BOARD DIRECTOR AGREEMENT
This
Agreement for a Director of the Board of Directors (this “Agreement”) is made
and entered into as of this 17th day of
June 2009, by and between Stratos Renewables Corporation, a Nevada corporation
(the “Company”), and
Xxxxxxx Xxxxxx, an individual (“Director”), with
reference to the following facts:
WHEREAS,
the Board of Directors of the Company has elected the Director to a position as
a Member of the Board of Directors of Company;
WHEREAS,
Director has agreed to accept such election on April 17, 2009;
WHEREAS,
the parties hereto desire to enter into an agreement under which Director will
be compensated for the provision of the services to the Company as a Member of
the Board of Directors.
NOW,
THEREFORE, in consideration of the mutual agreements and covenants contained
herein, the parties hereto hereby agree as follows:
1. Engagement and
Term. The Board of Directors of the Company elected Director,
and Director accepted such election as a Member of the Board of Directors of the
Company, upon the terms and conditions set forth herein for a One (1) year term
commencing as of April 17, 2009 and terminating on April 17, 2010 unless such
engagement is sooner terminated by either party upon thirty (30) days’ prior
written notice to the other party (the “Director
Term”). This Agreement is renewable on an annual basis subject
to approval by the Board of Directors of the Company assuming the Director
continues to be elected as a Director of the Company.
2. Position. The Board of Directors
of the Company elected Director to serve as a Member of the Board of Directors,
and Director accepted that election upon the terms and subject to the conditions
of this Agreement. Director shall perform such duties as are set
forth in the Bylaws of the Company and as are customary to such position, as
well as such other duties as the Company and Director may mutually agree from
time to time (the “Services”). Director
shall comply with the statutes, rules, regulations and orders of any
governmental authority, which are applicable to the performance of the Services,
as well as the Company's rules, regulations, written policies, and procedures
and approval practices as they may from time-to-time be adopted or modified and
shall be subject to the Company’s applicable policies, procedures and approval
practices, as are generally in effect from time-to-time.
3. Compensation. In
consideration of the performance by Director of his obligations under this
Agreement, the Company shall pay to Director:
(a) On
the last working day of each quarter during the Director Term, a director’s fee
in the amount of Fifteen Thousand Dollars ($15,000), less any deductions,
withholdings and offsets required by law, rule or regulation;
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(b) Six
Hundred Fifty Thousand (650,000) warrants, each of which shall entitle Director
to purchase one (1) share of the Company’s common stock at an exercise price of
Seventy Five Cents ($0.75) per share (the “Warrant Exercise
Price”) which warrants shall vest at Fifty percent (50%) the first year
during the Director Term, Twenty-five percent (25%) the second year and
Twenty-five percent (25%) the third year. Such warrants are to be
exercisable from the date of vesting until the fifth (5th)
anniversary of the date hereof. Further, if the Company shall effect
a merger, sale, reorganization, consolidation or transference of all or
substantially all of the Company’s properties or assets, then the vesting of all
unvested warrants will accelerate such that they will be eligible to be
exercised immediately prior to or simultaneously with such event. If
shares of the Company’s capital stock (other than a result of a conversion or
exercise of a convertible or options/warrants issued prior to the date of this
Agreement (the “Issue Date”) are issued after the Issue Date and prior to
the exercise in full or expiration of the warrant for consideration (as
reasonably determined by the Company’s board of directors) less than the Warrant
Exercise Price then in effect or convertible securities or options are sold or
issued which if converted or exercised would result in the issuance of shares of
the Company’s capital stock for less than the Warrant Exercise Price (based on
the total consideration paid for the options or convertible security, as well as
the exercise price of the options or convertible security, as reasonably
determined by the Company’s board of directors), then the Warrant Exercise
Price will be adjusted to such lower price. Notwithstanding the
foregoing, (i) in the event that this Agreement is terminated by Director, or by
the Company for Cause (as defined below), prior to the first (1st)
anniversary of the date hereof, Director’s warrants shall cease vesting as of
such date and all unvested warrants shall be cancelled and (ii) in the event
that this Agreement is terminated by the Company without Cause (as defined
below), Director’s warrants shall immediately vest in full. For the
purposes of this Section 3, “Cause” shall mean (A)
the failure, neglect or refusal by Director to perform duties consistent with
that of an Independent Director (including, without limitation, Director’s
inability to perform his obligations hereunder as a result of chronic alcoholism
or drug addiction and/or as a result of any failure to comply with any laws,
rules or regulations of any governmental entity with respect to the performance
of the consulting services described herein); (B) any willful, intentional or
grossly negligent act by Director having the effect of materially injuring the
reputation or business of the Company or its affiliates; or (C) Director’s
commission of a crime involving, in the Company’s good faith judgment, fraud,
dishonesty or moral turpitude; and
(c) Six
Hundred Fifty Thousand (650,000) restricted shares (the “Shares”) of the
Company’s common stock valued at par value of $.001 per
share. The Shares shall vest at Three Hundred Twenty Five
Thousand (325,000) immediately and the remaining Three Hundred Twenty Five
Thousand (325,000) Shares shall vest on a pro-rata monthly basis (i.e.,
1/11th per
month) over the next eleven months during the term of and so long as the
Director’s Board Agreement with the Company does not terminate, in which case
all unvested Shares shall be cancelled. The Shares shall be deemed
paid for as of the date of this Agreement and shall become eligible for resale
subject to the appropriate provisions of Rule 144. Further, if
the Company shall effect a merger, sale, reorganization, consolidation or
transference of all or substantially all of the Company’s properties or assets,
then the vesting of all unvested Shares will accelerate such that they will be
eligible to be issued immediately prior to or simultaneously with such
event.
4. Reimbursement of
Expenses. During each three (3) month period in the Director
Term, the Company shall reimburse Director for (a) up to Five Thousand Dollars
($5,000) in travel-related expenses incurred solely for Company business
purposes and (b) such other expenses as the Company shall pre-approve and commit
to reimburse in writing, in its sole and absolute discretion. Director shall
have reasonable access to the books and records of the Company (including
reasonable access to the Company’s independent auditors), as necessary to enable
Director to fulfill his obligations as Member of the Board of Directors of the
Company.
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5. Confidential Information;
Company Property. During the term of this Agreement and at all
times thereafter, Director shall keep all Company confidential information in
confidence and shall not disclose any of the same to any other person or entity,
except Director’s attorneys and other persons and/or entities designated in
writing and in advance by the Company. Director shall not cause,
suffer or permit such confidential information to be used for the gain or
benefit of any party outside of the Company or for Director’s personal gain or
benefit outside the scope of Director’s engagement by the Company.
6. Non Disclosure
Obligations. Director agrees to use his reasonable best
efforts to provide the Services and to devote the time necessary to faithfully
perform his duties. Director shall maintain in confidence and shall not,
directly or indirectly, disclose or use, either during or after the term of this
Agreement, any Proprietary Information (as defined below), confidential
information, or trade secrets belonging to Company, whether or not it is in
written or permanent form, except to the extent necessary to perform the
Services, as required by a lawful government order or subpoena, or as authorized
in writing by Company. These nondisclosure obligations also apply to
Proprietary Information belonging to customers and suppliers of Company, and
other third parties, learned by Director as a result of performing the Services.
"Proprietary Information" means all information pertaining in any manner to the
business of Company, unless (i) the information is or becomes publicly known
through lawful means; (ii) the information was part of Director's general
knowledge prior to his relationship with Company; or (iii) the information is
disclosed to Director without restriction by a third party who rightfully
possesses the information and did not learn of it from Company. If,
at any time, Director is required to make any disclosure or take any action that
may conflict with any of the provisions of this Agreement, Director will
promptly notify the Chairman of the Board of Directors and President of such
obligation, unless making such disclosure or taking such action is required by a
court of legal jurisdiction.
7. Indemnification. Company
will indemnify and defend and hold harmless Director against any liability,
costs, or expenses (including legal fees and costs of independent legal counsel)
incurred in the performance of the Services to the fullest extent authorized in
Company’s Certificate of Incorporation, as amended, bylaws, as amended, and
applicable law, except to the extent arising out of or based upon the gross
negligence or willful misconduct of Director. Company has purchased
Director’s and Officer’s liability insurance (D&O Policy), and Director
shall be entitled to the protection of any insurance policies,
fees and expenses in connection with any action, suit or proceeding
to which he may be made a party by reason of his affiliation with Company, its
subsidiaries, or affiliates.
8. General
Provisions.
(a) Notices. Any
notice or communication that is addressed as provided in this Section will be
deemed given (a) upon delivery, if delivered personally or via certified mail,
postage prepaid, return receipt requested; or (b) on the first business day of
the receiving Party after the transmission if by facsimile or after the timely
delivery to the courier, if delivered by overnight courier. Other
methods of delivery will be acceptable only upon proof of receipt by the Party
to whom notice is delivered.
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To
Company:
Stratos
Renewables Corporation
0000
Xxxxx Xxxxxx Xxxx., Xxxxx 000
Xxxxxxx
Xxxxx, XX 00000
Fax No.:
000-000-0000
Attention: Secretary
To
Director:
Xxxxxxx
Xxxxxx
000 Xxx
Xxxxxx
Xxxxxxx,
XX 00000
(b) Dispute
Resolution.
(i).
Arbitration. The
Parties agree that any dispute, claim or Controversy concerning the Director’s
engagement or the termination of that engagement hereunder or any dispute, claim
or controversy arising out of or relating to any interpretation, construction,
performance or breach of this Agreement, shall be settled by arbitration to be
held in Los Angeles, California. The parties may use the AAA or any
other alternate dispute resolution entity agreed upon for this
purpose. The decision of the arbitrator shall be final, conclusive
and binding on the parties to the arbitration. Judgment may be entered on the
arbitrator’s decision in any court having jurisdiction. To the extent
permitted by law, the parties will share equally in the costs of
arbitration. Each party shall bear its or his own attorneys’ fees and
costs incurred in connection with the arbitration.
(ii). Jurisdiction
Venue. The parties agree that any suit, action, or
proceeding between Director (and his attorneys, successors, and assigns) and
Company (and its affiliates, shareholders, directors, officers, employees,
members, agents, successors, attorneys, and assigns) relating to the Services or
the termination of those Services shall be brought in either the United States
District Court for the Central District of California or in a California state
court in the County of Los Angeles and that the parties shall submit to the
jurisdiction of such court. The parties irrevocably waive, to the fullest extent
permitted by law, any objection the party may have to the jurisdiction and venue
for any such suit, action or proceeding brought in such court. If any one or
more provisions of this Section shall for any reason be held invalid or
unenforceable, it is the specific intent of the parties that such provisions
shall be modified to the minimum extent necessary to make it or its application
valid and enforceable.
9. Entire Agreement;
Severability and Termination. This Agreement is intended to
embody the final, complete and exclusive agreement among the parties with
respect to the subject matter hereof and is intended to supersede all prior
agreements, understandings and representations written or oral, with respect
thereto. The provisions of this Agreement are severable, and in the
event that any provision is declared invalid, this Agreement shall be
interpreted as if such invalid provision were not contained herein. In the event
that Director resigns from the Board of Directors during the term of this
Agreement, dies, becomes permanently disabled or is removed as a Director for
Cause (as defined below), this Agreement will terminate, and except as provided
herein, the Company shall pay to Director all compensation and benefits to which
Director is entitled up through the date of termination, and thereafter, all of
the Company's obligations under this Agreement shall cease, except as provided
in Sections 5, 7 and 9. Notwithstanding the above, if the Director
dies or becomes permanently disabled his estate or legal guardian shall be able
to exercise any vested warrants through the 5th
anniversary of the date hereof. “Cause” shall include, but not be
limited to Director’s: (a) gross negligence and/or willful misconduct with
respect to Company and its successors; (b) commission of a felony; (c) acts or
omission which constitute theft, fraud or dishonesty; (d) having been repeatedly
or habitually intoxicated or under the influence of drugs while on the premises
of the Company or while performing any of his duties or obligations; or (e)
failure reasonably to provide the Services. If the Director is
terminated the Director agrees that all property, including, without limitation,
all equipment, tangible proprietary information, documents, records, notes,
contracts, and computer-generated materials provided to or prepared by Director
incident to his Services belong to Company and shall be promptly returned at the
request of Company. Upon termination of this Agreement, Director
shall be deemed to have resigned from all offices then held with Company by
virtue of his position as Director, except that Director shall continue to serve
as a Director if elected as a Director by the shareholders of Company as
provided in Company's Certificate of Incorporation, as amended, Company's
bylaws, as amended, and applicable law. Director agrees that following any
termination of this Agreement, he shall cooperate with Company in the winding up
or transferring to other Directors of any pending work and shall also cooperate
with Company (to the extent allowed by law, and at Company's expense) in the
defense of any action brought by any third party against Company that relates to
the Services.
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10. Waiver; Modification;
Assignment. This Agreement supersedes any and all other
agreements, wither oral or in writing, between the Parties with respect to the
subject of this Agreement and contains all covenants and agreements between the
Parties relating to such engagement in any manner whatsoever. Each
Party to this Agreement acknowledges that no representations, inducements,
promises, or agreements, oral or written, have been made by any Party, or anyone
acting on behalf of any Party, that are not embodied herein, and that no other
agreement, statement, or promise not contained in this Agreement will be valid
or binding. Any modification of this Agreement will be effective only
if it is in writing signed by the Party to be charged. No waiver of
any of the provisions of this Agreement will be deemed, or will constitute, a
waiver of any other provision, whether or not similar, nor will any waiver
constitute a continuing waiver. No waiver will be binding unless
executed in writing by the Party making the waiver. This Agreement may not be
assigned in whole or in part by Director without the prior written consent of
Company. Company may assign its rights under this Agreement without
the consent of Director in the event Company shall hereafter effect a
reorganization, consolidation, merger or sale of the Company, or transfer all or
substantially all of Company’s properties or assets. Subject to the
foregoing limitation, this Agreement will be binding on, and will inure to the
benefit of, the Parties and their respective heirs, legatees, executors,
administrators, legal representatives, successors and assigns.
11. Counterparts. This
Agreement may be executed simultaneously in one or more counterparts, each of
which will be deemed an original, but all of which together will constitute one
instrument. This Agreement may be executed and delivered by facsimile
and/or PDF signature which will be valid and binding. This Agreement
may be executed and delivered by facsimile and/or PDF signature.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first set forth above.
| DIRECTOR: | |||
| Xxxxxxx Xxxxxx, an individual | |||
|
|
By:
|
/s/ Xxxxxxx Xxxxxx | |
| COMPANY: | |||
| STRATOS RENEWABLES CORPORATION | |||
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxxx | ||
| Name: Xxxxxxx X. Xxxxxxxxx | |||
| Title: Corporate Secretary | |||
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