HELIX
WIND, INC.,
BOARD
OF DIRECTORS
SERVICE
AND INDEMNIFICATION AGREEMENT
THIS
HELIX WIND, INC., BOARD OF DIRECTORS SERVICE AND INDEMNIFICATION
AGREEMENT (“ Agreement ”) is executed and
entered into effective as of March 13, 2008, by and between Helix
Wind, Inc., a Nevada corporation, (the “ Company
”) and Scott Weinbrandt, an individual (“
Director ”), with reference to the
following facts:
A.
The
Company has requested that Director serve on its Board of
Directors.
B.
In
order to induce Director to serve on the Board, the Company has
agreed to pay Director the compensation (the “
Compensation ”) set forth below and to
contractually obligate itself to indemnify Director to the fullest
extent permitted by applicable law so that Director will serve or
continue to serve the Company free from undue concern that he will
not be so indemnified; and Director has agreed to serve on the
Board in consideration of the foregoing.
NOW,
THEREFORE , in
consideration of the premises and the covenants contained herein,
the Company and Director hereby covenant and agree as
follows:
1.
Service
By Director .
Director
agrees to serve as a member of the Board of Directors of the
Company (the “ Board ”) , for the Term,
and in consideration of the Compensation and other terms and
conditions of this Agreement set forth
below. Notwithstanding the foregoing, Director may at
any time and for any reason resign from such position, subject to
the provisions of this Agreement and any contractual or other
obligation imposed by operation of law.
1.1
Duties
.
As
a member of the Board, Director shall use his best efforts to
perform the duties commonly incident to the office and as set forth
in the Company Bylaws, including, without limitation:
1.1.1
attending
or otherwise participating in all regular and special meetings of
the Board;
1.1.2
reviewing
and overseeing the performance of the officers of the
Company;
1.1.3
making
himself reasonably available for consultation with the officers of
the Company on a day to day basis, as needed;
1.1.4
advising
the Company in development and implementation of its strategic
development and business plans;
1.1.5
assisting
the Company in the development of its capitalization plan and
securing equity and debt financing in accordance with such
plan;
1.1.6
representing
the Company at industry functions and meetings with potential
investors and business partners; and
1.1.7
doing
all other things reasonably requested by the Board in order to
advance the business and economic interests of the Company and its
shareholders.
1.2
Fiduciary
Duty .
Director
acknowledges and agrees that in his capacity as a member of the
Board, he has a fiduciary duty to the Company and its
shareholders. Accordingly, Director agrees to
use his best efforts to refrain from and avoid any action or
activity that would constitute or be likely to create a conflict of
interest with respect to his duties to the
Company. Director further covenants and agrees to use
his best efforts to comply with and abide by all policies,
procedures, guidelines and governing principles as may be adopted
by the Board from time to time; to serve the Company faithfully and
to the best of his ability; and to devote that amount of time,
attention and effort to the Company which is reasonably necessary
in order to satisfy the requirements of the Board.
2.
Term
. This
Agreement shall be effective as of the date first set forth above
(the “Effective Date”) and shall continue for a period
of three (3) years thereafter (the “ Initial Term
”) , terminating on the third anniversary of the
Effective Date (the “ Termination Date
”). This Agreement will terminate
automatically without the necessity of further notice or action of
any kind upon the Termination Date. Following the expiration of the
Initial Term, Director may be elected to serve on the Board for
additional terms, subject to the approval of the shareholders of
the Company, and in such event, it is anticipated that the Company
will enter into a new agreement with Director.
3.1
Annual
Stipend .
Commencing
the first month of the second (2 nd
) year
of your Term, you will receive an annual stipend in
the amount of $10,000, payable in four equal quarterly installments
of $2.500 each, in advance on or before the first day of each
calendar quarter throughout your Term. In the event you are
appointed to serve as the Chairman of the Board, you will receive
an additional annual stipend in the amount of $5,000, payable upon
appointment. In the event you are appointed to
serve as the Chairman of any Committee of the Board, you will
receive an additional annual stipend in the amount of $2,500,
payable upon appointment. In the event the Company
completes an Initial Public Offering of its common stock
(an” IPO ”) while you are on the Board,
you will receive a one time bonus equal to $15,000. If
you remain on the Board following completion of the IPO, your
annual stipend will increase to $25,000, payable quarterly at the
rate of $6,250 per quarter as above.
3.2
Business
Expenses Reimbursements .
During
the term of this Agreement, the Company will reimburse Director
promptly for all reasonable, pre-approved business expenses
incurred by Director, whether or not deductible by Company for
income tax purposes, including without limitation, meals, travel,
lodging, entertainment, parking, business meetings, and such other
business expenses reasonably incurred by Director in the pursuit
and furtherance of the Company’s business. Such
expenses shall be reimbursed only upon presentation to the Company
of appropriate documentation substantiating such
expense.
3.3
Equity Compensation . Effective upon
execution of this Agreement, Director will be granted a
Non-Qualified Option, pursuant to the Company’s 2008 Omnibus
Stock Plan (“2008 Stock Plan”), to purchase 25,000
shares (the “ Option Shares ”) of the
Company Common Stock at a purchase price of $1.50/share. The terms
and conditions of the Non-Qualified Stock Options shall be set
forth in a separate Notice of Grant and Stock Option Agreement
(collectively the “ Stock Option
Agreement ”) to be provided by the Company. The
Option Shares will vest as follows:
3.3.1
10,000
shares shall vest on the Effective Date of this
Agreement;
3.3.2
5,000
shares shall vest upon the 12 month anniversary of this
Agreement;
3.3.3
5,000
shares shall vest upon the 18 month anniversary of this Agreement;
and
3.3.4
5,000
shares shall vest upon the 24 month anniversary of this
Agreement.
3.3.5
Notwithstanding
the foregoing, if this Agreement terminates prior to full vesting
of the Option Shares due to Director’s failure to be
re-elected to the Board or any reason other than (i)
Director’s Removal for “Cause” as defined in the
Stock Option Agreement, or (ii) Director’s voluntary
resignation, all unvested Option Shares shall immediately vest
without further notice or action of any kind. In the
event this Agreement terminates prior to full vesting of the Option
Shares due to Director’s removal for “Cause” as
defined in the Stock Option Agreement, or (ii) Director’s
voluntary resignation, all unvested Option Shares shall immediately
be cancelled, as of the effective date of termination, in
accordance with the 2008 Stock Plan and the Stock Option
Agreement.
4.
Protection
of Company Property .
4.1
.
Restriction on Use . Director recognizes
and acknowledges that he will have access to Confidential
Information (as defined below) relating to the business or interest
of the Company or of persons with whom the Company may have
business relationships. Except as permitted herein or as
may be approved by the Company from time to time, the Director will
not during the Term of this Agreement or at any time thereafter,
use, disclose or permit to be known by any other person or entity,
any Confidential Information of the Company (except as required by
applicable law or in connection with the performance of the
Director’s duties and responsibilities
hereunder). If Director is requested or becomes legally
compelled to disclose any of the Confidential Information, he will
give prompt notice of such request or legal compulsion to the
Company. The Company may waive compliance with this
section 4 or will provide Director with legal counsel at no cost to
Director to seek an appropriate remedy.
4.2
Confidential
Information Defined . The
term “Confidential Information” means information
relating to the Company’s business affairs, proprietary
technology, trade secrets, patented processes, research and
development data, know-how, market studies and forecasts,
competitive analyses, pricing policies, vendor and supplier lists,
employee lists, employment agreements (other than this Agreement),
personnel policies, the substance of agreements with customers,
suppliers and others, marketing arrangements, customer lists,
commercial arrangements, or any other information relating to the
Company’s business that is not generally known to the public
or to actual or potential competitors of the Company (other than
through a breach of this Agreement). This obligation
shall continue until such Confidential Information becomes publicly
available, other than pursuant to a breach of this section 4 by the
Director, regardless of whether the Director continues to be
employed by the Company.
4.3
Company
Materials .
It
is further agreed and understood by and between the parties to this
Agreement that all “Company Materials,” which include,
but are not limited to, computers, computer software, computer
disks, tapes, printouts, source, HTML and other code, flowcharts,
schematics, designs, graphics, drawings, photographs, charts,
graphs, notebooks, test data, appraisals, customer lists, other
tangible or intangible manifestation of content, and all other
documents whether printed, typewritten, handwritten, electronic, or
stored on computer disks, tapes, hard drives, or any other tangible
medium, as well as samples, prototypes, models, products and the
like, shall be the exclusive property of the Company and, upon
termination of Director’s employment with the Company, and/or
upon the reques
