Exhibit
10.1
EMPLOYMENT
AGREEMENT
This Employment Agreement (this “
Agreement ”) is made on the 24 th day of
October, 2006 by and between Electric Aquagenics Unlimited, Inc., a
Delaware corporation (the “ Company ”), and Wade
R. Bradley, an individual resident of the State of Georgia (the
“ Employee ”).
RECITALS
A. The Employee and the Company are entering into
this Agreement in connection with the hiring of the
Employee.
B. The Employee will be actively involved in the
development of the plans for the business operations and customer
development initiatives of the Company, and the efforts of the
Employee are expected to be of great importance to the successful
implementation of such plans.
C. The Company owns or has access or rights to
certain confidential and proprietary information, including,
without limitation, its customer list and other information
relating to its customers, which information is vital to the
success of the Company, and the Company wishes to protect and
maintain this information, which has been or may be developed by or
which has or may become known to Employee during his employment by
the Company and which, if disclosed to the Company’s
competitors or if used in a competitive way, would be detrimental
to the Company’s business.
D. The Company has developed and continues to
develop important business relationships with its customers, and
Employee recognizes and acknowledges that he has and will play a
role in the development and maintenance of these relationships, all
of which are vital to the Company’s business, and the Company
wishes to protect and maintain these relationships.
E. The Company will employ individuals and engage
consultants in which it will invest substantial time and money in
training in ways to make the Company competitive and successful,
and such Employees and consultants will possess important skills
and knowledge which will be obtained by them during their
employment or engagement, and the Company wishes to protect and
maintain its relationships with its Employees and consultants in
order to further its business.
AGREEMENTS
In consideration of the employment of Employee
by the Company, and the mutual agreements set forth herein, the
parties hereby agree as follows:
Capitalized terms used in this Agreement, unless
otherwise defined herein, shall have the meanings set forth in
Schedule 1 attached hereto.
2.
Terms of Engagement;
Duties; Board of Directors.
(a) The Company hereby employs Employee and Employee
hereby accepts employment by the Company, upon the terms and
conditions contained herein. Employee shall be employed as the
Chief Executive Officer and President of the Company with overall
charge and responsibility for the business and affairs of the
Company, and shall report to and perform all of the executive
duties as may from, time to time, be determined and assigned to him
by the Board of Directors of the Company provided that such
duties shall be consistent with Employee’s title(s). The
obligations of Employee to start work and the obligations of the
Company hereunder shall commence not later than November 6, 2006
(“ Effective Date ”).
(b) Throughout the term of this Agreement, Employee
shall:
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(i)
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devote all of
Employee’s business effort, time, energy and skill (permitted
vacations and reasonable absences due to illness excepted) to the
duties assigned by the Company and to the promotion of the
Company’s interests;
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(ii)
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faithfully,
loyally and industriously perform such duties, subject to the
control and supervision of the Company’s Board of
Directors;
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(iii)
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diligently
follow and implement all lawful policies and decisions of the
Company that are communicated to Employee;
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(iv)
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not engage in,
or otherwise be interested in, directly or indirectly, any other
business or activity that would adversely affect the Company
Business or Employee’s ability to perform his duties under
this Agreement; and
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(v)
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be expected to
travel extensively on behalf of the Company (both domestically and
internationally).
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(c) The Company shall nominate Employee for election
to the Company’s Board of Directors at the Company’s
first annual shareholders’ meeting after the Effective Date.
Subject to approval by the Company’s shareholders, the
Employee shall be elected to and shall serve as a member of the
Company’s Board of Directors. The Employee shall not
participate in any vote of the Board of Directors that relates to
Employee’s employment by the Company, including without
limitation, the scope of Employee’s duties and any increase
in Employee’s Base Salary or other compensation and benefits.
For the avoidance of doubt, whenever this Agreement calls for any
decision or consent to be made by the Company, Employee may not
make such decision or grant such consent on the Company’s
behalf, such decision or consent shall only be made or granted at
the direction of the Company’s Board of Directors.
3.
Compensation and
Benefits.
(a) In consideration of the services rendered by
Employee pursuant to this Agreement, the Company shall provide
Employee with the following remuneration and benefits, which shall
be the only compensation payable and benefits provided to Employee
with respect to his employment hereunder, and, Employee shall not
be entitled to receive any compensation or benefits in addition to
the following for any services rendered by him in any capacity to
the Company, unless agreed to in writing by the Company:
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(i)
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Base
Salary . The Company
agrees to pay Employee an annual base salary (“ Base
Salary ”) of Two Hundred Forty Thousand Dollars and
No/100 ($240,000) per year. The Base Salary shall be payable in
accordance with the Company’s standard payroll practices for
its employees. The Company’s Board of Directors shall
annually review the Employee’s Base Salary and, in its sole
discretion, may (but shall not be obligated to) increase such Base
Salary. The Employee shall have no authority to increase his Base
Salary or any other compensation and benefits payable to
Employee.
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(ii)
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Bonus . The Company’s Board of Directors, with
input from the Employee, shall develop an annual bonus plan
pursuant to which Employee as well as other Company employees may
earn a bonus on an annual basis. The Employee and the
Company’s Board of Directors shall jointly develop the
performance benchmarks for determining whether or not Employee (or
any other employees) have earned a bonus. If Employee meets the
performance benchmarks that are developed, Employee shall be
eligible to earn a bonus at the end of the fiscal year of the
Company of up to thirty percent (30%) of his Base Salary. Any bonus
earned by Employee shall be paid to Employee within ninety (90)
days after the end of the applicable fiscal year. Employee shall
not be eligible for a bonus for the Company’s fiscal year
ending December 31, 2006.
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(i)
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Options . On the Effective Date, the Employee shall be
granted options (“ Option ”) to purchase five
hundred thousand (500,000) shares of the Company’s common
stock (“ Shares ”), which the Company represents
constitutes approximately 2.17% of the Company’s fully
diluted capital stock. The Option shall vest in installments in
accordance with the schedule below:
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·
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100,000 Shares
shall vest on February 6, 2007
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·
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100,000 Shares
shall vest on November 6, 2007
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·
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100,000 Shares
shall vest on November 6, 2008
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·
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100,000 Shares
shall vest on November 6, 2009
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·
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100,000 Shares
shall vest on November 6, 2010
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The exercise
price per Share for the Option shall be equal to the closing sale
price of the Company’s common stock on the date of this
Agreement first written above. The number of Shares subject to the
Option will be equitably adjusted in the event of any stock split,
stock dividend, reverse stock split or other similar event. The
definitive terms and conditions of the Option shall be set forth in
a separate option grant agreement to be entered into by the
Employee and the Company substantially in the form attached hereto
as Exhibit A .
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(iv)
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Benefit
Plans and Programs .
Employee shall be eligible to participate in all profit-sharing,
pension and other retirement plans, health insurance and other
benefit programs, and management incentive, stock option and bonus
plans as are from time to time established by the Company and which
are made available to the Company’s senior management. In the
event any plan or program of whatsoever nature is developed or
maintained by the Company in the future, the Employee shall have no
right therein by virtue of this Agreement; such right, if any, will
only be granted by any such future plan or program. Nothing in this
Agreement shall preclude the Company from terminating or amending
any of such plans or programs at any time or from time to
time.
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(v)
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COBRA . Until Employee is eligible for health coverage
under the Company’s group health insurance plan, the Company
will reimburse Employee for his (and not any dependents) health
insurance costs under Employee’s prior group health insurance
plan pursuant to COBRA; provided that the Company shall not be
obligated for more than four (4) months of COBRA expenses
commencing on the Effective Date.
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(vi)
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Vacation and
Company Recognized Holidays . Employee shall be entitled to twenty (20)
business days paid vacation per calendar year, which vacation shall
be earned (accrued) ratably throughout the calendar year. Vacation
days must be used by the Employee during the calendar year in which
they are earned. The Employee is not entitled to carry over earned
vacation days from one calendar year to the next and any earned
vacation time that the Employee does not use during the calendar
year in which they were earned will be forfeited. In addition, the
Company recognizes twelve (12) national and state holidays. Upon
termination of this Agreement, unused accrued vacation will be not
be paid to Employee except in accordance with Section 13 of this
Agreement.
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(vii)
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Company
Car . The Company shall
reimburse Employee for the amount required to lease an automobile
of Employee’s choice up to a maximum of Five Hundred Dollars
($500) per month. In addition, the Company will reimburse Employee,
up to a maximum of One Thousand Dollars ($1,000) per year, for the
following properly documented expenses related to such automobile:
(i) service, (ii) maintenance, (iii) repair and (iv) excess mileage
fees required by the automobile lease, if such excess mileage is
the result of required business travel by the Employee on behalf of
the Company.
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(viii)
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Reimbursable
Expenses The Company
shall reimburse the Employee for any and all reasonable, ordinary,
and necessary business expenses incurred by him in the course of
performing his duties under this Agreement which are consistent
with the Company’s policies in effect from time to time with
respect to travel, entertainment and other business expenses,
subject to the Company’s requirements with respect to
reporting and documentation of expenses.
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(b) Employee acknowledges that, as a condition of
his employment and continued employment by the Company, he has been
asked to assign certain rights, and has been asked not to engage in
certain activities which would be detrimental to the Company
Business, either during his employment or during certain periods
following termination of his employment, and Employee understands
and acknowledges that the compensation and benefits to be provided
to him by the Company under Section 3(a) above is being provided in
part for his agreement to these conditions, which are set out
below.
4.
Agreement Not to Solicit
Employees or Consultants.
During the term of Employee’s employment
by the Company and for a period of one (1) year following the
termination of such employment, regardless of the reason for or
manner of termination, Employee shall not, either directly or
indirectly, on Employee’s own behalf or on behalf of others,
solicit, divert or hire away, or attempt to solicit, divert or hire
away, any person employed by the Company, whether or not such
Employee is a full-time or temporary Employee of the Company and
whether or not such employment is pursuant to a written agreement
for a determined period of time or at will, or any consultant
engaged by the Company.
5.
Agreement Not to Solicit
Customers.
During the term
of Employee’s employment by the Company and for a period of
one (1) year following the termination of such employment,
regardless of the reason for or manner of termination, Employee
shall not, either directly or indirectly, on Employee’s own
behalf or on the behalf of others, solicit, divert or appropriate,
or attempt to solicit, divert or appropriate any customer or
actively sought prospective customer of the Company, to or on
behalf of any Competing Business, with a view to selling or
providing any product, equipment or service competitive with any
product, equipment or service sold or provided by Company, provided
that the restrictions set forth in this section shall apply only to
customers or actively sought prospective customers of the
Company with which Employe e has had material contact. For
purposes of this section, “material contact” means
contact between Employee and each customer or actively sought
prospective customer: (1) with whom Employee dealt; or (2) whose
dealings with the Company have been directly supervised by
Employee.
6.
Restrictions on Use and
Disclosure of Company Information
(a) Employee agrees that during the term of his
employment hereunder:
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(i)
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he will receive
and hold all the Company Information in trust and in strictest
confidence;
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(ii)
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he will protect
the Company Information from disclosure and will in no event take
any action causing any of the Company Information to lose its
character as Company Information, or fail to take the action
necessary in order to prevent any Company Information from losing
its status as Company Information; and
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(iii)
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except as
required by Employee’s duties in the course of employment by
the Company, he will not, directly or indirectly, use, publish,
disseminate or otherwise disclose any Company Information to any
third party without the prior written consent of the Company, which
may be withheld in the Company’s absolute
discretion.
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(b) The restrictions on Employee’s use or
disclosure of Company Information, as set forth in Section 6(a)
above, shall survive, with respect to Confidential Information, for
a period of three (3) years following any termination of this
Agreement.
(c) The restrictions on Employee’s use or
disclosure of Company Information, as set forth in Section 6(a)
above, shall survive, with respect to Trade Secrets, for so long as
such Company Information is a trade secret under applicable
law.
(d) If Employee (or anyone to whom Employee
transmits Company Information) becomes legally compelled to
disclose any Company Information covered by this Agreement through
subpoena, court order, or any other compulsory process, Employee
shall first promptly notify the Company so that it may either seek
a protective order (or other appropriate remedy) or waive
compliance with the applicable provisions of this Agreement. If
such protective order (or other remedy) is not obtained, or the
Company waives compliance with the applicable provisions of this
Agreement, Employee (or anyone to whom Employee transmits Company
Information) shall furnish only that portion of the Company
Information which Employee (or anyone to whom Employee transmits
Company Information) is advised by its counsel is legally required
to be disclosed, shall disclose them only to the parties in favor
of whom the relevant order or waiver is obtained, and shall
exercise reasonable efforts to obtain reliable assurances that
confidential treatment will be accorded to such disclosed
information.
(a) Employee agrees that all Subject Inventions and
all patent and other intellectual property and trade secret rights
in and to Subject Inventions will become the property of the
Company, and Employee hereby irrevocably assigns to the Company all
of Employee’s rights to all Subject Inventions, including all
derivative works thereof and in all media.
(b) Employee agrees that if he develops or reduces
to practice an Invention during his employment and there is a
reasonable basis to believe that the Invention is a Subject
Invention, Employee will promptly provide a written description of
the Invention to the Company adequate to allow evaluation for a
determination as to whether the Invention is a Subject
Invention.
(c) Employee further agrees that he will cooperate
with attorneys or other persons designated by the Company by
explaining the nature of any Subject Invention for which the
Company elects to file an application for patent protection,
reviewing applications and other papers and providing any other
cooperation required for prosecution of the patent applications.
The Company will be responsible for all expenses incurred for the
preparation and prosecution of all patent applications on Subject
Inventions assigned to the Company.
(a) The Company shall own all right, title and
interest in and to any Works. In furtherance of the foregoing,
Employee acknowledges that each Work is a
“work-made-for-hire” as defined under the U.S.
Copyright Act (as amended). The Company shall for copyright
purposes be considered the sole and original author of each Work,
and shall have the sole and exclusive right (and may grant to
others the right) in perpetuity throughout the universe, to
copyright, use, transmit, broadcast, modify, change, adapt, edit or
exploit each Work by any means, for any purpose, in any media now
or hereafter known. Employee warrants and represents that each Work
to Employee’s knowledge is an original creation and that to
Employee’s knowledge does not violate any law, or infringe
any copyright or other right of any person or entity. Employee
waives any and all rights ( e.g. , “moral
rights”) Employee may have in each Work, including but not
limited to the right to acknowledgment as author. Employee agrees
not to use or include in any Work any copyrighted, restricted or
protected code, specifications, concepts, trade secrets, or
confidential information of any third party or any other
information that Employee would be prohibited from using by any
confidentiality, non-disclosure or other agreement with any third
party. Employee agrees to fully and promptly disclose in writing to
the Company any Works as such Works from time to time may
arise.
(b) In the event a court of competent jurisdiction
ever determines that any Work is not a “work made for
hire” then, and regardless, Employee hereby irrevocably
assigns all right, title and interest in and to that Work to the
Company (and/or its successors or assigns). The foregoing
assignment includes all worldwide rights of any kind in and to each
Work (whether or not such rights are recognized in the United
States or any other country in the world), including without
limitation, all rights incident to patent, trademark or copyright
ownership (including renewals or extensions), to claims for damages
by reason of past, present or future infringement and to the right
to sue and recover such damages for the use and benefit of the
Company. If any such rights cannot be assigned to the Company, then
Employee waives the enforcement of such rights, and if any such
rights cannot be assigned or waived, then Employee hereby grants to
the Company an exclusive, irrevocable, perpetual, worldwide, fully
paid license, with right to sublicense through multiple tiers, to
such rights.
(c) Employee shall execute and deliver such
confirmatory assignments, instruments, or documents as Company
deems necessary or desirable to protect, maintain, establish or
confirm Company’s rights to each Work without requiring
company to provide any further consideration therefor, failing
which Employee hereby appoints Company (and its successors or
assigns) as his attorney-in-fact to execute such documents. In this
regard, Employee shall, withou
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