Exhibit 10.6
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (the
“Agreement”) dated as of October 1, 2005, is
entered into by and between Basin Water, Inc., a California
corporation (the “Company”), and Peter L. Jensen (the
“Employee”), with respect to the following
facts.
R E C I T A L S
A. The Company is in the business of
designing and building equipment to produce potable water from
contaminated wells.
B. The Employee has special
knowledge and expertise in the business conducted by the Company
and by this Agreement is being employed on a full-time basis as the
President and Chief Executive Officer of the Company.
NOW, THEREFORE in consideration of
the mutual promises and conditions hereinafter set forth, and for
other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties, intending to be legally
bound, do hereby agree as follows:
ARTICLE 1
EMPLOYMENT AND
TERM
1.1 Employment/Duties . The Company hereby
agrees to employ the Employee and the Employee hereby accepts
employment as the President and Chief Executive Officer of the
Company under the terms and conditions set forth in this Agreement.
Employee shall be responsible to the Company’s Board of
Directors for the performance of his duties. Employee shall have
responsibility for such duties as are customarily associated with
this position and such other duties and responsibilities as may be
assigned by the Company’s Board of Directors. During the
Term, Employee shall devote all of his working time, attention and
skill to the business affairs of the Company.
1.2 Effective Date . This Agreement shall
become effective immediately upon the date this Agreement is fully
executed (the “Effective Date”).
1.3 Term . This Agreement is effective from
the Effective Date and shall continue for a period of two
(2) years, unless earlier terminated as provided in ARTICLE 6
(the “Term”). At the end of the two-year period, unless
previously terminated, this contract may be renewed for an
additional twelve months with no action on the part of either
party, and may continue each subsequent year being automatically
renewed. If either party desires not to renew this agreement, such
party must indicate in writing no later than sixty (60) days
prior to the expiration of this agreement that they intend to allow
this agreement to terminate at the end of the current twelve-month
period.
Jensen Employment Agreement – Oct
2005
1
ARTICLE 2
COMPENSATION
2.1 Base Salary . The Employee shall be paid
a monthly base salary of Ten Thousand Four Hundred Sixteen Dollars
and Sixty-Seven Cents ($10,416.67), payable in two (2) equal
monthly installments on the 1st and 15th day of each month. As used
in this Agreement, the term “Salary” shall mean the
amount payable to Employee pursuant to this
Section 2.1.
2.2 Merit Review . The Employee shall be
eligible for an annual merit review based on performance and
profitability of the Company.
2.3 Annual Bonus . The Employee shall be
eligible for an annual bonus based on the Company’s
attainment of certain performance and profitability objectives as
determined and approved by the Company’s Board of
Directors.
2.4 Benefits . The Company currently offers
health insurance coverage, a Section 529 Flex Plan and a 401K
plan for all employees. Employee will be eligible to participate in
the Company’s health plan, Flex plan and the 401K plan on the
same terms and conditions available to other employees of the
Company. The Company currently offers no other benefits to its
employees. If the Company in the future decides to offer benefits
during the Term, the Company shall provide the Employee with
benefits comparable to those provided to its other employees,
provided that provision of such benefits by the Company is legal
and is not unreasonably burdensome to the Company. Participation
shall be subject to the terms of the applicable plan documents. The
Company may alter, modify, add to or delete its employee benefit
plans as they apply to the Company’s employees at such times
and in such manner as the Company determines appropriate, without
recourse by Employee.
2.5 Stock Options . The Company has
established that certain Basin Water Technology Group, Inc. 2001
Stock Option Plan (the “Plan”), pursuant to which stock
options may be authorized and granted to the executive officers,
directors, employees and key consultants of the Company.
Periodically, the Board of Directors of the Company shall grant
Employee options (the “Options”) to purchase shares of
the Company’s common stock; the number of options shall be
determined at the Board’s discretion. Any such options shall
vest as follows, (unless such vesting is modified by the
Company’s Board of Directors): One Third (1/3
rd
) of the Options shall
vest on the first anniversary of the Effective Date, One Third
(1/3 rd ) of the Options shall vest on the
second anniversary of the Effective Date and One Third (1/3
rd
) of the Options shall
vest on the third anniversary of the Effective Date. The exercise
price for the Options shall be the most recent market price per
share. Notwithstanding the foregoing, the Options shall be granted
pursuant to the Plan and shall in all respects be limited by and
subject to the express terms and provisions of that Plan, as it may
be amended from time to time and construed by the Board of
Directors of the Company.
2.6 Vacation . During each year of the Term
of this Agreement, Employee shall accrue twenty (20) days
(i.e., 3.0696 hours per forty (40) hour week, or one hundred
sixty (160) hours) of vacation time. Payments for vacation
time shall be calculated based on Employee’s Salary. Any
accrued but unused vacation time shall accumulate and carry forward
during subsequent
Jensen Employment Agreement – Oct
2005
2
years of the Term; provided, however, that no
more than one hundred sixty (160) hours of vacation time shall
carry forward to subsequent years of the Term; provided further,
however, that in no event shall Employee accrue more than two
hundred (200) hours of unused vacation time, and if Employee
accrues a total of two hundred (200) hours of unused vacation
time, Employee shall cease accruing vacation time until
Employee’s accrued but unused vacation time again drops below
two hundred (200) hours. Employee agrees to seek approval of
the Company prior to scheduling any vacation days, and agrees that
any scheduled vacation days shall be rescheduled at the
Company’s request to accommodate the reasonable needs of the
Company.
2.7 Business Expenses . The Company will pay
or reimburse Employee for all reasonable business expenses incurred
or paid by him in the performance of his duties and
responsibilities hereunder subject to and in accordance with a
pre-approved budget, subject to any restrictions on such expenses
set by the Company and to such reasonable substantiation
requirements as may be specified by the Company from time to
time.
ARTICLE 3
PROPRIETARY
INFORMATION
3.1 Proprietary Information .
(a) Confidentiality Required
. Employee acknowledges that the Company and each person or entity
which controls, is controlled by, or is under common control with
the Company (collectively the “Affiliates”) possess,
are developing and acquiring and will continue to possess, develop
and acquire valuable Proprietary Information (as defined below),
including information that Employee may acquire, develop or
discover during Employee’s employment with the Company. The
value of that Proprietary Information depends, in part, on it
remaining confidential. The Company and its Affiliates depend on
Employee to maintain that confidentiality, and Employee accepts
that position of trust.
(b) Proprietary Information,
Defined . As used in this Agreement, “Proprietary
Information” means or includes, without
limitation:
(1) Any information, ideas, and
materials (including any formula, pattern, compilation, device,
method, technique or process) that derives, in part, independent
economic value, actual or potential, from not being generally known
to the public or to other persons who can obtain economic value
from its disclosure or use, and includes information of or about
the Company, its Affiliates, its clients, employees, customers,
suppliers, joint venturers, licensors, licensees, distributors and
other persons and entities with whom the Company does or may do
business;
(2) Any ideas or materials, such as
know-how, show-how, research and development results, software
design and specifications, source and object code, training and
training materials, invention disclosures, patent applications,
trade secrets, blueprints, models, and other materials and concepts
relating to products and processes; and
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2005
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(3) Any information, ideas, or
materials of a business nature including without limitation
non-public financial information, information relating to profits,
costs, marketing, strategy, purchasing, sales, customers,
suppliers, pricing, bidding, customer information, contract terms,
employees, salaries, product development plans, business and
financial plans, forecasts and projections, client information,
marketing and sales plans and forecasts, any or all non-public
internal functionality, design parameters, and other proprietary
features of the Company’s current and future business
activities, and similar internal data.
(c) Non-Disclosure, Etc .
Employee will not disclose, disseminate, publish, copy or otherwise
make available for use (collectively “Use”) at any
time, either during or after Employee’s employment with the
Company, any or all Proprietary Information except for the
exclusive benefit of the Company and its Affiliates, as required by
Employee’s duties for the Company, or as the Company
expressly may consent to in writing. Employee will cooperate with
the Company and its Affiliates, and use Employee’s best
efforts to prevent the unauthorized Use of any or all Proprietary
Information. Employee understands that this prohibition on Use
prevents Employee from discussing Proprietary Information, even in
general terms, with persons outside the Company, except if
(1) the Use is authorized or required in connection with
Employee’s duties of employment for the Company or its
Affiliates during the Term, (2) the Company expressly consents
in writing to the Use of Proprietary Information, or (3) the
Use is required pursuant to any applicable judgment, order or
decree of any court or governmental body or agency having
jurisdiction, or by any law, rule or regulation (collectively
“Legal Process”). If Employee becomes subject to Legal
Process, Employee shall give the Company reasonable prior written
notice of the Legal Process and a written description of the
Proprietary Information being sought, and shall obtain, to the
maximum extent possible, confidential treatment for the Proprietary
Information sought to be obtained through the Legal Process.
Employee shall cooperate fully with the Company in its efforts to
prevent unauthorized Use of Proprietary Information.
(d) Return of Proprietary
Information . Upon leaving employment with the Company for any
reason, Employee shall immediately deliver to the Company all
tangible, written, graphical, machine readable, computer tapes,
diskettes, hard drives, and all other materials, including without
limitation all copies and excerpts, in Employee’s possession,
custody, or control containing or disclosing any or all Proprietary
Information.
(e) Civil Remedies, Criminal
Penalties . In addition to any civil remedies available to the
Company in the event of Employee’s unauthorized disclosure or
use of any or all Proprietary Information, Employee acknowledges
that the unauthorized taking, carrying away, or use of a trade
secret may constitute a criminal act under California Penal Code
Section 499c.
3.2 Disclosure and Assignment of Information
. Employee agrees promptly to disclose to the Company all
information pertaining to the Company’s business and
collected or learned by Employee, either alone or jointly with
others, in the course of his employment with the Company. In
addition, Employee hereby assigns to the Company any rights he may
have or acquire in the Proprietary Information, and promises that
during the duration of his employment with the Company and
thereafter, he will assist the Company in the enforcement and
protection of the Proprietary Information. The Company shall
promptly reimburse Employee for any reasonable expenses incurred in
complying with the provisions of this Section 3.2.
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2005
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3.3 Innovations and Improvements . Employee
agrees that all inventions, innovations or improvements in the
Company’s method of conducting its business conceived by him
during his employment with the Company belong to the Company.
Employee will promptly disclose such inventions, innovations or
improvements to the Company, and perform all actions reasonably
requested by the Company to establish and confirm such ownership.
Any such actions required to be performed by Employee shall be at
the expense of the Company.
3.4 Moral Rights Waiver . Employee also
hereby forever waives and agrees never to assert against Company,
its successors or licensees, any and all rights to claim authorship
of a work, any rights to object to any distortion or other
modification of a work, and any similar rights provided for by any
state, federal or international law or treaty, that Employee has,
had or may have in any Proprietary Information of the
Company.
3.5 Appointment of Attorney in Fact .
Employee hereby irrevocably designates and appoints the President
of the Company as Employee’s agent and attorney-in-fact to
act for and in Employee’s behalf and stead to execute and
file any document and to do all other lawfully permitted acts to
further the prosecution, issuance, and enforcement of patents,
copyrights and other proprietary rights with the same force and
effect as if executed and delivered by Employee.
ARTICLE 4
NONSOLICITATION AND
NONCOMPETITION
4.1 Nonsolicitation . Employee hereby
agrees
