EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this _1st____
day of ____April___________, 2008 (the “Effective Date”) by and between ECO
DEPOT, INC., (the “Company”), and XXXXXX XXXXXX (the “Executive”).
WHEREAS, the Company is
engaged in the business of selling environmentally friendly building products
and services and installing salt water desalination equipment and providing salt
water desalination services (the “Business”).
WHEREAS, the Company desires
to employ the Executive as the Chief Executive Officer and Chief Financial
Officer, to provide services pursuant to the terms of this Agreement;
and
WHEREAS, the Executive desires
to provide such services to the Company pursuant to this Agreement.
NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained in this
Agreement, the parties agree as follows:
ARTICLE
1.
EMPLOYMENT
1.1 Title;
Duties. The Company
agrees to employ the Executive, and the Executive agrees to serve as, the sole
officer and a member of the Board of Directors of the Company (the “Board”)
during the Employment Period, and Executive shall report directly to the
Board.
(a) The
Executive shall be the most senior executive and highest paid officer of the
Company and shall have all the duties and authority as is consistent with his
position. The Executive shall perform such other duties and services for the
Company commensurate with the Executive’s position, as may be designated from
time to time by the Board.
(b) The
Executive shall have overall responsibility for all operations of the Company
and the Subsidiary, including those duties associated with the most senior
executive officer of the companies, subject to the restrictions imposed by
customary oversight by the Board or the board of directors, as applicable, with
such duties to include general management of the day-to-day operations and
long-term planning for the future growth of the Company. All
employees of the Company shall report to the Executive.
(c)
1.2 Performance of
Duties.
(a) The Executive agrees to devote substantially all of his professional
time and attention to his duties to the Company as is reasonably appropriate to
carry out the Company’s business plans and other objectives from time to time in
place and to perform such duties in an efficient, trustworthy and businesslike
manner.
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(b) The
Executive represents and warrants that he is not bound by any employment,
consulting, non-competition, confidentiality,
finders, marketing or other agreement or arrangement that would, or might
reasonably be expected to, materially prohibit or restrict him from performing his duties and obligations
hereunder.
ARTICLE
2.
COMPENSATION AND OTHER
FINANCIAL MATERS
2.1 Compensation. The Company shall
pay to the Executive during the Employment Period compensation at the rate of
One Hundred Fifty Thousand Dollars ($150,000) per annum (“Salary”), payable in
arrears in weekly installments, less required payroll and other
deductions.
2.2 Benefits. In addition to
the compensation described in Section 2.1, the Company shall provide the
Executive with certain medical, health care, and retirement benefits as
described on Schedule 1 attached hereto and made a part hereof. In
addition to those benefits set forth on Schedule 1.
2.3 Reimbursement
of Expenses. During the
Employment Period, the Company will reimburse the Executive for all ordinary and
necessary business expenses incurred by the Executive in connection with the
performance of services contemplated by this Agreement. Reimbursement
of such expenses shall be paid on a regular basis, upon submission by the
Executive of vouchers itemizing such expenses in a form satisfactory to the
Company, properly identifying the nature and business purpose of any
expenditures.
2.4Termination
Compensation. The Company may terminate the employment of Executive
pursuant to Article 3 herein. In such event, Executive shall be entitled to a
lump-sum payment of $250,000. Executive shall also be entitled to receive (i)
payment for accrued and unpaid vacation pay and (ii) all bonuses that have
accrued during the term of the Agreement, but not been paid. Executive shall
further be entitled to receive all Benefits as outlined in Section 2.2 of this
Agreement for a period of two (2) years following the date of Executive’s
termination. Executive will otherwise cease to accrue salary and other benefits
upon the date of such final payment, other than the Company’s normal insurance
policies for terminated employees.
The
executive will be able to retain all electronic equipment, media, and supplies
provided by the company for use primarily by the employee off site, on loan for
up to one year from the termination date, after which the executive will return
the equipment.
ARTICLE
3.
EMPLOYMENT PERIOD;
TERMINATION OF EMPLOYMENT
3.1 Employment
Period. The term of this
Agreement shall be for a period of two (2) years commencing on the Effective
Date, unless terminated prior to such date pursuant to this ARTICLE
3. This Agreement shall be automatically renewed for succeeding terms
of one (1) year unless either party provides a minimum of ninety (90) days
written notice to the other party stating such party’s intent not to extend this
Agreement for a succeeding term (the initial and succeeding terms, if any, are
hereafter referred to as the “Employment Period”).
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3.2 Termination
by the Company for “Cause.” Except as set
forth in Section 3.4, the Company shall not have the right to terminate the
Employment Period or this Agreement other than pursuant to a Termination for
Cause, by written notice provided to the Executive specifying the reasons
therefore, which may be for any or all of the following causes (a “Termination
for Cause”):
(a) the
Executive’s conviction for, or entry of a plea of guilty or nolo contendere with respect to,
any felony;
(b) the
Executive’s commission of any act of fraud or dishonesty with respect to his
duties under this Agreement;
(c) the
Executive’s failure to execute and carry out a lawful directive of the Board of
Directors relating to the Business; or
(d) the
Executive’s material breach of any of his obligations hereunder which materially
and adversely affects the Company.
A
termination by the Company of this Agreement pursuant to clause (a) or (b) shall
be effective as of the date that notice of such termination is delivered to the
Executive. A termination by the Company of this Agreement pursuant to
clause (c) or (d) shall be effective on the tenth (10th) day following the date
that notice of such termination is delivered to the Executive (such ten day
period following notice is hereafter referred to as the “Cure
Period”). During the Cure Period, the Executive shall have the right
to undertake steps reasonably calculated to cure such cause for termination
pursuant to clause (c) or (d). Upon the successful cure by the
Executive of the cause for termination pursuant to clause (c) or (d) within the
Cure Period, such notice of termination shall be of no effect.
3.3 Termination
by the Executive. The Executive
shall have the right to terminate the Employment Period or this Agreement by
written notice provided to the Company specifying the reason therefore, upon the
occurrence of one or all of the following circumstances.
(a) the
Company’s failure to pay Salary, Bonus, Benefits, or any other compensation
provided by the Agreement when due;
(b) the
Company’s failure to appoint the Executive to the position contemplated by this
Agreement or the material adverse alteration of the Executive’s duties and
responsibilities hereunder, except with respect to a termination of this
Agreement by the Company in accordance with Section 3.2 or Section
3.4;
(c) any other
material breach by the Company of this Agreement
A
termination of this Agreement by the Executive shall be effective not less than
ninety (90) days following the date that notice of such termination is delivered
to the Company, unless the Company agrees to a shorter time requested by the
Executive. However, the first 30 days following receipt of such
notice provided by the Executive shall be considered a “Cure
Period.” During the Cure Period, the Company shall have the right to
undertake steps reasonably calculated to cure the Executive’s alleged cause for
termination. Alternatively, the Company shall have the right to make
the termination effective immediately after receiving such notice from the
Executive.
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3.4 Death or
Disability. The Employment
Period shall terminate effective immediately upon the death of the Executive or
upon the onset of a mental or physical disability that renders the Executive
incapable of rendering his duties under this Agreement in an effective and
competent manner.
ARTICLE
4.
EFFECT OF TERMINATION OF
EMPLOYMENT.
4.1 Termination
of Employment by the Company. In the event of termination of the Executive’s employment by
the Company with Cause as defined in Section 3.2, the Executive (or, if
applicable, his estate) shall be entitled to receive from the Company any
compensation, benefits, and reimbursements in accordance with Sections 2.1, 2.2,
2.3 and 2.4 hereof through the effective date of such termination. In
the event the Executive is terminated by the Company in a situation other than a
Termination for Cause, then the Executive shall be entitled to receive severance
payments of six (6) months salary and benefits from the date of
termination.
4.2 Termination
of Employment by the Executive. In the event of
termination of the Executive’s employment by the Executive, the Executive (or,
if applicable, his estate) shall be entitled to receive from the Company any
compensation, benefits, and reimbursements in accordance with
Sections 2.1, 2.2, 2.3 and 2.4 hereof through the effective date of
such termination.
ARTICLE
5.
NON-COMPETITION/NON-
SOLICITATION.
5.1 Covenant
Not to Compete. As part of the
consideration for entering into this Agreement the Executive hereby covenants to
the Company that for a period of three (3) years following the date of
termination of this Agreement for whatever reason or for a period of three (3)
years following the conclusion of an action brought by the Company to enforce
the provisions contained in this Section 5.1 (the “Restricted Period”), he shall
not, except on behalf of the Company and its Subsidiary, directly or indirectly,
in his own capacity or through or on behalf of any other business entity,
whether as owner, consultant, executive, partner, member, manager, officer,
director, venturer, agent, through stock ownership, investment of capital,
lending of money or property, rendering of services, or otherwise, engage in the
Business within a one-hundred (100) mile radius surrounding the site of a water
desalination plant installed or administered by the Company.
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5.2 Restriction
on Solicitation. During the
Restricted Period, the Executive shall not, directly or indirectly, in his own
capacity or through any other business entity (i) solicit or contact for
business purposes any existing customer, supplier, or prospective customer or
supplier, of the Company or any Subsidiary for the purpose of competing with the
Business, (ii) induce, or attempt to induce, any employees, agents, consultants
or suppliers of or to the Company or any Subsidiary to do anything from which
the Executive is restricted by reason of this ARTICLE 5, (iii) interfere with
existing or proposed agreements or other arrangements, or knowingly interfere
with future agreements or other arrangements, between the Company or any
Subsidiary on the one hand and any other unrelated third party on the other
hand, or (iv) offer or aid others to offer employment or engagement as a
consultant or agent to anyone who is an employee, agent or consultant of or to
the Company or any Subsidiary.
5.3 Non-Disclosure
and Non-Use. Without the prior
written consent of the Company, the Executive shall not disclose any
confidential information which the Company, any Subsidiary or, any of their
respective officers, directors, employees, counsel, agents, investment bankers,
or accountants, may possess or may hereafter create or obtain relating to the
financial condition, results of operations, business, properties, assets,
liabilities, or future prospects of the Company, or any Subsidiary or any
customer or supplier of the Company, or any Subsidiary, and such information
shall not be published, disclosed, or made accessible by any of them to any
other individual or business entity or used by any of them, except in the
business and for the benefit of the Company and/or any Subsidiary.
5.4 Reformation. If
the duration and/or geographic scope set forth in this Article is found by a
court to be excessive or overly broad, then they shall be reformed in accordance
with Article 7.3, and Executive’s obligations under this Article shall apply to
the greatest extent permitted by applicable law.
ARTICLE
6.
INDEMNIFICATION.
6.1 Exculpation. The Executive
shall not be liable to the Company or to its officers, directors, shareholders,
employees or other representatives or agents for any actions, claims, threatened
claims, taxes, penalties, obligations, liabilities, or damages (the “Losses”)
arising from any act performed or omitted by the Executive arising out of or in
connection with the performance by the Executive of his services under this
Agreement or the Company’s business or affairs, except to the extent that any
such Losses are primarily attributable to the gross negligence or willful
misconduct of the Executive.
6.2 Indemnification. The Company
shall, to the fullest extent permitted by applicable law, indemnify, defend and
hold harmless the Executive against any Losses and costs of defending and/or
settling any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative, to which the
Executive may become subject in connection with any matter arising out of or in
connection with the performance by Executive of his services under this
Agreement or the Company’s business or affairs (the “Legal Costs”), except to
the extent that any such Losses or Legal Costs are primarily attributable to the
gross negligence or willful misconduct of the Executive. The
Executive shall immediately inform the Company in the manner specified in
Article 7.2 if he receives notice of any action, suit, or proceeding that could
give rise to the indemnification of Legal Costs as provided by this Section
6.2. The Company, at its option, may assume the defense of the
action, suit, or proceeding, with counsel approved by the Executive, upon the
delivery of notice to the Executive. Notwithstanding the foregoing,
after delivery of such notice, selection of counsel by the Company, and approval
of such counsel by the Executive, the Company shall have no obligation to
indemnify any Legal Costs personally incurred by the Executive with respect to
the same action, suit, or proceeding.
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ARTICLE
7.
MISCELLANEOUS
PROVISIONS
7.1 Assignment
and Successors. The rights and
obligations of the Company under this Agreement may be assigned and shall inure
to the benefit of and be binding upon the successors and assigns of the
Company. The Executive’s rights or obligations hereunder may not be
assigned to or assumed by any other person, except as provided in Sections 4.1
and 4.2. No other persons shall have any right, benefit or obligation
hereunder.
7.2 Notices. Any notice,
request, instruction or other document or communication to be given hereunder
shall be in writing and may be either personally delivered or mailed by
registered or certified mail, return receipt requested, postage pre-paid, and
addressed to the address set forth below:
00000 Xxxxxxx Xxxxx Xxxxxxx XXXXX
X
Xxxxxxxx Xxxxxxx,
Xxxxxxxx 00000
If to the
Executive:
Xxxxxx Xxxxxx
00000 Xxxxxxx Xxxxx Xxxxxxx Xxxxx X
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Either
party may designate a different address by providing notice to the other party
in the manner set forth herein. Notices shall be deemed delivered
upon personal delivery, or if mailed in accordance herein, as of the date
mailed.
7.3 Severability. If any provision
or portion of this Agreement shall be or become illegal, invalid or
unenforceable in whole or in part for any reason, such provision shall be
ineffective only to the extent of such illegality, invalidity or unenforceability without invalidating the
remainder of such provision or the remaining provisions of this
Agreement. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the agreements contemplated hereby are fulfilled to the extent
possible.
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7.4 Amendment. This Agreement
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and may be modified, amended or waived only by a written
instrument signed by both parties hereto.
7.5 Counterparts. This Agreement
may be executed and delivered (including by facsimile transmission) in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all of which taken together shall constitute one and the same
agreement.
7.6 Interpretation. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. The
language in all parts of this Agreement shall in all cases be construed
according to its fair meaning, and not strictly for or against any party
hereto. In this Agreement, unless the context otherwise requires, the
masculine, feminine and neuter genders and the singular and the plural include
one another.
7.7 Non-Waiver
of Rights and Breaches. No failure or
delay of any party hereto in the exercise of any right given to such party
hereunder shall constitute a waiver thereof unless the time specified herein for
the exercise of such right has expired, nor shall any single or partial exercise
of any right preclude other or further exercise thereof or of any other
right. The waiver of a party hereto of any default of any other party
shall not be deemed to be a waiver of any subsequent default or other default by
such party, whether similar or dissimilar in nature.
7.8 Governing
Law; Consent to Arbitration. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of
Colorado. Any dispute arising between the Executive and the Company
concerning this Agreement or any aspect of the relationship between the parties
shall be submitted to final and binding arbitration with the American
Arbitration Association. All costs of the arbitration shall be shared
equally by the parties. The only exception to this mandatory
arbitration is a suit for injunctive relief the Company may have to enforce the
provisions of Article 5 of this Agreement.
7.9 Shareholder
Contact Information. The Executive
acknowledges that the Company has provided certain contact information with
respect to the shareholders of the Company’s common stock, including the name
and address of each such shareholder. The Company agrees to timely
inform the Executive of any changes to such shareholder contact
information. The Executive agrees to provide the Company and
appropriate individuals associated with the Company a minimum notice of one (1)
week prior to initiating any written, oral, electronic, or other form of
communication or correspondence with any shareholder of the
Company.
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IN WITNESS WHEREOF, the
parties, intending to be legally bound, executed this Agreement as of the date
first above written.
By:
Name:
Xxxxxx
Xxxxxx
Title: Chief Executive
Officer
THE
EXECUTIVE
Xxxxxx
Xxxxxx
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SCHEDULE
1
Benefits
1. Health
and Medical Benefits. The Company shall
pay or make available medical and health insurance coverage for the Employee,
the Employee’s spouse, and the Employee’s children. The extent of
such health and medical benefits shall be normal for an executive of a similar
position as the Employee at a similar entity.
2. Retirement
Benefits. Subsequent to the
execution of this Agreement, the Company shall establish a 401(k) XXX plan for
the benefit of the Executive that shall be normal for an executive of a similar
position as the Employee at a similar entity. Additionally, the
Company shall make matching contributions to such 401(k) plan up to the maximum
extent permitted by law.
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