EMPLOYMENT AGREEMENT
Exhibit
99.2
THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is made effective as of May 23, 2008
(the “Effective Date”), by and between Energy King, Inc., a
Nevada Corporation, (“Company”), and Xxxxxxx X Xxxxxxx, an individual
(“Executive”).
RECITALS
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A. Company
is engaged in the business of providing Heating,
Ventilating, Air Conditioning and Plumbing services to the residential and
light commercial sectors.
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B. Executive
is experienced in matters of operation related to Business.
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C. The
parties are willing to enter into this Agreement with respect to
Executive’s employment and services upon the terms and conditions
hereinafter set forth.
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AGREEMENT
In
consideration of the foregoing recitals and the premises herein contained, the
parties agree as follows:
I
TERM
Subject
to the provisions of Section IV hereof, Company hereby employs Executive and
Executive hereby accepts employment with Company beginning on or about the date
of May 23, 2008, and it shall continue in effect for a period of two
years (the “Initial Term”). Thereafter, the agreement shall be
renewed in writing signed by both parties upon mutual agreement of Executive and
Company (any renewal, collectively with the Initial Term, the “Employment
Term”). Except as otherwise provided herein, this agreement and Executive’s
employment may be terminated at Company’s discretion during the Initial Term,
provided that Company shall pay to Executive, in a lump sum, and on the date of
termination, an amount equal to Executive’s base salary rate for six (6) months
(“Severance Payment”). The Severance Payment will not accrue, and will not be
payable by Company, if Executive is terminated at any time for cause, or by
option of Executive. For purposes of this Agreement, the term “cause”
shall mean, without limitation, a determination by the Company’s Board of
Directors in good faith of: (i) the repeated inability of Executive to work
cooperatively with the Board of Directors; (ii) disruptiveness; (iii) impairment
affecting Executive’s ability to perform his duties for a period exceeding 30
days; (iv) dishonesty or fraud; (v) insubordination; or (vi) other action or
inaction constituting a material breach of this Agreement.
II
DUTIES
SECTION
II.1 General
Duties. Executive shall serve as the Chief Executive Officer
of Energy King, Inc during the Employment Term. Executive, during the
Employment Term, subject to the policies and directives of the Board of
Directors of Company (“Board”), shall be responsible for the daily operations of
the Company.
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SECTION
II.2 Devotion of Time
to Company’s Business. Executive agrees during the Employment Term, to
devote his best efforts, and all of his business time exclusively, to his
employment with Company, and to perform such duties as are specified in Section
II.1 and such other duties consistent with Section II.1 as shall be reasonably
requested by the Company. Executive shall not, during Executive’s employment,
unless otherwise agreed to in advance and in writing by Company, seek or accept
other employment, become self-employed in any other capacity, or engage in any
activities that are detrimental to the business of Company.
III
COMPENSATION AND
BENEFITS
As
compensation for his services hereunder, during the Employment Term, Executive
shall receive compensation and benefits (see below) payable in cash at the times
and in the installments consistent with Company’s payroll
practices.
Gross
Base Salary - $175,000 annually for the term of employment. The salary will be
accrued until a financing of at least $2,000,000 is completed. If the minimum
financing is not completed during the Term of this Agreement then the Company
does not owe the Executive his accrued salary, any Severance Payment or options.
Executive will not be eligible for an annual bonus until such a time Company
adopts a bonus plan for employees and then only under the terms of such
plan.
Stock
Option Incentive – Executive will receive employee stock options subject to the
Company’s approved Employee Stock Option Plan (the “Options”). In the event that
an approved Employee Stock Option Plan is not in place at the time Option
payments are due as provided herein, then the Executive shall be granted Options
as follows. If the financing obtained is debt financing, then the Option price
per option share shall be the price of the Company’s common stock as quoted on
the Over-The-Counter Bulletin Board at the close of business on the day of
closing of said debt financing. If the financing is equity investment, then the
Option price per option share shall be the price per share of said equity
investment.
The
Options payable shall equal to 5.0% of the outstanding Common Shares after the
financing is completed. The Options shall vest over a three-year period with
1/12 of the total vesting on the last day of each quarter starting from the
Effective Date of this agreement. Provided, however, that in the event the
Executive is terminated for cause as defined in Section I, all unvested Options
shall be deemed revoked as of the date of termination for cause.
In
evaluating the suitability of an investment in the Options, the Executive has
not relied upon any preliminary information supplied by the Company or any other
representations or other information (whether oral or written) from the Company
other than as set forth in the Company’s filings with the Securities And
Exchange Commission under the Securities Act of 1933 and the Securities Exchange
Act of 1934 (the “SEC Filings”). The Executive has carefully considered and has,
to the extent the Executive believes such discussion necessary, discussed with
the Executive's professional legal, tax, accounting and financial advisors the
suitability of an investment in the Options for the Executive's particular tax
and financial condition and has determined that the Options payable herein to
the Executive are a suitable investment for the Executive.
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The
Executive acknowledges that there are various substantial risks attendant to the
Company's business and an investment in the Options, including loss of the
entire amount of such investment. The Executive has considered the risks
associated with such an investment, including, but not limited to, those set
forth under the caption "Risk Factors" in any or all of the Company’s SEC
Filings. No representations or warranties have been made concerning the success
of the business or the potential profit of an investment in the
Company.
The
Executive acknowledges the illiquidity of the Options and the common stock
available thereunder. The Executive further acknowledges that, due to the fact
that the neither the common stock available under the Options nor the Options
will be registered under the Securitas Act of 1933 or state securities laws,
transfer of said shares or Options has been significantly limited. Therefore,
the Executive does not expect to be able to transfer his Options or shares of
common stock at any time in the immediate future except insofar as may be
provided by Securities And Exchange Commission Rule 144. The Executive
acknowledges that he must bear the economic risk of the investment for an
indefinite period of time and can afford a complete loss of the investment. The
Executive will not sell, hypothecate or otherwise transfer any of the Options or
common stock payable under the Options unless (a) registered under the 1933 Act
and applicable state securities laws, or (b) in the opinion of counsel,
concurred in by counsel to the Company, an exemption from the registration
requirements of the 1933 Act and such state laws is available. Furthermore, the
Executive understands that any certificates evidencing the shares payable
under the Options will bear an appropriate legend restricting the sale,
hypothecation, or other transfer and the transfer records of the Company will
contain appropriate notations of such transfer restrictions.
The
Executive represents and warrants to the Company that he is acquiring the
Options and the shares payable thereunder for investment purposes only, solely
for his own account and not for fractionalization or with a view toward
distribution and has no contract, agreement, arrangement or undertaking with any
person to sell, transfer or pledge such common stock. The Options and the common
stock payable thereunder will be issued only in the name of the Executive and no
other person has or will have a direct beneficial interest in the Options or the
common stock payable thereunder except as may be otherwise provided for by
law.
Benefits:
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Medical
Coverage
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Company
Plan
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Holidays
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Company
policy and procedures
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Vacation
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Fifteen
(15) business days per year
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401k
Plan
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Company
policy and procedures
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Company
will reimburse Executive for pre-approved business related expenses incurred in
performance of Executive’s services with Company. Company shall reimburse
Executive within 10 days of receipt of invoice for such expenses.
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IV
TERMINATION
SECTION
IV.1 Employment
At-Will. This is an at-will employment agreement. Either party may
terminate the employment relationship at any time with or without cause by
notifying the other party in writing at said party’s most recent principal
address by certified mail, return receipt requested. Executive understands and
agrees that no Company policy or procedure, nor anything in the employee
handbook, nor length of service, nor outstanding job performance, nor any oral
statement by anyone employed by Company can change either party’s right to
terminate the employment relationship at anytime and for any reason. No manager,
supervisor, employee or consultant of Company has any authority to bind Company
to any agreement for employment for any specified period of time or to make any
agreement other than at-will. Only the Board of Directors of the Company has the
authority to make such an agreement, and then only in writing. Notwithstanding
anything contained herein to the contrary, in the event Executive shall elect to
terminate this Agreement for any reason then the Company shall have no
obligation to pay any Severance Payment as set forth in Section I and all
unvested Options granted under this Agreement shall be deemed revoked as of the
date of such termination.
SECTION
IV.2 Termination for
Death or Disability. This Agreement and Executive’s employment hereunder
shall terminate automatically upon (1) Executive’s death or (2) the date of
determination by the Board of Directors that Executive has a disability. As used
herein, “disability” shall mean any condition that qualifies as a disability
under Company’s long-term disability plan as in effect on the date of
determination or which renders Executive incapable of performing substantially
all of Executive’s managerial and Executive services hereunder for ninety (90)
days or more in the aggregate during any one (1) year period, and which at any
time after such ninety (90) days the Board of Directors shall determine
continues to render Executive incapable of performing Executive’s managerial and
Executive services hereunder. If this Agreement is terminated because of
Executive’s death or disability pursuant to this Section, Company shall have no
further obligation or liability to Executive.
SECTION
IV.3 No Additional
Payments. Upon termination of Executive’s employment hereunder, Executive
shall not be entitled to any severance payments or severance benefits from
Company or any payments by Company on account of any claim for wrongful
termination, including but not limited to claims under any federal, state or
local human and civil rights or labor laws, except for any benefits which may be
due to Executive in the normal course under any Executive benefit plan or
program of Company which provides for benefits after termination of employment
except for the Severance Payment as listed in Section I above. Executive’s right
to receive payments or benefits under this Agreement upon termination of
employment will cease if Executive breaches any provision of Section V
below.
V
RESTRICTIVE
COVENANTS
SECTION
V.1 Confidential and
Proprietary Information. As an Executive of Company, Executive shall have
access to certain Confidential and Proprietary Information (as defined below)
concerning Company and its Affiliates (as defined below). Executive agrees that
he will not, either directly or indirectly, disclose to any person or use any of
the Confidential and Proprietary Information in any way during the Employment
Term (except as required in the course of the performance of his duties to
Company) or after the expiration of the Employment Term.
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For
purposes of this Agreement, “Confidential and Proprietary Information” means any
of the following information relating to the business of Company that is not
generally known to competitors, suppliers and customers of Company: (i) any
business or technical information, design, process, procedure, formula,
improvement, or any portion or phase thereof, that is owned by or has, at the
time of determination, been used by Company; (ii) any information related to the
development of products and production processes; (iii) any information
concerning proposed new processes; (iv) any information concerning customer
lists and other customer information, vendor lists and information, price data,
cost data, profit plans, capital plans and proposed or existing marketing
techniques or plans; and (v) any other information which would constitute a
“Trade Secret” under any Trade Secret legislation as in force and effect in the
State of Nevada, or any other relevant State.
For
purposes of this Agreement, “Affiliate” means any corporation, company,
partnership, joint venture, firm and/or other entity which controls is
controlled by or is under common control with the person with respect to which
the term “Affiliate” is used. For purposes of this Agreement, “Person” means an
individual, corporation, partnership, limited liability company, trust or
unincorporated organization, or a government or any agency or political
subdivision thereof. “Control” means (a) in the case of corporate entities,
direct or indirect ownership of at least fifty percent (50%) of the stock or
participating shares entitled to vote for the election of directors; and (b) in
the case of non-corporate entities (such as limited liability companies,
partnerships or limited partnerships), either (x) direct or indirect ownership
of at least fifty percent (50%) of the equity interest, or (y) the power to
direct the management and policies of the noncorporate entity.
SECTION
V.2 Inventions and
Improvements. Executive agrees that he will assign to Company, without
further consideration, the exclusive rights and title to all inventions,
discoveries, ideas, improvements, and other intellectual property made or
acquired by Executive during the Employment Term, whether alone or jointly with
others. Executive further agrees to execute any and all documents that are
required in order to transfer or assign such property rights to
Company.
SECTION
V.3 Equitable
Relief. Executive acknowledges and agrees that his services are of a
special, unique and extraordinary value to Company and its Affiliates and that
damages alone may be an inadequate remedy for any breach of this Agreement.
Accordingly, in the event of the breach by Executive of any of the provisions of
this Agreement, Company may, in addition and supplementary to other rights and
remedies existing in its favor, apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive or other relief in order
to enforce, or prevent any violations of, the provisions of this Agreement. In
the event of an alleged breach of Section V.1, the Executive consents to the
issuance of a temporary, preliminary and permanent injunction in a court of
competent jurisdiction against any further violation.
VI
MISCELLANEOUS
SECTION
VI.1 Severability. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is declared by a court of competent
jurisdiction to be illegal or invalid, such illegal or invalid term or provision
shall not affect the balance of the terms and provisions hereof, which terms and
provisions shall remain binding and enforceable.
SECTION
VI.2 Notice. Any notice or communication required to be given
hereunder may be delivered by hand, deposited with an overnight courier, sent by
confirmed facsimile, or mailed by registered or certified mail, if to Company,
to: 0000 Xxxxxx Xx., Xxxxx 0 Xxx Xxxxx, XX 00000. Attention, Xxxx Xxxxx., and if
to Executive, to: 0000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx Xxxxx, XX
00000 Notice shall be deemed received on the date sent if sent by
facsimile or personal delivery; three days after the date sent if sent by
registered or certified mail; and one day after the day it is sent if sent by
overnight courier.
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SECTION
VI.3 Entire Agreement;
Modification. This Agreement contains the entire and complete
understanding between the parties concerning its subject matter and all
representations, agreements, arrangements and understandings between or among
the parties, whether oral or written, have been fully merged herein and are
superseded thereby.
SECTION
VI.4 Law Governing
Agreement. This Agreement shall be governed by and construed in
accordance with the law of the State of California.
SECTION VI.5 Mandatory Binding
Arbitration. With the exception of any application
for provisional or injunctive relief, any and all disputes arising out of
or relating to the terms and provisions of this Agreement or that
involves any claim for breach of any contract or covenant (express or implied),
tort claims, claims for discrimination (including, but not limited to race, sex,
religion, national origin, age, handicap or disability), claims for compensation
or claims for violations of any federal, state, foreign or other governmental
law, statute, regulation or ordinance, then either party may initiate
arbitration proceedings in accordance with the Rules of the American Arbitration
Association (“AAA”). Arbitration proceedings shall be held in any Orange County,
California office of AAA. Both parties hereby consent to such arbitration, and
any arbitration award shall be final and binding. Neither party shall disclose
the existence of any dispute or the terms of any arbitration decision to any
third party, other than their legal counsel, accountants, and financial advisors
or as required by law. The prevailing party shall be entitled to reasonable
attorney’s fees and costs of suit. The parties hereto understand and agree that
execution of this Agreement will result in the waiver of the right to a jury
trial and other procedures inherent in ordinary civil
litigation.
Executive’s
Initials: _____
Signatory
of Company’s Initials: _____
SECTION
VI.6 Representation by
Counsel. Executive acknowledges that he has been represented by separate
legal counsel in connection with this Agreement and has consulted with such
legal counsel.
SECTION
VI.7 Counterparts. This
Agreement may be executed in counterparts, all of which taken together will
constitute one instrument.
SECTION
VI.8 Waiver.
Either party’s failure to enforce any provision or provisions of this Agreement
shall not in any way be construed as a waiver of any such provision or
provisions, nor prevent that party thereafter from enforcing each and every
other provision of this Agreement. The rights granted both parties herein are
cumulative and shall not constitute a waiver of either party’s right to assert
all other legal remedies available to it under the circumstances.
SECTION
VI.9 Binding
Effect. Except as otherwise provided in this Agreement, this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors, heirs, and assigns. Executive shall not assign, convey,
or otherwise transfer, voluntarily or by operation of law, to any person or
entity, this Agreement or any interest herein without the prior written consent
of Company. Any attempt to do so without such consent shall be null and
void.
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IN
WITNESS WHEREOF, the parties hereto have read, understand, agree to be bound by
and duly executed this Agreement as of the Effective Date.
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“Company”
Energy
King INC., A NEVADA CORPORATION,
By: /s/ Xxxx
Xxxxx
Xxxx
Xxxxx, CEO
“Executive”
By:
/s/ Xxxxxxx
X
Xxxxxxx
Xxxxxxx
X Xxxxxxx
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