International Energy, Inc.
Exhibit
10.5
0 Xxxxxxx
Xxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
October
15, 2008
Xx.
Xxxxxxx (Xxxxx) Xxxxxxx Xxxx
0000
Xxxxxx Xxxxxx
Xxx Xxx,
XX 00000
Dear
Xxxxx:
This
letter sets forth the terms and conditions of your employment by International
Energy, Inc. (the
“Company").
1.
Position and Duties.
You shall
be employed by the Company as its President and Chief Executive
Officer; in performance of your duties, you shall be subject to the direction
of, and be reporting directly to, the Company's Board of Directors (the
"Board"); provided that, if requested by the Board, you will immediately resign
as an officer of the Company. You shall be available to travel as the needs of
the business require. You agree to devote your full business time, energy and
skill to the duties assigned to you by the Board.
2. At-Will Employment.
Anything herein to the contrary notwithstanding, your employment with and by the
Company is “at-will employment” and may be terminated by you or the Company at
any time, with or without cause, and for any reason whatsoever, upon written
notice to the other.
3. Compensation. You shall be
compensated by the Company for your services as follows:
(a) Salary. Commencing October
15, 2008, you shall be paid a monthly salary of $8,333.33 ($100,000.00 per
year), subject to applicable tax withholding, payable in 24 installments on the
15th
and last day of each calendar month during the term of this Agreement. Such
salary shall be subject to a 12-month review, and any periodic review and
adjustment in accordance with the Company's salary review policies and practices
then in effect for its senior management. Your annual salary will
increase to $150,000.00 per year if, within the first 12-months of your tenure,
you are able to successfully create sufficient prototypes of products related to
the Company’s ongoing research program at The Regents of the University of
California, to the satisfaction of the Board of Directors.
(b) Stock Options. Within 60
days of execution of this Agreement, you and the Company shall have entered into
a Stock Option Agreement (the “Stock Option Agreement”),
pursuant to which you shall receive a total of 750,000 options (the “Options”) to purchase up to an
aggregate of 750,000 shares of the Company’s common stock; the Options are
subject to and shall have such restrictions, vesting requirements and exercise
provisions as are set forth in the Stock Option Agreement, the terms and
conditions of which will be identical to those previously discussed, and
detailed overleaf:
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1.
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225,000
vest and become exercisable in three equal annual installments of 75,000
options commencing on January 1, 2010, and annually
thereafter;
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2.
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275,000
vest and become exercisable in the event that the Company, or any
subsidiary thereof, with the prior approval of the Board of Directors:
successfully executes any partnership agreement or joint-venture agreement
of any technology under current or future development; or successfully
completes the sale any subsidiary; or any technology under current or
future development;
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3.
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250,000
vest and become exercisable upon: commencing commercial sales of products
derived from any technology under current or future development; or
successfully achieving commercial gross annual sales exceeding $10,000,000
of those products and/or services which are not derived from technologies
under current or future research and development by the Company; or
successfully completing the sale of International Energy, Inc. to a third
party, subject to shareholder and Board of Directors
approval.
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The
granting of the Options shall be effective only upon delivery of a fully
executed Stock Option Agreement. All unexercised Options, whether
vested or not, expire immediately in the event that you are removed from your
position by the Board of Directors or shareholders, or voluntarily resign from
this position.
(c) Additional Benefits. You
shall be entitled to two weeks of paid vacation annually. Nothing contained
herein shall preclude you from participating in the present or future employee
benefit plans of the Company for its senior executive staff, provided that you
meet the eligibility requirements for participation in any such
plans.
4.
Expenses.
(a) Medical Expense. During
the term of this Agreement, the Company agrees to pay your current monthly COBRA
insurance premiums (“COBRA
premiums”) up to a maximum of $1,200.00 per month until such time that
the Company can make available an alternative medical insurance
plan.
(b) Other Expenses. You shall
be entitled to reimbursement for reasonable travel and other out-of-pocket
expenses necessarily incurred in the performance of your duties hereunder, upon
submission and approval of written statements and bills in accordance with the
then regular procedures of the Company.
5. Your Representations
and Warranties. You represent and warrant to the Company that
(a) you are under no contractual or other restriction or obligation which is
inconsistent with the execution of this Agreement, the performance of your
duties hereunder, or the other rights of the Company hereunder, and (b) you are
under no physical or mental disability that would hinder your performance of
duties under this Agreement, and (c) you are not party to any ongoing civil or
criminal proceedings, and have not been party such proceedings within the past
five years, and do not know of any such proceeding that may be threatened or
pending against you, and (d) you are not currently engaged in activities and
will not knowingly engage in future activities that may cause embarrassment to
the Company or tarnish the reputation or public image of the Company, including
but not necessarily limited to association with or party to: any criminal
behavior(s) such as drug use, theft, or any other potential or active violation
of law; political controversy, civil disobedience, or public protest; lewd,
lascivious behavior.
6. Termination of Salary, Benefits
and Options. In the event of the termination of your employment by the
Company or by you for any reason whatsoever, then as of the date of the
termination of your employment as set forth in either the Company’s notice to
you or your notice to the Company, as the case may be (i), you shall no longer
be entitled to any compensation under Paragraph 3 hereof, (ii) you shall no
longer be entitled to any reimbursement of expenses under Paragraph 4 hereof,
except for expenses incurred by you and approved by the Company prior to the
date of such termination, (iii) any and all unexercised
Options, whether vested or not, shall expire and shall no longer be
exercisable as of the date of termination of this Agreement, and (iv) neither
party hereto shall have any further rights or obligations hereunder (except
obligations expressly stated to survive the termination of this Agreement).
Nothing shall limit your right to be indemnified by the Company, subject to its
indemnification policies then in effect, for your actions as a director or
officer of the Company, provided such indemnification would otherwise have been
available to you.
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7. Non Competition; Non
Solicitation. (a) In view of the unique and
valuable services it is expected that you will render to the Company, your
knowledge of its trade secrets, and other proprietary information relating to
the business of the Company and in consideration of the compensation to be
received hereunder, you will not, during the period you are employed by the
Company, engage in, or otherwise directly or indirectly, be employed by, or act
as a consultant or lender to, or, without the prior written approval of the
Board, be a director, officer, owner, or partner of, any other business or
organization that is engaged in the same field of research and development as is
the Company. Nothing herein shall be deemed to preclude you from being an
officer, director, owner, investor in, or partner of, any business or
organization which is not competing with the Company, provided the same does not
in any manner whatsoever impair your ability to perform your duties under this
Agreement.
(b)
During your employment and for a period of one year following the termination of
your employment, you will not directly or indirectly reveal the name of, solicit
or interfere with, or endeavor to entice away from the Company any of its
suppliers, customers, or employees.
(c)
During your employment and for a period of one year following the termination of
your employment, you shall not make any critical or disparaging statements about
the Company or any of its employees, directors or products to any other person
or entity.
(d) Since
a breach of the provisions of this Paragraph 7 could not adequately be
compensated by money damages, the Company shall be entitled, in addition to any
other right and remedy available to it, to an injunction restraining such breach
or a threatened breach, and in either case no bond or other security shall be
required in connection therewith, and you hereby consent to the issuance of such
injunction. You agree that the provisions of this Paragraph 7 are necessary
and reasonable to protect the Company in the conduct of its
business. If any restriction contained in this Paragraph 7 shall be
deemed to be invalid, illegal, or unenforceable by reason of the extent,
duration, or geographical scope thereof, or otherwise, then the court making
such determination shall have the right to reduce such extent, duration,
geographical scope, or other provisions hereof, and in its reduced form such
restriction shall then be enforceable in the manner contemplated hereby. This
Paragraph 7 shall survive the termination of this Agreement.
8. Intellectual Property. Any
interest in patents, patent applications, inventions, copyrights, developments,
and processes (“Intellectual Property”) which you now, or hereafter during the
period you are employed by the Company, may own or develop relating to the
fields in which the Company may then be engaged shall belong to the Company; and
forthwith upon request of the Company, you shall execute all such assignments
and other documents and take all such other action as the Company may reasonably
request in order to vest in the Company all your right, title, and interest in
and to such Intellectual Property free and clear of all liens, charges, and
encumbrances. This Paragraph 8 shall survive the termination of this
Agreement.
9. Confidential
Information. All confidential information which you may now
possess, or may obtain or create prior to the end of the period you are employed
by the Company, relating to the business of the Company, or any customer or
supplier of the Company, or any agreements, arrangements, or understandings to
which the Company is a party, shall not be disclosed or made accessible by you
to any other person or entity either during or after the termination of your
employment or used by you except during your employment by the Company in the
business and for the benefit of the Company. You shall return all
tangible evidence of such confidential information to the Company prior to or at
the termination of your employment. This Paragraph 9 shall survive the
termination of this Agreement.
10. Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon the Company and
its successors and assigns. In view of the personal nature of the services to be
performed under this Agreement by you, you shall not have the right to assign or
transfer any of your rights, obligations or benefits under this Agreement,
except as otherwise noted herein.
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11. No Reliance on
Representations. You acknowledge that you are not relying, and have not
relied, on any promise, representation or statement made by or on behalf of the
Company which is not set forth in this Agreement.
12. Entire Agreements;
Amendments. This Agreement sets forth our entire understanding of the
parties with respect to your employment by the Company, supersedes all existing
agreements between you and the Company concerning such employment, and may be
modified only by a written instrument duly executed by each of you and
Company.
13. Waiver. Any
waiver by either party of a breach of any provision of this Agreement shall not
operate as or be construed to be a waiver of any other breach of such provision
or of any breach of any other provision of this Agreement. The
failure of a party to insist upon strict adherence to any term of this Agreement
on one or more occasions shall not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. Any waiver must be in
writing.
14. Construction. You and the
Company have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by you and the
Company and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word “including” shall
mean including without limitation. The headings in this Agreement are solely for
the convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
15. Severability. Any term or
provision of this Agreement that is invalid or unenforceable in any situation in
any jurisdiction shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or enforceability of the
offending term or provision in any other situation or in any other
jurisdiction.
16.
Notices.
All
notices, demands or requests made pursuant to, under or by virtue of this
Agreement must be in writing and sent to the party to which the notice, demand
or request is being made by (i) certified or registered mail, return receipt
requested, (ii) nationally recognized overnight courier delivery, (iii) by
facsimile transmission provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party or (iv) hand
delivery as follows:
To the
Company:
Attention:
Xx. Xxxxx X. Xxxxxx, Director
c/o: Xx.
Xxxxxx Xxxxxxxx
000 Xxxx
00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx,
XX 00000
To
you:
Xx.
Xxxxxxx (Xxxxx) Xxxxxxx Xxxx
0000
Xxxxxx Xxxxxx
Xxx Xxx,
XX 00000
or to
such other address, facsimile number, or email address, as is specified by a
party by notice to the other party given in accordance with the provisions of
this Paragraph 16. Any notice given in accordance with the provisions of this
Paragraph 16 shall be deemed given (i) three (3) Business Days after mailing (if
sent by certified mail), (ii) one (1) Business Day after deposit of same with a
nationally recognized overnight courier service (if delivered by nationally
recognized overnight courier service), or (iii) on the date delivery is made if
delivered by hand or facsimile.
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17. Counterparts This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
18. Governing Law. All
other questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York. Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the City of
New York, County of New York for the adjudication of any dispute hereunder or in
connection herewith or therewith, or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
19. Date of
Agreement. The date of this Agreement shall be October 15,
2008 regardless of the date it is signed by you.
If you
find the foregoing acceptable, please acknowledge your acceptance of, and
agreement with, the terms and conditions set forth above by signing the enclosed
copy of this letter in the space provided and returning the same to the
undersigned.
Sincerely,
/s/ Xxxxx X.
Xxxxxx
Xx. Xxxxx
X. Xxxxxx
Director
On this
15th
day of October, 2008, I agree to and accept employment with International
Energy, Inc. on the terms and conditions set forth in this
Agreement.
Dated:
October 15, 2008
/s/ Xxxxx
Xxxx
Mr. Xxxxx
Xxxx
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