of the Term of this Agreement, or at any other time the
Company may so request, all memoranda, notes, records, reports
and other documents (and all copies thereof) relating to the
business of the Company which he obtained while employed by or
otherwise serving or acting on behalf of, the Company, as a
consultant or otherwise, and which he may then possess or have
under his control;
(iii) during the Term of this Agreement and any
additional period during which Diaz may be employed or
retained by the Company as a consultant or otherwise (whether
or not such employment or retention shall be pursuant to a
written agreement), he will not, unless the Board shall
otherwise consent in writing, alone or together with any other
person, firm, partnership, corporation or other entity
whatsoever (except a subsidiary or affiliate of the Company),
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directly or indirectly, whether as an officer, director,
stockholder, partner, proprietor, associate, employee,
representative, public relations or advertising
representative, management consultant or otherwise, engage in,
or have any material financial or monetary interest in, or
have any financial or monetary association with, any other
person, corporation, firm, partnership or other entity engaged
in, the composite materials or seafood business or any other
business which is competitive with any business conducted or
contemplated by the Company; and
(iv) for a period of twenty-four (24) months
following the Termination Date, he will not:
(A) solicit, or attempt to solicit, any
person or entity who or which is a customer of the
Company (as of the Termination Date or at any time
prior thereto) as a customer for any person or entity
engaged in the composite materials or seafood
business, or any other business which is competitive
with any business conducted or contemplated by the
Company; or
(B) otherwise disrupt or interfere with, or
attempt to disrupt or interfere with, the Company's
relations with any actual or potential customer or
supplier or any other relationship of the Company.
(b) Diaz recognizes that the territorial and time limitations in this
paragraph 9 are reasonable and properly required for the adequate protection of
the business of the Company, and that in the event that any such territorial or
time limitation is deemed to be unreasonable by a court of competent
jurisdiction, Diaz agrees to a reduction of said such territorial or time
limitation, as the case may be, to such area or period as such court deems
reasonable. In the event that Diaz shall be in violation of any of the covenants
contained in this paragraph 9, the time limitation thereof shall be extended
for a period of time equal to the period of time during which such breach or
breaches should exist.
(c) Diaz further agrees that the remedy at law for any breach or
threatened breach of any of the covenants contained in this paragraph 9 will be
inadequate and that the Company, in addition to such other remedies as may be
available to it, at law or in equity, shall be entitled to injunctive relief
without bond or other security. This paragraph 9 constitutes independent and
severable covenants and, if any or all of the provisions of this paragraph 9 is
or are held to be invalid or unenforceable for any reason, such invalidity or
unenforceability shall not in any way invalidate or affect the remainder of this
paragraph 9 or the remainder of this Agreement, as the case may be, which shall
remain in full force and effect.
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10. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of New Jersey applicable to contracts
executed in and to be performed solely within such state.
11. Notices. All notices required or permitted to be given by either
party pursuant to this Agreement, including notice of change of address, shall
be in writing and delivered by hand, or mailed, postage prepaid, certified or
registered mail, return receipt requested, to the other party as follows:
If to the Company: Baltek Corporation
10 Fairway Court
Northvale, New Jersey 07047
Attention:
President and Chief
Executive Officer
If to Executive: Antonio Diaz
15 Pennsylvania Avenue
Valley Cottage, New York 10989
12. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior oral or written agreements and understandings relating to the
employment of Diaz by the Company or the retention of Diaz as a consultant to
the Company. There are no oral promises, representations, understandings,
interpretations or terms of any kind as conditions or inducements to the
execution this Agreement by Diaz or in effect between the parties. This
Agreement may not be amended, and no provision hereof shall be waived, except by
a writing signed by the Company and Diaz (or in the case of a waiver of a provi-
sion of this Agreement, by the party waiving compliance therewith), which states
that it is intended, as the case may be, to amend this Agreement or waive a
provision of this Agreement. Any waiver of any right or failure to act in a
specific instance shall relate only to such instance and shall not be construed
as an agreement to waive any right or failure to act in any other instance,
whether or not similar.
(b) Severability. Should any provision of this Agreement be held by a
court of competent jurisdiction to be unenforceable or prohibited by applicable
law, this Agreement shall be considered divisible as to such provision, which
shall be inoperative, and the remainder of this Agreement shall be valid and
binding as if such provision were not included in this Agreement.
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(c) Successors and Assigns. This Agreement shall inure to the benefit
of, and be binding upon, the Company and any corporation with which the Company
merges or consolidates or to which the Company sells all or substantially all of
its assets, and upon Diaz and his executors, administrators, heirs and legal
representatives.
(d) Headings. All headings in this Agreement are for convenience only
and are not intended to affect the meaning of any provision hereof.
(e) Counterparts. This Agreement may be executed in two (2) or more
counterparts with the same effect as if the signatures to all such counterparts
were upon the same instrument, and all such counterparts shall constitute but
one instrument.
IN WITNESS WHEREOF, Diaz has executed this Agreement and the Company
has caused this Agreement to be executed by its duly authorized officer as of
the day and year first above written.
BALTEK CORPORATION
By: /s/ Jacques Kohn
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Jacques Kohn, President and
Chief Executive Officer
/s/ Antonio Diaz
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Antonio Diaz
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