Exhibit 10.77
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “
Agreement ”) is entered into as of January 30, 2009,
by and between Save the World Air, Inc, a Nevada corporation (the
“Company”), whose address is 235 Tennant Avenue, Morgan
Hill, California 95037, and Cecil Bond Kyte (“
Executive ”), an individual, whose address is 1267 Bel
Air, Santa Barbara, California 93105, with reference to the
following:
RECITALS
A. Executive has certain technical knowledge,
skills and abilities pertaining to the business in which the
Company engages.
B. The Company wishes to employ Executive as
its Chief Executive Officer, and Executive wishes to
accept employment with the Company, all on the terms and subject to
the conditions set forth in this Agreement.
AGREEMENT
Accordingly, the parties agree as
follows:
1. EFFECTIVE DATE AND TERM .
Unless sooner terminated as provided in this Agreement, including
as a result of the Company’s early termination of this
Agreement as provided in Section 4 below, the Company shall
employ Executive for an initial term commencing on a date to be
agreed between the parties but not later than January 30,
2009 (the “ Effective Date ”)
and continuing thereafter until the close of business on the day
immediately preceding the first anniversary of the Effective
Date. Thereafter, this Agreement shall be renewed
for successive one year periods unless either party shall give
written notice to the other, not later than October 31th of the
then-current year of the Term that this Agreement shall not be
renewed (the “Expiration Date”). This Agreement shall
in all respects terminate on the Expiration Date, except for those
obligations of either party that are expressly stated to continue
after such time or by nature will continue after such time. The
period beginning on the Effective Date and ending on the earlier of
the Expiration Date or the date Executive’s employment under
this Agreement actually terminates is referred to as the
“Term.”
2.1 General Duties . Executive
shall serve as the Company’s Chief Executive
Officer, and in such capacity shall be one of the Company’s
senior executive officers. Executive’s duties shall be
consistent with such position. In carrying out his duties,
Executive shall use Executive’s best efforts, skills,
judgment and abilities, and shall at all times promote the
Company’s interests and perform and discharge well and
faithfully, those duties. Executive shall report directly to the
Company’s Board of Directors. In acting on the
Company’s behalf, Executive shall observe and be governed by
all of the Company’s rules and policies, In addition,
Executive shall abide by all of the requirements of the Securities
and Exchange Commission, and adhere to the policies and requests of
the Company with respect thereto, as the same may exist from time
to time, applicable to executive officers of public
companies.
2.2 Full-Time Employment . At all
times during the Term, Executive shall devote Executive’s
entire business time, attention and energies to the Company’s
business, and shall furnish services for the Company and for its
subsidiaries, affiliates and divisions. During the Term, Executive
shall not engage in any activity that would materially interfere
with or adversely affect Executive’s performance of
Executive’s duties under this Agreement or which could
reasonably be expected to be competitive with or adverse to the
business of the Company or any of its subsidiaries, affiliates or
divisions.
2.3 Place of Performance . In
connection with Executive’s employment under this Agreement,
Executive shall be based at the Company’s offices where the
same are from time to time located during the term of this
Agreement, and which are, on the date hereof, in Morgan Hill,
California.
3.1 “ Compensation ” .
“ Compensation ” means the Base Salary (as
defined below) and bonus, if any, pursuant to this
Section 3.
3.2 Base Salary . For all services
rendered pursuant to this Agreement to the Company and any of its
subsidiaries and affiliates, commencing on the Effective Date
Executive shall receive a base salary (as may be adjusted from time
to time, the “ Base Salary ”) of $200,000 per
year. On or prior to each anniversary of the Effective Date, the
Company’s Board of Directors, or the appropriate committee
thereof, shall review the performance of the Executive hereunder
and shall consider whether or not to alter the Base Salary;
provided that the Base Salary shall not be reduced unless such
reduction is in proportion to, and on all of the other terms and
conditions promulgated in connection with, a reduction in salaries
paid to other senior executives of the Company
generally.
3.3 Bonus . Executive
shall be eligible to receive an annual cash bonus in an amount
equal to 2% of the Company’s net profit, if any, for its most
recently completed fiscal year, computed in accordance with
generally accepted accounting principles applied consistently with
prior periods. The bonus shall be payable, if at all, on
the anniversary date of employment of each year of the term;
provided that no bonus shall be payable if the Executive is not, on
such payment date, in the employ of the Company.
3.4 Benefits .
Executive shall be eligible to receive employee benefits during the
Term, at such times and on such terms and conditions as such
benefits are made available to the senior employees of the Company
generally. In addition, Executive shall receive paid
vacation of four weeks per year. Executive shall be entitled to
participate in the Company’s stock option plan as determined
by the Compensation Committee of the Board of Directors (the
“Compensation Committee”) in its sole, full and
absolute discretion, such participation to be in addition to the
stock option grant provided for pursuant to Section 3.7 below.
The Company shall provide to the Executive an unaccountable monthly
automobile allowance of $900.00, which amount shall be payable on
the last day of each month during the Term.
Notwithstanding the provisions of the first sentence of this
Section 3.4, the Executive may elect not to participate in any
group health insurance plan which may be offered to employees of
the Company. If the Executive elects not to participate
in such group health insurance plan, the Executive shall be paid on
the last day of each month during the Term the lesser of (i) the
premium the Company would have paid to include the Executive as a
participant in the Company’s group health insurance plan and
(ii) the sums paid by the Executive in connection with maintaining
private health insurance for the Executive.
3.5 Expenses . The Company shall
reimburse Executive for all reasonable and ordinary expenses
determined in the Company’s sole discretion that Executive
incurs or pays during the Term in performing Executive’s
services under this Agreement. Ordinary expenses
reimbursable to the Executive pursuant to this Section 3.5 shall
include the reasonable costs paid by the Executive for maintaining
dsl Internet access and other direct costs of maintaining an office
at the home of the Executive, but only until such time as the
Company shall provide to the Executive an office at a location
reasonably acceptable to the Executive. The Company shall, however,
be required to make any such reimbursement only after Executive
presents appropriate written expense statements, vouchers or such
other supporting information in accordance with the Company’s
reimbursement policies, as the Company may adopt from time to time.
The Company shall notify Executive of any dispute with respect to
any such expenses within three months of any request for
reimbursement or the expense shall be classified as
non-recoverable. Reimbursements shall be in arrears unless other
arrangements are made in advance.
3.6 Payment of Compensation . All
Compensation and other amounts payable to Executive under this
Agreement, whether for a period during or after the Term, shall be
paid in such installments and on such schedule as the Company may
from time to time implement for general payroll purposes, provided
that the Base Salary shall be paid at least monthly. Any Base
Salary required to be paid to Executive upon a termination of
Executive’s employment in excess of amounts accrued through
the Date of Termination (as defined in Section 4.1.1 below) shall
be paid in the same manner that Base Salary is paid during the
Term, but not more than 30 days from the Date of Termination. Any
payments made by the Company shall be designated by the Company as
applied towards base compensation, bonus payment or other
remuneration as the case may be. Any payments made prior to the
effective date of this Agreement shall not be applied to any
calculations called for in this Agreement.
3.7 Stock Option Grant
. Subject to the final decision of the Compensation
Committee, the Company will use its reasonable efforts to cause to
be granted to Executive:
An option (the “
Option”) to purchase a number of shares (the
“Supplemental Option Shares”) of the Company’s
common stock equal to the result of (A) 100,000 divided by (B) the
closing price per share of the Company’s Common Stock for the
five trading days preceding the first anniversary of the Effective
Date. The Option shall be an incentive stock option,
shall be exercisable at the closing price per share on the first
anniversary of the Effective Date, shall be exercisable for ten
years from the date of grant and shall vest on the second
anniversary of the Effective Date.
Consistent with the foregoing, the precise terms
and conditions of the agreements evidencing the Option and the
(“Stock Option Agreement”) to be entered into between
the Company and the Executive shall be as determined by the Board
of Directors and/or the Compensation Committee.
4. TERMINATION AND COMPENSATION UPON
TERMINATION .
4.1.1 “ Date of Termination ”
has the following meaning: (a) in the case of a termination of
Executive’s employment pursuant to this Agreement due to
Executive’s death or Disability (as defined below), the date
Executive dies or the date on which it is determined that Executive
has suffered a Disability, as applicable; and (b) in the case
of any other termination of Executive’s employment pursuant
to this Agreement, the date specified for termination of
Executive’s employment in the Notice of Termination (as
defined below), provided that the date specified shall be no
earlier than the time the Notice of Termination is
delivered.
4.1.2 “ Notice of Termination
” means a written document delivered by the party terminating
this Agreement to the other party that specifies (i) the
section of this Agreement pursuant to which termination is being
made and (ii) (the Date of Termination.
4.2 Effectiveness of Termination .
Termination of Executive’s employment, for any reason, shall
be effective upon the Date of Termination.
4.3 Death . Upon Executive’s
death, this Agreement shall automatically forever
terminate.
4.4 Disability . The Company may,
acting in its sole and absolute discretion, terminate
Executive’s employment under this Agreement because of
Executive’s Disability by delivering to Executive of a Notice
of Termination, which termination shall be effective 30 days after
delivery of such Notice of Termination. For purposes of this
Agreement, “ Disability ” means
Executive’s physical or mental incapacity or illness
rendering Executive unable to perform Executive’s duties
under this Agreement on a long-term basis (i) as evidenced by
Executive’s failure or inability to perform Executive’s
duties under this Agreement for a total of 90 days in any 360 day
period, or (ii) as determined by an independent and licensed
physician whom the Company selects, or (iii) as determined
without recourse by the Company’s disability insurance
carrier, if any.
4.5 Termination by Company Without
Cause . The Company may, acting in its sole and absolute
discretion, at any time terminate Executive’s employment
under this Agreement, upon no notice without Cause (as defined
below), or for any reason whatsoever or for no reason, by
delivering to Executive a Notice of Termination.
4.6 Termination for Cause . The
Company may at any time terminate Executive’s employment for
Cause by delivering to Executive a Notice of Termination. For
purposes of this Agreement, “ Cause ” means that
the Company, reasonably and in good faith, forms the belief that
Executive has (i) committed any act or omission constituting a
material breach of this Agreement; (ii) engaged in gross
negligence or willful misconduct in connection with the
Company’s business; (iii) been convicted of, or plead
guilty or nolo contendre in connection with, fraud or any
crime that constitutes a felony or that involves moral turpitude or
theft; or (iv) undertaken any act injurious to the
Company’s business, including insubordination or failure to
follow a directive of any of Executive’s
superiors.
4.7 Voluntary Termination .
Executive may terminate Executive’s employment with the
Company at any time, for any reason whatsoever, by giving the
Company a Notice of Termination, which termination shall be
effective on the sooner of (i) 30 days after delivery of such
Notice of Termination or (ii) the Company’s notice to the
Executive that it has accepted the Notice of Termination delivered
by the Executive.
4.8 Involuntary Termination . The
Company may terminate this Agreement in conjunction with a Change
of Control, merger, acquisition, bankruptcy or dissolution of the
Company. The Company shall pay Executive the amounts provided for
in Section 4.9 below upon any termination pursuant to this
Section 4.8. For purposes of this Agreement,
“Change of Control” means the occurrence of one or more
of the following events:
(i) the consummation of a merger or
consolidation of the Company with or into another entity or any
other corporate reorganization, if more than fifty percent
(50%) of the combined voting power of the continuing or
surviving entity’s securities outstanding immediately after
such merger, consolidation or other reorganization is owned by
persons who were not stockholders of the Company immediately prior
to such merger, consolidation or other reorganization;
or
(ii) the sale, transfer or other
disposition of all or substantially all of the Company’s
assets.
4.9 Payment Upon Termination . If
Executive’s employment under this Agreement is terminated by
the Company pursuant to Section 4.8, Executive shall be
entitled to receive (i) all Compensation that has accrued
through the Date of Termination, plus (ii) a severance payment
equal to one year’s Compensation, plus the Executive shall be
entitled to continue to participate in the Company’s employee
benefit programs offered to other senior management employees of
the Company for a period of 12 months following the Date of
Termination; provided , however , that if at any time
while the Company is required to pay severance to Executive
pursuant to clause (ii) of this paragraph any event occurs
that would cause the termination of Executive’s employment
(for example, Executive dies) or give rise to the right of the
Company to terminate this Agreement for Cause or due to
Executive’s Disability were Executive still employed pursuant
to this Agreement, then the Company’s obligation to pay such
severance shall thereupon immediately terminate. If
Executive’s employment under this Agreement is
terminated for any other reason except for termination
pursuant to Section 4.8, Executive (or in the case of
Executive’s death, Executive’s estate or other legal
representative) shall only be entitled to receive the Compensation
accrued through the Date of Termination.
4.10 Effect of Termination
. The amounts payable to Executive pursuant to
Section 4.9 upon a termination of Executive’s employment
shall upon payment constitute full and complete satisfaction of the
Company’s obligations to Executive in connection with this
Agreement and the Company’s employment of Executive.
Executive shall have no further rights or remedies with respect to
or against the Company in connection with this Agreement or the
Company’s employment of Executive. Notwithstanding anything
to the contrary in this Agreement, Executive’s
representations, warranties, covenants, duties and other
obligations set forth under Sections 5, 6, 7, 10 and 11 of
this Agreement shall survive and continue after any termination of
this Agreement, regardless of the reason for the
termination.
5.1 Assignment.
Executive and/or designates of the Executive shall
promptly and fully inform the Company of, and disclose to the
Company, any and all ideas, processes, trademarks, trade names,
service marks, service mark applications, copyrights, mask work
rights, fictitious business names, technology, patents, know-how,
trade secrets, computer programs, original works of authorship,
formulae, concepts, themes, inventions, designs, creations, new
works, derivative works and discoveries, and all applications,
improvements, rights and claims related to any the foregoing, and
all other intellectual property, proprietary rights and work
product, whether or not patentable or copyrightable, registered or
unregistered or domestic or foreign, and whether or not relating to
a published work, that Executive develops, makes, creates,
conceives or reduces to practice during the Te
|
