Exhibit 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
THIS
EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is entered into
and
made effective as of __________ __, 2005
(the "Effective Date"), by and between
Celerity Systems, Inc., a Delaware
corporation, having its principal offices at
146 Maryville Pike, Suite #201, Knoxville,
TN 37920 (the "Company"), and C.
Thomas McMillen, whose address is 1103
South Carolina Avenue, S.E., Washington,
D.C. 20003 (the "Executive").
RECITALS:
WHEREAS,
the Company desires to employ and retain the Executive for the
term specified herein in order to advance
the business and interests of the
Company on the terms and conditions set
forth herein; and
WHEREAS,
the Executive desires to provide his services to the Company in
such capacities, on and subject to the
terms and conditions hereof; and
WHEREAS,
the Company desires to provide the Executive with certain
options
to acquire stock in the Company in order
that the Executive may have the
opportunity to participate in the growth
and performance of the Company, as set
forth herein.
NOW,
THEREFORE, for and in consideration of the foregoing premises,
the
mutual covenants and agreements herein
contained, and for other good and
valuable consideration, the receipt and
adequacy of which is hereby
acknowledged, the parties hereto, intending
to be legally bound, hereby agree as
follows:
1.
Employment and Term. Subject to the terms and conditions hereof,
the
Company does hereby employ and agree to
employ the Executive as its President
and Chief Executive Officer for and during
the Employment Term (as defined
below), and the Executive does hereby
accept such employment. The initial term
of employment shall commence on
____________ __, 2005 and shall continue for two
(2) years thereafter unless earlier
terminated as herein provided (the
"Employment Term"), and thereafter shall be
renewed for additional terms of one
(1) year, unless either party provides the
other with notice, as provided for
herein, at least ninety (90) days prior to
the date the Employment Term would
otherwise renew, of that party's intention
not to so renew such term.
2. Duties
of Executive. The Executive shall, during the Employment Term
hereunder, perform the executive and
administrative duties, functions and
privileges incumbent with the position of
President and Chief Executive Officer
and such other duties as reasonably
determined by the Board of Directors of the
Company (the "Board") from time-to-time.
The Executive shall report to the Board
and if appointed by the Board, shall serve
as the Chairman of the Board without
additional compensation therefor. The
Executive agrees to serve the Company
faithfully, conscientiously and to the best
of his ability, and to devote at
least twenty-five (25) hours per week to
the business and affairs of the Company
(and, if requested by the Board, any
subsidiary or affiliate of the Company) so
as to promote the profit, benefit and
advantage of the Company and, if
applicable, any subsidiaries or affiliates
of the Company. The Executive agrees
to accept the compensation to be made to
him under this Agreement as full and
complete compensation for the services
required to be performed by, and the
covenants of, the Executive under this
Agreement.
<PAGE>
3.
Location and Travel. The Executive shall not be required to
relocate
outside the greater Washington, D.C.
metropolitan area without his consent. The
Executive acknowledges, however, that
significant domestic and international
travel may be required as part of his
duties hereunder; and the Executive agrees
to undertake such travel as may be
reasonably required by the business of the
Company from time-to-time.
4.
Compensation.
4.1 Base Salary. The Executive shall initially be paid a base
salary
(the "Base Salary") of One Hundred Twenty
Thousand Dollars ($120,000) per year,
which shall be periodically reviewed and
increased by the Board, in its sole
discretion, during the Employment Term. All
compensation shall be made in
accordance with the standard payroll
practices of the Company.
4.2 Regular Benefits. The Executive shall be entitled to
participate
in any health insurance, accident
insurance, hospitalization insurance, life
insurance, pension, or any other similar
plan or benefit provided by the Company
to its executives or employees generally,
including, but not limited to any
stock option plan, if and to the extent
that the Executive is eligible to
participate in accordance with the
provisions of any such insurance, plan or
benefit generally (such benefits,
collectively, the "Regular Benefits").
4.3 Vacation. The Executive shall be entitled to four (4) weeks
paid
vacation with such vacation to be taken at
times mutually agreeable to the
Executive and the Company. The Executive
shall further be entitled to the number
of paid holidays, and leaves for illness or
temporary disability in accordance
with the policies of the Company for its
senior executives.
4.4 Term Life Insurance. The Company shall have the right from
time-to-time to purchase, modify or
terminate insurance policies on the life of
the Executive for the benefit of the
Company in such amount as the Company shall
determine in its sole discretion. In
connection therewith the Executive shall,
at such time(s) and at such place(s) as the
Company may reasonably direct,
submit himself to such physical
examinations and execute and deliver such
documents as the Company may deem necessary
or desirable; provided, however,
that the eligibility of the Executive for,
or the availability of, such
insurance shall not be deemed to be a
condition of continued employment
hereunder.
4.5 Expense Reimbursement. The Company shall reimburse the
Executive
for all expenses reasonably incurred by him
in connection with the performance
of his duties hereunder and the business of
the Company upon the submission to
the Company of appropriate receipts
therefor, in accordance with the expense
reimbursement policy of the Company.
4.6 Annual Bonus. The Executive shall be eligible to receive an
annual bonus equal to one hundred percent
(100%) of the Base Salary then in
effect based on the achievement of
performance metrics established by the Board
and the Executive each calendar year during
the Employment Term, with the
metrics for the first calendar year of the
Employment Term to be established by
the Board and the Executive on or before
the date which is sixty (60) days from
the date hereof. All such metrics shall be
evidenced in a document signed by the
Board and timely provided to the
Executive.
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<PAGE>
4.7 Options. The Company shall issue to the Executive options
to
acquire a total of Five Hundred Eighty
Million shares (580,000,000) of the
Company's common stock, par value $0.001
per share ("Common Stock"), which
options shall vest as follows: (i) options
to acquire One Hundred Sixteen
Million (116,000,000) shares of Common
Stock shall vest on the date on which
this Agreement is executed by the parties
hereto; and (ii) options to acquire
One Hundred Sixteen Million (116,000,000)
additional shares of Common Stock
shall vest at the end of each of the first,
second, third and fourth calendar
quarters following the execution of this
Agreement by the parties hereto. Except
as otherwise expressly provided in this
Agreement, all terms and conditions
concerning the granting and exercise of any
options awarded to the Executive
hereunder, including any cashless exercise
provisions, shall be governed by the
Company's option plan, as such plan may be
amended from time to time.
4.8 Signing Bonus. The Company shall pay to the Executive a
signing
bonus (the "Signing Bonus") in the amount
of One Hundred Twenty-Five Thousand
Dollars ($125,000), with such Signing Bonus
to be paid as follows: (i)
Twenty-Five Thousand Dollars ($25,000)
shall be paid on the date on which this
Agreement is executed by the last of the
Company or the Executive, provided that
the other party has already executed this
Agreement; and (ii) the remaining One
Hundred Thousand Dollars ($100,000) shall
be paid on the date on which the
Company receives Two Hundred Fifty Thousand
Dollars ($250,000) in financings.
5.
Termination and Severance Arrangements.
5.1 Termination by the Company. Except as set forth in Section
5.3
hereof, the Company may terminate this
Agreement at any time by providing at
least thirty (30) days' prior written
notice to the Executive. In the event that
the Company terminates this Agreement (a)
other than in connection with a Change
of Control (as defined in Section 6
hereof), and (b) other than for Cause (as
defined in Section 5.3 hereof), the Company
shall, notwithstanding such
termination, in consideration for all of
the undertakings and covenants of the
Executive contained herein, continue to pay
to the Executive the Base Salary and
the Regular Benefits for the remainder of
the then-current Employment Term. In
addition, in the event the Company
terminates this Agreement as described in the
immediately preceding sentence, any and all
options granted to the Executive by
the Company shall become automatically and
immediately vested and exercisable.
In no event however, shall the continuation
of such payments during such
post-termination period be deemed to be
employment hereunder for purposes of
calculating any bonus due to the Executive
or for purposes of determining the
vesting or exercise period of any stock
options granted hereunder, or otherwise.
5.2 Termination by Executive. The Executive may terminate his
employment at any time for Good Reason and
receive the payments and benefits
specified in Section 5.1 hereof in the same
manner as if the Company had
terminated his employment without Cause.
For purposes of this Agreement, "Good
Reason" will exist if any one or more of
the following occur: failure by the
Company to honor any of its material
obligations under this Agreement,
including, without limitation, its
obligations under Section 4 hereof concerning
compensation, Section 10 hereof concerning
indemnification, and Section 12.5
hereof concerning successor
obligations.
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<PAGE>
5.3 Termination for Cause. Notwithstanding the Employment Term,
the
Company may terminate the Executive for
Cause upon a resolution duly adopted by
the affirmative vote of not less than a
majority of the entire membership of the
Board (excluding the Executive, if a
director at such time). In the event that
the employment of the Executive is
termina
