Gary De Laurentiis Employment Agreement EMPLOYMENT AGREEMENT
Exhibit
10.5
Xxxx
De
Laurentiis Employment Agreement
This
Employment Agreement dated as of July 26, 2006 (“Agreement”)
is
made by and between Itec
Environmental Group, Inc.,
a
corporation duly organized and existing under the laws of the State of Delaware
(the “Company”),
and
Xxxx
De Laurentiis
(“Executive”)
(referred to collectively herein as the “Parties”).
ARTICLE
I
RECITALS
WHEREAS,
the
Company desires to hire Executive and Executive desires to become employed
by
the Company; and
WHEREAS,
the
Company and Executive have determined that it is in their respective best
interest to enter into this Agreement on the terms and conditions as set forth
herein;
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants and promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as
follows:
1. Nature
of Agreement.
Any and
all prior oral understandings, offers, and/or representations (if any) with
respect to the employment of Executive are deemed by the parties to be either
canceled and void and/or are deemed to be superseded by this final written
Agreement.
2. Employment
Terms and Duties.
2.1. Term
of Employment.
The
employment of Executive under this Agreement shall be deemed to have commenced
on August 1, 2006 (the “Effective
Date”),
and
shall continue until terminated in accordance with Section 6 hereof (the
“Employment
Term”).
2.2. Location.
Executive agrees that he shall carry out his duties and obligations under the
terms of this Agreement at: (a) such reasonably configured premises within
the
State of California as shall be identified by Executive (which shall, during
the
Employment Term, be rented by the Company for use hereunder by Executive),
or
(b) the Company’s principal office in Riverbank, California, as reasonably
required by the Company from time to time.
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2.3.
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Position
and Primary Responsibility.
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(a) It
is
understood that Executive shall serve as (i) Chief Technology Officer, and
(ii)
as a Director of the Company.
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(b)
In
connection with the employment of Executive, Company agrees that, during the
Employment Term, neither the Restated Certificate of Incorporation, nor the
Bylaws, of the Company shall at any time be amended in a manner inconsistent
with the foregoing or the additional provisions of this Agreement.
2.4. Exclusivity.
Executive agrees to devote his full time, attention, energies, solely and
exclusively in the performance of his duties under the terms of this Agreement.
However, the expenditure of reasonable amounts of time for educational,
charitable, or professional activities shall not be deemed a breach of this
Agreement if those activities do not materially interfere with the services
required under this Agreement, and shall not require the prior written consent
of the Company’s Board of Directors. This Agreement shall not be interpreted to
prohibit Executive from making passive personal investments or conducting
private business affairs, or serving on the boards of directors of other
companies or other entities, if those activities do not materially interfere
with the services required under this Agreement and do not violate Sections
5, 9
and 11 of this Agreement.
3. Compensation.
3.1. Base
Salary.
In
consideration for the services rendered to the Company hereunder by Executive,
the Company shall, during his employment, pay Executive a salary at the annual
rate of Two Hundred and Ninety Thousand Dollars ($290,000.00) (as may be
adjusted pursuant to section 3.5, the “Base
Salary”),
less
statutory deductions and withholdings, payable to Executive on a bi-monthly
basis.
3.2. Payment.
All
compensation payable to Executive hereunder shall be subject to all applicable
state and federal employment law(s); it being understood that Executive shall
be
responsible for the payment of all taxes resulting from a determination that
any
portion of the compensation and/or benefits paid/received hereunder is a taxable
event to Executive; it being further understood that Executive shall hold the
Company harmless from any governmental claim(s) for Executive’s personal tax
liabilities, including interest or penalties, arising from any failure by
Executive to pay his individual taxes when due.
3.3. Reimbursement
of Expenses.
During
the Employment Term, the Company shall reimburse Executive for all reasonable
and necessary expenses incurred by Executive while performing his duties under
this Agreement in accordance with the Company’s customary practices for its
executive employees, subject to provision by Executive of documentation
reasonably satisfactory to the Board of Directors.
3.4. Cash
Bonuses.
Executive shall have a bonus entitlement during each calendar year (or portion
thereof) of the Employment Term of up to one hundred percent (100%) of his
Base
Salary for such year (or portion thereof). Within thirty (30) days of the
Effective Date, the Company and Executive shall concur, within their respective
reasonable discretion, on the criteria and procedures applicable to
establishment of Executive’s entitlement to such amount for the then current
calendar year; and, thereafter, within thirty (30) days prior to the
commencement of each calendar year of the Employment Term, the Company and
Executive shall concur, within their respective reasonable discretion, on the
criteria and procedures applicable to establishment of
Executive’s entitlement to such amount for the ensuing calendar year. Such
criteria shall include, without limitation: (i) specified revenue targets for
the Company during the applicable period; (ii) specified EBITDA targets for
the
Company during the applicable period (as defined pursuant to consensus between
the Company and Executive); and (iii) such additional specified targets as
the
Company and Executive mutually determine. Any such cash bonuses shall be paid
by
the Company no later than March 15 of the taxable year commencing after the
year
in which the Executive’s right to such payment becomes
vested.
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3.5. Compensation
Review.
It is
understood and agreed that Executive’s performance will be reviewed by the
Company’s Board of Directors at the end of each calendar year during which this
Agreement is in force for the purpose of determining whether or not Executive’s
Base Salary and/or cash bonuses should be increased; it being further understood
that the decision to increase Executive’s compensation shall be at the sole and
exclusive option of the Board of Directors.
3.6. Equity
Awards.
(a) The
Executive shall be entitled to a combination of (x) restricted grants of common
stock, $.0.001 par value of the Company and (y) grants of warrants exercisable
over a period of ten (10) years after grant with respect to shares of Common
Stock, in the aggregate covering a number of shares equal to twenty-four million
(24,000,000) shares common stock or “Common
Stock Equivalents”
(as
defined below) (the “Executive
Shares”).
For
purposes hereof, “Common
Stock Equivalents”
shall
mean the number of shares of Common Stock then outstanding, plus any rights
to
subscribe for or purchase, and any options for the purchase of, shares of Common
Stock, plus any stock or securities convertible into or exchangeable for shares
of Common Stock and any options therefor (all of the foregoing calculated after
giving effect to the operation of any and all provisions designed to protect
against dilution contained in securities theretofore issued and other
obligations theretofore entered into by the Company directly or indirectly
triggered as a result of consummation of the transactions contemplated hereunder
or any other event or circumstance).
(i) Executive
acknowledges that as of the date of this Agreement, he has received/been issued
a total of 17,953,208 shares of common stock or Common Stock
Equivalents.
(b) Promptly
after the execution and delivery of this Agreement, the Company, at its expense,
shall engage an independent appraiser mutually satisfactory to the Company
and
Executive,
in their respective reasonable discretion, to determine the fair market value
per share (the “Appraised
Value”)
of
Common Stock issuable to Executive under this Section 3.6, as at the respective
dates of issuance of, respectively, of the Restricted Shares, the Initial
Options and the Additional Options (as those terms are defined below). As soon
as practicable after determination of the initial Appraised Value, but in any
event within thirty (30) days of the date of this Agreement, the Company shall
issue and deliver to Executive:
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(i) that
amount in deferred compensation due and owing to Executive converted into shares
of the Company’s common stock at a per share price equal to the Appraised Value
(the “Deferred
Compensation Shares”).
Upon
issuance of the Deferred Compensation Shares, Executive shall receive that
number of shares such that in the aggregate Executive shall own twenty-four
million (24,000,000) shares of common stock or Common Stock Equivalents, in
satisfaction of the Executive Shares owed to Executive pursuant to this Section
3.6. Further, Executive hereby agrees that any remaining deferred compensation
due and owing to Executive by the Company shall be deemed to be waived, released
or otherwise forgiven.
(c) Upon
satisfying the CIWMB Obligations, as defined in Section 4, Executive shall
receive an additional two million (2,000,000) shares of the Company’s common
stock (the “CIWMB
Shares”).
(d) In
addition to any cash bonus offered to Executive pursuant to Section 3.4, the
Company shall undertake to provide Executive a bonus, independent of Section
3.4, equal to the Taxable Amount Per Share (as defined below). “Taxable
Amount Per Share”
shall
mean the quotient obtained by dividing (i) the aggregate amount of income tax
that Executive pays pursuant to applicable federal, state and local tax laws
as
a result of receipt of the Deferred Compensation Shares divided by (ii) the
total number of Deferred Compensation Shares issued to Executive (as
appropriately adjusted to reflect stock splits, stock dividends and the
like).
4. California
Integrated Waste Management Board Obligations. The
Company shall satisfy or take action to assign or novate Executive’s personal
guarantee with the California Integrated Waste Management Board (“CIWMB”),
provided that Executive supplies the Company with the intellectual property,
trade secrets, information and know-how associated with the operation of the
Eco2
Environmental
System and the Company’s plant located in Riverbank, California (the
“CIWMB
Obligations”).
The
CIWMB Obligations shall be deemed fulfilled upon the reasonable satisfaction
of
the Parties.
5. Benefits.
Within
sixty (60) days of the date of this Agreement, the Company and Executive shall
determine, in their respective reasonable discretion, the terms of the
“Welfare
Benefits”
(as
hereinafter defined) to which Executive shall be entitled. For purposes hereof,
“Welfare
Benefits”
shall
mean medical, prescription and dental plans, in no event less favorable than
those applicable to any other executive of the Company, and in all events
extending to (x) paid vacation per annum equal to four (4) weeks (accruing
ratably each year) and eleven (11) paid holidays and (y) a non-accountable
monthly allowance of Fifteen Hundred Dollars ($1,500) (the “Monthly
Allowance”).
6. Termination.
Executive’s employment and this Agreement (except as otherwise provided
hereunder) shall terminate upon the occurrence of any of the following, at
the
time set forth therefor (the “Termination
Date”):
6.1. Death
or Disability.
Immediately upon the death of Executive or after six (6) months of Executive’s
inability to perform the essential functions of his duties, with or without
reasonable
accommodation (defined under applicable law), due to a mental or physical
illness or incapacity (“Disability”)
(termination pursuant to this Section 6.1 being referred to herein as
termination for “Death
or Disability”);
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6.2. Termination
for Good Reason.
Immediately following notice of termination for “Good
Reason”
(as
defined below), specifying such Good Reason, given by Executive (termination
pursuant to this Section 6.2 being referred to as termination for “Good
Reason”).
As
used herein, “Good Reason” means (i) any reduction in Base Salary or other
benefits specified hereunder; (ii) a substantial diminution or dilution of
the
responsibilities, functions and duties attached to the position with the Company
held by Executive; (iii) the Company fails to provide any of the compensation
or
other benefits required hereunder; (iv) any representation made by the Company
herein is materially untrue or the Company otherwise is in material breach
of
this Agreement; or (v) the Company and Executive fail to effectuate the matters
contemplated by Sections 3.4, 3.6 or 5 within the respective periods
contemplated thereunder.
6.3. Voluntary
Termination.
Thirty
(30) days following Executive’s written notice to the Company of voluntary
termination of employment other than for Good Reason; provided, however, that
the Company may suspend, with no reduction in pay or benefits (including,
without limitation, bonuses, options and vesting), Executive from his duties
as
set forth herein (including, without limitation, Executive’s position as a
representative and agent of the Company) until the 30th
day
following Notice of Voluntary termination) (termination pursuant to this Section
6.3 being referred to herein as “Voluntary”
termination).
6.4. Termination
For Cause.
Immediately following notice of termination for “Cause”
(as
defined below), specifying such Cause, given by the Company (termination
pursuant to this Section 6.4 being referred to herein as termination for
“Cause”).
As
used herein, “Cause”
means
(i) termination based on Executive’s conviction or plea of “guilty” or “no
contest” to any crime constituting a felony in the jurisdiction in which the
crime constituting a felony is committed, or any other conviction by a court
of
competent jurisdiction for a violation of criminal law involving dishonesty
that
materially injures the Company (whether or not a felony); (ii) Executive’s
substance abuse that in any manner that materially interferes with the
performance of his duties; (iii) Executive’s failure to perform in any material
respect the responsibilities, functions and duties attached to his position
with
the Company or a refusal to perform his duties at all or in a reasonably
acceptable manner; or (iv) Executive’s material breach of this Agreement. The
Board of Directors shall provide Executive thirty (30) days written notice
of
any determination to terminate Executive for Cause and shall afforded Executive
the opportunity to be heard by the full Board of Directors. Notwithstanding
any
other provision in this Agreement, if Executive is terminated pursuant to
subsections (ii), (iii) or (iv) of this Section 6.4 for poor job performance,
excluding refusal to perform his duties, Executive shall have sixty (60) days
to
cure the behavior upon which the threatened termination is based.
6.5. Termination
Without Cause.
Notwithstanding any other provisions contained herein, the Company may terminate
Executive’s employment thirty (30) days following notice of termination without
Cause given by the Company; provided, however, that during any such thirty
(30)
day notice period, the Company may suspend, with no reduction in pay or benefits
(including, without limitation, bonuses, options and vesting), Executive from
his duties as set forth
herein (including, without limitation, Executive’s position as a representative
and agent of the Company) (termination pursuant to this Section 6.5 being
referred to herein as termination “Without
Cause”).
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6.6. Other
Remedies.
Termination pursuant to Section 6.2 above shall be in addition to and without
prejudice to any other right or remedy to which Executive may be entitled at
law, in equity, or under this Agreement. Termination pursuant to Section 6.4
above shall be in addition to and without prejudice to any other right or remedy
to which the Company may be entitled at law, in equity, or under this
Agreement.
6.7. Salary
Continuation During Disability.
Notwithstanding Section 6.1 above, if Executive suffers any physical or mental
disability that would prevent the performance of his essential job duties,
the
Company agrees to pay Executive one hundred percent (100%) of Executive’s salary
and other benefits (including, without limitation, bonuses, options and
vesting), payable in the same manner as provided for the payment of salary
and
benefits (including, without limitation, bonuses, options and vesting) herein,
for the duration of the disability, or six (6) months, whichever is less.
7. Severance
and Termination.
7.1. Voluntary
Termination,
Termination for Cause, Termination for Death or Disability. In the case of
a
termination of Executive’s employment hereunder for Death in accordance with
Section 6.1 above, or Executive’s Voluntary termination of employment hereunder
in accordance with Section 6.3 above, or a termination of Executive’s employment
hereunder for Cause in accordance with Section 6.4 above, (i) Executive shall
not be entitled to receive payment of, and the Company shall have no obligation
to pay, any severance or similar compensation attributable to such termination,
other than Base Salary earned but unpaid, accrued but unused vacation to the
extent required by the Company’s policies and any non-reimbursed expenses
pursuant to Section 4 hereof incurred by Executive as of the termination date,
and (ii) the Company’s obligations under this Agreement shall immediately cease
except (x) as required by law and (y) as provided in Section 16.1 below.
Provided further, in the event of a termination of Executive’s employment
hereunder for Cause in accordance with Section 6.4 above, Executive shall tender
back to the Company all unexercised options granted to Executive by the Company
in connection with Executive’s employment.
7.2. Termination
for Good Reason, Termination Without Cause.
(a) In
the
case of a termination of Executive’s employment hereunder for Good Reason in
accordance with Section 6.2 above, or Without Cause in accordance with Section
7.4 above, the Company shall, within thirty (30) days of the Termination Date,
pay Executive, in a lump-sum, cash in the amount (the “Severance
Payment”)
of the
sum of fifty percent (50%) of his annual Base Salary; provided, however, that,
in the event such termination of Executive’s employment follows a
“Change-of-Control” (as defined below), the Severance Payment shall be an amount
equal to the sum of one hundred and fifty percent (150%) of his annual Base
Salary. As used herein, “Change-of-Control”
means:
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(i) the
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) under the Exchange Act) of beneficial ownership (within
the
meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent
(20%) or more of the combined voting power of the outstanding voting securities
of the Company entitled to vote generally in the election of directors;
provided, however, that the following acquisitions shall not constitute a
Change-of-Control: (w) any original issuance by the Company, (x) any acquisition
by the Company after which the holders of the Company’s voting securities
entitled to vote generally in the election of directors of the Company (the
“Voting
Stock”)
outstanding immediately prior to consummation of such acquisition continue
to
hold at least fifty percent (50%) of the Company’s Voting Stock after such
acquisition, (y) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company, or (z) any acquisition by any
corporation pursuant to a transaction which complies with clauses (w), (x)
and
(y) immediately preceding; or
(ii) individuals
who, as of the date hereof, constitute the Board of Directors of the Company
(the “Incumbent
Board”)
cease
for any reason to constitute at least a majority of the Board of Directors
of
the Company unless they are replaced with a slate nominated by at least a
majority of the Incumbent Board and further provided that any individual
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company's stockholders, was approved by a vote of at least
a
majority of the directors then comprising the Incumbent Board shall, for
purposes of this sub-paragraph (ii), be considered as though such individual
were a member of the Incumbent Board, but excluding, for this purpose, any
such
individual whose initial assumption of office occurs as a result of an actual
or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of an individual, entity or group other than the Board of Directors
of
the Company acting by at least a majority thereof; or
(iii) consummation
of a reorganization, merger or consolidation or sale or disposition of all
or
substantially all of the assets of the Company (a “Business
Combination”),
in
each case, unless, following such transaction: (x) all or substantially all
of
the individuals and entities who were the beneficial owners, respectively,
of
the outstanding voting securities of the Company entitled to vote generally
in
the election of directors immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty percent (50%) (20%
in
the case of any Business Combination being proposed and implemented by at least
a majority of the Incumbent Board) of the Voting Stock of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or
more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the outstanding Voting Stock,
(y) no individual, entity or group beneficially owns, directly or indirectly,
twenty percent (20%) or more of the Voting Stock of such corporation except
to
the extent that such ownership existed prior to the Business Combination, and
(z) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board, or were nominated by at least a majority of the members of
the
Incumbent Board, at the time of the execution of the initial agreement, or
by
the action of the Board providing for such Business Combination;
or
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(iv) approval
by the stockholders of the Company of a complete liquidation or dissolution
of
the Company.
(b) In
addition, in the event Paragraph (a) immediately preceding applies, for six
months after the Termination Date (or such longer period as may be provided
by
the terms of the appropriate plan, program, practice or policy), the Company
shall continue Welfare Benefits to Executive and/or his family at least equal
to
those which would have been provided if Executive’s employment had not been
terminated (provided, however, that such period shall be eighteen months in
the
event such Paragraph (a) applies following a Change-of-Control).
Notwithstanding
the foregoing, in the event Executive is a “specified employee” as defined in
Section 409A(a)(2)(B)(i) of the Code, the payment of the Severance Payment
under
this Section 7.2 shall be made no earlier than six months after the Termination
Date.
8. Severance
Not Conditioned on Release of Claims.
The
Company’s obligation to provide Executive with the Severance Payments set forth
in Section 7.2 is not contingent upon Executive’s execution of a release of
claims in favor of the Company.
9. Non-competition,
Non-solicitation.
9.1 Non-Competition.
Executive agrees that he shall not, during the Employment Term and for twelve
(12) months subsequent thereto, without both the disclosure to and the written
approval of the Board of Directors of the Company, directly or indirectly,
engage or be interested in (whether as a principal, lender, employee, officer,
director, partner, venturer, consultant or otherwise) any business(es) that
is
competitive with the business being conducted by the Company through the
Termination Date, without the express written approval of the Board of
Directors.
9.2 Non-Solicitation.
Executive agrees that he will not, without the prior written consent of the
Company’s Board of Directors, for a period of twelve (12) months after the
Termination Date, directly or indirectly disturb, entice, or in any other manner
persuade, any employee(s) or consultant(s) of the Company to discontinue that
person’s or firm’s relationship with the Company if the employee(s) and/or
consultant(s) were employed by the Company at any time during the twelve (12)
month period prior to the Termination Date.
9.3 Customers.
Executive agrees that he will not, for a period of twelve (12) months following
the Termination Date, contact or solicit orders, sales or business from any
customer of the Company so as to induce or attempt to induce such customer
to
cease doing business with the Company.
9.4 Public
Investments.
The
provisions of Section 9.1 through 9.3, inclusive, shall not be deemed breached
by reason of Executive’s ownership of five percent (5%) or less of the equities
of any entity with a class of publicly traded securities.
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10. Inventions,
Discoveries and Improvements. Any and all invention(s),
discovery(ies) and improvement(s), whether protectible or unprotectible by
patent, trademark, copyright or trade secret, made, devised, or discovered
by
Executive, whether by Executive alone or jointly with others, from the time
of
entering the Company’s employ until the earlier of the Termination Date of this
Agreement or the actual date of termination of employment, relating or
pertaining in any way to Executive’s employment with the Company, shall be
promptly disclosed in writing to the Board of Directors of the Company, and
become and remain the sole and exclusive property of the Company. Executive
agrees to execute any assignments to the Company, or its nominee, of Executive’s
entire right, title, and interest in and to any such inventions, discoveries
and
improvements and to execute any other instruments and documents requisite
or
desirable in applying for and obtaining patents, trademarks or copyrights
at the
cost of the Company, with respect thereto in the United States and in all
foreign countries, that may be requested by the Company. Executive further
agrees, whether or not then in the employment of the Company, to cooperate
to
the fullest extent and in the manner that may be reasonably requested by
the
Company in the prosecution and/or defense of any suit(s) involving claim(s)
of
infringement and/or misappropriation of proprietary rights relevant to
patent(s), trademark(s), copyright(s), trade secret(s), processes, and/or
discoveries involving the Company’s product(s); it being understood that all
reasonable costs and expenses thereof shall be paid by the Company. The Company
shall have the sole right to determine the treatment of disclosures received
from Executive, including the right to keep the same as a trade secret, to
use
and disclose the same without a prior patent application, to file and prosecute
United States and foreign patent application(s) thereon, or to follow any
other
procedure which the Company may deem appropriate. In accordance with this
provision, Executive understands and is hereby further notified that this
Agreement does not apply to an invention which the employee developed entirely
on his own time without using the Company’s equipment, supplies, facilities, or
trade secret information.
11. Confidential
Information and Trade Secrets.
11.1
Non-Disclosure.
Executive hereby acknowledges that all confidential or proprietary trade,
engineering, production, and technical data, information or “know-how”
including, but not limited to, customer lists, sales and marketing techniques,
vendor names, purchasing information, processes, methods, investigations, ideas,
equipment, tools, programs, costs, product profitability, plans, specifications,
patent application(s), drawings, blueprints, sketches, layouts, formulas,
inventions, processes and data, whether or not reduced to writing, used in
the
development and manufacture of the Company’s products and/or the performance of
services, or in research or development, are the exclusive property of the
Company, and shall be at all times, whether after the Effective Date or after
the Termination Date, be kept strictly confidential and secret by Executive;
it
being understood, however, that information which was publicly known, or which
is in the public domain, or which is generally known, shall not be subject
to
this restriction (and Executive’s duties of non-disclosure shall further not
extend to (i) disclosures to other employees, executives, officers and/or
directors of the Company, or as may be required or appropriate in connection
with performance hereunder, and (ii) the requirements of legal process, subpoena
or other court order).
11.2 Return
of Property.
Executive agrees not to remove from the Company’s office or copy any of the
Company’s confidential information, trade secrets, books, records, documents or
customer or supplier lists, or any copies of such documents, without the express
written permission of the Board of Directors of the Company or as may be
required or appropriate in connection
with performance hereunder. Executive agrees, at the Termination Date, to return
any property belonging to the Company, including, but not limited to, any and
all records, notes, drawings, specifications, programs, data and other materials
(or copies thereof) pertaining to the Company’s businesses or its product(s) and
service(s), generated or received by Executive during the course of his
employment with the Company.
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12.
Information
of Others.
Executive agrees that the Company does not desire to acquire from Executive
any
secret or confidential information or “know-how” of others. Executive,
therefore, specifically represents to the Company that he will not bring to
the
Company any materials, documents, or writings containing any such information.
Executive represents and warrants that from the Effective Date of this Agreement
he is free to divulge to the Company, without any obligation to, or violation
of, the rights of others, information, practices and/or techniques which
Executive will describe, demonstrate or divulge or in any other manner make
known to the Company during Executive’s performance of services. Executive also
agrees to indemnify and hold the Company harmless from and against any and
all
liabilities, losses, costs, expenses, damages, claims or demands for any
violation of the rights of others as it relates to Executive’s misappropriation
of secrets, confidential information, or “know-how” of others. Such
indemnification will not apply in the event action by the Company is
unsuccessful.
13.
Indemnification.
The
Company shall indemnify Executive in his capacity as director, officer and
employee of the Company upon terms no less favorable to him than are contained
under Article 7 of the Restated Certificate of Incorporation of the Company,
and
Article VI of the By-laws of the Company, as in effect on the date hereof.
The
Company shall extend to Executive the benefits of directors’ and officers’
liability insurance upon terms no less favorable than are extended to any other
director or officer of the Company. Upon execution, the Company and Executive
shall enter into an Indemnification Agreement in form and substance acceptable
to Executive providing for the indemnification contemplated hereby.
14.
Notice.
All
notices and other communications under this Agreement shall be in writing and
shall be delivered personally or mailed by registered or certified mail, return
receipt requested, and shall be deemed given when so delivered or mailed, to
a
party at his or its address as follows (or at such other address as a party
may
designate by notice given hereunder):
| If to Executive: | Xxxx De Laurentiis | |||
| X.X. Xxx 000 | ||||
| Xxxxxxxxx, XX 00000 | ||||
| With a copy to: | ||||
| If to the Company: | Itec Environmental Group, Inc. | |||
| X.X. Xxx 000 | ||||
| Xxxxxxxxx, XX 00000 | ||||
| With a copy to: | Xxxxx X. Xxxx | |||
|
The
Xxxx Law Group, PLLC
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|
000
Xxxxx Xx., Xxxxx 0000
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Xxxxxxx,
XX 00000
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15.
Suit,
Jurisdiction.
Any
controversy between the Company and Executive arising out of or relating to
any
of the terms, provisions or conditions of this Agreement shall be submitted
to
arbitration in accordance with the American Arbitration Association’s National
Arbitration Rules for the Resolution of Employment Disputes. On the written
request of either party for arbitration of such a claim pursuant to this
paragraph, the Company and Executive shall both be deemed to have waived the
right to litigate the claim in any federal or state court. To the extent that
any claim or controversy arising out of this Agreement cannot be submitted
to
arbitration as set forth above, each party hereby agrees that any suit, action
or proceeding with respect to this Agreement, and any transactions relating
hereto, may be brought in the State of California, County of San Francisco,
and
each of the parties hereby irrevocably consents and submits to the jurisdiction
of such Court(s) for the purpose of any such suit, action or proceeding. Each
of
the parties hereby waives and agrees not to assert, by way of motion, as a
defense or otherwise, in any such suit, action or proceeding; any claim that
it
(he) is not personally subject to the jurisdiction of the above-named Court(s);
and, to the extent permitted by applicable law, any claim that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper or that this Agreement or any
replacements hereof or thereof may not be enforced in or by such Court(s).
The
Company shall pay any and all costs associated with arbitration or court
adjudication.
16.
Miscellaneous.
16.1 Post
Termination Obligations.
Notwithstanding the termination of Executive’s employment hereunder, the
provision(s) of Section(s) “3.6(e),” “6,” “7,” “8,” “10,” “11,” “13” and “15”
shall survive the Termination Date.
16.2 Assignment.
This
Agreement shall be assigned to and inure to the benefit of, and be binding
upon,
any successor to substantially all of the assets and business of the Company
as
a going concern, whether by merger, consolidation, liquidation or sale of
substantially all of the assets of the Company or otherwise. The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform this Agreement
in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place; and, as used in this
Agreement, "Company"
shall
mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement
by
operation of law, or otherwise; provided that for purposes of Section 8 hereof,
the term “Company” shall mean the Company as hereinbefore defined and any such
transaction in which this Agreement is assigned to a successor may not expand
or
enlarge the scope of restrictions applicable to Executive pursuant to Section
9
hereof. Executive understands and agrees, however, that this Agreement is
exclusive and personal to him only, and, as such, he will neither assign nor
subcontract all or part of his undertaking(s) or obligation(s) under the terms
of this Agreement.
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16.3 Severability.
In the
event that any provision of this Agreement shall be determined to be
unenforceable or otherwise invalid, the balance of the provision(s) shall be
deemed to be enforceable and valid; it being understood that all provision(s)
of
this Agreement are deemed to be severable, so that unenforceability or
invalidity of any single provision will not affect the remaining
provision(s).
16.4 Headings.
The
Section(s) and paragraph heading(s) in this Agreement are deemed to be for
convenience only, and shall not be deemed to alter or affect any provision
herein.
16.5 Interpretation
of Agreement.
This
Agreement shall be interpreted in accordance plain meaning of its terms and
under the laws of the State of California.
16.6 Variation.
Subject
to Section 16.8, any changes in the Sections relating to salary, bonus, or
other
material condition(s) after the Effective Date of this Agreement shall not
be
deemed to constitute a new Agreement. All unchanged terms are to remain in
force
and effect.
16.7 Collateral
Documents.
Each
party hereto shall make, execute and deliver such other instrument(s) or
document(s) as may be reasonably required in order to effectuate the purposes
of
this Agreement.
16.8 Non-Impairment.
This
Agreement may not be amended or supplemented at any time unless reduced to
a
writing executed by each party hereto. No amendment, supplement or termination
of this Agreement shall affect or impair any of the rights or obligations which
may have matured thereunder.
16.9 Execution.
This
Agreement may be executed in one or more counterpart(s), and each executed
counterpart(s) shall be considered by the parties as an original.
16.10 Legal
Counsel.
Executive represents to the Company that he has retained legal counsel of his
own choosing, and was given sufficient opportunity to obtain legal counsel
prior
to executing this Agreement. Executive also represents that he has read each
provision of this Agreement and understands its meaning.
16.11 Transition.
In the
event that Executive’s employment with the Company terminates, Executive shall,
through the last day of employment, and at the Company’s request, use
Executive’s reasonable efforts (at the Company’s expense) to assist the Company
in transitioning Executive’s duties and responsibility responsibilities to
Executive’s successor and maintaining the Company’s professional relationship
with all customers, suppliers, etc. Without limiting the generality of the
foregoing, Executive shall cooperate and assist the Company, at the Company’s
direction and instruction, during the transition period between any receipt
of
or giving of notice of the termination of employment and the final day of
employment.
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16.12 Section
409A Matters.
It is
the intention of the parties that no payment or entitlement pursuant to this
Agreement will give rise to any adverse tax consequences to the Executive
under 26 U.S.C. § 409A ("409A").
The
Agreement shall be interpreted to that end and, consistent with that objective
and notwithstanding any provision herein to the contrary, the Company shall
indemnify Executive from any adverse tax consequences, penalties and/or interest
thereon that may arise under 409A, and the Company may unilaterally take any
action it deems necessary or desirable to amend any provision herein to avoid
the application of 409A if such action will only benefit the Executive. Should
either party determine that there is a reasonable possibility that the text
of
this Agreement could give rise to such adverse tax consequences, the parties
agree to negotiate in good faith to amend the Agreement to obviate the
possibility of such consequences.
If,
at
any time, the Company (or its direct or indirect parent) has a class of stock
that is publicly traded on an established securities market or otherwise, the
Company shall from time to time compile a list of “Specified Employees” as
defined in, and pursuant to, Prop. Reg. § 1.409A-1(i) or any successor
regulation. Notwithstanding any other provision herein, if the Executive is
a
Specified Employee on the date of his termination of employment, no payment
of
compensation under this Agreement shall be made to the Executive during the
period lasting six months from the date of his termination of employment unless
the Executive determines that there is no reasonable basis for believing that
making such payment would cause the Executive to suffer any adverse tax
consequences pursuant to 409A. If any payment to the Executive is delayed
pursuant to the provisions of this paragraph, such payment instead shall be
made
on the first business day following the expiration of the six (6) month period
referred to in the prior sentence.
IN
WITNESS WHEREOF, the parties hereto have set their hands and seals the day
and
year first above written.
THE
COMPANY:
ITEC
ENVIRONMENTAL GROUP, INC.
By:
_________________________________
Its:
_________________________________
EXECUTIVE:
XXXX
DE
LAURENTIIS
_____________________________________
Xxxx
De
Laurentiis
13
