Exhibit 10.8
AMENDED EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("AGREEMENT") made as of this 1st day of December
2005 ("EFFECTIVE DATE") by and between ECOSPHERE TECHNOLOGIES, INC., a Delaware
corporation ("COMPANY"), and XXXXXXX X. XXXX, XX. ("EXECUTIVE").
In consideration of the mutual covenants and agreements herein contained,
the compensation to be paid hereunder and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. TERM OF EMPLOYMENT. The Company hereby employs Executive, and
Executive hereby accepts employment with the Company, for a period
beginning on the Effective Date and terminating, unless sooner
terminated as provided herein, on the date that is the third year's
anniversary of the Effective Date (such third anniversary or earlier
date of termination, the "TERMINATION DATE", and such period, the
"TERM"). Notwithstanding the foregoing sentence, this Agreement may
be terminated by the Company effective as of the first year's
anniversary of the Effective Date (the "FIRST ANNIVERSARY", and the
period between the effective date and the First Anniversary, "YEAR
1", and the subsequent annual periods covering the same months,
"YEAR 2" and "YEAR 3", respectively), by delivery of written notice
of termination to Executive at any time (but no later than sixty
(60) days after the First Anniversary, if either of the following
two requirements are not met:
(i) At all times during the ninety (90) days preceding and
inclusive of the First Anniversary, the Company must be
"cash positive"; "cash positive" means that the Company
is able to pay all of its obligations as they become due
(excluding obligations that were already due and payable
on the Effective Date) out of the Company's cash flow
from operations; the determination of whether the
Company is "cash positive" shall be within the
reasonable discretion of the Parent Company, UltraStrip
Systems, Inc. ("UltraStrip"), Board of Directors or its
Compensation Committee (either the "BOARD"); and
(ii) During the Term of Employment the Company shall operate
as a unified team, with its management, employees and
consultants all fulfilling or working towards fulfilling
their assigned duties, not impeding or interfering with
the assigned duties of others at the Company, and
working generally in harmony towards the common goals
established by the Board and the Executive; the Board
shall determine, in the exercise of its reasonable
judgment, if the foregoing requirement has been met.
2. DUTIES OF EXECUTIVE. Executive is hereby hired and employed by the
Company as its President. Executive shall perform the duties and
accept the responsibilities typical for the President of an emerging
technology sales and service company, and Executive shall devote his
efforts to rendering services to the Company in such capacity.
Executive shall
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not be required without his consent to undertake responsibilities
not commensurate with his position. Executive shall report to the
Board. [FROM A LIMITATION OF LIABILITY PERSPECTIVE, IT IS BEST TO
HAVE HIM REPORT TO THE ECOSPHERE BOARD MEMBERS OTHER THAN HIMSELF].
3. COMPENSATION OF EXECUTIVE.
(i) BASE SALARY. Executive shall be entitled to receive from
the Company a base salary ("BASE SALARY") of: (A) two
hundred twenty five thousand dollars ($225,000) in Year
1; (B) two hundred fifty thousand dollars ($250,000) in
Year 2; and (C) two hundred seventy five thousand
dollars ($275,000) in Year 3. [THE INITIAL YEAR BASE
SALARY SHALL NOT COMMENCE UNTIL THE COMPANY HAS ACHIEVED
SIGNIFICANT CASH FLOW FROM A NEW CONTRACT OR HAS CLOSED
AND COLLECTED A SUBSTANTIAL CAPITAL INFUSION] Base
Salary shall be payable in accordance with the normal
payroll scheduling practices of the Company; PROVIDED,
HOWEVER, that the Board may at any time, and from time
to time, defer up to fifty percent (50%) of the Base
Salary until such time as the Company is, in the Board's
discretion, financially able to pay the full Base
Salary. If Base Salary is deferred, it shall be paid in
full on the ninetieth (90th) day after the date that the
Board determines, by resolution, that the Company is
"fully funded", meaning that it is financially able to
pay the full Base Salary and all deferred Base Salary.
(ii) STOCK OPTIONS.
(A) Upon execution of this Agreement, UltraStrip
granted Executive a non-statutory stock option
to acquire five hundred thousand (500,000)
shares of UltraStrip's common stock at an
exercise price of $1.00 value at the date of
grant, exercisable at any time prior to the
date that is the fifth year's anniversary of
the Effective Date ("FIFTH ANNIVERSARY"),
subject to SECTION 3(ii)(E), below.
(B) If on the thirtieth (30th) day following the
First Anniversary Executive remains employed
by the Company and has not been notified by
the Board that his employment hereunder is
terminated, UltraStrip shall grant Executive a
non-statutory stock option to acquire an
additional one hundred fifty thousand
(150,000) shares of Company's common stock and
on the thirtieth (30th) day following the
Second Anniversary Executive remains employed
by the Company and has not been notified by
the Board that his employment hereunder is
terminated, UltraStrip shall grant Executive a
non-statutory stock option to acquire an
additional one hundred fifty thousand
(150,000) shares of UltraStrip's common stock
at an exercise price per share that is equal
to the fair market value per share of
UltraStrip's common stock as of the date of
the option grant. Fair market value shall be
determined as provided in the stock option
plan then maintained by UltraStrip for its
employees, and if there is no such plan, then
fair market value shall be determined by the
Board of Directors in the good faith exercise
of its discretion
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(either case to be hereinafter referred to
"FMV". Such option shall be exercisable at any
time prior to the Fifth Anniversary, subject
to SECTION 3(ii)(E), below.
(C) All options granted to Executive under this
SECTION 3(ii) are referred to herein as the
"OPTIONS". If Executive's employment hereunder
is terminated by Company for any reason other
than for "cause" (defined below), or if
Executive terminates his employment for "good
reason" (also defined below), or if this
Agreement expires in accordance with its
terms, then all Options that are granted,
vested and effective prior to such date of
termination or expiration shall remain in
effect, but those that are not then granted,
vested and effective shall expire ninety (90)
days after the date of such termination or
expiration. If Executive's employment
hereunder is terminated by Company for
"cause", or if Executive terminates his
employment and does not have "good reason" to
terminate, then all Options that have been
granted but are not exercised by Executive on
or before the date of such termination shall
expire on the date of termination of
employment.
(D) All shares acquired upon exercise of options
granted under this SECTION 3(ii) shall have be
covered by UltraStrip's Form S-8 which it
shall file with the Securities and Exchange
Commission at about the time it files its Form
10-KSB for the year ending December 31, 2005.
(E) All provisions of this SECTION 3(ii) that are
to be performed after expiration or
termination of this Agreement shall survive
the expiration or termination of this
Agreement until such provisions expire or
terminate in accordance with their terms.
(iii) ANNUAL PERFORMANCE EVALUATION. Following each calendar
year during the Term, the UltraStrip . President & CEO
acting with the consent of the Board shall evaluate the
Executive's performance during such calendar year and
may pay the Executive a cash bonus of up to one percent
(1%) of annual gross revenues, after deducting
consultant "brokerage fees" as presented in the approved
Annual Budget of the Company not to exceed 25% of the
Executive's current Salary. This provision shall
obligate the UltraStrip President & CEO to evaluate the
Executive and consider payment of a bonus annually, but
does not require payment of any bonus unless the CEO,
with the consent of the Board, determines to pay a
bonus.
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4. OTHER BENEFITS.
(i) In the course of his employment Executive shall be expected to
incur various business expenses customarily incurred by
persons holding like positions, including, but not limited to,
traveling, entertainment and similar expenses, for the benefit
of the Company. Subject to the Company's policy regarding the
reimbursement of such expenses, the Company shall reimburse
Executive for such expenses from time to time, at Executive's
request, and Executive shall account to the Company for such
expenses.
(ii) The Company shall, so long as it is available, maintain health
insurance coverage for Executive in such amount, on such
terms, and with such carriers as shall reasonably be
determined by the Company's Board of Directors. However,
Company shall, at a minimum, provide Executive with such
insurance coverage as may be made available to other
executive-level employees at the Company and UltraStrip.
(iii) Executive shall be entitled to up to four (4) weeks (or the
equivalent of 160 hours) Personal leave (PTO) during each of
Year 1, Year 2 and Year 3. Each year's specific amount of PTO
(not to exceed four weeks) will be determined in the Annual
Performance Evaluation. In the event Executive does not take
all of his vacation during any year, the unused vacation shall
not carry over into the next year, nor shall the Company be
required to pay Executive for any unused vacation.
5. TERMINATION BY THE COMPANY.
(i) In addition to its right to terminate this Agreement at the
end of Year 1 pursuant to SECTION 1 hereof, the Company shall
have the right to terminate this Agreement under the following
circumstances:
(A) Upon notice from the Company to Executive in
the event of an illness or other disability
which has incapacitated him from performing a
material portion of his duties for twelve (12)
consecutive weeks as determined in good faith
by the Board; or
(B) For "cause" upon notice from the Company.
Termination by the Company of Executive's
employment for "cause" shall be limited to the
following circumstances:
1. Executive is convicted of, pleads guilty to or pleads no
contest to a felony involving moral turpitude including
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fraud, conversion, embezzlement, falsifying records or reports
regardless of whether it relates to the Company or a similar
crime involving the Company's property;
2. Executive willfully breaches this Agreement in a material way,
which breach remains uncured thirty (30) days after written
notice thereof shall have been sent to Executive; or
3. Insubordination or incompetence, as reasonably determined by
the Board after Executive has had the opportunity to address
the Board with respect to the matter.
(ii) If this Agreement is terminated pursuant to SECTION 5(i)
above, all of Executive's rights and all of the Company's
obligations hereunder shall forthwith terminate except as
expressly provided in this Agreement.
(iii) If this Agreement is terminated as the result of his death or
pursuant to SECTION 5(i)(A) above, Executive or his estate
shall be entitled to receive cash equal to Executive's
remaining unpaid Base Salary through the period that ends on
the 360th consecutive day following the date of termination of
this Agreement or that ends on the third year's anniversary of
the Effective Date, whichever occurs first. Such cash shall be
payable to Executive or his estate in accordance with the
Company's normal payroll practices that would otherwise have
applied to payment of his Base Salary. The Company may
purchase insurance to cover all or any part of its obligations
set forth in this SECTION 5(iii), and Executive agrees to take
a physical examination to facilitate the obtaining of such
insurance. However, death and disability benefits are not
conditioned upon the Executive's insurability or the Company's
obtaining insurance.
(iv) Whenever compensation is payable to Executive hereunder during
a time when he is partially or totally disabled and such
disability (except for the provisions hereof) would entitle
him to disability income or to salary continuation payments
from the Company according to the terms of any plan now or
hereafter provided by the Company or according to any Company
policy in effect at the time of such disability, the
compensation payable to him hereunder shall be inclusive of
any disability income or salary continuation and shall not be
in addition thereto. If disability income is payable directly
to Executive by an insurance company under an insurance policy
paid for by the Company, the amounts paid to him by said
insurance company shall be considered to be part of the
payments to be made by the Company to him pursuant to this
Section, and shall not be in addition thereto.
6. TERMINATION BY EXECUTIVE. Executive shall have the right to
terminate his employment under this Agreement for "good reason", by
giving at least sixty (60) days'
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prior written notice of termination to the Company if the Company
materially reduces Executive's duties and responsibilities
hereunder. Executive's duties and responsibilities shall not be
deemed materially reduced for purposes hereof solely by virtue of
the fact that the Company is (or substantially all of its assets
are) sold to, or is combined with, another entity. If this Agreement
is terminated pursuant to SECTION 5(i) above, all of Executive's
rights and all of the Company's obligations hereunder shall
forthwith terminate except as expressly provided in this Agreement.
7. CERTAIN CONSEQUENCES OF TERMINATION. If Executive terminates this
Agreement for "good reason" pursuant to SECTION 6 hereof, or if the
Company terminates Executive's employment under this Agreement for
any reason other than any that is set forth in SECTION 1 OR 5(i),
Executive shall receive cash payments equal to six months (6) the
Executive's Base Compensation for the year of termination. Such cash
shall be payable to Executive in accordance with the Company's
normal payroll practices that would otherwise have applied to
payment of his Base Salary.
8. REMEDIES. The Company recognizes that because of Executive's special
talents and stature, in the event of termination by the Company
hereunder (except under SECTION 1 OR 5(i)), or in the event of
termination by Executive for "good reason" under SECTION 6, before
the end of the agreed term, the Company acknowledges and agrees that
the provisions of this Agreement regarding further payments of Base
Salary constitute fair and reasonable provisions for the
consequences of such termination, do not constitute a penalty, and
such payments and benefits shall not be limited to or reduced by
amounts Executive might earn or be able to earn from any other
employment or ventures during the remainder of the agreed term of
this Agreement.
9. COVENANT NOT TO COMPETE; DISCLOSURE OF INFORMATION.
(i) Executive agrees that all information concerning Company
and its business, customers and suppliers, that is not
generally known to the public by means other than
disclosure by or on behalf of Executive, is confidential
(collectively, "CONFIDENTIAL INFORMATION") and shall be
kept confidential by Executive. Executive agrees not to
use or disclose any Confidential Information to any
person, under any circumstances, at any time, except
solely to the extent required to perform his duties to
the Company under this Agreement. If Executive is
legally required to disclose any Confidential
Information pursuant to a subpoena or court order, he
may make such disclosure, upon giving at least ten (10)
days' prior written notice to Company (or upon such
shorter notice as is available to Executive if the
subpoena is returnable within less than ten (10) days).
(ii) During the term of Executive's employment with Company
and for a period of two (2) years after his employment
terminates ("Noncompete Period"):
(A) Executive shall not directly or indirectly
compete, or assist another person in
competing, against Company anywhere in the
world; and for
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these purposes, to "compete" shall mean to
provide the same or similar products or
services as those provided, marketed, or
actively being developed, by Company at any
time during the Noncompete Period;
(B) Except on behalf of and for the benefit of the
Company in the performance of his duties
hereunder, Executive shall not directly or
indirectly recruit, solicit or influence any
employee of the Company to discontinue his or
her employment relationship with the Company,
or employ or seek to employ, or cause or
encourage any other person to employ or seek
to employ, any person who is then, or was at
any time within the then preceding two (2)
years, employed by the Company;
(C) Executive shall not directly or indirectly
compete with the Company by soliciting,
inducing or influencing any of the Company's
suppliers or customers, or former suppliers or
customers, to discontinue or reduce the extent
of their relationship with the Company; and
(D) Executive shall not interfere with, or disrupt
or attempt to disrupt, any business
relationship, whether established by formal
contract or otherwise, between the Company and
any supplier, customer, employee or agent of
the Company.
(iii) The parties hereto acknowledge that the worldwide scope
of this Noncompete is reasonable because the Company
conducts business worldwide.
(iv) The covenants in this SECTION 9 shall survive the
termination of this Agreement.
(v) If Executive shall breach or threaten to breach any of
the provisions of this SECTION 9, Executive agrees that,
in addition to remedies at law available to Company,
Company shall be entitled to obtain, and Executive
agrees not to oppose on any basis, equitable relief in
the form of specific performance, temporary or permanent
injunction or any other equitable remedy available to
Company.
10. NOTICES AND DEMANDS. Any notice or demand which, by any provision of
this Agreement or any agreement, document or instrument executed
pursuant hereto, except as otherwise provided therein, is required
or provided to be given shall be deemed to have been sufficiently
given or served for all purposes if hand delivered or sent by
certified or registered mail, postage and charges prepaid, to the
following addresses: if to the Company, Attention: President & CEO,
0000 X.X. Xxxxxx Xxxxxxx, Xxxxxx, Xxxxxxx 00000, or at any other
address designated by the Company to Executive in writing; and if to
Executive, at his last known address provided by him in writing to
Company.
11. SEVERABILITY. In case any covenant, condition, term or provision
contained in this Agreement shall be held to be invalid, illegal or
unenforceable in any respect, in whole or in
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part, by judgment, order or decree of any court or other judicial
tribunal of competent jurisdiction, from which judgment, order or
decree no further appeal or petition for review is available, the
validity of the remaining covenants, conditions, terms and
provisions contained in this Agreement, and the validity of the
remaining part of any term or provision held to be partially
invalid, illegal or unenforceable, shall in no way be affected,
prejudiced or disturbed thereby. In furtherance of this provision,
the parties intend that the two year non compete provision may be
shortened by a Court to a time period which the Court concludes is
enforceable.
12. WAIVER OR MODIFICATION. No waiver or modification of this Agreement
or of any covenant, condition or limitation herein contained shall
be valid unless in writing and duly executed by the party to be
charged therewith. Furthermore, no evidence of any waiver or
modification shall be offered or received in evidence in any
proceeding, arbitration or litigation between the parties arising
out of or affecting this Agreement, or the rights or obligations of
any party hereunder, unless such waiver or modification is in
writing and duly executed as aforesaid. The provisions of this
Section may not be waived except as herein set forth.
13. COMPLETE AGREEMENT. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter of this
Agreement and supersedes any and all previous agreements between the
parties, whether written or oral, with respect to such subject
matter.
14. APPLICABLE LAW, BINDING EFFECT AND VENUE. This Agreement shall be
construed and regulated under and by the laws of the State of
Florida, and shall inure to the benefit of and be binding upon the
parties hereto and their heirs, personal representatives, successors
and assigns. Venue for any action related to or arising out of this
Agreement shall lie in Xxxxxx County, Florida.
15. PRIOR AGREEMENT. This Amended Employment Agreement supercedes and
replaces the prior Employment Agreement of even date which had
certain scrivener's errors.
IN WITNESS WHEREOF, the undersigned have executed this Employment Agreement as
of the date first written above with the intent to be legally bound.
XXXXXXX X. XXXX ECOSPHERE TECHNOLOGIES, INC.
_______________________________ BY: _______________________________________
X.X. "Xxx" Xxxxxxx III, Authorized Signatory
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