EXECUTIVE EMPLOYMENT AGREEMENT
This
EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of
the 19th day of March, 2008 by and between CLEAR SKIES SOLAR, INC., a
Delaware corporation with offices at 0000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxx
Xxxx, Xxx Xxxx 00000 (the “Company”), and XXXXXX X. XXXXXXX, an individual
residing at 00 Xxxxxxx Xxxxx, Xxx Xxxxx, XX 00000 (“Executive”).
W
I T N E
S S E T H:
WHEREAS,
the Executive desires to be employed by the Company as its President and the
Company wishes to employ Executive in such capacity;
NOW,
THEREFORE, in consideration of the foregoing recitals and the respective
covenants and agreements of the parties contained in this document, the Company
and Executive hereby agree as follows:
1. Employment
and Duties.
The
Company agrees to employ and Executive agrees to serve as the Company's
President. The duties and responsibilities of Executive shall include the duties
and responsibilities as the Chief Executive Officer (“CEO”) or the Board may
from time to time reasonably assign to Executive. Executive shall devote
substantially all of his working time and efforts during the Company's normal
business hours to the business and affairs of the Company and its subsidiaries
and to the diligent and faithful performance of the duties and responsibilities
duly assigned to him pursuant to this Agreement.
2. Term.
The
term of this Agreement shall commence on the Effective Date and shall continue
for a period of two years and shall be automatically renewed for successive
one
year periods thereafter unless either party provides the other party with
written notice of his or its intention not to renew this Agreement at least
three months prior to the expiration of the initial term or any renewal term
of
this Agreement. “Employment Period” shall mean the initial two-year term plus
renewals, if any. The Effective Date shall be that date on which Executive
actually starts working full time under this Agreement for the company as will
be stated in a later document to be signed by both parties when that date is
known with certainty.
3. Place
of Employment.
Executive's services shall be performed at the Company's offices located in
Massapequa, New York and any other locus where the Company now or hereafter
has
a business facility within 50 miles of the Massapequa office. The parties
acknowledge, however, that Executive may be required to travel in connection
with the performance of his duties hereunder.
4. Base
Salary.
For all
services to be rendered by Executive pursuant to this Agreement, the Company
agrees to pay Executive during the Employment Period an initial base salary
(the
“Base Salary”) at an annual rate of $190,000. The Base Salary shall be paid in
regular installments in accordance with the Company's standard payroll
practices. In addition, the executive shall be entitled to a car allowance
in
the amount of $400.00/month.
5.
Bonus.
During
the term of this Agreement, the Executive shall be entitled to receive an annual
bonus of $50,000 in the first year of employment, if the Company records gross
revenue in excess of $5,000,000 in the twelve months starting on April 1, 2008
and an annual bonus of $75,000 if the Company records gross revenues in excess
of $10,000,000 in the twelve months starting April 1, 2009. Each annual bonus
shall be paid by the Company to the Executive promptly after determination
that
the relevant targets have been met, it being understood that the attainment
of
any financial targets shall be determined after the results of the annual audit
are know and the auditors have reviewed the financial performance for the first
three month of the relevant calendar year.
The
Compensation Committee (the “Compensation Committee”) of the Board, or the Board
if there is no Compensation Committee, shall review the Executive’s Base Salary
annually after the conclusion of the initial two year term and shall make a
recommendation to the Board as to whether such Base Salary should be increased
but not decreased, which decision shall be within the Board’s sole
discretion.
6. Expenses.
Executive shall be entitled to prompt reimbursement by the Company for all
reasonable ordinary and necessary travel, entertainment, and other expenses
incurred by Executive while employed (in accordance with the policies and
procedures established by the Company for its senior executive officers) in
the
performance of his duties and responsibilities under this Agreement; provided,
that Executive shall properly account for such expenses in accordance with
Company policies and procedures.
7. Other
Benefits.
During
the term of this Agreement, the Executive shall be eligible to participate
in
incentive, savings, retirement (401(k)), and welfare benefit plans, including,
without limitation, health, medical, dental, vision, life (including accidental
death and dismemberment) and disability insurance plans (collectively, “Benefit
Plans”), in substantially the same manner and at substantially the same levels
as the Company makes such opportunities available to the Company's managerial
or
salaried executive employees.
8. Vacation.
During
the term of this Agreement, the Executive shall be entitled to accrue, on a
pro
rata basis, 15 paid vacation days per year. Vacation shall be taken at such
times as are mutually convenient to the Executive and the Company and no more
than 15 consecutive days shall be taken at any one time without Company approval
in advance. The Executive shall not be entitled to carry over any accrued,
unused vacation days from year to year.
9. Stock
Options.
The
Executive shall be eligible for such grants of awards under the Company’s 2007
Equity Incentive Plan as the Compensation Committee or the Board may from time
to time determine. The Executive shall receive such a grant as of the Effective
Date to purchase 225,000 shares in accordance with said Plan.
10. Termination
of Employment.
(a) Death.
If
Executive dies during the Employment Period, this Agreement and the Executive’s
employment with the Company shall automatically terminate and the Company shall
have no further obligations to the Executive or his heirs, administrators or
executors with respect to compensation and benefits accruing thereafter, except
for the obligation to pay to the Executive’s heirs, administrators or executors
any earned but unpaid Base Salary and vacation pay and reimbursement of any
and
all reasonable expenses paid or incurred by the Executive in connection with
and
related to the performance of his duties and responsibilities for the Company
during the period ending on the termination date. The Company shall deduct,
from
all payments made hereunder, all applicable taxes, including income tax, FICA
and FUTA, and other appropriate deductions. In addition, the Executive’s spouse
and minor children shall be entitled to continued coverage for a period of
one
year following the termination of employment, at the Company’s expense, under
all health, medical, dental and vision insurance plans in which the Executive
was a participant immediately prior to his last date of employment with the
Company.
(b) Disability.
In the
event that, during the term of this Agreement the Executive shall be prevented
from performing his duties and responsibilities hereunder to the full extent
required by the Company by reason of Disability (as defined below), this
Agreement and the Executive’s employment with the Company shall automatically
terminate and the Company shall have no further obligations or liability to
the
Executive or his heirs, administrators or executors with respect to compensation
and benefits accruing thereafter, except for the obligation to pay the Executive
or his heirs, administrators or executors any earned but unpaid Base Salary
and
unused vacation days accrued through the Executive’s last date of Employment
with the Company and reimbursement of any and all reasonable expenses paid
or
incurred by the Executive in connection with and related to the performance
of
his duties and responsibilities for the Company during the period ending on
the
termination date. The Company shall deduct, from all payments made hereunder,
all applicable taxes, including income tax, FICA and FUTA, and other appropriate
deductions through the last date of the Executive’s employment with the Company.
For purposes of this Agreement, “Disability”
shall
mean a physical or mental disability that prevents the performance by the
Executive, with or without reasonable accommodation, of his duties and
responsibilities hereunder for a period of not less than an aggregate of three
months during any twelve consecutive months.
(c) Cause.
(1)
At
any time during the Employment Period, the Company may terminate this Agreement
and the Executive’s employment hereunder for Cause. For purposes of this
Agreement, “Cause” shall mean: (a) the willful and continued failure of the
Executive to substantially perform his duties and responsibilities for the
Company (other than any such failure resulting from Executive’s death or
Disability) after a written demand by the CEO or the Board for substantial
performance is delivered to the Executive by the Company, which specifically
identifies the manner in which the CEO or the Board believes that the Executive
has not substantially performed his duties and responsibilities, which willful
and continued failure is not cured by the Executive within thirty (30) days
of
his receipt of such written demand; (b) the conviction of, or plea of guilty
or
nolo
contendere
to, a
felony, (c), violation of Sections 10 or 11 of this Agreement, or (d) fraud,
dishonesty or gross misconduct which is materially and demonstratively injurious
to the Company. Termination under clauses (b), (c) or (d) of this Section
9(c)(1) shall not be subject to cure.
(2)
Upon
termination of this Agreement for Cause, the Company shall have no further
obligations or liability to the Executive or his heirs, administrators or
executors with respect to compensation and benefits thereafter, except for
the
obligation to pay the Executive any earned but unpaid Base Salary and vacation
pay, and reimbursement of any and all reasonable expenses paid or incurred
by
the Executive in connection with and related to the performance of his duties
and responsibilities for the Company during the period ending on the termination
date. The Company shall deduct, from all payments made hereunder, all applicable
taxes, including income tax, FICA and FUTA, and other appropriate
deductions.
(d) Change
of Control.
For
purposes of this Agreement, “Change of Control” shall mean the occurrence of any
one or more of the following: (i) the accumulation, whether directly,
indirectly, beneficially or of record, by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended) of 50% or more of the shares of the outstanding Common
Stock of the Company, whether by merger, consolidation, sale or other transfer
of shares of Common Stock (other than a merger or consolidation where the
stockholders of the Company prior to the merger or consolidation are the holders
of a majority of the voting securities of the entity that survives such merger
or consolidation), or (ii) a sale of all or substantially all of the assets
of the Company, provided,
however,
that
the following acquisitions shall not constitute a Change of Control for the
purposes of this Agreement: (A) any acquisitions of Common Stock or securities
convertible into Common Stock directly from the Company, or (B) any acquisition
of Common Stock or securities convertible into Common Stock by any employee
benefit plan (or related trust) sponsored by or maintained by the
Company.
(e) Good
Reason.
(1)
At
any time during the term of this Agreement, subject to the conditions set forth
in Section 9(e)(2) below, the Executive may terminate this Agreement and the
Executive’s employment with the Company for “Good Reason.” For purposes of this
Agreement, “Good Reason” shall mean the occurrence of any of the following
events: (A) the assignment, without the Executive’s consent, to the Executive of
duties that are significantly different from, and that result in a substantial
diminution of, the duties that he assumed on the Effective Date; (B) the
assignment, without the Executive’s consent, to the Executive of a title that is
different from and subordinate to the title President; (C) any termination
of
the Executive’s employment by the Company within 12 months after a Change of
Control, other than a termination for Cause, death or Disability; or (D)
material breach by the Company of this Agreement.
(2)
The
Executive shall not be entitled to terminate this Agreement for Good Reason
unless and until he shall have delivered written notice to the Company of his
intention to terminate this Agreement and his employment with the Company for
Good Reason, which notice specifies in reasonable detail the circumstances
claimed to provide the basis for such termination for Good Reason, and the
Company shall not have eliminated the circumstances constituting Good Reason
within 30 days of its receipt from the Executive of such written
notice.
(3)
In
the event that the Executive terminates this Agreement and his employment with
the Company for Good Reason, the Company shall pay or provide to the Executive
(or, following his death, to the Executive’s heirs, administrators or
executors): (A) any earned but unpaid Base Salary, and unused vacation days
accrued through the Executive’s last day of employment with the Company; (B)
continued coverage, at the Company’s expense, under all Benefits Plans in which
the Executive was a participant immediately prior to his last date of employment
with the Company, or, in the event that any such Benefit Plans do not permit
coverage of the Executive following his last date of employment with the
Company, under benefit plans that provide no less coverage than such Benefit
Plans, for a period of one year following the termination of employment; (C)
reimbursement of any and all reasonable expenses paid or incurred by the
Executive in connection with and related to the performance of his duties and
responsibilities for the Company during the period ending on the termination
date; and (D) the Base Salary, as in effect immediately prior to the Executive’s
termination hereunder for a period of six months. All payments due hereunder
shall be payable according to the Company’s standard payroll procedures. The
Company shall deduct, from all payments made hereunder, all applicable taxes,
including income tax, FICA and FUTA, and other appropriate
deductions.
(f) Without
“Good Reason” by Executive or Without “Cause” by the Company.
(1)
By
the
Executive.
At any
time during the term of this Agreement, the Executive shall be entitled to
terminate this Agreement and the Executive’s employment with the Company without
Good Reason by providing prior written notice of at least 30 days to the
Company. Upon termination by the Executive of this Agreement and the Executive’s
employment with the Company without Good Reason, the Company shall have no
further obligations or liability to the Executive or his heirs, administrators
or executors with respect to compensation and benefits thereafter, except for
the obligation to pay the Executive any earned but unpaid Base Salary, unused
vacation days accrued through the Executive’s last day of employment with the
Company and reimbursement of any and all reasonable expenses paid or incurred
by
the Executive in connection with and related to the performance of his duties
and responsibilities for the Company during the period ending on the termination
date. The Company shall deduct, from all payments made hereunder, all applicable
taxes, including income tax, FICA and FUTA, and other appropriate
deductions.
(2)
By
the
Company.
At any
time during the term of this Agreement, the Company shall be entitled to
terminate this Agreement and the Executive’s employment with the Company without
Cause by providing prior written notice of at least 30 days to the Executive.
Upon termination by the Company of this Agreement and the Executive’s employment
with the Company without Cause, the Company shall pay or provide to the
Executive (or, following his death, to the Executive’s heirs, administrators or
executors): (A) any earned but unpaid Base Salary and unused vacation days
accrued through the Executive’s last day of employment with the Company; (B)
continued coverage, at the Company’s expense, under all Benefits Plans in which
the Executive was a participant immediately prior to his last date of employment
with the Company, or, in the event that any such Benefit Plans do not permit
coverage of the Executive following his last date of employment with the
Company, under benefit plans that provide no less coverage than such Benefit
Plans, for a period of six months following the termination of employment;
(C)
reimbursement of any and all reasonable expenses paid or incurred by the
Executive in connection with and related to the performance of his duties and
responsibilities for the Company during the period ending on the termination
date; and (D) the Base Salary, as in effect immediately prior to the Executive’s
termination hereunder for the period of six months if the termination occurs
within the first 90 days of the Employment Term, twelve months if the
termination occurs after the first 90 days but during the first 270 days of
the
Employment Term and for the remainder of the initial two years of the Employment
Term if termination occurs after 270 days of employment under this Agreement.
If
the termination occurs after the initial two-year term than the applicable
severance shall be the remainder of the annual renewal term then in effect.
All
payments due hereunder shall be payable according to the Company’s standard
payroll procedures. The Company shall deduct, from all payments made hereunder,
all applicable taxes, including income tax, FICA and FUTA, and other appropriate
deductions.
11. Confidential
Information.
(a) Disclosure
of Confidential Information.
The
Executive recognizes, acknowledges and agrees that he has had and will continue
to have access to secret and confidential information regarding the Company,
its
subsidiaries and their respective businesses (“Confidential
Information”),
including but not limited to, its products, formulae, patents, sources of
supply, customer dealings, data, know-how and business plans, provided such
information is not in or does not hereafter become part of the public domain,
or
become known to others through no fault of the Executive. The Executive
acknowledges that such information is of great value to the Company, is the
sole
property of the Company, and has been and will be acquired by him in confidence.
In consideration of the obligations undertaken by the Company herein, the
Executive will not, at any time, during or after his employment hereunder,
reveal, divulge or make known to any person, any information acquired by the
Executive during the course of his employment, which is treated as confidential
by the Company, and not otherwise in the public domain. The provisions of this
Section 10 shall survive the termination of the Executive’s employment
hereunder.
(b) The
Executive affirms that he does not possess and will not rely upon the protected
trade secrets or confidential or proprietary information of any prior
employer(s) in providing services to the Company.
(c) In
the
event that the Executive’s employment with the Company terminates for any
reason, the Executive shall deliver forthwith to the Company any and all
originals and copies, including those in electronic or digital formats, of
Confidential Information.
12. Non-Competition
and Non-Solicitation.
(a) The
Executive agrees and acknowledges that the Confidential Information that the
Executive has already received and will receive is valuable to the Company
and
that its protection and maintenance constitutes a legitimate business interest
of the Company, to be protected by the non-competition restrictions set forth
herein. The Executive agrees and acknowledges that the non-competition
restrictions set forth herein are reasonable and necessary and do not impose
undue hardship or burdens on the Executive. The Executive also acknowledges
that
the products and services developed or provided by the Company, its affiliates
and/or its clients or customers are or are intended to be sold, provided,
licensed and/or distributed to customers and clients in and throughout the
United States (the “Territory”) (to the extent the Company comes to operate,
either directly or through the engagement of a distributor or joint or
co-venturer, or sell a significant amount of its products and services to
customers located, in areas other than the United States during the term of
the
Employment Period, the definition of Territory shall be automatically expanded
to cover such other areas), and that the Territory, scope of prohibited
competition, and time duration set forth in the non-competition restrictions
set
forth below are reasonable and necessary to maintain the value of the
Confidential Information of, and to protect the goodwill and other legitimate
business interests of, the Company, its affiliates and/or its clients or
customers.
(b) The
Executive hereby agrees and covenants that he shall not, without the prior
written consent of the Company, directly or indirectly, in any capacity
whatsoever, including, without limitation, as an employee, employer, consultant,
principal, partner, shareholder, officer, director or any other individual
or
representative capacity (other than a holder of less than two percent (2%)
of
the outstanding voting shares of any publicly held company), or whether on
the
Executive's own behalf or on behalf of any other person or entity or otherwise
howsoever, during the Employment Period and thereafter to the extent described
below, within the Territory:
(1)
Engage, own, manage, operate, control, be employed by, consult for, participate
in, or be connected in any manner with the ownership, management, operation
or
control of any business in competition with the business of the
Company;
(2)
Recruit, solicit or hire, or attempt to recruit, solicit or hire, any employee,
or independent contractor of the Company to leave the employment (or independent
contractor relationship) thereof, whether or not any such employee or
independent contractor is party to an employment agreement;
(3)
Attempt in any manner to solicit or accept from any customer of the Company,
with whom the Company had significant contact during Executive’s employment by
the Company (whether under this Agreement or otherwise), business of the kind
or
competitive with the business done by the Company with such customer or to
persuade or attempt to persuade any such customer to cease to do business or
to
reduce the amount of business which such customer has customarily done or might
do with the Company, or if any such customer elects to move its business to
a
person other than the Company, provide any services (of the kind or competitive
with the Business of the Company) for such customer, or have any discussions
regarding any such service with such customer, on behalf of such other person;
or
(4)
Interfere with any relationship, contractual or otherwise, between the Company
and any other party, including, without limitation, any supplier, distributor,
co-venturer or joint venturer of the Company to discontinue or reduce its
business with the Company or otherwise interfere in any way with the Business
of
the Company.
With
respect to the activities described in Paragraphs (2), (3) and (4) above, the
restrictions of this Section 11(b) shall continue beyond the Employment Period
until one year following the termination of this Agreement or of the Executive’s
employment with the Company, whichever occurs later. Furthermore, if the Company
terminates Executive’s employment for Cause or if Executive terminates his
employment without Good Reason, then the restrictions of this Section 11(b)
shall continue with respect to the activities described in Paragraph (1) above,
beyond the Employment Period until one year following the termination of this
Agreement or of the Executive’s employment with the Company, whichever occurs
later.
13. Miscellaneous.
(a) The
Executive acknowledges that the services to be rendered by him under the
provisions of this Agreement are of a special, unique and extraordinary
character and that it would be difficult or impossible to replace such services.
Furthermore, the parties acknowledge that monetary damages alone would not
be an
adequate remedy for any breach by the Executive of Section 10 or Section 11
of this Agreement. Accordingly, the Executive agrees that any breach or
threatened breach by him of Section 10 or Section 11 of this Agreement
shall entitle the Company, in addition to all other legal remedies available
to
it, to apply to any court of competent jurisdiction to seek to enjoin such
breach or threatened breach. The parties understand and intend that each
restriction agreed to by the Executive hereinabove shall be construed as
separable and divisible from every other restriction, that the unenforceability
of any restriction shall not limit the enforceability, in whole or in part,
of
any other restriction, and that one or more or all of such restrictions may
be
enforced in whole or in part as the circumstances warrant. In the event that
any
restriction in this Agreement is more restrictive than permitted by law in
the
jurisdiction in which the Company seeks enforcement thereof, such restriction
shall be limited to the extent permitted by law. The remedy of injunctive relief
herein set forth shall be in addition to, and not in lieu of, any other rights
or remedies that the Company may have at law or in equity.
(b) Neither
the Executive nor the Company may assign or delegate any of their rights or
duties under this Agreement without the express written consent of the other;
provided,
however,
that
the Company shall have the right to delegate its obligation of payment of all
sums due to the Executive hereunder, provided that such delegation shall not
relieve the Company of any of its obligations hereunder.
(c) This
Agreement constitutes and embodies the full and complete understanding and
agreement of the parties with respect to the Executive’s employment by the
Company, supersedes all prior understandings and agreements, whether oral or
written, between the Executive and the Company, and shall not be amended,
modified or changed except by an instrument in writing executed by the party
to
be charged. The invalidity or partial invalidity of one or more provisions
of
this Agreement shall not invalidate any other provision of this Agreement.
No
waiver by either party of any provision or condition to be performed shall
be
deemed a waiver of similar or dissimilar provisions or conditions at the same
time or any prior or subsequent time.
(d) This
Agreement shall inure to the benefit of, be binding upon and enforceable
against, the parties hereto and their respective successors, heirs,
beneficiaries and permitted assigns.
(e) The
headings contained in this Agreement are for convenience of reference only
and
shall not affect in any way the meaning or interpretation of this
Agreement.
(f) All
notices, requests, demands and other communications required or permitted to
be
given hereunder shall be in writing and shall be deemed to have been duly given
when personally delivered, sent by registered or certified mail, return receipt
requested, postage prepaid, or by reputable national overnight delivery service
(e.g. Federal Express) for overnight delivery to the party at the address set
forth in the preamble to this Agreement, or to such other address as either
party may hereafter give the other party notice of in accordance with the
provisions hereof. Notices shall be deemed given on the sooner of the date
actually received or the third business day after deposited in the mail or
one
business day after deposited with an overnight delivery service for overnight
delivery.
(g) This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York without reference to principles of conflicts
of
laws and each of the parties hereto irrevocably consents to the jurisdiction
and
venue of the federal and state courts located in the County and State of New
York.
(h) This
Agreement may be executed simultaneously in two or more counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one of the same instrument. The parties hereto have executed this Agreement
as
of the date set forth above.
(i) The
Executive represents and warrants to the Company, that he has the full power
and
authority to enter into this Agreement and to perform his obligations hereunder
and that the execution and delivery of this Agreement and the performance of
his
obligations hereunder will not conflict with any agreement to which Executive
is
a party.
IN
WITNESS WHEREOF, the Executive and the Company have caused this Executive
Employment Agreement to be executed as of the date first above
written.
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X. XXXXXXX
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/s/
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Xxxxxx X. Xxxxxxx | |
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| By: | /s/ Xxxx Xxxxx | |
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Name:
Xxxx Xxxxx
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Title:
Chief Executive Officer
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