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 Robert G. Crockett ( the "
Executive ").
1.
Employment: The Company hereby agrees to employ
the Executive as its Chief Executive 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, attainment of new
revenue sources and compliance with SEC and other requirements of a
public company. In the performance of his duties, the
Executive shall report to the Board of Directors.
2.2 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 three
(3) years (the " Initial Term ").
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 or
termination by Executive for Good Reason, the Company shall pay to
Executive 50% of unpaid compensation and benefits based on the
remaining term of Executive’s employment. The
Company shall be deemed to have terminated the Executive's
employment 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. Any
termination which occurs within one year of a change in control
shall be presumed to be a termination without Cause.
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. If the Executive is terminated for Cause, 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." Any termination
which occurs within one year of a change in control shall be
presumed to be a termination without Cause.
4.1
Base Salary
. The Company shall pay
the Executive an annual salary for his services under the Agreement
shall be $200,000 for calendar year 2009. Such salary
shall be payable semi-monthly, subject to applicable withholding
and other taxes. For calendar year 2010 and beyond, the
Executive’s salary shall be annually 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 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 alter stock options
previously granted to Executive to purchase 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 in the amounts and with vesting
from Executive’s initial date of employment (September 15,
2008) as follows: (i) 110,000 stock options vest at 12
months, (ii) 110,000 stock options vest at 18 months, and (iii)
110,000 vest at 24 months. In addition, the Company will
grant Executive 670,000 additional stock options to purchase 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,
one-quarter of which shall vest on 30 months, 36 months, 42 months
and 48 months from the date of Executive’s initial date of
employment (September 15, 2008) respectively. 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 Board of Directors.
6.
Place of
Employment: The Executive's regular place of work shall be
2701 Cambridge Ct., Auburn Hills, MI 48326, or such other place in
the Detroit metropolitan area 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 seven (7) 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 three (3) 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 all medical, dental and hospitalization, group
life insurance, and any and all other such plans as are presently
and hereafter provided by the Company to its executives.
8.
Expenses: During the term of the Executive's
employment hereunder, the Company, upon the submission of proper
substantiation by the Executive, shall reimburse the Executive for
all reasonable expenses actually and necessarily paid or incurred
by the Executive in the course of and pursua
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