EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the "Agreement") is made and entered into
as of July 3, 2006, by and between Composite Technology Corporation, a Nevada
corporation (the "Company"), and Xxxxxxx Xxxxxx ("Executive"). In consideration
of the mutual covenants and conditions contained herein, the parties, intending
to be legally bound and acknowledging that this Agreement shall supplant,
supersede and cause to terminate the Services Agreement between EU Energy plc (a
wholly owned subsidiary of the Company as of the effective date of this
Agreement) and Executive dated December 13, 2004 and the Contract for Services
between EU Energy plc and Laikadog Holdings Limited (an entity owned and
controlled by Executive), agree as follows:
ARTICLE 1
EMPLOYMENT
1.1 Employment. The Company hereby employs Executive, and Executive hereby
accepts employment with the Company, upon the terms and subject to the
conditions hereinafter set forth, to hold the office of President of Composite
Technology Corporation. Executive shall do and perform, and shall have the
authority to do and perform, all services, acts and other things necessary to
perform such tasks as may be assigned to Executive by the Company. Executive
shall adhere to the Company's policies, ethical practices and standards of care
and competence. Executive shall devote his full business time and attention and
best effort to the affairs of the Company, and Executive shall not engage in any
other business duties or pursuits, or directly or indirectly render any services
of a business, commercial or professional nature to any other entity or person,
whether for compensation or otherwise, without the prior written consent of the
Company; provided, however, that Executive may participate in charitable and
other civic functions so long as such other activities do not adversely affect
Executive's ability to perform his responsibilities hereunder.
1.2 Term. This Agreement shall be effective as of the date of the closing
of the acquisition of EU Energy plc (anticipated to be July 3, 2006), and shall,
unless otherwise terminated as provided herein, terminate on July 2, (the
"Initial Term"). The Initial Term shall be extended automatically for an
additional one year period on each July 2, commencing July 2, unless the Company
provides notice to the contrary (the "Non-Renewal Notice") at least thirty (30)
days prior to the expiration of the Initial Term or any such one year period
(the period from the effective date of this Agreement until the termination of
this Agreement is referred to as the "Term").
ARTICLE 2
COMPENSATION AND BENEFITS
2.1 Base Salary. During the Term, the Company shall pay to Executive a
base salary of $400,000 per year (the "Base Salary"), payable in equal
semimonthly installments, or at such other time or times as the Company
generally pays employees. The Company shall review the Base Salary at least
annually during the first quarter of each calendar year and may increase the
Base Salary in its sole discretion.
2.2 Annual Bonus. During the Term, Executive shall be eligible to earn an
annual bonus, based upon the achievement, as determined by the Company in its
sole discretion. Any such discretionary bonus shall be paid no later than the
end of the first quarter of the calendar year following each year of the Term
and shall be payable to Executive only if Executive continues to be employed by
the Company on the day any such annual bonus is actually paid.
2.3 Benefits. During the Term, Executive and Executive's spouse shall be
eligible to participate in and shall be covered by any and all medical,
disability, life and other insurance plans, stock option incentive programs,
401K plans and other benefits generally available to other employees of the
Company in similar employment positions, as such plans and benefits may change
from time to time, on the same terms as such employees, subject to meeting any
and all applicable eligibility requirements. Notwithstanding the foregoing, if
the medical insurance benefits cannot be arranged for Xxxxxxx and his wife by
the Company , then the Company agrees to pay his medical expenses.
2.4 Employment Taxes. All payments to Executive hereunder shall be made
after deduction for any federal, state and local withholding and payroll taxes,
all as determined under applicable law. The Company shall make all reports and
similar filings required by law with respect to such payments, withholdings and
taxes.
2.5 Vacation. During the Term, Executive shall receive paid vacation
annually in accordance with the Company's practices for executive officers, as
in effect from time to time, but in any event not less than four weeks per
calendar year.
ARTICLE 3
TERMINATION
3.1 Termination for Cause. The Company shall have the right at any time,
exercisable immediately with or without notice, to terminate this Agreement for
"Cause." As used herein, "Cause" shall mean any of the following: (i) Executive
materially breaches any provision of this Agreement; (ii) Executive is indicted,
convicted or pleads "no contest" to a felony, or any other conduct of a criminal
nature (other than traffic violations); (iii) Executive engages in fraud,
embezzlement or any other illegal or wrongful conduct materially detrimental to
the Company or the Company's reputation, regardless of whether such conduct is
designed to defraud the Company or others; (iv) Executive takes action (or fails
to take action) that Executive knew or should have reasonably known was likely
to materially damage the Company; (v) Executive is grossly negligent in the
performance of, or willfully disregards, Executive's obligations hereunder; (vi)
Executive intentionally imparts material Proprietary Information to competitors
or other third parties other than in the course of carrying out Executive's
duties hereunder; or (vii) Executive refuses to obey the reasonable and lawful
orders of the Chief Executive Officer or Board of Directors of the Company. Upon
termination for Cause, Executive shall be entitled to receive (1) the Base
Salary then in effect and the benefits set forth in Section 2.3 through the
effective date of such termination and (2) no other payments or compensation of
any kind, except to the extent required by law. The Company's exercise of its
right to terminate Executive for Cause shall be without prejudice to any other
remedy to which the Company may be entitled at law, in equity or under this
Agreement.
3.2 Resignation. Executive shall have the right at any time, exercisable
upon 60 days notice, to resign and terminate the Agreement for any reason or no
reason. Upon Executive's termination of this Agreement pursuant to this Section
3.2, Executive shall be entitled to receive (i) the Base Salary then in effect
and the benefits set forth in Section 2.3 through the effective date or such
resignation and (ii) no other payments or compensation of any kind, except to
the extent required by law.
3.3 Termination Due to Death or Disability. This Agreement shall
automatically terminate upon the death of Executive. In addition, the Company
shall have the right, exercisable upon ten (10) days notice, to terminate the
Agreement if Executive is unable to perform Executive's duties hereunder by
reason of any mental or physical disability or incapacity for a period of 90
consecutive days. Upon termination due to death or disability pursuant to this
Section 3.3, Executive (or Executive's estate, as the case may be) shall be
entitled to receive (i) the Base Salary then in effect and the benefits set
forth in Section 2.3 through the effective date of such termination and (ii) no
other payments or compensation of any kind, except to the extent required by
law.
3.4 Termination Without Cause or Non-Renewal by the Company . The Company
shall have the right at any time and without any prior notice to terminate this
Agreement for any reason other than as set forth in Sections 3.1 or 3.3, or for
no reason. Upon the Company's termination of this Agreement pursuant to this
Section 3.4, Executive shall be entitled to receive (i) the Base Salary then in
effect and the benefits set forth in Section 2.3 through the effective date of
such termination, (ii) as severance pay or liquidated damages or both, payments
at the Base Salary rate then in effect in equal semimonthly installments (or at
such other time or times as the Company generally pays employees), for a period
of six months following the effective date of such termination and (iii) no
other payments or compensation of any kind except to the extent required by law.
3.5 Continuation of Health Insurance Benefits. Upon the termination of
this Agreement for any reason other than due to Executive's death, Executive
shall be eligible to continue the health insurance benefits provided to
Executive immediately prior to such termination for the period of time and
subject to the terms and conditions required under the Consolidated Omnibus
Budget Reconciliation Act of 1985 or as otherwise required by law.
ARTICLE 4
CERTAIN AGREEMENTS
4.1 Confidentiality. Executive acknowledges that the Company and its
present or future subsidiaries or affiliates, including, but not limited to EU
Energy plc, (which, collectively with the Company, are referred to herein as the
"Company") owns and will own and has developed and will develop proprietary
information concerning its business and its customers and clients which derives
value by not being generally known to the Company's competitors or others. Such
information (the "Proprietary Information") includes, among other things, trade
secrets, financial information, prices, costs, product plans, customer lists,
marketing plans, systems, manuals, training materials, forecasts, inventions,
improvements, ideas, business strategies, formulas, product ideas, computer
programs and software, software designs and documentation, source codes, object
codes, data and data bases, algorithms, techniques, schematics, compensation
information, clinical trial information, know-how and other intellectual
property. Executive shall, at all times, both during the Term and thereafter,
keep all Proprietary Information in confidence and trust and will not use or
disclose any Proprietary Information or anything relating to it without the
prior written consent of the Company, except as may be necessary in the ordinary
course of performing Executive's duties for the Company.
4.2 The Company's Property. Executive recognizes that all Proprietary
Information, however stored or memorialized, and all identification cards, keys,
access codes, marketing materials, samples, tape recordings, notes, tools,
documents, records, apparatus and other equipment or property which the Company
provides to or makes available to Executive are the sole property of the
Company. Executive shall use such property solely for the benefit of the Company
and for no other purpose. Upon the termination of this Agreement, Executive
shall (i) refrain from taking any such property from the Company's premises,
(ii) immediately return to the Company any such property in Executive's
possession or control (including any and all copies thereof) and (iii) certify
in writing that Executive has complied with this Section 4.2.
4.3 Assignment of Inventions to the Company. Executive shall promptly
disclose to the Company all improvements, inventions, formulas, ideas, works of
authorship, processes, computer programs and software, software designs and
documentation, algorithms, techniques, schematics, know-how and trade secrets,
whether or not patentable, made or conceived or reduced to practice or developed
by Executive, either alone or jointly with others, during Executive's employment
with the Company (collectively "Inventions"). All Inventions, and all patents,
copyrights, trade secret rights and other intellectual property rights related
thereto (including any extensions, renewals, continuations or divisions of any
of the foregoing), shall be the sole property of the Company to the maximum
extent permitted by law and, to the extent permitted by law, shall be "works
made for hire." Executive hereby assigns to the Company any rights Executive may
have or may acquire in all Inventions and agrees to perform, both during the
Term and thereafter, all acts necessary or desirable by the Company to permit
and assist the Company, at the Company's expense, in obtaining and enforcing
patents, copyrights, trade secrets or other intellectual property rights with
respect to such Inventions in any and all countries. Executive hereby
irrevocably designates and appoints the Company and its duly authorized officers
and agents as Executive's agents and attorneys-in-fact to act for and in
Executive's name and stead, to execute and file any applications or related
filings and do all other lawfully permitted acts to further the prosecution and
issuance or patents, copyrights, trade secret rights or other intellectual
property rights with respect to any Inventions with the same legal force and
effect as if executed by Executive. The foregoing notwithstanding, the Company
acknowledges and agrees that the Company will not own, and Executive is not
obligated to disclose or assign to the Company, any of Executive's rights in any
invention that Executive develops entirely on Executive's own time without using
the Company's equipment, supplies, facilities, or Proprietary Information except
for those inventions that either (i) relate either (a) at the time of conception
or (b) at the time of reduction to practice to the Company's business or actual
or demonstrably anticipated research or development of the Company, or (ii)
result from any work performed by Executive for the Company.
4.4 Non-Solicitation of Employees and Others. During the Term and for two
years thereafter, Executive shall not directly or indirectly (i) encourage,
solicit, induce, or attempt to encourage, solicit or induce any employee, agent
or representative of the Company to leave his/her employment with, terminate
his/her relationship with or devote less of his/her time on behalf of the
Company , or (ii) hire or attempt to hire any person who is an employee, agent
or representative of the Company at such time or was an employee, agent or
representative of the Company at any time within 180 days preceding such time.
4.5 Non-Solicitation of Customers and Clients. During the Term and for two
years thereafter, Executive shall not directly or indirectly on behalf of any
person or entity competitive with the Company solicit, divert or attempt to
solicit or divert any actual or identified prospective customer or client of the
Company at the time of such solicitation, diversion or attempted solicitation or
diversion or within one year preceding such time. Executive acknowledges and
agrees that actual and identified prospective customers and clients of the
Company constitute protectable trade secrets as defined and covered by the
Uniform Trade Secrets Act (California Civil Code ss. 3426, et seq).
4.6 Non-Interference. During the Term and for two years thereafter,
Executive shall not directly or indirectly hire, engage, sell any work to, place
orders with, or in any manner be associated with any supplier, contractor,
subcontractor or other business relation of the Company during such period if
such action by Executive would have a material adverse effect on the business,
assets or financial condition of the Company, or materially interfere with the
relationship between any such person or entity and the Company.
4.7 Covenant Not to Compete during Employment. During the Term, Executive
shall not directly or indirectly own, manage, finance, operate, join, control or
participate in the ownership, management or operation of or be employed, provide
services to or otherwise be connected in any manner with, any person or entity
competitive with the Company.
4.8 Competitor Defined. For the purposes of this Article 4, a person or
entity shall be deemed to be competitive with the Company if such person or
entity conducts, operates, carries out or otherwise engages in the development,
production, marketing or servicing of (i) any service or product of, or similar
to that of, the Company or (ii) any service or product which, or similar to that
which, the Company is developing, producing, marketing or servicing or plans to
develop, produce, market or service, provided that Executive was involved in any
manner or gained any knowledge regarding such product or service in the course
of Executive's employment with the Company.
4.9 Certain Representations of Executive. In connection with the
provisions of Sections 4.4, 4.5, 4.6, 4.7 and 4.8, Executive represents that
Executive's experience, capabilities and circumstances are such that such
provisions will not prevent him from earning a livelihood. Executive further
agrees that the limitations set forth in such sections are reasonable and
properly required for the adequate protection of the current and future business
of the Company.
4.10 Injunctive Relief. Executive acknowledges and agrees that a remedy at
law for any breach or threatened breach of the provision of this Article 4 would
be inadequate and, therefore, agrees that the Company shall be entitled to
injunctive relief in addition to any other available rights and remedies in case
of any such breach or threatened breach; provided, however that nothing
contained herein shall be construed as prohibiting the Company from pursuing any
other rights and remedies available for any such breach or threatened breach.
ARTICLE 5
MISCELLANEOUS PROVISIONS
5.1 Severability. If any provision of this Agreement, or the application
of such provision to any person or circumstance, shall be judicially declared to
be invalid, unenforceable, void or voidable, such decision will not have the
effect of invalidating, voiding or rendering voidable the remainder of this
Agreement or affect the application of such provision to other persons or
circumstances or in other jurisdictions, and the parties agree that the
provision of this Agreement so held to be invalid, unenforceable, void or
voidable will be deemed to have been stricken (except as set forth in the
following sentence) and the remainder of this Agreement will have the same force
and effect as if such provision had never been included. In the event that any
provision of this Agreement, or the application of such provision to any person
or circumstance, is judicially declared to be invalid, unenforceable, void or
voidable by reason of being unreasonably broad in scope or by reason of
extending for an unreasonably long period or time, then such provision or
application shall be reduced and reformed by such court to a scope or time
period which such court shall deem reasonable.
5.2 Successors and Assigns. Except as otherwise provided herein, the terms
and conditions of this Agreement shall inure to the benefit or and be binding
upon the respective successors and permitted assigns of the parties. Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
5.3 Notices. Any notice under this Agreement shall be in writing and shall
be deemed to have been duly given (i) on the date of personal service, (ii) on
the third business day after mailing, if the document is mailed by registered
mail, (iii) one day after being sent by professional or overnight courier or
messenger service guaranteeing one-day delivery, with receipt confirmed by the
courier, or (iv) on the date of transmission if sent by telecopy or other means
of electronic transmission, with receipt confirmed. Any such notice shall be
delivered or addressed to the address set forth below such party's signature to
this Agreement or at the most recent address specified by the addressee through
written notice under this provision. Failure to conform to the requirements of
this Section shall not defeat the effectiveness of notice actually received by
the addressee. Notices shall be delivered as follows:
If to the Company: Composite Technology Corporation
0000 XxXxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx, CEO
If to Executive: Xxxxxxx Xxxxxx
Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx
Xxxxxx Xxxx
Xxxxxxx
or to such other address as a party shall have specified most recently by like
Notice.
5.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without giving effect to the
conflicts of law provisions thereof.
5.5 Entire Agreement and Amendment. This Agreement, including any exhibits
attached hereto: (1) is the final, complete and exclusive statement of the
agreement of the parties with respect to the subject matter hereof; (2)
supersedes any prior or contemporaneous agreements, promises, assurances,
guarantees, representations, understandings, conduct, proposals, conditions,
commitments, acts, course of dealing, warranties, interpretations or terms of
any kind, oral or written, including but not limited to, the Services Agreement
between EU Energy plc (which Executive and the Company acknowledge is a wholly
owned subsidiary of the Company as of the effective date of this Agreement) and
Executive dated December 13, 2004 and the Contract for Services between EU
Energy plc and Laikadog Holdings Limited (which Executive represents, warrants
and acknowledges he is the controlling shareholder) (collectively and severally,
the "Prior Agreements"), and that any such Prior Agreements are of no force or
effect except as expressly set forth herein other than the Share Exchange
Agreement by and among the Company and the shareholders of EU Energy plc dated
June 2, 2006 which shall remain in effect, and (3) may not be varied,
supplemented or contradicted by evidence of Prior Agreements, or by evidence of
subsequent oral agreements. Executive's obligations under this Agreement may be
amended, supplemented, modified and/or rescinded only through an express written
instrument executed by the Chief Executive Officer of the Company. The Company's
obligations under this Agreement may be amended, supplemented, modified and/or
rescinded only through an express written instrument executed by the Executive.
5.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute a single agreement.
5.7 Arbitration. To the fullest extent allowed by law, any controversy or
claim arising out of or relating to this Agreement, Executive's employment with
the Company, or termination of the Agreement or such employment, shall be
settled by binding and non-appealable arbitration by a single arbitrator in the
County of Orange in the State of California. Possible disputes covered by the
foregoing, include, but are not limited to, wage, contract, discrimination, or
other employment-related claims under laws known as Title VII of the Civil
Rights Act, Americans with Disabilities Act, Age Discrimination in Employment
Act, and any other federal, state or local statutes, rules or regulations
relating to an employee's relationship with his/her employer. However, claims
for workers' compensation benefits and unemployment insurance are not covered by
this arbitration provision and such claims may be presented to the appropriate
court or state agency. If there is a controversy or claim, Executive and the
Company shall initially confer and attempt to agree on the individual to be
appointed as the arbitrator. If no agreement is reached, the parties shall
request from the Judicial Arbitration and Mediation Services ("JAMS") office in
Orange, California, a list of five retired judges affiliated with JAMS.
Executive and the Company shall each alternately strike names from such list
until only one name remains and such person shall thereby be selected as the
arbitrator. The arbitration shall be conducted in conformity with the applicable
California arbitration laws and, to the extent that anything in this Agreement
conflicts with such laws, the provisions of such laws shall govern. The
arbitrator shall (i) allow the discovery authorized by such laws in arbitration
proceedings (ii) issue a written award that sets forth the essential findings
and conclusions on which the award is based, and (iii) have the authority to
award any relief authorized by law in connection with the asserted claims or
disputes. The arbitrator's award shall be subject to correction, confirmation,
or vacation, as provided by the applicable law setting forth the standard of
judicial review of arbitration awards. Any final decision of the arbitrator may
be enforced by a court of competent jurisdiction. The Company agrees to pay for
(1) the arbitrator's fee (2) any other expense or cost that the Executive would
not be required to bear if Executive were free to bring the dispute or claim in
court, and (3) any other expense or cost that is unique to arbitration. If
either party is determined by the arbitrator to be the prevailing party in the
arbitration, then that party will be entitled to reimbursement from the other
party of all the reasonable fees (including attorneys' fees) and expenses
incurred in connection with such arbitration. The parties intend that this
Section 5.7 shall be valid, binding, enforceable and irrevocable. Executive
acknowledges that Executive is waiving Executive's right to a jury trial and
agrees that the decision of the arbitrator shall be final and binding.
5.8 Survival. It is understood and agreed that the provisions of Article 4
and this Article 5 shall survive the expiration of this Agreement.
5.9 Preparation of Agreement. It is acknowledged by each party that such
party either had separate and independent advice of counsel or the opportunity
to avail itself or himself of same. In light of these facts it is acknowledged
that no party shall be construed to be solely responsible for the drafting
hereof, and therefore any ambiguity shall not be construed against any party as
the alleged draftsman of this Agreement.
5.10 Cooperation. Each party agrees, without further consideration, to
cooperate and diligently perform any further acts, deeds and things and to
execute and deliver any documents that may from time to time be reasonably
necessary or otherwise reasonably required to consummate, evidence, confirm
and/or carry out the intent and provisions of this Agreement, all without undue
delay or expense.
5.11 Waiver. No breach of any agreement or provision herein contained, or
of any obligation under this Agreement, may be waived, nor shall any extension
of time for performance of any obligations or acts be deemed an extension of
time for performance of any other obligations or acts contained herein, except
by written instrument signed by the party to be charged or as otherwise
expressly authorized herein. No waiver of any breach of any agreement or
provision herein contained shall be deemed a waiver of any preceding or
succeeding breach thereof, or a waiver or relinquishment of any other agreement
or provision or right or power herein contained.
5.12 Headings; References; Incorporation; Gender. The headings used in
this Agreement are for convenience and reference purposes only, and shall not be
used in construing or interpreting the scope or intent of this Agreement or any
provision hereof. References to this Agreement shall include all amendments or
renewals thereof. Any exhibit referenced in this Agreement shall be construed to
be incorporated in this Agreement. As used in this Agreement, each gender shall
be deemed to include the other gender, including neutral genders or genders
appropriate for entities, if applicable, and the singular shall be deemed to
include the plural, and vice versa, as the context requires.
5.13 Execution by All Parties Required to be Binding; Electronically
Transmitted Documents. This Agreement shall not be construed to be an offer and
shall have no force and effect until this Agreement is fully executed by all
parties hereto. If a copy or counterpart of this Agreement is originally
executed and such copy or counterpart is thereafter transmitted electronically
by facsimile or similar device, such facsimile document shall for all purposes
be treated as if manually signed by the party whose facsimile signature appears.
IN WITNESS WHEREOF, the parties have executed this Agreement.
Company:
Composite Technology Corporation
By:/s/ Xxxxxx X Xxxxxxxx
-----------------------------------
Xxxxxx X Xxxxxxxx, CEO and Chairman
Executive:
/s/ Xxxxxxx Xxxxxx
---------------------------------------
Xxxxxxx Xxxxxx
