EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this “ Agreement ”)
is made, entered into and effective as of September 01, 2007
(the “ Effective Date ”), between Ethanex
Energy, Inc. (the “ Company ”), and Alan H.
Belcher, an individual (the “ Executive
”).
WHEREAS,
the Company and the Executive wish to memorialize the terms
and conditions of the Executive’s employment by the
Company in the positions of Executive Vice President,
Technology and Business Development;
NOW,
THEREFORE, in consideration of the covenants and promises
contained herein, the Company and the Executive agree as
follows:
1.
Employment Period . The Company offers to employ the Executive,
and the Executive agrees to be employed by Company, in accordance
with the terms and subject to the conditions of this Agreement. The
Company and Executive agree that Executive is employed “at
will” which means that the employment relationship may be
terminated by either party at any time, for any reason or no
reason, subject to the provisions of Section 11 below. The
Executive affirms that no obligation exists between the Executive
and any other entity which would prevent or impede the
Executive’s immediate and full performance of every
obligation of this Agreement.
2.
Position and Duties . During the term of the Executive’s
employment hereunder, the Executive shall continue to serve in, and
assume duties and responsibilities consistent with, the positions
of Executive Vice President, Technology and Business Development of
a public company, which may include, but are not limited to,
management of the Company’s technology and business
development affairs, unless and until otherwise instructed by the
Company. The Executive agrees to devote to the Company
substantially all of his working time, skill, energy and best
business efforts during the term of his employment with the
Company, and the Executive shall not engage in business activities
outside the scope of his employment with the Company if such
activities would detract from or interfere with his ability to
fulfill his responsibilities and duties under this Agreement or
require substantial amounts of his time or of his
services.
3.
No Conflicts . The Executive covenants and agrees that for so
long as he is employed by the Company, he shall inform the Company
of each and every future business opportunity presented to the
Executive that arises within the scope of the Business of the
Company (as defined below) and would be feasible for the Company,
and that he will not, directly or indirectly, exploit any such
opportunity for his own account.
4.
Hours of Work . The Executive’s normal days and hours of
work shall coincide with the Company’s regular business
hours. The nature of the Executive’s employment with the
Company requires flexibility in the days and hours that the
Executive must work, and may necessitate that the Executive work on
other or additional days and hours.
5.
Location . The locus of the Executive’s employment with
the Company shall be Basehor, Kansas and any other locus where the
Company now or hereafter has a business facility. The Executive
will travel elsewhere as required from time to time as necessary to
fulfill his duties.
6.
Compensation .
(a)
Base Salary . During the term of this Agreement, the Company
shall pay, and the Executive agrees to accept, in consideration for
the Executive’s services hereunder, pro rata bi-weekly
payments of the annual salary of $180,000, less all applicable
taxes and other appropriate deductions.
(i)
The
Compensation Committee (the “ Compensation
Committee ”) of the Board shall also review the
Executive’s base salary annually no later than March
31st and shall make a recommendation to the Board as to
whether such base salary should be increased but not
decreased, which decision shall be within the Board’s
sole discretion.
(b)
One Time Bonus . A one-time bonus of $20,000 shall be paid upon
the submittal of the R.W. Beck information to the lenders. A
one-time bonus of $50,000 shall be paid on September 01, 2007 for
the development of the Buhler, Inc. Joint Marketing Agreement and
the preparation and submittal of the information for Pure
Vision’s application to the Department of Energy for funding
their cellulosic plant.
(c)
Annual Bonus . During the term of this Agreement, the Executive
shall be entitled to an annual bonus of up to 75% of his base
salary (considered at the end of the period for which the bonus is
being calculated) the actual amount of which bonus shall be
determined according to achievement of performance-related targets
established annually for the Company and the Executive by the
Compensation Committee (or by the independent members of the Board
if there exists no Compensation Committee). Such performance
targets for each fiscal year shall be adopted by the Compensation
Committee promptly after the end of the prior fiscal year, but in
no event later than March 31st of the current fiscal year, the
performance targets for which shall be adopted within 45 days after
the Effective Date). Each annual bonus shall be paid by the Company
to the Executive promptly after the first meeting of the Board
following the completion of the annual audit, which meeting shall
occur on or about April 15th of each year.
7.
Expenses . During
the term of this Agreement, the Executive shall be entitled to
payment or reimbursement of any reasonable expenses paid or
incurred by him in connection with and related to the performance
of his duties and responsibilities hereunder for the Company. All
requests by the Executive for payment of reimbursement of such
expenses shall be supported by appropriate invoices, vouchers,
receipts or such other supporting documentation in such form and
containing such information as the Company may from time to time
require, evidencing that the Executive, in fact, incurred or paid
said expenses. The Executive is entitled to participate is the
Company’s established Executive relocation
package.
8.
Vacation . During the term of this Agreement, the Executive
shall be entitled to accrue, on a pro rata basis, 20 vacation days,
per year. The Executive shall be entitled to carry over any
accrued, unused vacation days from year to year without
limitation.
9.
Stock Options and Restricted Shares . The Company hereby agrees
that the Executive shall be granted a non-qualified stock option
and restricted shares on the terms and conditions hereinafter
stated:
(a)
Grant of Options . On the Effective Date, the Company will
grant the Executive an option to purchase an aggregate of 1,440,000
shares of the Company’s common voting stock (the “
Option ”) under the Company’s December 2006
Omnibus Stock Option Plan (the “ Stock Option Plan
”). Such grant shall be evidenced by an Option Agreement as
contemplated by the Stock Option Plan. In subsequent years the
Executive shall be eligible for such grants of Options and other
permissible awards (collectively with Options and Restricted
Shares, “Awards”) under the Stock Option Plan as the
Compensation Committee or the Board shall determine. For 60,000
options currently held under the original 2006 employment agreement
according to the Omnibus Stock Award plan, the vesting schedule
shall remain unchanged.
(b)
Option Price; Term . The per share exercise price of the Option
shall be the fair market value per share of Company common voting
stock on the Effective Date as determined by the closing sale price
of Company common stock on the OTC Bulletin Board on the date
immediately preceding the Effective Date. The term of the Option
shall be ten years from the date of grant.
(c)
Option Vesting and Exercise . Twenty-five percent (25%) of the
Option shall be vested and exercisable on the first anniversary of
the grant of the Options. Thereafter, the balance of the Options
shall be vested and become exercisable in monthly installments over
the next 24 months that the Executive is employed with the Company.
For 60,000 options currently held under the original 2006
employment agreement according to the Omnibus Stock Award plan, the
vesting schedule shall remain unchanged.
(d)
Grant of Restricted Shares . On the Effective Date, the Company
will grant the Executive a restricted stock award of 907,000 shares
of the Company’s common voting stock (the “
Restricted Shares ”) under the Stock Option Plan. Such
grant shall be evidenced by a Restricted Stock Agreement as
contemplated by the Stock Option Plan. For 93,000 restricted
granted shares currently held under the original 2006 employment
agreement according to the Omnibus Stock Award plan, the vesting
schedule shall remain unchanged.
(e)
Restricted Share Vesting and Disposition . Twenty-five percent
(25%) of the Restricted Shares shall be vested six months after the
Effective Date. Thereafter, the balance shall be vested in monthly
installments over the next 30 months that the Executive is employed
with the Company. During the Executive’s employment with the
Company, all Restricted Shares, whether vested or not, shall only
be sold or otherwise disposed of with the consent of the
Company’s Board of Directors or if the dollar value of the
shares of common stock beneficially owned by the Executive
following such sale or disposition is equal to or exceeds four
times the Executive’s base salary.
(f)
Termination of Service; Accelerated Vesting .
(i)
If
the Executive’s employment is terminated for Cause, as
such term is defined below, all Awards, whether or not vested,
shall immediately expire effective the date of termination of
employment.
(ii)
If
the Executive’s employment is terminated voluntarily by
the Executive without Good Reason, as such term is defined
below, all unvested Awards shall immediately expire effective
the date of termination of employment. Vested Awards, to the
extent unexercised, shall expire one month after the
termination of employment.
(iii)
If
the Executive’s employment is terminated (A) in
connection with a Change of Control, as defined below, (B) by
the Company without Cause or (C) upon death or Disability, as
defined below, all unvested Awards shall immediately vest and
become exercisable effective the date of termination of
employment, and, to the extent unexercised, shall expire one
year after any such event.
(g)
Payment . The full consideration for any shares purchased by
the Executive upon exercise of the Option shall be paid in
cash.
10.
Other Benefits .
(a)
During
the term of this Agreement, the Executive shall be eligible to
participate in incentive, savings, retirement (401(k)), and
welfare benefit plans, including, without limitation,
health, medical,
dental,
vision,
life (including accidental death and dismemberment)
and
disability insurance plans (collectively, “ Benefit
Plans ”), in substantially the same manner,
including but not limited to responsibility for the cost
thereof, and at
substantially the same levels, as the Company
makes
such
opportunities available to all of the Company’s
managerial
or salaried executive
employees.
(b)
The
Executive’s spouse and dependent minor children will be
covered under the Benefit Plans providing health, medical,
dental, and vision benefits, in substantially the same manner,
including but not limited to responsibility for the cost
thereof, and at substantially the same levels, as the Company
makes such opportunities available to the spouses and
dependent minor children to all of the Company’s
managerial or salaried executive employees.
(c)
The
Company shall purchase and maintain traditional directors and
officers liability insurance coverage in the amount of at
least $5,000,000 covering the Company’s officers and
directors, including the Executive no later than 30 days
following the Effective Date, provided such coverage is
available on commercially reasonable terms.
(d)
Until
such time as Executive becomes covered by Company medical
coverage, the Company shall reimburse Executive for
Executive’s medical coverage currently in
place.
(e)
The
Company shall provide the Executive with a Company vehicle,
which the Executive will utilize in accordance with the
Company’s vehicle policy.
11.
Termination of Employment .
(a)
Death . In the event that during the term of this Agreement the
Executive dies, this Agreement and the Executive’s employment
with the Company shall automatically terminate and the Company
shall have no further obligations or liability to the Executive or
his heirs, administrators or executors with respect to compensation
and benefits accruing thereafter, except for the obligation to pay
the Executor’s heirs, administrators or executors any earned
but unpaid base salary, unpaid pro rata annual bonus and unused
vacation days accrued through the date of death; provided, that
nothing contained in this paragraph shall be deemed to excuse any
breach by the Company of any provision of this Agreement. The
Company shall deduct, from all payments made hereunder, all
applicable taxes, including income tax, FICA and FUTA, and other
appropriate deductions.
(b)
“
Disability .” In the event that, during the term
of this Agreement the Executive shall be prevented from
performing his duties and responsibilities hereunder to the
full extent required by the Company by reason of Disability
(as defined below) this Agreement and the Executive’s
employment with the Company shall automatically terminate and
the Company shall have no further obligations or liability to
the Executive or his heirs, administrators or executors with
respect to compensation and benefits accruing thereafter,
except for the obligation to pay the Executive or his heirs,
administrators or executors any earned but unpaid base salary,
unpaid pro rata annual bonus and unused vacation days accrued
through the Executive’s last date of Employment with the
Company; provided, that nothing contained in this paragraph
shall be deemed to excuse any breach by the Company of any
provision of this Agreement including any failure to maintain
the long-term disability insurance coverage required pursuant
to Section 10(b)(iv). The Company shall deduct, from all
payments made hereunder, all applicable taxes, including
income tax, FICA and FUTA, and other appropriate deductions
through the last date of the Executive’s employment with
the Company. For purposes of this Agreement,
“Disability” shall mean a physical or mental
disability that prevents the performance by the Executive,
with or without reasonable accommodation, of his duties and
responsibilities hereunder for a period of not less than an
aggregate of three months during any twelve consecutive
months.
(c)
“
Cause .”
(i)
At
any time during the term of this Agreement, the Company may
terminate this Agreement and the Executive’s employment
hereunder for “Cause.” For purposes of this
Agreement, “ Cause ” shall be defined as
the occurrence of:
(A)
gross neglect, malfeasance or gross insubordination in
performing the Executive’s duties under this Agreement;
(B) the Executive’s conviction for a felony, excluding
convictions associated with traffic violations; (C) an
egregious act of dishonesty (including without limitation
theft or embezzlement) or a malicious action by the Executive
toward the Company’s customers or employees; (D) a
willful and material violation of any provision of Sections 12
and 13 hereof; (E) intentional reckless conduct that is
materially detrimental to the business or reputation of the
Company; or (F) material failure, other than by reason of
Disability, to carry out reasonably assigned duties or
instructions consistent with the titles of Executive Vice
President, Technology and Business Development (provided that
material failure to carry out reasonably assigned duties shall
be deemed to constitute Cause only after a finding by the
Board of Directors, or a duly constituted committee thereof,
of material failure on the part of the Executive and the
failure to remedy such performance to the Board’s or the
committee’s satisfaction within 30 days after delivery
of written notice to the Executive of such
finding).
(ii)
Upon
termination of this Agreement for Cause, the Company shall
have no
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