EMPLOYMENT
AGREEMENT
THE AGREEMENT is made as of the 21st day of September, 2009
(the “Effective Date”) by and between Ecology Coatings, Inc., a
Nevada corporation (the " Company "), and F. Thomas Krotine (
the " Executive ").
WITNESSETH
WHEREAS , the Company is engaged in the business of the
developing, producing and selling nanotechnology
coatings;
WHEREAS , the Company desires to employ the Executive as
its President and Chief Operations Officer;
WHEREAS , the parties desire to memorialize the
employment of the Executive in the Agreement.
NOW THISEFORE , in consideration of the premises and the
mutual covenants and agreements contained herein, the parties
mutually covenant and agree as follows:
The Company
hereby agrees to employ the Executive as its Chief Operating
Officer and the Executive hereby accepts such employment upon the
terms and conditions set forth in the Agreement.
2.1 During the term of
the Agreement, the Executive shall diligently perform all services
consistent with his position as may be assigned to his by or under
the direction of the Board of Directors of the Company and such
other members of senior management designated by the
Board. The Executive's duties shall include overall
responsibility for the affairs of the Company, legal and SEC
compliance and other requirements of a public
company. In the performance of his duties, the Executive
shall report to the Board of Directors and the Chief Executive
Officer.
2.2
(b) The
Executive shall devote his full working time and attention to the
business and affairs of the Company, render such services in a
competent and efficient manner, and use his reasonable and
appropriate best efforts to faithfully promote the interests of the
Company.
3.1 Term
. The term of employment shall begin upon execution of
the Agreement and extend for a period of one (1) year (the "
Initial Term "). It shall thereafter be
automatically renewed for successive periods of one (1) year, each
upon the terms and conditions set forth in the Agreement, unless,
at least thirty (30) days prior to such renewal date, either party
shall have delivered to the other party written notice of
termination of the Agreement.
3.2 Termination
Without Cause . The Company shall have the right to
terminate the Executive's employment under the Agreement by written
notice to the Executive at any time; provided ,
however , that, upon such termination without Cause, as such
term is defined below, the Company shall pay to Executive the full
value of the remaining unpaid compensation owed to the Executive
for the balance of the Initial Term, including medical and dental
insurance coverage that the Company provides to its other
executives. If the Agreement is terminated without Cause
by the Company during the final year of the Initial Term or during
any subsequent one-year extension term, a full year's compensation,
including medical and dental insurance coverage, shall be due and
payable. The Company shall have no further liability
under the Agreement, other than for reimbursement for reasonable
business expenses incurred prior to the date of
termination. The Company shall be deemed to have
terminated the Executive's employment pursuant to this Section 3.2
if such employment is terminated: (i) by the Company
without Cause; or (ii) by the Executive voluntarily for "Good
Reason." For purposes of the Agreement, " Good
Reason " means any breach by the Company of any of the terms or
provisions of the Agreement which is not cured within thirty (30)
business days of written notice by the Executive.
3.3 Termination for
Cause . The Company may terminate the Agreement and
the Executive's employment hereunder immediately upon written
notice to the Executive for "Cause" (as hereinafter
defined). For purposes of the Agreement, the term "
Cause " shall mean (i) the repeated failure or refusal of
the Executive to perform the duties or render the services
reasonably assigned to his from time to time by the Board of
Directors (except during reasonable vacation periods or sick
leave); (ii) the charging or indictment of the Executive in
connection with a felony or willful misfeasance or nonfeasance;
(iii) the association, directly or indirectly, of the Executive,
for his profit or financial benefit, with any person, firm,
partnership, association, entity or corporation that competes, in
any material way, with the Company; (iv) the disclosing or using of
any material "Confidential Information", "Trade
Secrets" or “Material, Non-Public
Information” (as those terms are defined in Section 9) of the
Company at any time by the Executive, except as required in
connection with his duties to the Company, (v) the breach by the
Executive of his fiduciary duty or duty of trust to the Company,
including the commission by the Executive of an act of fraud or
embezzlement against the Company, (vi) trading, directly or
indirectly, in the Company’s securities while in possession
of material, non-public information (vii) any other material breach
by the Executive of any of the terms or provisions of the Agreement
or any other agreement between the Company and the Executive, which
other material breach is not cured within thirty (30) business days
of notice by the Company; or (vii) any other action by the
Executive, which, in the good faith and reasonable determination of
all of the members of the Company's Board of Directors, has the
effect of materially injuring the reputation or business of the
Company. In which event, notwithstanding any other
provision in the Agreement to the contrary, the Executive shall
have no further rights or entitlements under the Agreement, the
Company shall have no further obligations to the Executive, and the
Agreement shall be null and void, provided , however
, that the Executive shall be entitled to be receive all unpaid,
earned salary, wages and benefits, including accrued vacation pay
and reimbursement for reasonable business expenses incurred prior
to the date of termination, to the date of
termination. It shall be the Company's burden to show
that good "Cause" existed for termination under the Section by
clear and convincing evidence, and any failure by the Company to
carry the burden shall convert the termination into a termination
without "Cause."
4.1
Base Salary
. The Company shall
initially pay the Executive an annual salary of $65,000 for his
services under the Agreement starting November 1,
2009. Such salary shall be payable semi-monthly, subject
to applicable withholding and other taxes and subject to annual
adjustment by the Company’s Compensation Committee or its
Board of Directors. For calendar year 2010 and beyond,
the Executive’s salary shall be reviewed by the Compensation
Committee or the Board of Directors for possible
increase.
4.2 Bonus and Other
Compensation . Executive shall be entitled to
participate on the same terms as other directors and officers in
any applicable bonus, stock option, restricted stock, pension or
profit sharing plan, or any other type of plan adopted by the
Company for the benefit of its officers, directors and
employees.
5.
Grant of Stock Options
. The Company will grant
an additional 169,000 options to purchase shares of the
Company’s common stock at a price per share equal to the
closing price of the Company’s stock on the date the
Company’s Board of Directors approves this Agreement with
vesting as follows: one-quarter of which shall vest on 6
months, 12 months, 18 months and 24 months from the date of this
Agreement. The Company shall provide in its stock option
plan and/or stock option agreements with Executive that all of
Executive’s stock options shall vest upon a “Change in
Control” of the ownership or composition of the
Company’s Board of Directors.
The Executive's regular place of work shall be
1238 Brittain Rd., Akron, OH 44310, or such other place
that it may designate from time to time. However, if the
Company desires to move its office out of such area, or any other
area it thereafter designates, the Company shall provide Executive
with no less than one (1) year’s time to complete his
relocation. The Company shall pay the Executive's
reasonable moving expenses.
7.1 Holidays
. The Executive shall be entitled to fifteen (15) paid
holidays annually. The Company will notify the Executive
as much in advance as practical with respect to the holiday
schedule to be observed by the Company.
7.2 Vacations
. During the term of the Agreement, the
Executive shall be entitled to four (4) weeks of paid vacation
annually. The Executive agrees not to utilize vacation
and/or compensatory time at a time when to do so could adversely
affect the Company's business.
7.3 Personal
Insurance Benefits . The Executive shall be entitled
to participate in al
