Exhibit 10.13
EMPLOYMENT AGREEMENT
THE AGREEMENT is made as of the 1st day of January, 2007 (the "Effective
Date") by and between ECOLOGY COATINGS, INC., a California corporation (the
"Company"), and XXXXX X.X. XXXXXX (the "Executive").
WITNESSETH
WHEREAS, the Company is engaged in the business of the developing,
producing and selling nanotechnology coatings;
WHEREAS, the Executive is experienced in chemistry and research
development;
WHEREAS, the Company desires to employ the Executive as its Chief Chemist
and Director of Research and Development;
WHEREAS, the parties desire to memorialize the employment of the Executive
in the Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties mutually covenant and agree as
follows:
1. EMPLOYMENT.
The Company hereby agrees to employ the Executive as its Chief Chemist and
Director of Research and Development and the Executive hereby accepts such
employment upon the terms and conditions set forth in the Agreement.
2. DUTIES.
2.1 During the term of the Agreement, the Executive shall diligently
perform all services consistent with her position as may be assigned to her by
or under the direction of the President of the Company and such other member of
senior management designated by the President. The Executive's duties shall
include: new technology and product discovery and research and development. In
the performance of her duties, the Executive shall report to the President or
such other member of senior management designated by the President.
2.2 (b) The Executive shall devote her full working time and attention to
the business and affairs of the Company, render such services in a competent and
efficient manner, and use her reasonable and appropriate best efforts to
faithfully promote the interests of the Company.
3. TERM OF EMPLOYMENT.
3.1 Term. The term of employment shall begin upon execution of the
Agreement and extend for a period of five (5) years (the "Initial Term"). It
shall thereafter be automatically renewed for successive periods of one (1)
year, each upon the terms and conditions set forth in the Agreement, unless, at
least thirty (30) days prior to such renewal date, either party shall have
delivered to the other party written notice of termination of the Agreement.
3.2 Termination Without Cause. The Company shall have the right to
terminate the Executive's employment under the Agreement by written notice to
the Executive at any time; provided, however, that, upon such termination
without Cause, as such term is defined below, the Company shall pay to Executive
the full value of the remaining unpaid compensation owed to the Executive for
the balance of the Initial Term, including medical and dental insurance coverage
that the Company provides to its other executives. If the Agreement is
terminated without Cause by the Company during the final year of the Initial
Term or during any subsequent one-year extension term, a full year's
compensation, including medical and dental insurance coverage, shall be due and
payable. The Company shall have no further liability under the Agreement, other
than for reimbursement for reasonable business expenses incurred prior to the
date of termination. The Company shall be deemed to have terminated the
Executive's employment pursuant to this Section 3.2 if such employment is
terminated: (i) by the Company without Cause; or (ii) by the Executive
voluntarily for "Good Reason." For purposes of the Agreement, "Good Reason"
means any breach by the Company of any of the terms or provisions of the
Agreement which is not cured within thirty (30) business days of written notice
by the Executive.
3.3 Termination for Cause. The Company may terminate the Agreement and the
Executive's employment hereunder immediately upon written notice to the
Executive for "Cause" (as hereinafter defined). For purposes of the Agreement,
the term "Cause" shall mean (i) the repeated failure or refusal of the Executive
to perform the duties or render the services reasonably assigned to her from
time to time by the President of the Company and/or the Board of Directors
(except during reasonable vacation periods or sick leave); (ii) the charging or
indictment of the Executive in connection with a felony or willful misfeasance
or nonfeasance; (iii) the association, directly or indirectly, of the Executive,
for her profit or financial benefit, with any person, firm, partnership,
association, entity or corporation that competes, in any material way, with the
Company; (iv) the disclosing or using of any material "Confidential Information"
or "Trade Secrets" (as those terms are defined in Section 10) of the Company at
any time by the Executive, except as required in connection with her duties to
the Company, (v) the breach by the Executive of her fiduciary duty or duty of
trust to the Company, including the commission by the Executive of an act of
fraud or embezzlement against the Company, (vi) any other material breach by the
Executive of any of the terms or provisions of the Agreement or any other
agreement between the Company and the Executive, which other material breach is
not cured within thirty (30) business days of notice by the Company; or (vii)
any other action by the Executive, which, in the good faith and reasonable
determination of all of the members of the Company's Board of Directors, has the
effect of materially injuring the reputation or business of the Company. In
which event, notwithstanding any other provision in the Agreement to the
contrary, the Executive shall have no further rights or entitlements under the
Agreement, the Company shall have no further obligations to the Executive, and
the Agreement shall be null and
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void, provided, however, that the Executive shall be entitled to be receive all
unpaid, earned salary, wages and benefits, including accrued vacation pay and
reimbursement for reasonable business expenses incurred prior to the date of
termination, to the date of termination. It shall be the Company's burden to
show that good "Cause" existed for termination under the Section by clear and
convincing evidence, and any failure by the Company to carry the burden shall
convert the termination into a termination without "Cause."
4. COMPENSATION.
4.1 Base Salary. The Company shall pay the Executive an annual salary for
her services under the Agreement as follows: (i) $180,000 for the first year;
(ii) $200,000 for each of the second, third and fourth years; and (iii) $220,000
for the fifth year (the "Base Salary"), exclusive of bonuses, cost of living and
merit increases. Such salary shall be payable bi-monthly, subject to applicable
withholding and other taxes.
4.2 Bonus and Other Compensation. Executive shall be entitled to
participate on the same terms as other directors and officers in any applicable
bonus, stock option, restricted stock, pension or profit sharing plan, or any
other type of plan adopted by the Company for the benefit of its officers,
directors and employees.
5. GRANT OF STOCK OPTIONS. The Company shall issue the Executive options to
purchase four hundred fifty thousand (450,000) shares of the Company's common
stock at a price of $2.00 per share. Provided Executive remains employed by the
Company: 150,000 shares on the third anniversary of the Effective Date, the
options shall vest as follows: 150,000 shares on the fourth anniversary of the
Effective Date; and 150,000 shares on the fifth anniversary of the Effective
Date. The options will vest immediately if the Executive is terminated under
Paragraph 3.2, "Termination Without Cause." The options issued under this
Section 5 have a ten-year term from the date of their issue, and will be
incentive stock options to the extent allowable under the Internal Revenue Code
and non-qualified options as to the balance.
6. PLACE OF EMPLOYMENT.
The Executive's regular place of work shall be 0000 Xxxxxxxx Xxxx, Xxxxx,
Xxxx, or such other place in the Akron metropolitan area that it may designate
from time to time. However, if the Company desires to move its office out of
such area, the Company shall pay the Executive's reasonable moving expenses in
that regard.
7. EXECUTIVE BENEFITS.
7.1 Holidays. The Executive shall be entitled to ten (10) paid holidays
annually. The Company will notify the Executive as much in advance as practical
with respect to the holiday schedule to be observed by the Company.
7.2 Vacations. During the term of the Agreement, the Executive shall be
entitled to two (2) weeks of paid vacation annually. Upon completion of the
first year of the Initial Term of the Agreement, the Executive shall be allowed
three (3) weeks of paid vacation annually. Upon completion of the second year of
the Initial Term of the Agreement, the Executive shall be allowed four (4) weeks
of paid vacation annually. The Executive agrees not to utilize vacation
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and/or compensatory time at a time when to do so could adversely affect the
Company's business.
7.3 Personal Insurance Benefits. The Executive shall be entitled to
participate in all medical, dental and hospitalization, group life insurance,
and any and all other such plans as are presently and hereafter provided by the
Company to its executives.
8. EXPENSES.
During the term of the Executive's employment hereunder, the Company, upon
the submission of proper substantiation by the Executive, shall reimburse the
Executive for all reasonable expenses actually and necessarily paid or incurred
by the Executive in the course of and pursuant to the business of the Company.
The payments will be made within ten (10) days after the Executive provides the
Company with an itemized statement of all charges.
9. CONFIDENTIALITY.
9.1 The Executive shall not divulge, communicate, use to the detriment of
the Company or for the benefit of any other person or persons, or misuse in any
way, any "Confidential Information" pertaining to the Company or its affiliates.
Any confidential information or data now known or hereafter acquired by the
Executive with respect to the Company or its affiliates shall be deemed a
valuable, special and unique asset of the Company that is received by the
Executive in confidence and as a fiduciary, and the Executive shall remain a
fiduciary to the Company with respect to all of such information. For purposes
of the Agreement, the following terms when used in the Agreement have the
meanings set forth below:
9.1.1 "Confidential Information" means confidential data and
confidential information relating to business of the Company or its affiliates,
including the nano-engineered, ultraviolet curable coatings and technology owned
or developed by the Company, (which does not rise to the status of a Trade
Secret under applicable law) which is or has been disclosed to the Executive or
of which the Executive became aware as a consequence of or through her
employment with the Company and which the Executive knows or has reason to know
has value to the Company or its affiliates and is not generally known to the
competitors of the Company. Confidential Information shall not include any data
or information that (i) has been voluntarily disclosed to the general public by
the Company or its affiliates, (ii) has been independently developed and
disclosed to the general public by others, or (iii) otherwise enters the public
domain through lawful means.
9.1.2 "Trade Secrets" means information of the Company or its
affiliates including, but not limited to, technical or non-technical data,
formulas, patterns, compilations, programs, financial data, financial plans,
product or service plans or lists of actual or potential customers or suppliers
which (i) derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons
who can obtain economic value from its disclosure or use, and (ii) is the
subject of efforts that are reasonable under the circumstances to maintain its
secrecy.
9.2 In addition, during the Initial Term and during the periods described
in the last sentence of this Section 9.2, the Executive (i) will receive and
hold all Confidential Information
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and Trade Secrets (collectively, the "Company Information") in trust and in
strictest confidence, (ii) will take reasonable steps to protect the Company
Information from disclosure and will in no event knowingly or wrongfully take
any action causing, or fail to take any action reasonably necessary to prevent,
any Company Information to lose its character as Company Information, and (iii)
except as required by the Executive's duties in the course of her employment by
the Company, will not, directly or indirectly, use, disseminate or otherwise
disclose any Company Information to any third party without the prior written
consent of the Company, which may be withheld in the Company's absolute
discretion. The provisions of this Section 9 shall survive the termination of
the Executive's employment for a period of two (2) years with respect to
Confidential Information, and, with respect to Trade Secrets, for so long as any
such information qualifies as a Trade Secret under applicable law.
10. RESTRICTIVE COVENANTS.
10.1 Non-competition. The Executive agrees that, at all times during the
term of the Agreement, any subsequent one-year extension term and for a period
of two (2) years after termination of her employment under the Agreement,
howsoever brought about, he will not, directly or indirectly, (whether as owner,
principal, agent, shareholder, employee, partner, lender, venturer with or
consultant to any person, firm, partnership, corporation, limited liability
company or other entity), whether or not compensation is received: (i) engage or
participate in the development, design and production of nano-engineered,
ultraviolet curable coatings which compete with the products of the Company; or
(ii) engage or participate in any activity for any business or entity which is
or plans to engage in the marketing and sale of any products or services which
are under active development or are marketed or sold by the Company, or other
business in which the Company is engaged, during the term of the Agreement
anywhere in the United States. In the event that the provisions of the Section
11 ever be deemed to exceed the time, geographic or occupational limitations
permitted by the applicable laws, then such provisions shall be reformed to the
maximum time, geographic or occupational limitations by the applicable laws.
10.2 Non-solicitation of Clients. The Executive agrees that, during the
term of the Agreement, any subsequent one-year extension term, and for a period
of two (2) years after termination of her employment under the Agreement,
howsoever brought about, he will not directly or indirectly, for herself or for
any other person, firm, corporation partnership, association or other entity:
(i) induce any person who is an actual client or a known targeted prospective
client of the Company to patronize any competing firm; (ii) canvass, solicit or
accept any business relationship from any person who is an actual client or a
known targeted prospective client of the Company; (iii) directly or indirectly
request or advise any person who is an actual client or a known targeted
prospective client of the Company to withdraw, curtail or cancel such business
with the Company; or (iv) directly or indirectly disclose to any other person,
firm or corporation the names or addresses of any of the actual clients or known
targeted prospective clients of the Company.
10.3 Non-solicitation of Employees. The Executive agrees that, during the
term of the Agreement, any subsequent one-year extension term, and for a period
of two (2) years after termination of her employment under the Agreement,
howsoever brought about, he will not, directly or indirectly, for herself or for
any other person, firm, corporation, partnership,
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association or other entity, attempt to employ or enter into any contractual
arrangement with any person known by the Executive to be an employee or former
employee of the Company, unless such employee or former employee has not been
employed by the Company for a period in excess of six months.
10.4 Books and Records. All books, records, reports, writings, notes,
notebooks, computer programs, sketches, drawings, blueprints, prototypes,
formulas, photographs, negatives, models, equipment, chemicals, reproductions,
proposals, flow sheets, supply contracts, customer lists and other documents
and/or things relating in any manner to the business of the Company (including
but not limited to any of the same embodying or relating to any Confidential
Information or Trade Secrets), whether prepared by the Executive or otherwise
coming into the Executive's possession, shall be the exclusive property of the
Company and shall not be copied, duplicated, replicated, transformed, modified
or removed from the premises of the Company except pursuant to the business of
the Company and shall be returned immediately to the Company on termination of
the Executive's employment hereunder or on the Company's request at any time.
10.5 No Conflict. The Executive represents to the Company that her
execution and performance of the Agreement does not violate the provisions of
any employment, non-competition, confidentiality or other material agreement to
which he is a party or by which he is bound. The Executive also agrees to
indemnify and hold harmless the Company from any and all damages and other
obligations or liabilities incurred by the Company in connection with any breach
of the foregoing representation.
11. REMEDIES FOR BREACH OF AGREEMENT.
In the event of the breach or threatened breach of any provision of the
Agreement by either party, the other party shall be entitled to injunctive
relief, both preliminary and final, enjoining and restraining such breach or
threatened breach. Such remedies shall be in addition to all other remedies
available at law or in equity, including the Company's right to recover from the
Executive any and all damages that may be sustained as a result of Executive's
breach of the Agreement.
12. INTELLECTUAL PROPERTY.
12.1 Inventions. Executive hereby assigns and agrees to assign to Company,
its subsidiaries, successors and assigns, all intellectual property rights, in
all countries of the world, in and to any invention, patent, trademark,
copyright, trade secret, confidential information and technology developed,
authored, conceived, or reduced to practice solely by the Executive or jointed
with others during the term of the Agreement, which is related to Company's
present or prospective business interests. The Executive will, without charge to
Company, but at its expense, sign all papers, take all rightful oaths, and do
all acts which may be necessary, desirable, or convenient for securing and
maintaining intellectual property rights in any and all countries and for
vesting title thereto with Company, her successors, assigns, and legal
representatives or nominees.
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12.2 Prior Inventions. Executive shall disclose to Company in writing any
of her inventions, discoveries and technology that occurred prior to the
execution of the Agreement but during her employment with the Company, which
inventions, discoveries and technology Executive also hereby assigns to the
Company. The disclosure shall contain sufficient detail to permit Company to
evaluate and quantify the scope of Executive's work prior to the date of this
Agreement.
13. MISCELLANEOUS.
13.1 Severability. If any of the provisions of the Agreement shall be
invalid or unenforceable, such invalidity shall not invalidate or render
unenforceable the entire Agreement, but rather the entire Agreement shall be
construed as if not containing the particular invalid or unenforceable
provisions, and the rights and obligations the Company and the Executive shall
be construed and enforced accordingly.
13.2 Notices. All communications and notices required by or relating to the
Agreement shall be deemed to have been duly given upon receipt in writing by the
addressee addressed as indicated below:
Ecology Coatings, Inc. Xxxxx X. X. Xxxxxx
Attn: Chairman Ecology Coatings, Inc.
00000 Xxxxxxxx Xxxxxx 0000 Xxxxxxxx Xxxx
Xxxxx 000 Xxxxx, XX 00000
Xxxxxxxxxx Xxxxx, XX 00000
The address to which notices or communications may be given by either party
may be changed by written notice given by such party to the other pursuant to
the Article. The mailing or transmittance of any notice shall be deemed complete
upon the mailing or transmission of the notice to the address stated above or
any subsequent amended address.
13.3 Law. The Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio in all respects, including matters of
construction, validity, and performance. The parties irrevocably agree that, all
actions of proceedings in any way, manner or respect arising out of or from or
related to the Agreement shall be litigated only in courts having situs in the
State of Ohio and hereby consent and submit to the jurisdiction of any local,
State, or Federal court located in the State of Ohio.
13.4 Non-Waiver. No course of dealing or failure of either party to
strictly enforce any term, right or condition of the Agreement shall be
construed as a waiver of such terms, right or condition.
13.5 Entire Agreement. The Agreement constitutes the entire Agreement
between the parties and may not be modified or amended other than by a written
instrument executed by both parties. All agreements, oral or written, entered
into by or on behalf of the parties prior to the Agreement are revoked and
superseded hereby. No representations, warranties, inducements or oral
agreements have been made by any of the parties except as expressly set forth
herein.
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13.6 Assignment. Any assignment of the Agreement by either party must be
approved in writing by the other party and the assignee must agree in writing to
be bound by the terms of the Agreement.
IN WITNESS WHEREOF, the foregoing Agreement has been executed by the
parties hereto to be effective as of the day and year first above written.
ECOLOGY COATINGS, INC. EXECUTIVE
/s/ Xxxxxxx X. Xxxxxxxxx /s/ Xxxxx X. X. Xxxxxx
------------------------------------- ----------------------------------------
Xxxxxxx X. Xxxxxxxxx Xxxxx X. X. Xxxxxx
Its: Chairman
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