UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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):
February 14, 2002
Delaware 0-2000 95-2368719
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(State or other (Commission File (IRS employer
jurisdiction of Number) identification no.)
incorporation)
2 Corporate Plaza, Suite 125, Newport Beach, CA 92660
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(Address of principal executive offices & Zip Code)
(949) 719-1234
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Registrant's telephone number, including area code
N/A
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(Former name or former address,
if changed since last report)
Item 1. Changes in Control of Registrant.
On February 14, 2002, Grant S. Kesler, Anthony C. Dabbene and Bruce H. Haglund
resigned as members of the Board of Directors of Metalclad Corporation
("Metalclad"). The remaining three members of the Board of Directors appointed
Wayne W. Mills, Gary W. Copperud, Kenneth W. Brimmer and Joseph M. Senser
as members of Metalclad's Board of Directors, to replace the three resigning
directors, and to fill an existing vacancy on Metalclad's Board of Directors.
Wayne W. Mills, age 47, is the owner of Blake Capital Partners, LLC, which he
formed in September, 1999, primarily to provide consulting services in the
areas of capital formation, and mergers and acquisitions. From May, 1991
until September, 1999, Mr. Mills was a stockbroker with R.J. Steichen & Co.,
in Minneapolis, Minnesota. Mr. Mills and his spouse are the beneficial owners
of 1,422,900 shares of Metalclad's common stock, which they acquired in the
open market with their own funds over the period January, 2001 through
January, 2002.
Kenneth W. Brimmer, age 46, was the chief executive officer and chief
financial officer of Active IQ Technologies, Inc., from March, 2000 until
December, 2001, and continues to be a member of that company's board
of directors. Active IQ Technologies, Inc., which is headquartered
in Minnetonka, Minnesota, is engaged in providing accounting and financial
management software and services, as well as other software and
e-business solutions, to small and medium sized companies, and is
listed on the NASDAQ System under the symbol AIQT. Until April, 2000,
Mr. Brimmer was an executive officer of Rainforest Cafe, Inc., which had
offices in Hopkins, Minnesota, serving as its treasurer from 1995, and
its president from April, 1997. Rainforest Cafe, Inc. was the owner and
operator of the "Rainforest Cafe" restaurants located throughout the
United States and in several foreign countries. From 1990 until 1997
Mr. Brimmer was also engaged in an executive position with Grand
Casino, Inc., in Minneapolis, Minnesota, which primarily owned or
managed gaming casinos in Minnesota, Mississippi and Louisiana.
Mr. Brimmer is also a member of the boards of directors of Hypertension
Diagnostics, Inc. (NASDAQ symbol HDII) and Sterion Incorporated
(NASDAQ symbol STEN). Mr. Brimmer is a certified public accountant.
Mr. Brimmer beneficially owns 70,500 shares of Metalclad which
he acquired in the open market with his own funds from October,
2001 through December, 2001.
Joseph M. Senser, age 45, is the owner of Joe Senser's Sports
Grill, Inc. which owns and operates three restaurants in the Minneapolis,
Minnesota metropolitan area. Mr. Senser opened his first restaurant in
1987. From 1995 until August, 2000, Mr. Senser also acted as director
of community relations for Grand Casino Mille Lacs and Grand Casino
Hinckley, which are native American owned and operated gaming
casinos in north-central Minnesota. Since August, 2000, Mr. Senser
has acted as a manager of two related non-profit organizations; the
Milton Hershey School and the Hershey Trust. The Milton Hershey
School, with funding from the Hershey Trust, provides K through 12
education and living facilities, in Hershey, Pennsylvania, for financially
disadvantaged children. Mr. Senser does not own any common stock
of Metalclad.
Gary W. Copperud, age 43, has been the president and general
manager of CMM Properties, LLC, in Fort Collins, Colorado, since 1983.
CMM Properties, LLC is primarily engaged in making investments in
real estate and equity securities, and the management of those
investments. Mr. Copperud beneficially owns 108,730 shares of
Metalclad common stock which he acquired in the open market with
his own funds; 40,000 shares of which he has owned for more than
two years, and 68,730 shares of which he acquired in the open market
with his own funds over the period January, 2001 through January, 2002.
Immediately following the appointment of the four new members
of the Board of Directors, Wayne W. Mills was elected as chief executive
officer of Metalclad to replace Grant S. Kesler who resigned that position,
and Brian Niebur was named as treasurer of Metalclad to replace
Anthony C. Dabbene, who resigned that position.
Brian Niebur, age 38, will be employed part time by Metalclad.
Mr. Niebur is a certified public accountant, and since July, 2000, has
acted as a vice president and controller for Wyncrest Capital, Inc. in
Minneapolis, Minnesota, a privately held venture capital firm. Mr. Niebur's
primary duties for Wyncrest Capital, Inc. are to act as chief financial officer
for Marix Technologies, Inc., a development stage software company in
which Wyncrest Capital, Inc. has made an equity investment. From
August, 1997 until July, 2000, Mr. Niebur was the controller for Vital
Images, Inc., a developer and marketer of medical visualization and
analysis software, in Plymouth, Minnesota. Mr. Niebur was the vice
president and controller of IVI Publishing, Inc. in Eden Prairie, Minnesota,
from September, 1996 until August, 1997, having previously acted as
controller from September, 1993 until September 1996. IVI Publishing,
Inc. was an electronic publisher of health and medical information.
The change in the Board of Directors and executive officers of Metalclad
came after negotiation between Wayne W. Mills, the two former executive
officers of Metalclad, Grant S. Kesler and Anthony C. Dabbene, and
Metalclad's secretary and general counsel, Bruce H. Haglund, and
Metalclad's Board of Directors. Mr. Mills had previously expressed
his intention to attempt to change the make-up of Metalclad's Board
of Directors and management through such negotiation or through
a solicitation of Metalclad's shareholders. Item 5 discusses
agreements that were entered into as a result of such negotiations,
primarily between Metalclad and Messrs. Kesler and Dabbene.
Item 2. Acquisition or Disposition of Assets.
Not applicable.
Item 3. Bankruptcy or Receivership.
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant.
Not Applicable
Item 5. Other Events and Regulation FD Disclosure.
(a) Employment Agreements.
On January 1, 2002, Grant S Kesler and Anthony C. Dabbene entered
into Amended and Restated Employment Agreements (the "Amended
Agreements") with Metalclad, as approved by its then Compensation
Committee and Board of Directors, which amended previously executed
employment agreements dated January 1, l998. The Amended
Agreements raised the salaries of Messrs. Kesler and Dabbene from
$250,000 to $300,000, and from $180,000 to $216,000, respectively.
The prior employment agreements permitted Messrs. Kesler and
Dabbene to resign if there was a 65% exchange in the composition
of the Board of Directors in any fiscal year, and to continue to receive
their base salaries and minimum bonuses for a three year period
after termination. The Amended Agreements permitted Messrs. Kesler
and Dabbene to resign and receive a termination allowance if there
was a change in the composition of the Board of Directors, such that
the incumbent members comprised less that one half of the members
of the Board of Directors in any 12 month period. In addition, the
Amended Agreements provided that the termination allowance was
to equal 299% of the executive officers' base pay and minimum
bonus, payable in a lump sum.
176:
(b) Consulting Agreements
In connection with the resignation of Grant S. Kesler and Anthony
C. Dabbene as executive officers and directors of Metalclad, as
discussed under Item 1, Metalclad entered into consulting
agreements (the "Consulting Agreements") with both Mr. Kesler
and Dabbene, which provided for termination compensation in
lieu of that set forth in the Amended Agreements.
Under his Consulting Agreement, Mr. Kesler received $832,000
in cash, 140,000 shares of Metalclad's common stock, and the
forgiveness of a debt due to Metalclad, in the amount of $543,000,
as a result of a loan made to Mr. Kesler in October, 1994, in the
original principal amount of $370,000. The term of Mr. Kesler's
Consulting Agreement is two years, and the payments made to
Mr. Kesler were paid to him as an employee of Metalclad in lieu
of the termination compensation otherwise due him under his
Amended Agreement, and are not contingent upon his performance
under his Consulting Agreement.
Under his Consulting Agreement, Anthony C. Dabbene
received $637,000 in cash and 86,000 shares of Metalclad's
common stock. The term of Mr. Dabbene's Consulting
Agreement is three months, and the payments made to
Mr. Dabbene were paid to him as an employee of Metalclad,
in lieu of the termination compensation otherwise due him
under his Amended Agreement, and are not contingent upon
his performance under his Consulting Agreement. Mr. Dabbene
will also receive $5,000 per month during the term of his
Consulting Agreement for his services.
(c) Bylaws
On February 14, 2002, the Board of Directors of Metalclad
adopted new Bylaws.
Item 6. Resignations of Registrant's Directors.
Not Applicable
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired
Not Applicable
(b) Pro-Forma Financial Information
Not Applicable
(c) Exhibits
(i) Amended and Restated Employment Agreement
between Grant S. Kesler and Metalclad Corporation dated January 1, 2002.
(ii) Amended and Restated Employment Agreement
between Anthony C. Dabbene and Metalclad Corporation dated January 1, 2002.
(iii) Consulting Agreement between Grant S. Kesler and
Metalclad Corporation dated February 14, 2002.
(iv) Consulting Agreement between Anthony C. Dabbene
and Metalclad Corporation dated February 14, 2002.
(v) Amended and Restated Bylaws adopted February 14, 2002.
Item 8. Change in Fiscal Year.
Not Applicable.
Item 9. Regulation FD Disclosure.
Not Applicable.
Dated: February 28, 2002
METALCLAD CORPORATION
/s/Wayne W. Mills
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Wayne W. Mills
President and Chief Executive Officer
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into this 1st day of January,
2002 by and between METALCLAD CORPORATION, a Delaware
corporation (hereinafter referred to as the "COMPANY"), and Anthony C.
Dabbene (hereinafter referred to as "Executive") under the following terms
and conditions:
RECITALS:
WHEREAS, the parties entered into an Employment Agreement
dated January 1, 1998 ("Original Employment Agreement");
WHEREAS, the Company and Executive desire to amend and
restate the Original Employment Agreement in order to set forth the
terms and conditions under which (i) the Company shall continue to
employ Executive, (ii) Executive shall continue to render services to the
Company, (iii) the Company shall compensate Executive for such
services; and (iv) Executive shall receive Termination Compensation
upon termination or resignation of employment or after a change of
control; and
WHEREAS, in connection with the employment of Executive by the
Company, the Company desires to restrict Executive's rights to compete
with the business of the Company and its affiliates.
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements hereinafter set forth, the parties hereto agree
as follows:
1. EMPLOYMENT.
The Company hereby employs Executive and Executive hereby
accepts employment with the Company upon the terms and conditions
hereinafter set forth.
2. TERM.
2.1 The term of this Agreement (the "Term") shall be for a
three year period commencing on the Effective Date (as defined in
Subsection 2.3 below) of this Agreement, subject, however, to extension
and termination as provided herein in Sections 6 and 7 below.
2.2 Each year, prior to the anniversary date, the Company and
Executive shall meet to determine any additional compensation if any
for the remaining contract term.
2.3 The Effective Date of this Agreement shall be January 1,
2002 (the "Effective Date").
3. COMPENSATION.
3.1 For all services rendered by Executive under this Agreement,
the Company shall pay or cause one or more of its subsidiaries to pay
Executive, during the first year of the Term hereof, a salary at the rate of T
wo Hundred Sixteen Thousand Dollars ($216,000) per year ("Base Salary").
The Company shall pay such compensation to Executive semi-monthly i
n accordance with its standard practice for payment of compensation to
its employees.
3.2 Executive shall be entitled to periodic cash and stock bonus
incentives in accordance with the Metalclad Corporation Stock Option and
Incentive Plans and the award of stock options, any other incentive bonus
plans or other forms of compensation, at the discretion of the Company's
Board of Directors, dependent upon Employee's performance. Executive
shall be entitled to participate in the Company's 401(k) plan.
3.3 Executive shall be entitled to a car allowance, dues for one
club membership and Company-paid health insurance for him and his
dependents.
3.4 All compensation shall be subject to customary withholding
tax and other employment taxes as are required with respect to
compensation paid by a corporation to an employee.
3.5. Incentive Bonus Program. For the calendar year 2002, the
Board of Directors has set major performance criteria for the Company's
key executives. For the calendar year 2002 Executive shall receive at least
a minimum incentive bonus of twenty percent (20%) of Base Salary, payable
in December of 2002. To the extent that the Board's performance criteria are
met or exceeded, the key participants in the incentive bonus program,
including Executive, may each be entitled to an additional incentive bonus
up to a maximum of one hundred fifty percent (150%) of Base Salary.
3.6. The Board of Directors shall provide additional bonus i
ncentives for years subsequent to 2002, provided that for the Term of
this Agreement Executive shall always receive at least a minimum
incentive bonus of twenty percent (20%) of Base Salary, payable in
December of each year.
4. DUTIES AND RESPONSIBILITIES
4.1 Executive shall, during the Term of this Agreement unless
otherwise agreed by management, devote his full attention and expend
his best efforts, energies, and skills on a full-time basis, to the business
of the Company and any corporation controlled by the Company (each, a
"Subsidiary"). The Company acknowledges that Executive is engaged
in other business activities separate from and outside the scope of the
business of the Company. The Company acknowledges and agrees
that the devotion of reasonable amounts of time to such other business
activities shall not be deemed a violation of the terms of this Agreement
on the conditions that (i) such activities are not corporate opportunities
of the Company; and (ii) such activities do not interfere with the
performance of Executive's duties hereunder. For purposes of this
Agreement, the term the "Company" shall mean the Company and
all Subsidiaries.
4.2 During the Term of this Agreement, Executive
shall serve as the Executive Vice President and Chief Financial
Officer of the Company, except as provided for under Subsection
7.1. In the performance of all of his responsibilities hereunder,
Executive shall be subject to all of the Company's policies, rules,
and regulations applicable to his executive status and shall
report directly to, and shall be subject to, the direction and control
of the Board of Directors of the Company and shall perform such
duties as are regularly associated with his position. . In performing
such duties, Executive will be subject to and abide by, and will use
his best efforts to cause other employees of the Company to be
subject to and abide by, all policies and procedures developed
by the Company.
4.3 Without first obtaining the written permission of
the Board of Directors of the Company, Executive will not authorize
or permit the Company to engage the services of, or engage in
any business activity with, or provide any financial or other benefit
to, any affiliate of Executive. The phrase "affiliate of Executive" as
used in this Subsection 4.3 shall mean and include Executive's
family by blood or marriage (including, without limitation, parents,
spouse, siblings, children and in-laws), and any business or
business entity which is directly or indirectly owned or controlled
by Executive or any member of Executive's family or in which
Executive or any member of Executive's family has a direct or
indirect financial interest whatsoever.
4.4 To induce the Company to enter into this Agreement,
Executive represents and warrants to the Company that (i) Executive
is not a party or subject to any employment agreement or
arrangement with other person, firm, company, corporation or
other business entity, (ii) Executive is subject to no restraint,
limitation or restriction by virtue of any law or rule of law or
otherwise which would impair Executive's right or ability (a)
to enter the employ of the Company, or (b) to perform fully his
duties and obligations pursuant to this Agreement.
5. RESTRICTIVE COVENANTS
5.1 Executive acknowledges that (i) he has a major responsibility
for the operation, administration, development and growth of the
Company's business, (ii) his work for the Company has brought
him and will continue to bring him into close contact with
confidential information of the Company and its customers,
and (iii) the agreements and covenants contained in this
Subsection 5.1 are essential to protect the business interests
of the Company and that the Company will not enter into this
Agreement but for such agreements and covenants. Accordingly,
Executive covenants and agrees as follows:
5.1.1 Except as otherwise provided for in this Agreement,
during the Term of this Agreement Executive shall not, directly or
indirectly, compete with respect to any services or products of the
Company which are either offered or are being developed by the
Company as of the date of Executive's termination; or, without limiting
the generality of the foregoing, by or become, or agree to be or become,
interested in or associated with, in any capacity (whether as a partner,
shareholder, owner, officer, director, employee, principal, agent, creditor,
trustee, consultant, co-venturer or otherwise) any individual, corporation,
firm, association, partnership, joint venture or other business entity,
which competes with respect to any services or products of the Company
which are either offered or are being developed by the Company as of the
date of Executive's termination; provided, however, that Executive may own,
solely as an investment, not more than one percent (1%) of any class of
securities of any publicly held corporation in competition with the Company
whose securities are traded on any national securities exchange in the
United States of America.
5.1.2 During the Term of this Agreement and, for one year
thereafter ("Termination Period"), Executive shall not, directly or indirectly,
(i) induce or attempt to influence any employee of the Company to leave
its employ, (ii) aid or agree to aid any competitor, customer or supplier
of the Company in any attempt to hire away any person who shall have
been employed by the Company within the one (1) year period preceding
such requested aid, or (iii) induce or attempt to influence any person or
business entity who was a customer or supplier of the Company as of
the date of Executive's termination to transact business with a competitor
of the Company in Company's business.
5.1.3 During the Term of this Agreement, the Termination
Period and any time thereafter, Executive shall not disclose to anyone any
information about the confidential or proprietary affairs of the Company,
including, without limitation, trade secrets, trade "know-how", inventions,
customer lists, business plans, operational methods, pricing policies,
marketing plans, sales plans, identity of suppliers or customers, sales,
profits or other financial information, which is confidential to the
Company or is not generally known in the relevant trade, nor shall
Executive make use of any such information for his own benefit.
5.2 If Executive breaches Subsection 5.1 (the "Restrictive
Covenants"), the Company shall have the following rights and
remedies, each of which shall be enforceable, and each of which
is in addition to, and not in lieu of, any other rights and remedies
available to the Company at law or in equity:
5.2.1 Executive acknowledges and agrees that in
the event of a violation or threatened violation of any of the
provisions of Subsection 5.1.1, the Company shall have no
adequate remedy at law and shall therefore be entitled to
enforce each such provision by temporary or permanent injunctive
or mandatory relief obtained in any court of competent jurisdiction
without the necessity or proving damages, posting any bond or
other security, and without prejudice to any other rights and
remedies which may be available at law or in equity.
5.3 If any of the Restrictive Covenants, or any part thereof,
is held to be invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants, which shall be given full
effect, without regard to the invalid or unenforceable portions.
Without limiting the generality of the foregoing, if any of the
Restrictive Covenants, or any part thereof, is held to be
unenforceable because of the duration of such provision or
the area covered thereby, the parties hereto agree that the
court making such determination shall have the power to reduce
the duration and/or area of such provision and, in its reduced
form, such provision shall then be enforceable.
5.4 In the event that any court shall hold any of the
Restrictive Covenants wholly unenforceable by reason of the
breadth of such scope or otherwise, it is the intention of the
parties hereto that such determination not bar or in any way
affect the Company's right of the relief provided above in the
courts of any other jurisdictions as to breaches of such covenants
in such other respective jurisdictions, the above covenants as they
relateto each jurisdiction being, for this purpose, severable into
diverse and independent covenants.
6. TERMINATION.
6.1 The basic three-year Term shall automatically
be renewed each year, for one additional year, on the anniversary
date of this Agreement, unless the Company elects to terminate
the Agreement. Upon election to terminate the Agreement, the
Company may exercise one of the following options. In either
case, the Executive shall be entitled to Termination Compensation.
6.1.1 It may ask Executive to resign, severing
all relationships with the Company.
6.1.2 It may ask Executive to resign, leaving the
day-to-day employ of the Company and remain as a consultant
on terms to be agreed upon by the parties.
6.2 The Company also may terminate Executive's
employment under this Agreement at any time for Cause. "Cause"
shall exist for such termination if Executive (i) is adjudicated guilty
of illegal activities that adversely affect the Company by a court of
competent jurisdiction, (ii) commits any act of fraud or intentional
misrepresentation, that adversely affects the Company, (iii) has
engaged in serious misconduct, which conduct has, or would, if
generally known, materially adversely affect the goodwill or reputation
of the Company and which conduct Executive has not cured or altered
within ten (10) days following written notice by the Board to Executive
regarding such conduct, (iv) is in material breach under this Agreement,
or (v) habitually fails to perform the duties and responsibilities of his
employment as set forth in Section 4 of this Agreement and, with r
egard to grounds (iv) and (v) the Board has given Executive thirty (30)
days written notice of the grounds for his proposed termination and
the conduct required by Executive to cure such failure, with such
conduct outlined with reasonable specificity, and Executive has
not cured such failure, within the thirty (30) day period provided
in the written notice to Executive.
6.3 If the Company terminates Executive's employment
under this Agreement pursuant to the provisions of Subsection 6.2,
Executive shall be entitled to receive only a sum equal to six months
of Base Salary as severance pay.
6.4 If Executive's employment with the Company is
terminated due to the death or permanent disability of Executive,
the spouse of the Executive, the estate of Executive or the
Executive, as the case may be, shall continue to receive
compensation as outlined in Section 7 below.
6.5 Executive shall have the right to voluntarily terminate
this Agreement, and his employment hereunder, upon thirty (30)
days written notice to the Company. If Executive's employment
with the Company is terminated as the result of Executive's
purely voluntary resignation for reasons other than those set
forth in Section 7 below, Executive shall not be entitled to
Termination Compensation.
6.6 Executive shall have the right to voluntarily resign
for Good Reason, upon thirty (30) days written notice to the
Company. "Good Reason" shall exist for Executive's voluntary r
esignation if the Company determines to move its principal
place of business more than thirty (30) miles from its
present location. If Executive voluntarily resigns for Good
Reason he shall be entitled to Termination Compensation.
7. TERMINATION COMPENSATION.
7.1 If (i) Executive is requested to resign pursuant to
Section 6.1; (ii) Executive dies; (iii) Executive becomes permanently
disabled, as manifest by his inability to discharge his responsibilities
due to health or a disability in which case, after six months of such a
condition, during which time he received his Compensation under
paragraph 3 of this Agreement, the Board may terminate the Agreement
pursuant to paragraph 6.1; or (iv) the Executive resigns due to a Change
of Control as defined below, Executive, or his spouse or estate in the
case of his death, shall receive Termination Compensation, as follows:
7.1.1 Severance (2.99x payment): Company shall pay
to the Executive in a lump sum, no later than 30 days following the date
of the qualifying resignation or termination, an amount equal to the
following:
7.1.1.1 299% of the Executive's Base Salary plus
any allowances then in effect; and
7.1.1.2 299% of his prior year's incentive bonus
provided that said sum is not less than 20% of the current year's
Base Salary. Any other provision of this Agreement or of the
Company's incentive bonus plan notwithstanding, after the a
mount described in this Subsection 7.1.1.2 has been paid to the
Executive, the Executive shall have no further interest in such plan.
7.1.2 Three Years of Life Insurance and Health Plan
Coverage: The coverage described in this paragraph 7.1.3 shall
be provided for a "Continuation Period" beginning on the date
when the qualifying resignation or termination is effective and
ending on the earlier of (1) the third anniversary of that date or
(2) the date of the Executive's death. During the Continuation
Period, the Executive (and, where applicable, the Executive's
dependents) shall be entitled to continue participation in the
group term life insurance plan and in the health care plan for
employees maintained by the Company as if the Executive
were still an employee of the Company. Where applicable,
the Executive's compensation for purposes of such plans
shall be deemed to be equal to the Executive's compensation
(as defined in such plans) in effect on the date of the resignation
or employment termination. To the extent that the Company
finds it undesirable or impossible to cover the Executive under
the group life insurance and health plans of the Company, the
Company shall, at its sole expense, provide the Executive and
his dependents with the same level of coverage under individual
policies.
7.1.3 Incentive Programs: All stock options or equity
awards granted by the Company shall vest 100% upon the
effective date of the qualifying resignation or termination; and
7.1.4 Notwithstanding anything to the contrary in
the Company's stock option plans or the Executive's stock option
agreements, the vesting of Executive's unvested stock options,
as described on Exhibit "A," shall be immediately accelerated.
Executive shall have the full term set forth in the original stock
option grants to exercise such options.
7.2 For purposes of this Agreement, a "Change in
Control" shall mean:
7.2.1 The consummation of a merger or consolidation
of the Company with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting power
of the continuing or surviving entity's securities outstanding
immediately after such merger, consolidation or other
reorganization is owned by persons who were not stockholders
of the Company immediately prior to such merger, consolidation
or other reorganization; or
7.2.2 The sale, transfer or other disposition of all or
substantially all of the Company's assets; or
7.2.3 A change in the composition of the Board of
Directors, as a result of which fewer than one-half of the incumbent
directors are directors who either:
7.2.3.1 Had been directors of the Company twelve
(12) months prior to such change; or
7.2.3.2 Were elected, or nominated for election, to
the Board of Directors with the affirmative votes of at least a majority of
the directors who had been directors of the Company twelve (12)
months prior to such change and who were still in office at the time
of the election or nomination.
7.2.4 A transaction shall not constitute a Change of
Control if its sole purpose is to change the state of the Company's
incorporation or to create a holding company that will be owned in
substantially the same proportions by the persons who held the
Company's securities immediately before such transaction.
8. EXPENSES.
8.1 Executive shall be entitled to reimbursement of all
reasonable expenses actually incurred in the course of his employment.
Executive shall submit to the Company a standardized expense report
form, provided by the Company, and shall attach thereto receipts for all
expenditures. Expenses shall include automobile expenses and travel.
8.2 The Company shall reimburse Executive within fifteen
(15) days after submission by Executive of his expense report.
9. PAID VACATION; SICK LEAVE; INSURANCE.
9.1 Executive shall be entitled to a paid vacation each year
equal to not less than three (3) weeks per year in addition to the paid
holidays on which the Company's offices are closed.
9.2 Executive shall be entitled to reasonable periods of paid
sick leave during the Term of the Agreement in accordance with the
Company's policy.
9.3 The Company shall provide Executive, at the Company's
expense, participation in group medical, accident and health insurance,
and life insurance plans of the Company as may be provided by the
Company from time to time to Company executives of comparable status,
subject to, and to the extent that, Executive is eligible under such benefit
plans in accordance with their respective terms.
10. LEGAL DEFENSE.
The Company acknowledges that the environmental services
industry is a highly litigious industry whereby many regulatory fines,
penalties and third-party suits are directed at the individuals involved in
ownership and operations. The Company agrees to pay all legal fees,
judgments, awards, bonds, fines, penalties and costs related to the
defense and outcome as to any matter where Executive was acting,
or he believed he was acting, in his corporate capacity. The
Company also indemnifies and agrees to defend the Executive
against all claims and suits arising from his position as an
Officer and/or Director of the Company, including all costs of
defense whether Domestic or Foreign, to the fullest extent
permitted by its Bylaws as of the date of termination, or as later
amended, whichever provides broader coverage for Executive.
The Company agrees, within thirty (30) days of Executive's
resignation or termination, to obtain "Runoff" coverage for its
D&O insurance to further protect Executive.
11. MISCELLANEOUS.
11.1 The Company may, from time to time, apply for and take
out, in its own name and at its own expense, life, health, accident,
disability or other insurance upon Executive in any sum or sums that
it may deem necessary to protect its interests, and Executive agrees
to aid and cooperate in all reasonable respects with the Company in
procuring any and all such insurance, including without limitation,
submitting to the usual and customary medical examinations, and
by filling out, executing and delivering such applications and other
instruments in writing as may be reasonably required by an
insurance company or companies to which an application or
applications for such insurance may be made by or for the Company.
11.2 This Agreement is a personal contract, and the rights and
interests of Executive hereunder may not be sold, transferred, assigned,
pledged or hypothecated except as otherwise expressly permitted by the
provisions of this Agreement. Executive shall not under any circumstances
have any option or right to require payment hereunder otherwise than in
accordance with the terms hereof. Except as otherwise expressly
provided herein, Executive shall not have any power of anticipation,
alienation or assignment of payments contemplated hereunder, and
all rights and benefits of Executive shall be for the sole personal
benefit of Executive, and no other person shall acquire any right,
title or interest hereunder by reason of any sale, assignment, transfer,
claim or judgment or bankruptcy proceedings against Executive;
provided, however, that in the event of Executive's death, Executive's
estate, legal representative or beneficiaries (as the case may be)
shall have the right to receive all of the benefit that accrued to
Executive pursuant to, and in accordance with, the terms of this
Agreement.
11.3 The Company shall have the right and obligation
to assign this Agreement to any successor of substantially all of its
business or assets, and any such successor and Executive shall
be bound by all of the provisions hereof.
12. NOTICES.
All notices, requests, demands and other communications
provided for by this Agreement shall be in writing and (unless otherwise
specifically provided herein) shall be deemed to have been given three
(3) days after having been mailed in any general or branch United
States Post Office, enclosed in a registered or certified postpaid
envelope, addressed to the parties stated below or to such changed
address as such party may have fixed by notice:
TO THE COMPANY: METALCLAD CORPORATION
2 Corporate Plaza, Suite 125
Newport Beach, California 92660
COPY TO: Bruce H. Haglund, Esq.
Gibson & Haglund
2 Park Plaza, Suite 450
Irvine, California 92614
EXECUTIVE: Anthony C. Dabbene
26921 Magnolia Court
Laguna Hills, CA 92653
COPY TO: R. Craig Scott, Esq.
Executive Law Group, Inc.
One Newport Place, Suite 1000
Newport Beach, CA 92660
13. ENTIRE AGREEMENT.
This Agreement supersedes any and all agreements, whether
oral or written, between the parties hereto, with respect to the employment
of Executive by the Company and contains all of the covenants and
agreements between the parties with respect to the rendering of such
services in any manner whatsoever. Each party to this Agreement
acknowledges that no representations, inducements, promises or
agreements, orally or otherwise, have been made by any party, or
anyone acting on behalf of any party, which are not embodied herein,
and that no other agreement, statement or promise with respect to
such employment not contained in this Agreement shall be valid or
binding. Any modification of this Agreement will be effective only if it is
writing and signed by the parties hereto.
14. PARTIAL INVALIDITY.
If any provision in this Agreement is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force and
effect without being impaired or invalidated in any way.
15. ARBITRATION OF DISPUTES.
Except with respect to paragraph 5, which issues are
reserved for the court, any dispute of any kind regarding the interpretation
or application of this Agreement, or the alleged breach hereof, or any
act which allegedly has, or would, violate any provision of this Agreement
must be submitted to arbitration before a neutral arbitrator. The arbitration
shall be conducted in accordance with the rules of JAMS/UNDISPUTED
of Orange County, California. A written demand for arbitration pursuant
to Section 638 of the Code of Civil Procedure must be made within sixty
(60) days of the alleged breach. A neutral arbitrator shall render a written
decision reviewing his or her essential findings and conclusions. The
same damages and costs that are recoverable in civil litigation shall be
awardable in the arbitration. The Company shall pay all fees and costs
associated with the arbitration, including the arbitrator's fee. The results
of arbitration will be the exclusive, final and binding remedy for such
claim or dispute. The arbitrator shall award the prevailing party his or
its reasonable attorneys? fees and costs.
16. GOVERNING LAW.
This Agreement will be governed by and construed in
accordance with the laws of the State of California.
17. BINDING NATURE.
This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective representatives,
heirs, successors and assigns.
18. WAIVER.
No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in writing by
the party making the waiver.
19. CORPORATE APPROVALS.
The Company represents and warrants that the execution
of this Agreement by its corporate officer named below has been
duly authorized by the Board of Directors of the Company, is not in
conflict with any Bylaw or other agreement and will be a binding
obligation of the Company, enforceable in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date above written.
THE COMPANY: METALCLAD CORPORATION
/s/Bruce H. Haglund
By:----------------------------
Bruce H. Haglund
Secretary and General Counsel
EXECUTIVE: /s/Anthony C. Dabbene
----------------------------
Anthony C. Dabbene
EXHIBIT A
The following is a schedule of outstanding options as of the
date hereof, together with the expiration date of each. All options are
in the name of Anthony C. Dabbene.
QUANTITY EXERCISE PRICE EXPIRATION DATE
-------- -------------- -----------------
150,000 $2.00 June 1, 2011
200,000 $3.00 November 20, 2010
100,000 $3.00 August 24, 2009
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into this 1st day
of January, 2002 by and between METALCLAD CORPORATION,
a Delaware corporation (hereinafter referred to as the "COMPANY"),
and Grant S. Kesler (hereinafter referred to as "Executive") under
the following terms and conditions:
RECITALS:
WHEREAS, the parties entered into an Employment Agreement
dated January 1, 1998 ("Original Employment Agreement");
WHEREAS, the Company and Executive desire to amend and
restate the Original Employment Agreement in order to set forth the
terms and conditions under which (i) the Company shall continue to
employ Executive, (ii) Executive shall continue to render services to
the Company, (iii) the Company shall compensate Executive for such
services; and (iv) Executive shall receive Termination Compensation
upon termination or resignation of employment or after a change of
control; and
WHEREAS, in connection with the employment of Executive by
the Company, the Company desires to restrict Executive's rights to
compete with the business of the Company and its affiliates.
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements hereinafter set forth, the parties hereto
agree as follows:
1. EMPLOYMENT.
The Company hereby employs Executive and Executive hereby
accepts employment with the Company upon the terms and conditions
hereinafter set forth.
2. TERM.
2.1 The term of this Agreement (the "Term") shall be for a
three year period commencing on the Effective Date (as defined in
Subsection 2.3 below) of this Agreement, subject, however, to extension
and termination as provided herein in Sections 6 and 7 below.
2.2 Each year, prior to the anniversary date, the Company
and Executive shall meet to determine any additional compensation if
any for the remaining contract term.
2.3 The Effective Date of this Agreement shall be January 1,
2002 (the "Effective Date").
3. COMPENSATION.
3.1 For all services rendered by Executive under this Agreement,
the Company shall pay or cause one or more of its subsidiaries to pay
Executive, during the first year of the Term hereof, a salary at the rate of
Three Hundred Thousand Dollars ($300,000) per year ("Base Salary").
The Company shall pay such compensation to Executive semi-monthly
in accordance with its standard practice for payment of compensation
to its employees.
3.2 Executive shall be entitled to periodic cash and stock
bonus incentives in accordance with the Metalclad Corporation Stock
Option and Incentive Plans and the award of stock options, any other
incentive bonus plans or other forms of compensation, at the discretion
of the Company's Board of Directors, dependent upon Employee's
performance. Executive shall be entitled to participate in the Company's
401(k) plan.
3.3 Executive shall be entitled to a car allowance, housing
allowance and Company-paid health insurance for him and his dependents.
3.4 All compensation shall be subject to customary withholding
tax and other employment taxes as are required with respect to compensation
paid by a corporation to an employee.
3.5. Incentive Bonus Program. For the calendar year 2002, the
Board of Directors has set major performance criteria for the Company's
key executives. For the calendar year 2002 Executive shall receive at least
a minimum incentive bonus of twenty percent (20%) of Base Salary, payable
in December of 2002. To the extent that the Board's performance criteria
are met or exceeded, the key participants in the incentive bonus program,
including Executive, may each be entitled to an additional incentive bonus
up to a maximum of one hundred fifty percent (150%) of Base Salary.
3.6. The Board of Directors shall provide additional bonus
incentives for years subsequent to 2002, provided that for the Term of this
Agreement Executive shall always receive at least a minimum incentive
bonus of twenty percent (20%) of Base Salary, payable in December of
each year.
4. DUTIES AND RESPONSIBILITIES
4.1 Executive shall, during the Term of this Agreement unless
otherwise agreed by management, devote his full attention and expend
his best efforts, energies, and skills on a full-time basis, to the business
of the Company and any corporation controlled by the Company (each, a
"Subsidiary"). The Company acknowledges that Executive is engaged in
other business activities separate from and outside the scope of the
business of the Company. The Company acknowledges and agrees
that the devotion of reasonable amounts of time to such other business
activities shall not be deemed a violation of the terms of this Agreement
on the conditions that (i) such activities are not corporate opportunities
of the Company; and (ii) such activities do not interfere with the performance
of Executive's duties hereunder. For purposes of this Agreement, the term
the "Company" shall mean the Company and all Subsidiaries.
4.2 During the Term of this Agreement, Executive shall serve
as the President and Chief Executive Officer of the Company, except as
provided for under Subsection 7.1. In the performance of all of his
responsibilities hereunder, Executive shall be subject to all of the
Company's policies, rules, and regulations applicable to his executive
status and shall report directly to, and shall be subject to, the direction
and control of the Board of Directors of the Company and shall perform
such duties as are regularly associated with his position. In performing
such duties, Executive will be subject to and abide by, and will use his
best efforts to cause other employees of the Company to be subject to
and abide by, all policies and procedures developed by the Company.
4.3 Without first obtaining the written permission of the
Board of Directors of the Company, Executive will not authorize or
permit the Company to engage the services of, or engage in any
business activity with, or provide any financial or other benefit to,
any affiliate of Executive. The phrase "affiliate of Executive" as used
in this Subsection 4.3 shall mean and include Executive's family
by blood or marriage (including, without limitation, parents, spouse,
siblings, children and in-laws), and any business or business entity
which is directly or indirectly owned or controlled by Executive or any
member of Executive's family or in which Executive or any member
of Executive's family has a direct or indirect financial interest whatsoever.
4.4 To induce the Company to enter into this Agreement,
Executive represents and warrants to the Company that (i) Executive
is not a party or subject to any employment agreement or arrangement
with other person, firm, company, corporation or other business entity,
(ii) Executive is subject to no restraint, limitation or restriction by virtue
of any law or rule of law or otherwise which would impair Executive's
right or ability (a) to enter the employ of the Company, or (b) to perform
fully his duties and obligations pursuant to this Agreement.
5. RESTRICTIVE COVENANTS
5.1 Executive acknowledges that (i) he has a major
responsibility for the operation, administration, development and
growth of the Company's business, (ii) his work for the Company
has brought him and will continue to bring him into close contact
with confidential information of the Company and its customers,
and (iii) the agreements and covenants contained in this Subsection
5.1 are essential to protect the business interests of the Company
and that the Company will not enter into this Agreement but for
such agreements and covenants. Accordingly, Executive covenants
and agrees as follows:
5.1.1 Except as otherwise provided for in this
Agreement, during the Term of this Agreement Executive shall
not, directly or indirectly, compete with respect to any services
or products of the Company which are either offered or are
being developed by the Company as of the date of Executive's
termination; or, without limiting the generality of the foregoing,
by or become, or agree to be or become, interested in or
associated with, in any capacity (whether as a partner,
shareholder, owner, officer, director, employee, principal,
agent, creditor, trustee, consultant, co-venturer or otherwise)
any individual, corporation, firm, association, partnership,
joint venture or other business entity, which competes with
respect to any services or products of the Company which
are either offered or are being developed by the Company
as of the date of Executive's termination; provided, however,
that Executive may own, solely as an investment, not more
than one percent (1%) of any class of securities of any publicly
held corporation in competition with the Company whose
securities are traded on any national securities exchange
in the United States of America.
5.1.2 During the Term of this Agreement and,
for one year thereafter ("Termination Period"), Executive
shall not, directly or indirectly, (i) induce or attempt to influence
any employee of the Company to leave its employ, (ii) aid or
agree to aid any competitor, customer or supplier of the
Company in any attempt to hire away any person who shall
have been employed by the Company within the one (1)
year period preceding such requested aid, or (iii) induce
or attempt to influence any person or business entity who
was a customer or supplier of the Company as of the date
of Executive's termination to transact business with a
competitor of the Company in Company's business.
5.1.3 During the Term of this Agreement, the
Termination Period and any time thereafter, Executive shall
not disclose to anyone any information about the confidential
or proprietary affairs of the Company, including, without
limitation, trade secrets, trade "know-how", inventions,
customer lists, business plans, operational methods,
pricing policies, marketing plans, sales plans, identity of
suppliers or customers, sales, profits or other financial
information, which is confidential to the Company or is not
generally known in the relevant trade, nor shall Executive
make use of any such information for his own benefit.
5.2 If Executive breaches Subsection 5.1 (the
"Restrictive Covenants"), the Company shall have the following
rights and remedies, each of which shall be enforceable,
and each of which is in addition to, and not in lieu of, any
other rights and remedies available to the Company at law
or in equity:
5.2.1 Executive acknowledges and agrees that
in the event of a violation or threatened violation of any of the
provisions of Subsection 5.1.1, the Company shall have no
adequate remedy at law and shall therefore be entitled to
enforce each such provision by temporary or permanent
injunctive or mandatory relief obtained in any court of
competent jurisdiction without the necessity or proving
damages, posting any bond or other security, and without
prejudice to any other rights and remedies which may be
available at law or in equity.
5.3 If any of the Restrictive Covenants, or any
part thereof, is held to be invalid or unenforceable, the same
shall not affect the remainder of the covenant or covenants,
which shall be given full effect, without regard to the invalid
or unenforceable portions. Without limiting the generality
of the foregoing, if any of the Restrictive Covenants, or any
part thereof, is held to be unenforceable because of the
duration of such provision or the area covered thereby, the
parties hereto agree that the court making such determination
shall have the power to reduce the duration and/or area of
such provision and, in its reduced form, such provision shall
then be enforceable.
5.4 In the event that any court shall hold any of
the Restrictive Covenants wholly unenforceable by reason of
the breadth of such scope or otherwise, it is the intention of
the parties hereto that such determination not bar or in any
way affect the Company's right of the relief provided above
in the courts of any other jurisdictions as to breaches of such
covenants in such other respective jurisdictions, the above
covenants as they relate to each jurisdiction being, for this
purpose, severable into diverse and independent covenants.
6. TERMINATION.
6.1 The basic three-year Term shall automatically
be renewed each year, for one additional year, on the anniversary
date of this Agreement, unless the Company elects to terminate
the Agreement. Upon election to terminate the Agreement, the
Company may exercise one of the following options. In either
case, the Executive shall be entitled to Termination Compensation.
6.1.1 It may ask Executive to resign, severing all
relationships with the Company.
6.1.2 It may ask Executive to resign, leaving the
day-to-day employ of the Company and remain as a consultant
on terms to be agreed upon by the parties.
6.2 The Company also may terminate Executive's
employment under this Agreement at any time for Cause.
"Cause" shall exist for such termination if Executive (i) is
adjudicated guilty of illegal activities that adversely affect the
Company by a court of competent jurisdiction, (ii) commits any
act of fraud or intentional misrepresentation, that adversely
affects the Company, (iii) has engaged in serious misconduct,
which conduct has, or would, if generally known, materially
adversely affect the goodwill or reputation of the Company and
which conduct Executive has not cured or altered within ten (10)
days following written notice by the Board to Executive regarding
such conduct, (iv) is in material breach under this Agreement,
or (v) habitually fails to perform the duties and responsibilities
of his employment as set forth in Section 4 of this Agreement
and, with regard to grounds (iv) and (v) the Board has given
Executive thirty (30) days written notice of the grounds for his
proposed termination and the conduct required by Executive
to cure such failure, with such conduct outlined with reasonable
specificity, and Executive has not cured such failure, within the
thirty (30) day period provided in the written notice to Executive.
6.3 If the Company terminates Executive's employment
under this Agreement pursuant to the provisions of Subsection
6.2, Executive shall be entitled to receive only a sum equal to six
months of Base Salary as severance pay.
6.4 If Executive's employment with the Company is
terminated due to the death or permanent disability of Executive,
the spouse of the Executive, the estate of Executive or the Executive,
as the case may be, shall continue to receive compensation as
outlined in Section 7 below.
6.5 Executive shall have the right to voluntarily terminate
this Agreement, and his employment hereunder, upon thirty (30)
days written notice to the Company. If Executive's employment
with the Company is terminated as the result of Executive's
purely voluntary resignation for reasons other than those set
forth in Section 7 below, Executive shall not be entitled to
Termination Compensation.
6.6 Executive shall have the right to voluntarily resign
for Good Reason, upon thirty (30) days written notice to the Company.
"Good Reason" shall exist for Executive's voluntary resignation if the
Company determines to move its principal place of business more
than thirty (30) miles from its present location. If Executive voluntarily
resigns for Good Reason he shall be entitled to Termination
Compensation.
7. TERMINATION COMPENSATION.
7.1 If (i) Executive is requested to resign pursuant to
Section 6.1; (ii) Executive dies; (iii) Executive becomes permanently
disabled, as manifest by his inability to discharge his responsibilities
due to health or a disability in which case, after six months of such a
condition, during which time he received his Compensation under
paragraph 3 of this Agreement, the Board may terminate the Agreement
pursuant to paragraph 6.1; or (iv) the Executive resigns due to a Change
of Control as defined below, Executive, or his spouse or estate in the
case of his death, shall receive Termination Compensation, as follows:
7.1.1 Severance (2.99x payment): Company shall pay
to the Executive in a lump sum, no later than 30 days following the date
of the qualifying resignation or termination, an amount equal to the
following:
7.1.1.1 299% of the Executive's Base Salary plus
any allowances then in effect; and
7.1.1.2 299% of his prior year's incentive bonus
provided that said sum is not less than 20% of the current year's Base
Salary. Any other provision of this Agreement or of the Company's
incentive bonus plan notwithstanding, after the amount described
in this Subsection 7.1.1.2 has been paid to the Executive, the
Executive shall have no further interest in such plan.
7.1.2 Three Years of Life Insurance and Health Plan
Coverage: The coverage described in this paragraph 7.1.3 shall be
provided for a "Continuation Period" beginning on the date when the
qualifying resignation or termination is effective and ending on the
earlier of (1) the third anniversary of that date or (2) the date of the
Executive's death. During the Continuation Period, the Executive
(and, where applicable, the Executive's dependents) shall be
entitled to continue participation in the group term life insurance
plan and in the health care plan for employees maintained by the
Company as if the Executive were still an employee of the Company.
Where applicable, the Executive's compensation for purposes of
such plans shall be deemed to be equal to the Executive's compensation
(as defined in such plans) in effect on the date of the employment
resignation or termination. To the extent that the Company finds it
undesirable or impossible to cover the Executive under the group
life insurance and health plans of the Company, the Company shall,
at its sole expense, provide the Executive and his dependents with
the same level of coverage under individual policies.
7.1.3 Incentive Programs: All stock options or equity
awards granted by the Company shall vest 100% upon the effective
date of the qualifying resignation or termination; and
7.1.4 Notwithstanding anything to the contrary in the
Company's stock option plans or the Executive's stock option agreements,
the vesting of Executive's unvested stock options, as described on Exhibit
"A," shall be immediately accelerated. Executive shall have the full term
set forth in the original stock option grants to exercise such options.
7.2 For purposes of this Agreement, a "Change in Control"
shall mean:
7.2.1 The consummation of a merger or consolidation
of the Company with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting power of
the continuing or surviving entity's securities outstanding immediately
after such merger, consolidation or other reorganization is owned by
persons who were not stockholders of the Company immediately prior
to such merger, consolidation or other reorganization; or
7.2.2 The sale, transfer or other disposition of all or
substantially all of the Company's assets; or
7.2.3 A change in the composition of the Board of Directors,
as a result of which fewer than one-half of the incumbent directors are
directors who either:
7.2.3.1 Had been directors of the Company twelve (12)
months prior to such change; or
7.2.3.2 Were elected, or nominated for election, to the
Board of Directors with the affirmative votes of at least a majority of the
directors who had been directors of the Company twelve (12) months
prior to such change and who were still in office at the time of the election
or nomination.
7.2.4 A transaction shall not constitute a Change of Control
if its sole purpose is to change the state of the Company's incorporation
or to create a holding company that will be owned in substantially the
same proportions by the persons who held the Company's securities
immediately before such transaction.
8. EXPENSES.
8.1 Executive shall be entitled to reimbursement of all
reasonable expenses actually incurred in the course of his
employment. Executive shall submit to the Company a
standardized expense report form, provided by the Company,
and shall attach thereto receipts for all expenditures.
Expenses shall include automobile expenses and travel.
8.2 The Company shall reimburse Executive within
fifteen (15) days after submission by Executive of his expense report.
9. PAID VACATION; SICK LEAVE; INSURANCE.
9.1 Executive shall be entitled to a paid vacation each
year equal to not less than three (3) weeks per year in addition
to the paid holidays on which the Company's offices are closed.
9.2 Executive shall be entitled to reasonable periods
of paid sick leave during the Term of the Agreement in accordance
with the Company's policy.
9.3 The Company shall provide Executive, at the
Company's expense, participation in group medical, accident
and health insurance, and life insurance plans of the Company
as may be provided by the Company from time to time to Company
executives of comparable status, subject to, and to the extent that,
Executive is eligible under such benefit plans in accordance with
their respective terms.
10. LEGAL DEFENSE.
The Company acknowledges that the environmental
services industry is a highly litigious industry whereby many
regulatory fines, penalties and third-party suits are directed at
the individuals involved in ownership and operations. The
Company agrees to pay all legal fees, judgments, awards,
bonds, fines, penalties and costs related to the defense and
outcome as to any matter where Executive was acting, or he
believed he was acting, in his corporate capacity. The Company
also indemnifies and agrees to defend the Executive against
all claims and suits arising from his position as an Officer
and/or Director of the Company, including all costs of defense
whether Domestic or Foreign, to the fullest extent permitted
by its Bylaws as of the date of termination, or as later amended,
whichever provides broader coverage for Executive. The
Company agrees, within thirty (30) days of Executive's
resignation or termination, to obtain "Runoff" coverage for
its D&O insurance to further protect Executive.
11. AGREEMENT TO CONSULT.
Following his termination or resignation, Executive
can assist the Company in effecting a smooth transition and
in furthering the Company's business. The Company has
requested, and Executive has agreed, to serve as a
consultant and to perform duties as are outlined by the
Board of Directors as services are needed. Reasonable
compensation shall be agreed to between the parties for
services rendered using available criteria for similar services.
As consideration for Executive's making himself available to
consult, as the Company deems necessary for a period not
to exceed 25 months, the Company agrees to forgive certain
debt owed to the Company by Executive as follows. In
October 1994 the Company loaned certain funds to Executive
to accommodate overseas financings requiring the pledge
of Executive's privately owned stock. Funds were used by
the Executive to make the stock freely available for the
financing. Part of the loan was repaid in 1996. The
balance is to be forgiven as follows: One-third of the
principal and one-third of the interest at the execution
of this Agreement; one-third of the principal and one-third
of the interest one year from the Effective Date of this
Agreement; and the balance on the second year
anniversary of the execution of this Agreement.
12. MISCELLANEOUS.
12.1 The Company may, from time to time, apply
for and take out, in its own name and at its own expense,
life, health, accident, disability or other insurance upon
Executive in any sum or sums that it may deem necessary
to protect its interests, and Executive agrees to aid and
cooperate in all reasonable respects with the Company
in procuring any and all such insurance, including without
limitation, submitting to the usual and customary medical
examinations, and by filling out, executing and delivering
such applications and other instruments in writing as
may be reasonably required by an insurance company
or companies to which an application or applications
for such insurance may be made by or for the Company.
12.2 This Agreement is a personal contract,
and the rights and interests of Executive hereunder may
not be sold, transferred, assigned, pledged or hypothecated
except as otherwise expressly permitted by the provisions
of this Agreement. Executive shall not under any circumstances
have any option or right to require payment hereunder otherwise
than in accordance with the terms hereof. Except as otherwise
expressly provided herein, Executive shall not have any power
of anticipation, alienation or assignment of payments
contemplated hereunder, and all rights and benefits of
Executive shall be for the sole personal benefit of Executive,
and no other person shall acquire any right, title or interest
hereunder by reason of any sale, assignment, transfer, claim
or judgment or bankruptcy proceedings against Executive;
provided, however, that in the event of Executive's death,
Executive's estate, legal representative or beneficiaries (as
the case may be) shall have the right to receive all of the
benefit that accrued to Executive pursuant to, and in
accordance with, the terms of this Agreement.
12.3 The Company shall have the right and
obligation to assign this Agreement to any successor of
substantially all of its business or assets, and any such
successor and Executive shall be bound by all of the
provisions hereof.
13. NOTICES.
All notices, requests, demands and other
communications provided for by this Agreement shall be
in writing and (unless otherwise specifically provided herein)
shall be deemed to have been given three (3) days after
having been mailed in any general or branch United
States Post Office, enclosed in a registered or certified
postpaid envelope, addressed to the parties stated below
or to such changed address as such party may have fixed
by notice:
TO THE COMPANY: METALCLAD CORPORATION
2 Corporate Plaza, Suite 125
Newport Beach, California 92660
COPY TO: Bruce H. Haglund, Esq.
Gibson & Haglund
2 Park Plaza, Suite 450
Irvine, California 92614
EXECUTIVE: Grant S. Kesler
3739 Brighton Point Drive
Salt Lake City, Utah 84121
COPY TO: R. Craig Scott, Esq.
Executive Law Group, Inc.
One Newport Place, Suite 1000
Newport Beach, CA 92660
14. ENTIRE AGREEMENT.
This Agreement supersedes any and all agreements,
whether oral or written, between the parties hereto, with respect to
the employment of Executive by the Company and contains all of
the covenants and agreements between the parties with respect to
the rendering of such services in any manner whatsoever. Each
party to this Agreement acknowledges that no representations,
inducements, promises or agreements, orally or otherwise, have
been made by any party, or anyone acting on behalf of any party,
which are not embodied herein, and that no other agreement,
statement or promise with respect to such employment not contained
in this Agreement shall be valid or binding. Any modification of this
Agreement will be effective only if it is writing and signed by the
parties hereto.
15. PARTIAL INVALIDITY.
If any provision in this Agreement is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force and
effect without being impaired or invalidated in any way.
16. ARBITRATION OF DISPUTES.
Except with respect to paragraph 5, which issues are
reserved for the court, any dispute of any kind regarding the
interpretation or application of this Agreement, or the alleged
breach hereof, or any act which allegedly has, or would, violate
any provision of this Agreement must be submitted to arbitration
before a neutral arbitrator. The arbitration shall be conducted in
accordance with the rules of JAMS/UNDISPUTED of Orange
County, California. A written demand for arbitration pursuant to
Section 638 of the Code of Civil Procedure must be made within
sixty (60) days of the alleged breach. A neutral arbitrator shall
render a written decision reviewing his or her essential findings
and conclusions. The same damages and costs that are recoverable
in civil litigation shall be awardable in the arbitration. The Company
shall pay all fees and costs associated with the arbitration, including
the arbitrator's fee. The results of arbitration will be the exclusive,
final and binding remedy for such claim or dispute. The arbitrator
shall award the prevailing party his or its reasonable attorneys'
fees and costs.
17. GOVERNING LAW.
This Agreement will be governed by and construed in
accordance with the laws of the State of California.
18. BINDING NATURE.
This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective representatives,
heirs, successors and assigns.
19. WAIVER.
No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in writing by
the party making the waiver.
20. CORPORATE APPROVALS.
The Company represents and warrants that the execution
of this Agreement by its corporate officer named below has been duly
authorized by the Board of Directors of the Company, is not in conflict
with any Bylaw or other agreement and will be a binding obligation of
the Company, enforceable in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date above written.
THE COMPANY: METALCLAD CORPORATION
/s/Bruce H. Haglund
By:----------------------------
Bruce H. Haglund
Secretary and General Counsel
EXECUTIVE: /s/Grant S. Kesler
----------------------------
Grant S. Kesler
EXHIBIT A
The following is a schedule of outstanding options as of the
date hereof, together with the expiration date of each. All options are i
n the name of Grant S. Kesler.
QUANTITY EXERCISE PRICE EXPIRATION DATE
-------- -------------- -----------------
200,000 $2.00 June 1, 2011
250,000 $3.00 November 20, 2010
170,000 $3.00 August 24, 2009
CONSULTING AGREEMENT
THIS AGREEMENT is entered into as of the 13th day of February,
2002, by and between Metalclad Corporation, a Delaware corporation
(hereinafter the "Company"), and Anthony C. Dabbene (hereinafter the
"the Consultant").
Recitals
WHEREAS, the Consultant is a former officer, director, and
employee of the Company knowledgeable with respect to all aspects
of the Company's business;
WHEREAS, the Company is desirous of obtaining the advice
and counsel of the Consultant, and the Consultant is desirous of providing
such advice and counsel, subject to the terms of this Agreement; and
WHEREAS, the Company and the Consultant desire that this
Agreement shall supersede the Amended and Restated Employment
Agreement between the Company and the Consultant dated January 1,
2002, a copy of which is attached hereto as Exhibit "A" (hereinafter
referred to as the "Employment Agreement"), in its entirety, with the
sole exception of Sections 7.1.3 ("Incentive Programs"), 7.1.4 ("Options"),
and 10 ("Legal Defense") thereof (the "Surviving Sections"), which sections
shall survive the termination of the Employment Agreement and are
incorporated by reference into this Agreement as set forth below;
Agreement
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. Engagement of the Consultant/Duties. The Company
hereby engages the Consultant as a consultant, and the Consultant
hereby accepts the engagement, upon the terms and conditions
hereinafter set forth. The Consultant shall advise and assist the
Company, for approximately 60 hours per month, with respect to
the Company's business, including, but not limited to, the audit of
the Company's financial statements for the year ended December 31,
2001, preparation of the Company's Annual Report on Form 10-K for
the year ended December 31, 2001, preparation of the Company's
Proxy Statement for the 2002 Annual Meeting of Stockholders of the
Company, the transmittal and communication of documents, information,
know-how, and special knowledge to the officers and directors of the
Company, appointed contemporaneously with the execution of this
Agreement, and their agents. The parties agree that the Consultant
shall perform his duties at the Company's offices in Newport Beach,
California, unless otherwise agreed to in writing by the parties.
2. Term. The term of this Agreement shall commence on
February 14, 2002, and shall terminate at the close of business on
May 13, 2002. The Surviving Sections shall survive the termination
of this Agreement.
3. Consideration for Consulting; Termination of Employment
Agreement.
3.1 The consideration for the Consultant's services rendered
under this Agreement shall be a fee of $5,000 per month during the term
of this Agreement, payable on February 28, March 31, and April 30, 2002.
3.2 The parties acknowledge that prior to entering into this
Agreement they agreed to the payment of $858,000.00 as the full and final
settlement of the compensation payable under Section 7 of the Employment
Agreement, payable on as follows: (i) $414,690.49 shall be withheld by the
Company for payroll taxes, including $318,000.00 for Federal withholding
taxes, $70,000.00 for California state taxes, $4,101.30 for Social Security
taxes, $12,441.00 for Medicare taxes, $248.19 for California state disability
taxes, and $9,900.00 for contribution to the Consultant's 401(k) plan;
(ii) the issuance of 86,000 restricted shares of the Company's common
stock (the "Settlement Shares") to the Consultant valued at $2.57 per
share or an aggregate of $221,020.00; and (iii) a check in the amount
of $222,289.51 paid to the Consultant, the receipt of which is hereby
acknowledged. The Consultant agrees that he shall be responsible
for any additional taxes on the compensation payable pursuant to this
Section 3.2 not withheld by the Company as provided herein.
3.3 The Company agrees to (i) make the payments referred
to in Sections 3.1 and 3.2 above when due, and (ii) upon execution of this
Agreement promptly to instruct the Company's stock transfer agent to issue
the Settlement Shares.
3.4 The parties agree that upon the payment in full by the
Company of all of the compensation set forth in Section 3.2 above, the
Employment Agreement shall be terminated except for the Surviving
Sections, which are incorporated into this Agreement and remain in
full force and effect. The parties agree that upon termination of the
Employment Agreement as set forth herein, this Agreement, including
the Surviving Sections of the Employment Agreement, shall supersede
the Employment Agreement.
4. Reimbursement. The Company shall reimburse the
Consultant for business expenses reasonably incurred by the Consultant
in connection with the performance of the Consultant's services hereunder.
Expenses shall be reimbursed to the Consultant within 15 days of the
Consultant's submission of the Company's standard expense
reimbursement form as supplied to the Consultant by the Company
from time to time.
5. Written Statement. If requested by the President of the
Company, the Consultant shall submit a written statement to the
President that briefly describes the nature of the services provided
to the Company during the prior calendar month.
6. Independent Contractor Status. The parties hereto agree
that: (a) the Consultant shall not be considered an agent or employee
of the Company for any purpose, but shall be an independent contractor;
and (b) the Consultant shall not be treated as an employee for purposes
of employment taxes, income tax withholding and employee benefits.
7. Indemnification.
7.1 The Consultant will indemnify and hold harmless the
Company from any claim with respect to: (a) Worker's Compensation
benefits payable on account of injury or death to the Consultant; and (b)
claims for bodily injury or death or property loss or damage sustained by
the Consultant, unless caused in whole or in material part by the negligence,
either active or passive, of the Company.
7.2 The Company will defend, indemnify and hold harmless the
Consultant from lawsuit brought or damages claimed by a third party against
the Consultant for any contract, commitment, or obligation that the Company
authorized the Consultant to enter into on the Company's behalf or for any
action taken by the Consultant that was authorized by the Company.
7.3 The Company shall fully indemnify the Consultant as
provided in the Company's Certificate of Incorporation, its Bylaws, the
resolutions adopted by the Company's Board on the date of this
Agreement, and in the Delaware General Corporation Law in his
capacity as a former officer and director of the Company.
7.4 The Company agrees to maintain a policy or policies
of insurance that provide(s) liability coverage to current and former
officers and directors of the Company when acting in their respective
capacities as officers or directors of the Company, through October 1,
2005, with liability limits, and containing terms and conditions, which
are not substantially less favorable to such officers and directors as
those contained in the Company's Directors & Officers Liability
Insurance Policy Number 874-24-82 and Excess Directors & Officers
Liability Insurance Policy Number ELU82759-01 (the "D&O Insurance")
or, alternatively, to purchase the run-off coverage for the Discovery
Period under the D&O Insurance such that coverage for a minimum
of $5,000,000 is in place until October 1, 2005.
8. Disclosure of Company Confidential Information. Without
the prior written consent or authorization of the Company, the
Consultant shall not disclose confidential information concerning
the Company and the Company's business, including product
designs, marketing plans or proposals, customer information,
know-how, trademarks, trade names, trade practices, trade secrets,
investment strategies, investment plans, business plans, financial
condition, prospects, director or management discussions of Company
business, and other proprietary information of the Company
9. Non-Competition. During the term of this Agreement, the
Consultant shall not, without the prior consent of the Company, directly
or indirectly, engage in, or assist any other person to engage in, in any
capacity (e.g. as an employee, consultant, partner, etc.), and whether
or not for compensation, any activity that competes with any operating
business being conducted by the Company in the United States.
10. Remedies. The Consultant acknowledges that irreparable
injury will result to the Company if the Consultant violates and continues
to violate Sections 8 or 9 of this Agreement, and that the Company may
not be adequately compensated therefore by money damages. The
Consultant hereby expressly agrees that the Company shall be entitled,
in addition to damages and any other remedies provided by law, to an
injunction or other equitable remedy respecting any such violation by
the Consultant.
11. Entire Agreement; Modification. This Agreement constitutes
the full and complete understanding and agreement of the parties with
respect to the services to be provided by the Consultant to the Company,
and supersedes any prior understanding or agreement between the
parties relating thereto, with the exception of the Surviving Sections of
the Employment Agreement.
12. Notices. To be effective, all notices, consents or other
communications required or permitted hereunder shall be in writing.
Mailed or telecopied communications shall be directed as follows
unless written notice of a change of address or telecopier number
has been given in writing in accordance with this Section:
If to the Company: Metalclad Corporation
Attn: Wayne W. Mills
800 Nicollet Mall, Suite 2690
Minneapolis, MN 55402
Telecopier No. (612) 338-7332
If to the Consultant: Anthony C. Dabbene
26921 Magnolia Court
Laguna Hills, California 92653
Telecopier No. 949-367-9622
13. Waiver. No waiver of any term, condition or covenant of this
Agreement by a party shall be deemed to be a waiver of any subsequent
breaches of the same or other terms, covenants or conditions hereof by
such party.
14. Construction. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective or
valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining
provisions of this Agreement.
15. Governing Law. This Agreement shall be construed in
accordance with the laws of the state of Delaware, without reference to
conflicts of law principals or provisions.
16. Arbitration. All disputes or claims arising out of or in any
way relating to this Agreement, including disputes regarding the validity
or enforceability of this arbitration provision, shall be submitted to and
determined by final and binding arbitration under the rules of the American
Arbitration Association. Arbitration proceedings may be initiated by the
Company or the Consultant upon notice to the other and to the American
Arbitration Association, and shall be conducted by three arbitrators
under the rules of the American Arbitration Association in Orange County,
California in the case of an arbitration initiated by the Company and in
Minneapolis, Minnesota in the case of an arbitration initiated by the
Consultant or in such other location agreed upon by the parties; provided,
however, that the Company and the Consultant may agree following the
giving of such notice to have the arbitration proceedings conducted with
a single arbitrator. The notice must specify, in general, the issues to
be resolved in any such proceeding. The arbitrators shall be selected
by agreement of the Company and the Consultant from a list of ten or
more arbitrators proposed to the Company and the Consultant by the
American Arbitration Association, or may be persons not on such list
as agreed to by the Company and the Consultant. If the Company and
the Consultant fail to agree on one or more of the persons to serve as
arbitrators within 15 days of delivery of the list as proposed by the
American Arbitration Association, then at the request of the Company
or the Consultant such arbitrators shall be selected at the discretion
of the American Arbitration Association. Each party to the arbitration
proceedings shall bear its own costs and its pro-rata share of its
fees and expenses charged by the arbitrators and the American
Arbitration Association in connection with any arbitration proceeding.
Notwithstanding the foregoing, nothing herein will prevent a party from
seeking and obtaining equitable relief from a court of competent jurisdiction
pending a final decision of the arbitrators and the proper filing of such
decision with such court.
17. Investment Representation. The Consultant represents
that he is acquiring the Settlement Shares for his own account for
investment without a view to the resale or other redistribution thereof,
and that he is, and will be at the time he receives the Settlement Shares,
an "accredited investor" as that term is defined under the Securities
Act of 1933, by reason, among the possibility of others, of his financial
net worth or income.
18. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, and
all such counterparts shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed
this Consulting Agreement effective as of the day and year first above
written.
CONSULTANT METALCLAD CORPORATION
/S/Anthony C. Dabbene /s/Bruce H. Haglund
--------------------------- ---------------------------
Anthony C. Dabbene Bruce H. Haglund, Secretary
CONSULTING AGREEMENT
THIS AGREEMENT is entered into as of the 13th day of
February, 2002, by and between Metalclad Corporation, a Delaware
corporation (hereinafter the "Company"), and Grant S. Kesler
(hereinafter the "the Consultant").
Recitals
WHEREAS, the Consultant is a former officer, director, and
employee of the Company knowledgeable with respect to all aspects
of the Company's business;
WHEREAS, the Company is desirous of obtaining the advice
and counsel of the Consultant, and the Consultant is desirous of
providing such advice and counsel, subject to the terms of this
Agreement; and
WHEREAS, the Company and the Consultant desire that
this Agreement shall supersede the Amended and Restated
Employment Agreement between the Company and the Consultant
dated January 1, 2002, a copy of which is attached hereto as
Exhibit "A" (hereinafter referred to as the "Employment Agreement"),
in its entirety, with the sole exception of Sections 7.1.3 ("Incentive
Programs"), 7.1.4 ("Options"), and 10 ("Legal Defense") thereof
(the "Surviving Sections"), which sections shall survive the
termination of the Employment Agreement and are incorporated
by reference into this Agreement as set forth below;
Agreement
NOW, THEREFORE, in consideration of the premises and
the mutual covenants contained herein, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. Engagement of the Consultant/Duties. The Company
hereby engages the Consultant as a consultant, and the Consultant
hereby accepts the engagement, upon the terms and conditions
hereinafter set forth. The Consultant shall make himself reasonably
available to consult with and advise the Company with respect to the
Company's business, including, but not limited to, (i) the litigation in
which the Company is engaged as of the date of this Agreement,
and related litigation in which the Company may become involved
in the future that is based on a cause of action that arises prior to
the date of this Agreement (collectively hereinafter referred to as
the "Litigation"), and (ii) the Company's efforts to identify appropriate
candidates for merger, acquisition, or similar transactions.
2. Term. The term of this Agreement shall commence on
February 14, 2002, and shall terminate at the close of business on
February 13, 2004. The Surviving Sections shall survive the termination
of this Agreement.
3. Consideration for Consulting; Termination of Employment
Agreement.
3.1 The consideration for the Consultant's services rendered
under this Agreement shall be the loan forgiveness as described in
Section 3.4 below.
3.2 The parties acknowledge that prior to entering into this
Agreement they agreed to the payment of $1,192,000.00 as the full and
final settlement of the compensation payable under Section 7 of the
Employment Agreement, payable on as follows: (i) $471,909.38
shall be withheld by the Company for payroll taxes, including $333,760.00
for Federal withholding taxes, $107,280.00 for California state taxes,
$3,579.88 for Social Security taxes, $17,284.00 for Medicare taxes,
$172.50 for California state disability taxes, and $9,833.00 for contribution
to the Consultant's 401(k) plan; (ii) the issuance of 140,000 restricted
shares of the Company's common stock (the "Settlement Shares") to
the Consultant valued at $2.57 per share or an aggregate of $359,800.00;
and (iii) a check in the amount of $360,290.62 paid to the Consultant,
the receipt of which is hereby acknowledged. The Consultant agrees
that he shall be responsible for any additional taxes on the compensation
payable pursuant to this Section 3.2 not withheld by the Company as
provided herein.
3.3 The Company agrees to (i) make the payments referred to
in Section 3.2 above when due, and (ii) upon execution of this Agreement
promptly to instruct the Company's stock transfer agent to issue the
Settlement Shares.
3.4 The parties acknowledge that (i) in October 1994, the
Company loaned certain funds to the Consultant to accommodate
overseas financings requiring the pledge of the Consultant's privately
owned shares of common stock of the Company, (ii) the loaned funds
were used by the Consultant to make the stock freely available for the
financing; and (iii) part of the loan was repaid in 1996. The parties
agree that the balance of such loan, which totals $543,243 as of
February 1, 2002, is to be forgiven as follows: one-third of the principal
and one-third of the interest shall be forgiven upon the execution of this
Agreement; one-third of the principal and one-third of the interest shall
be forgiven on the first anniversary of this Agreement; and the balance
of principal and interest shall be forgiven on the second anniversary of
this Agreement.
3.5 The parties agree that upon the payment in full by the
Company of all of the compensation set forth in Section 3.2 above, the
Employment Agreement shall be terminated except for the Surviving
Sections, which are incorporated into this Agreement and remain in
full force and effect. The parties agree that upon termination of the
Employment Agreement as set forth herein, this Agreement, including
the Surviving Sections of the Employment Agreement, shall supersede
the Employment Agreement.
4. Reimbursement. The Company shall reimburse the
Consultant for business expenses reasonably incurred by the
Consultant in connection with the performance of the Consultant's
services hereunder. Expenses shall be reimbursed to the Consultant
within 15 days of the Consultant's submission of the Company's
standard expense reimbursement form as supplied to the Consultant
by the Company from time to time.
5. Written Statement. If requested by the President of the
Company, the Consultant shall submit a written statement to the
President that briefly describes the nature of the services provided
to the Company during the prior calendar month.
6. Independent Contractor Status. The parties hereto
agree that: (a) the Consultant shall not be considered an agent or
employee of the Company for any purpose, but shall be an
independent contractor; (b) the Consultant shall, at all times,
defend and hold the Company harmless from any and all claims
in any way arising out of anything done or omitted to be done by
the Consultant or his agents or employees; and (c) the Consultant
shall not be treated as an employee for purposes of employment
taxes, income tax withholding and employee benefits.
7. Indemnification.
7.1 The Consultant will indemnify and hold harmless
the Company from any claim with respect to: (a) Worker's Compensation
benefits payable on account of injury or death to the Consultant; and
(b) claims for bodily injury or death or property loss or damage
sustained by the Consultant, unless caused in whole or in material
part by the negligence, either active or passive, of the Company.
7.2 The Company will defend, indemnify and hold
harmless the Consultant from lawsuit brought or damages claimed
by a third party against the Consultant for any contract, commitment,
or obligation that the Company authorized the Consultant to enter
into on the Company's behalf or for any action taken by the Consultant
that was authorized by the Company.
7.3 The Company shall fully indemnify the Consultant as
provided in the Company's Certificate of Incorporation, its Bylaws, the
resolutions adopted by the Company's Board on the date of this
Agreement, and in the Delaware General Corporation Law in his
capacity as a former officer and director of the Company.
7.4 The Company agrees to maintain a policy or policies
of insurance that provide(s) liability coverage to current and former
officers and directors of the Company when acting in their respective
capacities as officers or directors of the Company, through October 1,
2005, with liability limits, and containing terms and conditions, which
are not substantially less favorable to such officers and directors as
those contained in the Company's Directors & Officers Liability Insurance
Policy Number 874-24-82 and Excess Directors & Officers Liability
Insurance Policy Number ELU82759-01 (the "D&O Insurance") or,
alternatively, to purchase the run-off coverage for the Discovery
Period under the D&O Insurance such that coverage for a minimum
of $5,000,000 is in place until October 1, 2005.
8. Disclosure of Company Confidential Information.
Without the prior written consent or authorization of the Company, the
Consultant shall not disclose confidential information concerning the
Company and the Company's business, including product designs,
marketing plans or proposals, customer information, know-how,
trademarks, trade names, trade practices, trade secrets, investment
strategies, investment plans, business plans, financial condition,
prospects, director or management discussions of Company business,
and other proprietary information of the Company
9. Non-Competition. During the term of this Agreement, the
Consultant shall not, without the prior consent of the Company, directly
or indirectly, engage in, or assist any other person to engage in, in any
capacity (e.g. as an employee, consultant, partner, etc.), and whether
or not for compensation, any activity that competes with any operating
business being conducted by the Company in the United States.
10. Remedies. The Consultant acknowledges that
irreparable injury will result to the Company if the Consultant
violates and continues to violate Sections 8 or 9 of this Agreement,
and that the Company may not be adequately compensated therefore
by money damages. The Consultant hereby expressly agrees
that the Company shall be entitled, in addition to damages and
any other remedies provided by law, to an injunction or other
equitable remedy respecting any such violation by the Consultant.
11. Entire Agreement; Modification. This Agreement
constitutes the full and complete understanding and agreement
of the parties with respect to the services to be provided by the
Consultant to the Company, and supersedes any prior understanding
or agreement between the parties relating thereto, with the exception
of the Surviving Sections of the Employment Agreement.
12. Notices. To be effective, all notices, consents or other
communications required or permitted hereunder shall be in writing.
Mailed or telecopied communications shall be directed as follows
unless written notice of a change of address or telecopier number
has been given in writing in accordance with this Section:
If to the Company: Metalclad Corporation
Attn: Wayne W. Mills
800 Nicollet Mall, Suite 2690
Minneapolis, MN 55402
Telecopier No. (612) 338-7332
If to the Consultant: Grant S. Kesler
3739 Brighton Point Drive
Salt Lake City, Utah 84121
Telecopier No. 801-943-8965
13. Waiver. No waiver of any term, condition or covenant of this
Agreement by a party shall be deemed to be a waiver of any subsequent
breaches of the same or other terms, covenants or conditions hereof by
such party.
14. Construction. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective or
valid under applicable law, but if any provision of this Agreement shall
be prohibited by or invalid under applicable law, such provision shall
be ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions
of this Agreement.
15. Governing Law. This Agreement shall be construed in
accordance with the laws of the state of Delaware, without reference
to conflicts of law principles or provisions.
16. Arbitration. All disputes or claims arising out of or in any
way relating to this Agreement, including disputes regarding the validity
or enforceability of this arbitration provision, shall be submitted to and
determined by final and binding arbitration under the rules of the
American Arbitration Association. Arbitration proceedings may be
initiated by the Company or the Consultant upon notice to the other
and to the American Arbitration Association, and shall be conducted
by three arbitrators under the rules of the American Arbitration
Association in Orange County, California in the case of an arbitration
initiated by the Company and in Minneapolis, Minnesota in the case
of an arbitration initiated by the Consultant or in such other location
agreed upon by the parties; provided, however, that the Company
and the Consultant may agree following the giving of such notice to
have the arbitration proceedings conducted with a single arbitrator.
The notice must specify, in general, the issues to be resolved in any
such proceeding. The arbitrators shall be selected by agreement of
the Company and the Consultant from a list of ten or more arbitrators
proposed to the Company and the Consultant by the American
Arbitration Association, or may be persons not on such list as
agreed to by the Company and the Consultant. If the Company
and the Consultant fail to agree on one or more of the persons
to serve as arbitrators within 15 days of delivery of the list as
proposed by the American Arbitration Association, then at the
request of the Company or the Consultant such arbitrators
shall be selected at the discretion of the American Arbitration
Association. Each party to the arbitration proceedings shall
bear its own costs and its pro-rata share of its fees and expenses
charged by the arbitrators and the American Arbitration Association
in connection with any arbitration proceeding. Notwithstanding
the foregoing, nothing herein will prevent a party from seeking
and obtaining equitable relief from a court of competent jurisdiction
pending a final decision of the arbitrators and the proper filing of
such decision with such court.
17. Access to Documents. The Company and the
Consultant acknowledge that the Consultant has an academic
interest in certain documents that relate to the NAFTA litigation
in which the Company was involved. The Company agrees to
give the Consultant permission to make one copy of all legal
pleadings and exhibits used in the NAFTA litigation. The
Company also agrees that all remaining documents are to
be stored at the warehouse of the Company's subsidiary in
Anaheim, California and made available to Executive as
reasonably requested during the term of this Agreement.
18. Investment Representation. The Consultant
represents that he is acquiring the Settlement Shares for his
own account for investment without a view to the resale or
other redistribution thereof, and that he is, and will be at the
time he receives the Settlement Shares, an "accredited
investor" as that term is defined under the Securities
Act of 1933, by reason, among the possibility of others,
of his financial net worth or income.
19. Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed
to be an original, and all such counterparts shall constitute
one instrument.
IN WITNESS WHEREOF, the parties hereto have
executed this Consulting Agreement effective as of the day
and year first above written.
CONSULTANT METALCLAD CORPORATION
/s/Grant S. Kesler /s/Bruce H. Haglund
---------------------------- -----------------------------
Grant S. Kesler Bruce H. Haglund, Secretary
AMENDED AND RESTATED BYLAWS
OF
METALCLAD CORPORATION
a Delaware corporation
ARTICLE I
OFFICERS
Section 1.1 Registered Office. The registered office of
Metalclad Corporation (hereinafter called the "Corporation") shall
be at such place in the State of Delaware as shall be designated
by the Board of Directors (the "Board").
Section 1.2 The principal office for the transaction of the
business of the Corporation shall be at such place as may be
established by the Board. The Board is granted full power and
authority to change said principal office from one location to
another.
Section 1.3 The Corporation may also have an office or
offices at such other places, either within or without the State
of Delaware, as the Board may from time to time designate or
the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 2.1 Time and Place of Meetings. Meetings of
stockholders shall be held at such time and place, within or
without the State of Delaware, as determined by the Board,
and shall be stated in the notice of the meeting or in a duly
executed waiver of notice thereof.
Section 2.2 Annual Meetings. Annual meetings of the
stockholders of the Corporation for the purpose of electing
directors and for the transaction of such other proper business
as may come before such meetings may be held at such time,
date and place as the Board shall determine by resolution.
Section 2.3 Special Meetings. Special meetings of the
stockholders of the Corporation for any purpose or purposes
may be called at any time by the Board, or by a committee of
the Board that has been duly designated by the Board and
whose powers and authority, as provided in a resolution of
the Board or in the Bylaws of the Corporation, include the
power to call such meetings, and shall be called by the
President or Secretary at the request in writing by the Board,
but such special meetings may not be called by any other
person or persons. Business transacted at any special
meeting of stockholders shall be limited to the purposes
stated in the notice.
Section 2.4 Stockholder Lists. The officer who has charge
of the stock ledger of the Corporation shall prepare and make,
at least 10 days before every meeting of stockholders, a complete
list of stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder
and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least 10 days prior to
the meeting, either at a place within the city where the meeting
is to be held, which place shall be specified in the notice of the
meeting or at the place of the meeting, and the list shall also be
available at the meeting during the whole time thereof, and may
be inspected by any stockholder who is present.
Section 2.5 Notice of Meetings. Written notice of each
meeting of stockholders, whether annual or special, stating the
place, date and hour of the meeting and, in the case of a special
meeting, the purpose or purposes for which such meeting has
been called, shall be given to each stockholder of record entitled
to vote at such meeting not less than 10 nor more than 60 days
before the date of the meeting. Except as otherwise expressly
required by law, notice of any adjourned meeting of the
stockholders need not be given if the time and place thereof
are announced at the meeting at which the adjournment is taken.
Section 2.6 Whenever any notice is required to be given
under the provisions of the statutes or of the Certificate of
Incorporation or of these Bylaws, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent
thereto. Notice of any meeting of stockholders shall be deemed
waived by any stockholder who shall attend such meeting in
person or by proxy, except a stockholder who shall attend such
meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.
Section 2.6 Quorum. The holders of a majority of the
stock issued and outstanding and entitled to vote thereat, present
in person or represented by proxy, shall constitute a quorum for
holding all meetings of stockholders, except as otherwise
provided by applicable law or by the Certificate of Incorporation;
provided, however, that the stockholders present at a duly called
or held meeting at which a quorum is present may continue to
transact business until adjournment notwithstanding the
withdrawal of enough stockholders to leave less than a quorum,
if any action taken (other than adjournment) is approved by at
least a majority of the shares required to constitute a quorum.
Section 2.7 Adjournment. The Chairman of any meeting
of the stockholders, annual or special, shall have power to adjourn
any such meeting, from time to time, without notice other than
announcement at such meeting. At such adjourned meeting,
any business may be transacted which might have been
transacted at the meeting as originally noticed. If the adjournment
is for more than 30 days, or if after the adjournment a new record
date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 2.8 Voting. In all matters, when a quorum is present
at any meeting, the vote of the holders of a majority of the capital
stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of
applicable law, these Bylaws or the Certificate of Incorporation, a
different vote is required in which case such express provision
shall govern and control the decision of such question. Such
vote may be viva voce or by written ballot; provided, however, that
the Board may, in its discretion, require a written ballot for any vote,
and further provided that all elections for directors must be by
written ballot upon demand made by a stockholder at any election
and before the voting begins.
Unless otherwise provided in the Certificate of Incorporation, each
stockholder shall at every meeting of the stockholders be entitled
to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder.
Section 2.9 Cumulative Voting. Every stockholder entitled
to vote at any election for directors of the Corporation may cumulate
such holder's votes and give one candidate a number of votes
equal to the number of directors to be elected multiplied by the
number of votes to which such holder's shares are entitled, or
distribute such holder's votes on the same principle among as
many candidates as such holder deems appropriate. The
candidates receiving the highest number of votes shall be
elected, up to the number of directors to be elected.
Section 2.10 Proxies. Each stockholder entitled to vote at
a meeting of stockholders may authorize in writing another person
or persons to act for such holder by proxy, but no proxy shall be
voted or acted upon after three years from its date, unless the
person executing the proxy specifies therein a longer period of
time for which it is to continue in force.
Section 2.11 Inspectors of Election. The Corporation shall,
in advance of any meeting of stockholders, appoint one or more
inspectors to act at the meeting and make a written report thereof.
The Corporation or the Chairman of the meeting shall appoint
one or more alternate inspectors to replace any inspector who
fails to act. Each inspector, before undertaking his or her duties,
shall take and sign an oath faithfully to execute the duties of
inspector with strict impartiality and according to the best of his
or her ability. The inspector shall ascertain the number of shares
outstanding and the voting power of each, determine the shares
represented at the meeting and the validity of the proxies and
ballots, count all votes and ballots, determine and retain for a
reasonable period a record of the disposition of any challenges
made to any determination by the inspectors and certify their
determination of the number of shares represented at the
meeting and their count of all votes and ballots. The inspector
shall perform his or her duties and shall make all determinations
in accordance with the Delaware General Corporation Law
including, without limitation, Section 231 of the Delaware General
Corporation Law.
The date and time of the opening and closing of the polls for
each matter upon which the stockholders will vote at a meeting
shall be announced at the meeting. No ballot, proxies or votes,
nor revocations thereof or changes thereto, shall be accepted
by the inspectors after the closing of the polls unless the Court
of Chancery upon application by a stockholder shall determine
otherwise.
The appointment of inspectors of election shall be in the discretion
of the Board until such time as the Corporation has a class of
voting stock that is (i) listed on a national securities exchange,
(ii) authorized for quotation on an interdealer quotation system
of a registered national securities association, or (iii) held of
record by more than 2,000 stockholders, at which time
appointment of inspectors shall be obligatory.
Section 2.12 Action Without a Meeting. Subject to the
requirements of Sections 2.13, 2.14 and 2.15, any action which
may be taken at any annual or special meeting of the stockholders,
may be taken without a meeting, if a consent in writing, setting
forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number
of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were
present and voted. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not
consented in writing.
Section 2.13 Record Date for Action by Written Consent.
In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting,
the Board may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record
date is adopted by the Board, and which date shall not be more
than 10 days after the date upon which the resolution fixing the
record date is adopted by the Board. Any stockholder of record
seeking to have the stockholders authorize or take corporate
action by written consent shall, by written notice to the Secretary,
request the Board to fix a record date. The Board shall promptly,
but in all events within 10 days after the date on which such a
request is received, adopt a resolution fixing the record date
(unless a record date has previously been fixed by the Board
pursuant to the first sentence of this Section 2.13). If no record
date has been fixed by the Board pursuant to the first sentence
of this Section 2.13 or otherwise within 10 days of the date on
which such a request is received, the record date for determining
stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the Board is required
by applicable law, shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is
delivered to the Corporation by delivery to its registered office in
Delaware, its principal place of business, or to any officer or agent
of the Corporation having custody of the book in which proceedings
of meetings of stockholders are recorded. Delivery shall be by
hand or by certified or registered mail, return receipt requested.
If no record date has been fixed by the Board pursuant to the first
sentence of this Section 2.13, the record date for determining
stockholders entitled to consent to corporate action in writing
without a meeting if prior action by the Board is required by law
shall be at the close of business on the date on which the Board
adopts the resolution taking such prior action.
Section 2.14 Inspectors of Written Consent. In the event of
the delivery, in the manner provided by Section 2.13, to the Corporation
of written consent or consents to take corporate action and/or any
related revocation or revocations, the Corporation shall engage
independent inspectors of elections for the purpose of performing
promptly a ministerial review of the validity of the consents and
revocations. For the purpose of permitting the inspectors to perform
such review, no action by written consent without a meeting shall
be effective until such date as the independent inspectors certify to
the Corporation that the consents delivered to the Corporation in
accordance with Section 2.13 represent at least the minimum
number of votes that would be necessary to take the corporate
action. Nothing contained in this Section 2.14 shall in any way
be construed to suggest or imply that the Board or any stockholder
shall not be entitled to contest the validity of any consent or
revocation thereof, whether before or after such certification by
the independent inspectors, or to take any other action (including,
without limitation, the commencement, prosecution or defense
of any litigation with respect thereto, and the seeking of injunctive
relief in such litigation).
Section 2.15 Effectiveness of Written Consent. Every
written consent shall bear the date of signature of each stockholder
who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless, within 60 days
of the earliest dated written consent received in accordance with
Section 2.13, a written consent or consents signed by a sufficient
number of holders to take such action are delivered to the corporation
in the manner prescribed in Section 2.13.
ARTICLE III
DIRECTORS
Section 3.1 Powers. The Board shall have the power to
manage or direct the management of the property, business and
affairs of the Corporation, and except as expressly limited by law,
to exercise all of its corporate powers. The Board may establish
procedures and rules, or may authorize the Chairman of any
meeting of stockholders to establish procedures and rules, for
the fair and orderly conduct of any meeting including, without
limitation, registration of the stockholders attending the meeting,
adoption of an agenda, establishing the order of business at the
meeting, recessing and adjourning the meeting for the purposes
of tabulating any votes and receiving the results thereof, the timing
of the opening and closing of the polls, and the physical layout of
the facilities for the meeting.
Section 3.2 Number, Election, Tenure and Qualification.
The authorized number of directors of the Corporation shall be
not less than three and not more than seven as determined by
resolution of the Board. No reduction of the authorized number
of directors shall have the effect of removing any director before
that director's term of office expires. Until otherwise determined
by resolution of the Board, the Board shall consist of seven
directors. At all times, at least three of the directors shall each
(a) be a person who is not an officer or employee of the
Corporation or its subsidiaries, and (b) not be a person that is
an affiliate (as defined in Rule 12b-2 of the Securities Act of 1933,
as amended) or associate (as defined in Rule 14a-1(a)(3) of
Regulation 14A of the Securities and Exchange Act of 1934, as
amended) of any member of the Board or any officer of the
Corporation. Directors shall be elected at the annual meeting
of stockholders and each director shall serve until such director's
successor is elected and qualified or until such director's death,
retirement, resignation or removal.
Section 3.3 Vacancies and Newly Created Directorships.
Any newly created directorship resulting from an increase in the
number of directors may be filled by a majority of the Board then
in office, provided that a quorum is present, and any other vacancy
on the Board may be filled by the vote of a majority of the directors
then in office plus one director, even if less than a quorum, or by
a sole remaining director or by two directors if there are only two
directors.
Section 3.4 Meetings. The Board may hold meetings, both
regular and special, either within or outside the State of Delaware.
Section 3.5 Annual Meeting. The Board shall meet as soon
as practicable after each annual election of directors.
Section 3.6 Regular Meetings. Regular meetings of the
Board shall be held without call or notice at such time and place
as shall from time to time be determined by resolution of the Board.
Section 3.7 Special Meetings. Special meetings of the Board
may be called at any time, and for any purpose permitted by law,
by the Chairman of the Board (or, if the Board does not appoint a
Chairman of the Board, the President), or by the Secretary on the
written request of any two members of the Board unless the
Board consists of only one director in which case the special
meeting shall be called on the written request of the sole director,
which meetings shall be held at the time and place designated
by the person or persons calling the meeting. Notice of the time,
place and purpose of any such meeting shall be given to the
directors by the Secretary, or in case of the Secretary's absence,
refusal or inability to act, by any other officer. Any such notice
may be given by mail, by telegraph, by telephone, by personal
service, or by any combination thereof as to different directors.
If the notice is by mail, then it shall be mailed by U.S Post Office
or commercial express mail service by overnight delivery, postage
pre-paid, for delivery at least 72 hours before the time of the
meeting; if by facsimile transmission, at least 48 hours before
the time of the meeting; if by telephone or by personal service,
communicated or delivered at least 48 hours before the time of
the meeting.
Section 3.8 Quorum; Voting. At all meetings of the Board,
a majority of the whole board shall be necessary and sufficient
to constitute a quorum for the transaction of business, and the
act of a majority of the directors present at any meeting at which
there is a quorum shall be the act of the Board, except as may
be otherwise specifically provided by applicable law or by the
Certificate of Incorporation or by these Bylaws. Any meeting of
the Board may be adjourned to meet again at a stated day and
hour. Even though a quorum is not present, as required in this
Section, a majority of the directors present at any meeting of the
Board, either regular or special, may adjourn from time to time
until a quorum be had. Notice of any adjourned meeting must
be given. Notwithstanding the foregoing, the affirmative vote
of a majority of the Board of Directors plus one director shall
be required for the Board to take any action to enter into a
transaction involving:
(i) the issuance of any equity securities of the Company;
(ii) the election and compensation of the officers of the
Company;
(iii) any expenditure or contractual obligation in excess of
$500,000;
(iv) any merger or other form of reorganization;
(v) the approval of any action that also requires the
approval of the stockholders or the outstanding shares of the
Company;
(vi) the creation of any committees of the Board of
Directors;
(vii) the filling of vacancies on the Board of Directors or
any committee of the Board of Directors, except that vacancies
on the Board of Directors may be filled by a sole remaining
director or by two directors if there are only two directors as
provided in Section 3.3;
(viii) the amendment or repeal of the Bylaws or the adoption of
new Bylaws; and
(ix) a distribution to the stockholders of the Company
with respect to shares owned.
Section 3.9 Fees and Compensation. Each director and
each member of a committee of the Board shall receive such
fees and reimbursement of expenses incurred on behalf of the
Corporation or in attending meetings as the Board may from
time to time determine. No such payment shall preclude any
director from serving the Corporation in any other capacity and
receiving compensation therefore.
Section 3.10 Meetings by Telephonic Communication.
Members of the Board or any committee thereof may participate
in a regular or special meeting of such Board or committee by
means of conference telephone or similar communications
equipment by means of which all persons participating in the
meeting can hear each other. Participation in a meeting pursuant
to this Section shall constitute presence in person at such meeting.
Section 3.11 Committees. The Board may, in its discretion,
designate committees, each committee to consist of one or more
of the directors of the Corporation. The Board may designate one
or more directors as alternate members of any committee, who
may replace any absent or disqualified member at any meeting of
the committee. Upon the absence or disqualification of a member
of a committee, if the Board has not designated one or more
alternates (or if such alternate(s) are then absent or disqualified),
the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members
constitute a quorum, may unanimously appoint another member
of the Board to act at the meeting in the place of any such absent
or disqualified member or alternate. Any such committee, to the
extent provided in the resolution of the Board, shall have and may
exercise all the powers and authority of the Board in the
management of the business and affairs of the Corporation,
and may authorize the seal of the Corporation to be affixed to all
papers that may require it; but no such committee shall have the
power or authority in reference to: (a) amending the Certificate of
Incorporation (except that a committee may, to the extent
authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the Board as provided
in Section 151(a) of the Delaware General Corporation Law fix
the designations and any of the preferences or rights of such
shares relating to dividends, redemption, dissolution, any
distribution of assets of the Corporation or the conversion into,
or the exchange of such shares for, shares of any other class or
classes or any other series of the same or any other class or
classes of stock of the Corporation or fix the number of shares
of any series of stock or authorize the increase or decrease of
the shares of any series); (b) adopting an agreement of merger
or consolidation under Section 251 or 252 of the Delaware
General Corporation Law; (c) recommending to the stockholders
the sale, lease or exchange of all or substantially all of the
Corporation's property and assets; (d) recommending to the
stockholders a dissolution of the Corporation or a revocation
of a dissolution; or (e) amending the Bylaws of the Corporation.
Unless the resolution appointing such committee or the Certificate
of Incorporation expressly so provides, no such committee shall
have the power or authority to declare a dividend or to authorize
the issuance of stock or to adopt a certificate of ownership and
merger pursuant to Section 253 of the Delaware General
Corporation Law. Each committee shall have such name as
may be determined from time to time by resolution adopted by
the Board. Each committee shall keep minutes of its meetings
and report to the Board when required.
Section 3.12 Action Without Meetings. Unless otherwise
restricted by applicable law or by the Certificate of Incorporation
or by these Bylaws, any action required or permitted to be taken
at any meeting of the Board or of any committee thereof may be
taken without a meeting if all members of the Board or of such
committee, as the case may be, consent thereto in writing, and
the writing or writings are filed with the minutes of the proceedings
of the Board or committee.
Section 3.13 Removal. The entire Board or any individual
director may be removed from office by a vote of stockholders
holding a majority of the outstanding shares entitled to vote at
an election of directors; provided, however, if less than the entire
Board is to be removed, no director may be removed without
cause if the votes cast against such removal would be sufficient
to elect such director if then cumulatively voted at an election of
the entire Board of Directors.
ARTICLE IV
OFFICERS
Section 4.1 Appointment and Salaries. The officers of the
Corporation shall be appointed by the Board and shall be a
President, a Secretary and a Treasurer. The Board may also
appoint a Chairman of the Board and one or more Vice Presidents
and the Board or the President may appoint such other officers
(including Assistant Secretaries and Financial Officers) as the
Board or the President may deem necessary or desirable. The
officers shall hold their offices for such terms and shall exercise
such powers and perform such duties as shall be determined
from time to time by the Board. The Board shall fix the salaries
of all officers appointed by it. Unless prohibited by applicable
law or by the Certificate of Incorporation or by these Bylaws, one
person may be elected or appointed to serve in more than one
official capacity. Any vacancy occurring in any office of the
Corporation shall be filled by the Board.
Section 4.2 Removal and Resignation. Any officer may be
removed, either with or without cause, by the Board or, in the case
of an officer not appointed by the Board, by the President. Any
officer may resign at any time by giving notice to the Board, the
President or Secretary. Any such resignation shall take effect at
the date of receipt of such notice or at any later time specified
therein and, unless otherwise specified in such notice, the
acceptance of the resignation shall not be necessary to make
it effective.
Section 4.3 Chairman of the Board. The Board may, at its
election, appoint a Chairman of the Board. If such an officer be
elected, he or she shall, if present, preside at all meetings of the
stockholders and of the Board and shall have such other powers
and duties as may from time to time be assigned to him or her by
the Board.
Section 4.4 Chief Executive Officer. The Chief Executive
officer shall have general and active management, supervision,
direction, and control of the business of the Corporation. He or
she shall assist the Chairman of the Board in the management
of the Corporation, and in the absence or disability of or upon the
delegation by the Chairman of the Board, he or she shall preside
at all meetings of stockholders and of the Board. He or she
shall report from time to time to the Board all matters within his
or her knowledge which the interest of the Corporation may
require to be brought to the attention of the Board. The Chief
Executive Officer shall have the general powers and duties of
supervision and management usually vested in the office of
President of a Corporation and shall exercise such powers and
perform such duties as generally pertain or are necessarily
incidental to his or her office and shall have such other powers
and perform such other duties as may be specifically assigned
to him or her from time to time by the Board or the Chairman of
the Board.
Section 4.5 President. Subject to such powers, if any, as
may be given by the Board to the Chairman of the Board or the
Chief Executive Officer, if there are such officers, the President
shall have supervising authority over and may exercise general
executive powers concerning all of the operations and business
of the Corporation, with the authority from time to time to delegate
to other officers such executive and other powers and duties as
he or she may deem advisable. The President shall also perform
such duties as may be specifically assigned to him or her from
time to time by the Board, the Chairman of the Board, or the Chief
Executive Officer. If there be no Chairman of the Board or Chief
Executive Officer, or in their absence, the President shall preside
at all meetings of the stockholders and of the Board, unless the
Board appoints another person who need not be a stockholder,
officer or director of the Corporation, to preside at a meeting of
stockholders.
Section 4.6 Vice President. In the absence of the President,
or in the event of the President's inability or refusal to act, the Vice
President, if any, (or if there be more than one Vice President, the
Vice Presidents in the order of their rank or, if of equal rank, then in
the order designated by the Board or the President or, in the
absence of any designation, then in the order of their appointment)
shall perform the duties of the President and when so acting,
shall have all the powers of and be subject to all the restrictions
upon the President. The rank of Vice Presidents in descending
order shall be Executive Vice President, Senior Vice President
and Vice President. The Vice President shall perform such other
duties and have such other powers as the Board may from time
to time prescribe.
Section 4.7 Secretary and Assistant Secretary. The
Secretary shall attend all meetings of the Board (unless the
Board shall otherwise determine) and all meetings of the
stockholders and record all the proceedings of the meetings of
the Corporation and of the Board in a book to be kept for that
purpose and shall perform like duties for the committees when
required. The Secretary shall give, or cause to be given, notice
of all meetings of stockholders and special meetings of the
Board. The Secretary shall have custody of the corporate
seal of the Corporation and shall (as well as any Assistant
Secretary) have authority to affix the same to any instrument
requiring it and to attest it. The Secretary shall perform such
other duties and have such other powers as the Board or the
President may from time to time prescribe.
Section 4.8 Treasurer. The Treasurer (who may also be
referred to as the Chief Financial Officer) shall have custody of
the corporate funds and securities and shall keep full and accu
rate accounts of receipts and disbursements in books belonging
to the Corporation and shall deposit all monies and other valuable
effects in the name and to the credit of the Corporation in such
depositories as may be designated by the Board. The Treasurer
may disburse the funds of the Corporation as may be ordered by
the Board or the President, taking proper vouchers for such
disbursements, and shall render to the Board at its regular
meetings, or when the Board so requires, an account of
transactions and of the financial condition of the Corporation.
The Treasurer shall perform such other duties and have such
other powers as the Board or the President may from time to
time prescribe.
Section 4.9 Assistant Officers. An assistant officer shall, in
the absence of the officer to whom such person is an assistant or
in the event of such officer's inability or refusal to act (or, if there be
more than one such assistant officer, the assistant officers in the
order designated by the Board or the President or, in the absence
of any designation, then in the order of their appointment), perform
the duties and exercise the powers of such officer. An assistant
officer shall perform such other duties and have such other powers
as the Board or the President may from time to time prescribe.
ARTICLE V
SEAL
It shall not be necessary to the validity of any instrument executed
by any authorized officer or officers of the Corporation that the
execution of such instrument be evidenced by the corporate seal,
and all documents, instruments, contracts and writings of all kinds
signed on behalf of the Corporation by any authorized officer or
officers shall be as effectual and binding on the Corporation
without the corporate seal, as if the execution of the same had
been evidenced by affixing the corporate seal thereto. The Board
may give general authority to any officer to affix the seal of the
Corporation and to attest the affixing by signature.
ARTICLE VI
FORM OF STOCK CERTIFICATE
Every holder of stock in the Corporation shall be entitled to have a
certificate signed by, or in the name of, the Corporation by the
Chairman or Vice-Chairman of the Board, if any, or by the
President or a Vice-President, and by the Treasurer or a Financial
Officer, or the Secretary or an Assistant Secretary certifying the
number of shares owned in the Corporation. Any or all of the
signatures on the certificate may be a facsimile signature. If any
officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the Corporation
with the same effect as if such person were such officer, transfer
agent or registrar at the date of the issuance.
If the Corporation shall be authorized to issue more than one
class of stock or more than one series of any class, the powers,
designations, preferences and relative, participating, optional or
other special rights of each class of stock or series thereof and
the qualification, limitations or restrictions of such preferences
and/or rights shall be set forth in full or summarized on the face
or back of the certificate that the Corporation shall issue to r
epresent such class or series of stock. Except as otherwise
provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements, there may be
set forth on the face or back of the certificate a statement that
the Corporation will furnish without charge to each stockholder
who so requests the powers, designations, preferences and
relative, participating, optional or other special rights of each
class of stock or series thereof and the qualifications, limitations
or restrictions of such preferences and/or rights.
ARTICLE VII
REPRESENTATION OF SHARES OF OTHER CORPORATIONS
Any and all shares of any other corporation or corporations
standing in the name of the Corporation shall be voted, and all
rights incident thereto shall be represented and exercised on
behalf of the Corporation, as follows: (i) as the Board of the
Corporation may determine from time to time, or (ii) in the absence
of such determination, by the Chairman of the Board, or (iii) if the
Chairman of the Board shall not vote or otherwise act with respect
to the shares, by the President. The foregoing authority may be
exercised either by any such officer in person or by any other
person authorized so to do by proxy or power of attorney duly
executed by said officer.
ARTICLE VIII
LOST, STOLEN OR DESTROYED CERTIFICATES
The Board may direct a new certificate or certificates be issued in
place of any certificate theretofore issued alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of the fact by
the person claiming the certificate to be lost, stolen or destroyed.
When authorizing such issue of a new certificate, the Board may,
in its discretion and as a condition precedent to the issuance,
require the owner of such certificate or certificates, or such
person's legal representative, to give the Corporation a bond
in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the
lost, stolen or destroyed certificate.
ARTICLE IX
RECORD DATE
The Board may fix in advance a date, which shall not be more
than 60 days nor less than 10 days preceding the date of any
meeting of stockholders, nor more than 60 days prior to any
other action, as a record date for the determination of
stockholders entitled to notice of or to vote at any such meeting
and any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment
of any dividend or other distribution or allotment of any rights, or
entitled to exercise the rights in respect of any change, conversion
or exchange of stock, and in such case such stockholders, and
only such stockholders as shall be stockholders of record on the
date so fixed shall be entitled to such notice of, and to vote at,
such meeting and any adjournment thereof, or to receive payment
of such dividend, or to receive such allotment of rights, or to
exercise such rights, or to give such consent, as the case may
be, notwithstanding any transfer of any stock on the books of the
Corporation after any such record date fixed as aforesaid.
ARTICLE X
REGISTERED STOCKHOLDERS
The Corporation shall be entitled to treat the holder of record of
any share or shares of stock of the Corporation as the holder in
fact thereof and shall not be bound to recognize any equitable or
other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice
thereof, except as expressly provided by applicable law.
ARTICLE XI
FISCAL YEAR
The Corporation shall operate on a fiscal year ending on
December 31 or as shall otherwise be determined by resolution
of the Board.
ARTICLE XII
AMENDMENTS
Subject to any contrary or limiting provisions contained in the
Certificate of Incorporation, these Bylaws may be amended or
repealed, or new Bylaws may be adopted by the Board at any
regular or special meeting.
ARTICLE XIII
DIVIDENDS
Section 13.1 Declaration. Dividends on the capital stock of
the Corporation, subject to the provisions of the Certificate of
Incorporation, if any, may be declared by the Board at any regular
or special meeting, pursuant to law, and may be paid in cash, in
property or in shares of capital stock.
Section 13.2 Set Aside Funds. Before payment of any
dividend, there may be set aside out of any funds of the Corporation
available for dividends such sums as the directors from time to
time, in their absolute discretion, think proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or
for repairing or maintaining any property of the Corporation, or
for such other purpose as the directors shall determine to be in
the best interest of the Corporation, and the directors may modify
or abolish any such reserve in the manner in which it was created.
ARTICLE XIV
INDEMNIFICATION AND INSURANCE
Section 14.1 Right to Indemnification. Each person who
was or is a party or is threatened to be made a party to or is
involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person of whom he or she
is the legal representative, is or was a director or officer of the
Corporation or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether the basis
of such proceeding is alleged action or inaction in an official
capacity or in any other capacity while serving as a director,
officer, employee or agent, shall be indemnified and held
harmless by the Corporation to the fullest extent permitted by
the laws of Delaware, as the same exist or may hereafter be
amended, against all costs, charges, expenses, liabilities and
losses (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection
therewith, and such indemnification shall continue as to a person
who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that the Corporation shall
indemnify any such person seeking indemnification in connection
with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board.
The right to indemnification conferred in this Article shall be a
contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such
proceeding in advance of its final disposition; provided, however,
that, if the Delaware General Corporation Law requires, the
payment of such expenses incurred by a director or officer in his
or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such person while a
director or officer, including, without limitation, service to an
employee benefit plan) in advance of the final disposition of a
proceeding, shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such director or officer, to
repay all amounts so advanced if it shall ultimately be determined
that such director or officer is not entitled to be indemnified under
this Section or otherwise. The Corporation may, by action of the
Board, provide indemnification to employees and agents of the
Corporation with the same scope and effect as the foregoing
indemnification of directors and officers.
Section 14.2 Right of Claimant to Bring Suit. If a claim under
Section 14.1 of this Article is not paid in full by the Corporation
within thirty days after a written claim has been received by the
Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the
claim and, if successful in whole or in part, the claimant shall be
entitled to be paid also the expense of prosecuting such claim.
It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in defending
any proceeding in advance of its final disposition where the
required undertaking, if any is required, has been tendered to
the Corporation) that the claimant has failed to meet a standard
of conduct which makes it permissible under Delaware law for
the Corporation to indemnify the claimant for the amount claimed.
Neither the failure of the Corporation (including its Board,
independent legal counsel, or its stockholders) to have made
a determination prior to the commencement of such action that
indemnification of the claimant is permissible in the
circumstances because he or she has met such standard of
conduct, nor an actual determination by the Corporation
(including its Board, independent legal counsel, or its
stockholders) that the claimant has not met such standard of
conduct, shall be a defense to the action or create a presumption
that the claimant has failed to meet such standard of conduct.
Section 14.3 Non-Exclusivity of Rights. The right to
indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition
conferred in this Article shall not be exclusive of any other
right which any person may have or hereafter acquire under
any statute, provision of the Certificate of Incorporation, bylaw,
agreement, vote of stockholders or disinterested directors or
otherwise.
Section 14.4 Insurance. The Corporation may maintain
insurance, at its expense, to protect itself and any director, officer,
employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against any
such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such
expense, liability or loss under Delaware law.
Section 14.5 Expenses as a Witness. To the extent that
any director, officer, employee or agent of the Corporation is by
reason of such position, or a position with another entity at the
request of the Corporation, a witness in any action, suit or
proceeding, he or she shall be indemnified against all costs
and expenses actually and reasonably incurred by him or her
or on his or her behalf in connection therewith.
Section 14.6 Indemnity Agreements. The Corporation
may enter into agreements with any director, officer, employee
or agent of the Corporation providing for indemnification to the
full extent permitted by Delaware law.
CERTIFICATE OF SECRETARY
OF
METALCLAD CORPORATION,
a Delaware corporation
I hereby certify that I am the duly elected and acting Secretary of
Metalclad Corporation, a Delaware corporation, and that the
foregoing Amended and Restated Bylaws, comprising 20
pages, constitute the Amended and Restated Bylaws of said
corporation as duly adopted by the Board of Directors on
February 12, 2002.
/s/Bruce H. Haglund
---------------------------
Bruce H. Haglund, Secretary