Exhibit 10.2
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (“
Agreement ”) is made and entered into as of the
14 th day of September, 2006 by and
between Universal Energy Corp., a Delaware corporation (hereinafter
called the “ Company ”), and Dyron M.
Watford (hereinafter called the “ Executive
”).
Recitals
A. The Board of Directors of the
Company (the “ Board ”) desires to assure
the Company of the Executive’s continued employment in an
executive capacity and to compensate him therefore.
B. The Board has determined that
this Agreement will reinforce and encourage the Executive’s
continued attention and dedication to the Company.
C. The Executive is willing to make
his services available to the Company on the terms and conditions
hereinafter set forth.
Agreement
NOW, THEREFORE, in consideration of
the premises and mutual covenants set forth herein, the parties
agree as follows:
1. Employment .
1.1 Employment and Term . The
Corporation hereby agrees to employ the Executive as its Chief
Financial Officer, in such capacity, agrees to provide services to
the Corporation for the period beginning on September 14, 2006
and ending September 14, 2009 (the “ Termination
Date ”) (or such later date as may be agreed to by
the parties within 120 days prior to the Termination Date) (the
“ Employment Period ”).
1.2 Duties of Executive . The
Executive shall serve as the Chief Financial Officer of the Company
and shall diligently perform all services as may be reasonably
assigned to him by the Board, and shall exercise such power and
authority as may from time to time be delegated to him by the
Board. The Executive shall be required to report solely to, and
shall be subject solely to the supervision and direction of the
Board at duly called meetings thereof, and no other person or group
shall be given authority to supervise or direct Executive in the
performance of his duties. In addition, the Executive shall
regularly consult with the Chairman of the Board with respect to
the Company’s business and affairs. The Executive shall
devote his working time and attention as he deems appropriate to
the business and affairs of the Company (excluding any vacation and
sick leave to which the Executive is entitled), render such
services to the best of his ability, and use his reasonable best
efforts to promote the interests of the Company. It shall not be a
violation of this Agreement for the Executive to (A) serve on
corporate, civic or charitable boards or committees,
(B) deliver lectures, fulfill speaking engagements or teach at
educational institutions, and (C) manage personal investments,
so long as such activities do not significantly interfere with the
performance of the Executive’s responsibilities as an
employee of the Company in accordance with this
Agreement.
1.3 Place of Performance . In
connection with his employment by the Company, the Executive shall
be based at the Company’s principal executive offices except
for travel reasonably necessary in connection with the
Company’s business. The Company shall not, without the
written consent of the Executive, relocate or transfer its
principal executive offices outside the area generally known as the
greater Orlando, Florida area.
2. Compensation .
2.1 Base Salary . Commencing
on the effective date of this Agreement, the Executive shall
receive a base salary at the annual rate of not less than $72,000
(the “ Base Salary ”) during the term of
this Agreement, with such Base Salary payable in installments
consistent with the Company’s normal payroll schedule,
subject to applicable withholding and other taxes. The Base Salary
will be automatically increased to not less than $84,000 during
year 2 of this Agreement and increased to not less than $96,000
during year 3 of this Agreement. The Base Salary shall also be
reviewed, at least annually, for merit increases and may, by action
and in the discretion of the Board, be increased at any time or
from time to time. The Base Salary shall also be increased at any
time and from time to time as shall be substantially consistent
with increases in base salary awarded in the ordinary course of
business to other key executives of the Company and its
subsidiaries. The Base Salary, if increased, shall not thereafter
be decreased for any reason.
2.2 Incentive Compensation .
The Executive shall be entitled to receive such bonus payments or
incentive compensation as may be determined at any time or from
time to time by the Board (or any authorized committee hereof) in
its discretion. Such potential bonus payments and/or incentive
compensation shall be considered at least annually by the
Board.
2.3 Incentive Stock Option
Grant .
(a) The Company hereby grants to the
Executive 2,500,000 options to purchase of the common stock of the
Company at a price of $1.95 per share. The stock is restricted as
defined by applicable securities laws:
|
|
(b)
|
The Option is
granted effective as of September 14, 2006.
|
|
|
(c)
|
TERM: Your
right to exercise each vesting installment of the Option will
expire five years after the vesting date for that installment,
unless sooner terminated as a result of termination of your
employment or services with the Company or upon a Terminating
Event.
|
|
|
(d)
|
VESTING: The
Option shall vest monthly over the term of this Employment
Agreement. Any Option Shares that have not yet vested shall be
considered “Unvested Shares.” Upon cessation of your
employment or services on behalf of the Company for any reason, no
further vesting of the Option will occur and any unvested portion
of the Option will terminate.
|
|
|
(e)
|
ACCELERATION OF VESTING SCHEDULE:
In the event (i) the Company enters into a purchase and sale
agreement whereby substantially all of the Company’s assets
will be sold to an unrelated thirty party or (ii) more than
ninety-five percent (95%) of the total issued and outstanding
shares of the Company are to be sold pursuant to a stock
|
2
|
|
transfer agreement to an
unrelated third party (herein an “Accelerating Event”),
any installments of the option not yet vested shall conditionally
vest and the Employee will have the right to exercise such
installment(s) of the option subject to the following:
|
|
|
a.
|
Exercise. The
terms and conditions of the Employee’s right to exercise any
installment as set forth herein shall remain the same except that
the exercise must occur concurrent with the successful consummation
of the Accelerating Event.
|
|
|
b.
|
Failure to
Exercise or Consummate. In the event the Employee fails to exercise
any installment of the option concurrent with the consummation of
the Accelerating Event, or, for whatever reason, the Accelerating
Event is not consummated, the Employee’s right to exercise
the conditionally vested shares expire and the vesting schedule as
set forth in this Agreement shall control the date of the
Employee’s right to exercise the next installment of the
option.
|
|
|
c.
|
Accelerating
Event. Accelerating Event shall not include (i) corporate
reorganizations where shareholders of the successor company(s) are
substantially the same as the Company’s stockholders and/or
(ii) the assignment of shares of stock in the Company among
family members, whether for estate planning or
otherwise.
|
3. Expense Reimbursement and
Other Benefits .
3.1 Expense Reimbursement .
During the term of Executive’s employment hereunder, the
Company, upon the submission of reasonable supporting documentation
by the Executive, shall reimburse the Executive for all reasonable
expenses actually paid or incurred by the Executive in the course
of and pursuant to the business of the Company, including all
travel and entertainment related expenses.
3.2 Incentive, Savings and
Retirement Plans . During the Employment Period, the Executive
shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable to
other key executives of the Company and its subsidiaries, in each
case comparable to those currently in effect or as subsequently
amended. Such plans, practices, policies and programs, in the
aggregate, shall provide the Executive with compensation, benefits
and reward opportunities at least as favorable as the most
favorable of such compensation, benefits and reward opportunities
provided at any time hereafter with respect to other key
executives.
3.3 Welfare Benefit Plans .
During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company and its subsidiaries (including, without limitation,
medical, prescription, dental, disability, salary continuance,
employee life, group life, accidental death and travel accident
insurance plans and programs), at least as favorable as the most
favorable of such plans, practices, policies and programs in effect
at any time hereafter with respect to other key
executives.
3
3.4 Working Facilities .
During the term of Executive’s employment hereunder, the
Company shall furnish the Executive with such facilities and
services suitable to his position and adequate for the performance
of his duties hereunder.
3.5 Automobile Allowance .
During the Employment Period, the Company shall provide Executive
with a non-accountable automobile allowance of two hundred fifty
Dollars ($250.00) per month, which amount is intended to compensate
Executive for wear and tear and, in addition, reimburse the
Executive for all costs of gasoline, oil, repairs, maintenance,
insurance and other expenses incurred by Executive by reason of the
use of Executive’s automobile for Company business from time
to time.
3.6 Vacation . During the
Employment Period, the Executive shall be entitled to paid vacation
in accordance with the most favorable plans, policies, programs and
practices of the Company and its subsidiaries as in effect at any
time hereafter with respect to other key executives of the Company
and its subsidiaries; provided , however , that in no
event shall Executive be entitled to fewer than four weeks paid
vacation per year.
4. Termination .
4.1 Termination for Cause .
Notwithstanding anything contained to the contrary in this
Agreement, this Agreement may be terminated by the Company for
Cause. As used in this Agreement, “Cause” shall only
mean (i) an act or acts of personal dishonesty taken by the
Executive and intended to result in substantial personal enrichment
of the Executive at the expense of the Company, (ii) subject
to the following sentences, repeated violation by the Executive of
the Executive’s material obligations under this Agreement
which are demonstrably willful and deliberate on the
Executive’s part and which are not remedied in a reasonable
period of time after receipt of written notice from the Company, or
(iii) the conviction of the Executive for any criminal act
which is a felony. Upon any determination by the Company’s
Board of Directors that Cause exists under clause (ii) of the
preceding sentence, the Company shall cause a special meeting of
the Board to be called and held at a time mutually convenient to
the Board and Executive, but in no event later than ten
(10) business days after Executive’s receipt of the
notice contemplated by clause (ii). Executive shall have the right
to appear before such special meeting of the Board with legal
counsel of his choosing to refute any determination of Cause
specified in such notice, and any termination of Executive’s
employment by reason of such Cause determination shall not be
effective until Executive is afforded such opportunity to appear.
Any termination for Cause pursuant to clause (i) or
(iii) of the first sentence of this Section 4.1 shall be
made in writing to Executive, which notice shall set forth in
detail all acts or omissions upon which the Company is relying for
such termination. Upon any termination pursuant to this
Section 4.1, the Executive shall be entitled to be paid his
Base Salary to the date of termination and the Company shall have
no further liability hereunder (other than for reimbursement for
reasonable business expenses incurred prior to the date of
termination).
4.2 Disability .
Notwithstanding anything contained in this Agreement to the
contrary, the Company, by written notice to the Executive, shall at
all times have the right to terminate this Agreement, and the
Executive’s employment hereunder, if the Executive shall, as
the result of mental or physical incapacity, illness or disability,
fail to perform his duties and responsibilities provided for herein
for a period of more than one hundred twenty (120) consecutive
days in any 12-month period. Upon any termination pursuant to this
Section 4.2, the Executive shall be entitled to be paid his
Base Salary to the date of termination and the Company shall have
no further liability hereunder (other than for reimbursement for
reasonable business expenses incurred prior to the date of
termination).
4
4.3 Death . In the event of
the death of the Executive during the term of his employment
hereunder, the Company shall pay to the estate of the deceased
Executive an amount equal to the sum of (x) any unpaid amounts
of his Base Salary to the date of his death, plus (y) six
months of Base Salary, and the Company shall have no f
