EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT ("Agreement") is made and
entered into as of the 5th day of January, 2011 by and between BIOPOWER, a
Nevada corporation (hereinafter called the “Company "), and Xxxxxx X. Xxxx
(hereinafter called the "Executive").
RECITALS
WHEREAS, the Company is in the
business of establishing and growing multi-location biomass operations
throughout the world for the purpose of producing biomass feedstock for the
production of biomass energy products including electricity and biofuels;
and
WHEREAS, the Company
acknowledges that the Executive is a Co-founder, Director and has been serving
as the Company’s Chairman and Chief Executive Officer since September 13, 2010;
and
WHEREAS, the Company desires
to maintain the employ of the Executive as the Chairman and Chief Executive
Officer of the Company, and the Executive is willing to continue such
employment; and
WHEREAS, as a condition
precedent to and as an incentive to the Company to maintain the employ of the
Executive as the Chairman of the Company, the Company and the Executive desire
to record the arrangements for such employment, in the manner provided for
herein and upon the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in
consideration of the promises and mutual covenants herein contained, and other
good and valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties agree as follows:
1. Employment.
1.1
Employment and Term. The Company hereby
agrees to employ the Executive and the Executive hereby agrees to serve the
Company, on the terms and conditions set forth herein, for the period commencing
on the date hereof and expiring on December 31, 2015 (the “Initial Term”) unless sooner
terminated as hereinafter set forth. This Agreement shall be extended
for an additional five (5) year term (the “Renewal Term”) and
collectively with the Initial Term, the (“Term”) upon prior written
mutual agreement between the Company and the Executive of at least ninety (90)
days prior to the expiration of the Initial Term.
1.2
Duties of Executive. The Executive
shall serve as the Chairman and Chief Executive Officer of the Company and shall
have powers and authority superior to any other officer or employee of the
Company or of any subsidiary of the Company, including, without limitation, the
duties and responsibilities customarily associated with a chief executive /
president (e.g., control of day-to-day operations, signing checks, hiring and
firing, etc.). The Executive shall be required to report solely to,
and shall be subject solely to the supervision and direction of the Board
of Directors and no other person or group shall be given authority to supervise
or direct Executive in the performance of his duties. The Executive
shall devote substantially all his working time and attention to the business
and affairs of the Company (excluding any vacation and sick leave to which the
Executive is entitled), render such services to the best of his ability, and use
his reasonable best efforts to promote the interests of the
Company. It shall not be a violation of this Agreement for the
Executive to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or teach at
educational institutions, and (C) manage personal investments, so long as
such activities do not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in accordance with
this Agreement.
1.3
Place of Performance. In connection with his
employment by the Company, the Executive shall be based at the Company's
principal executive offices except for travel reasonably necessary in connection
with the Company's business.
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2. Compensation.
2.1(a)
Base Salary. Commencing on the effective date of
this Agreement, the Executive shall receive an annual base salary (the “Base Salary”) of US$200,000.
The Base Salary shall be payable in installments consistent with the Company's
normal payroll schedule, subject to applicable withholding and other taxes, and
shall not be decreased for any reason. This salary shall accrue until the
Company has raised $2,500,000. The Executive’s salary shall be
reviewed each year and the Executive will be compensated based on the
performance of the Company.
2.1(b)
Any amount of Base Salary not paid pursuant to Section 2.1(a) shall accrue until
paid in full.
2.2
Incentive
Compensation. The Executive shall be entitled to receive such bonus
payments or incentive compensation as may be determined at any time or from time
to time by the Board of Directors of the Company (or any authorized committee
thereof) in its discretion. Such potential bonus payments and/or
incentive compensation shall be considered at least annually by the Board or
committee.
2.3
Stock Options.
(a) The
Executive shall be entitled to participate in all stock option plans of the
Company (the “Plans”) in
effect during the Term of employment pursuant to this Agreement.
(b) All
Options issued to the Executive in accordance with this Agreement shall become
immediately exercisable as to 100% of the shares of Common Stock not otherwise
vested upon any termination of Executive’s employment pursuant to Sections 4.4
or 4.5 hereof, it being agreed that the Company shall vest the unvested portion
of the Executive’s Option shares and cooperate in good faith to afford the
Executive the right to accelerate the exercise of the Options in full
immediately prior to any Change in Control (as hereinafter
defined). In the event that Executive terminates or is terminated
pursuant to Sections 4.4 or 4.5 hereof, Executive shall have the remaining
term of the Options, in order to exercise his Options.
(c) Upon
proper exercise of an Option, the Executive shall be deemed for all purposes the
owner of the shares of Common Stock that are purchasable upon such
exercise.
(d) The
provisions of the Plan shall not be adversely modified as to the Executive
without the Executive’s prior written consent.
(e) All
Option shares shall be fully adjusted for events such as splits.
3. Expense
Reimbursement and Other Benefits.
3.1
Expense Reimbursement. During the
Term of Executive's employment hereunder, the Company, upon the submission of
reasonable supporting documentation by the Executive, shall reimburse the
Executive for all reasonable expenses actually paid or incurred by the Executive
in the course of and pursuant to the business of the Company, including expenses
for travel, lodging and entertainment in accordance with Company’s
policies.
3.2
Incentive, Savings and Retirement
Plans. During the Term of Executive’s Employment hereunder, the
Executive shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable to other key
executives of the Company and its subsidiaries, in each case comparable to those
currently in effect or as subsequently amended. Such plans,
practices, policies and programs, in the aggregate, shall provide the
Executive with compensation, benefits and reward opportunities at least as
favorable as the most favorable of such compensation, benefits and reward
opportunities provided at any time hereafter with respect to other key
executives.
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3.3
Welfare Benefit
Plans. During the Term of Executive’s Employment hereunder, the
Executive and/or the Executive’s spouse, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its subsidiaries
(including, without limitation, medical, prescription, dental, disability,
salary continuance, employee life, group life, accidental death and travel
accident insurance plans and programs), at least as favorable as the most
favorable of such plans, practices, policies and programs in effect at any time
hereafter with respect to other key executives. Until such plans are
in place Executive is entitled to reimbursement for his
medical insurance.
3.4
Vacation. During
the Term of Executive’s Employment hereunder, the Executive shall be entitled to
paid vacation in accordance with the most favorable plans, policies, programs
and practices of the Company and its subsidiaries as in effect at any time
hereafter with respect to other key executives of the Company and its
subsidiaries; provided, however, that in no event shall Executive be entitled to
fewer than three weeks paid vacation per year, as well as pay for holidays
observed by the Company.
4. Termination.
4.1
Termination for Cause. Notwithstanding anything contained to the
contrary in this Agreement, this Agreement may be terminated by the Company for
Cause. As used in this Agreement, “Cause” shall only
mean:
(a) an
act or acts of personal dishonesty taken by the Executive and intended to result
in substantial personal enrichment of the Executive or substantial damages to
the Company;
(b) subject
to the following sentences, a violation by the Executive of the Executive's
material obligations under this Agreement which are demonstrably willful,
persistent and deliberate on the Executive’s part and which are not remedied in
a reasonable period of time after receipt of written notice from
the Company’s Board of Directors; or
(c) the
conviction of the Executive for any criminal act which is a felony.
(d) any
and all acts that would be deemed as self-dealing that would be reasonably
considered as beneficial to the Company.
Upon any
reasonable and good faith determination by the Company's Board of Directors that
Cause exists under clause (a) of the preceding sentence and clause (b) of the
preceding sentence (to the extent the violation under said clause (b) has not
been cured by the Executive), the Company shall cause a special meeting of
the Board to be called and held at a time mutually convenient to the Board and
Executive, but in no event later than ten (10) business days after Executive's
receipt of the notice contemplated by clauses (a) and (b). Executive
shall have the right to appear before such special meeting of the Board with his
legal counsel at Executive’s expense to refute any determination of Cause
specified in such notice, and any termination of Executive's employment by
reason of such Cause determination shall not be effective until Executive is
afforded such opportunity to appear. Any termination for Cause
pursuant to clause (a) or (b) of the first sentence of this Section 4.1 shall be
made in writing to Executive, which notice shall set forth in detail all
acts or omissions upon which the Company is relying for such
termination. Upon any termination pursuant to this Section 4.1, the
Executive shall be entitled to be paid all of his Base Salary through the date
of the termination.
4.2
Disability. Notwithstanding
anything contained in this Agreement to the contrary, the Company, by written
notice to the Executive, shall at all times have the right to terminate this
Agreement, and the Executive's employment hereunder, if the Executive shall, as
the result of mental or physical incapacity, illness or disability, fail to
perform his duties and responsibilities provided for herein for a period of more
than sixty (60) consecutive days in any 12-month period. Upon
any termination pursuant to this Section 4.2, the Executive shall be
entitled to be paid his Base Salary for the remaining term of the
Agreement. In the event that the Agreement has less than six months
remaining at such time, Executive shall be entitled to a payment equal to six
months of his Base Salary. In addition, Executive shall be entitled
to reimbursement for all business expenses incurred prior to his
disability.
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4.3
Death. In the event of the
death of the Executive during the Term of his employment hereunder, the Company
shall pay to the estate of the deceased Executive an amount equal to the Base
Salary for the remaining term of this Agreement in cash or stock. In
the event that the Agreement has less than six months remaining at
such time, Executive shall then be entitled to a payment equal to six
months of his Base Salary. In addition, Executive shall be entitled
to reimbursement for all business expenses incurred prior to his
death. The Company has the right to get life insurance on the
Executive.
4.4
Optional Termination. Notwithstanding
anything contained in this Agreement to the contrary, the Executive, by giving
thirty (30) days prior written notice to the Company, shall two years after the
date of this Agreement, have the right to terminate this Agreement at his sole
discretion. Upon any termination pursuant to this Section 4.4, the
Executive shall be entitled to be paid his Base Salary and the
benefit referred to hereinbefore for a period of 12 months from the date of
termination and the Company shall have no further liability hereunder thereafter
(other than for reimbursement for reasonable business expenses incurred prior to
the date of termination and as to the vesting of Options pursuant to Section
2.3(d)), unless the Executive and the Company agree to a different
arrangement.
4.5
Termination Without
Cause. At any time the Company shall have the right to terminate
Executive's employment hereunder by written notice to Executive; provided,
however, that the Company shall:
(a) pay
to Executive any all unpaid Base Salary and allow the Executive to enjoy all the
benefits given hereunder for the period remaining period of this Employment
Agreement, including the Compensation package referred to in clause 2 hereof,
and will further allow to receive all pro-rata bonus, incentive and option
shares that would be payable had Executive completed the full term of
employment;
(b) pay
to the Executive in a lump sum, in cash or stock within 30 days after the date
of employment termination, an amount equal to the greater of (i) 100% of his
annual Base Salary then in effect, or (ii) the balance of the Executive’s Base
Salary from the effective date of termination through the expiration of the
Initial Term or Renewal Term then in effect as per clause 1 hereof;
(c) continue
to pay the Executive’s health and disability insurance, and all other benefits
referred to in clause 3 hereof for the longer of a period of twelve (12) months
or the remaining term of this Agreement, whichever is longer; and
(i) For
purposes of this Agreement, a “Change in Control” shall
mean:
1) The
acquisition (other than by or from the Company), at any time after the date
hereof, by any person, entity or “group,” within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the " Exchange Act "), of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of either the then outstanding shares of common
stock or the combined voting power of the Company's then outstanding voting
securities entitled to vote generally in the election of directors;
2) All
or any of the two (2) individuals who, as of the date hereof, constitute the
Board (as of the date hereof the " Incumbent Board ") cease for
any reason to constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest
relating to the election of the directors of the Company, as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) shall be, for purposes of this Agreement, considered as though such
person were a member of the Incumbent Board;
3) Approval
by the shareholders of the Company of (A) a reorganization, merger or
consolidation with respect to which persons who were the shareholders of the
Company immediately prior to such reorganization, merger or consolidation do
not, immediately thereafter, own more than 51% of the combined voting power
entitled to vote generally in the election of directors of the reorganized,
merged or consolidated company's then outstanding voting securities, (B) a
liquidation or dissolution of the Company, or (C) the sale of all or
substantially all of the assets of the Company, unless the approved
reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned; and
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4) The
approval by the Board of the sale, distribution and/or other transfer or action
(and/or series of sales, distributions and/or other transfers or actions from
time to time or over a period of time), that results in the Company's ownership
of less than 50% of the Company's current assets.
5. Restrictive
Covenants.
5.1 Nondisclosure. During
his employment and for twelve (12) months thereafter, Executive shall not
divulge, communicate, use to the detriment of the Company or for the benefit of
any other person or persons, or misuse in any way, any Confidential Information
(as hereinafter defined) pertaining to the business of the Company, unless
required to do so by a governmental agency or court of law. Any
Confidential Information or data now or hereafter acquired by the Executive with
respect to the business of the Company shall be deemed a valuable, special and
unique asset of the Company that is received by the Executive in confidence and
as a fiduciary, and Executive shall remain a fiduciary to the Company with
respect to all of such information. For purposes of this Agreement,
"Confidential
Information" means all material information about the Company's business
disclosed to the Executive or known by the Executive as a consequence of or
through his employment by the Company (including information conceived,
originated, discovered or developed by the Executive) after the date hereof, and
not generally known.
5.2 Non-solicitation
of Employees. While employed by the Company and for a period of
twelve (12) months thereafter, Executive shall not directly or indirectly, for
himself or for any other person, firm, corporation, partnership, association or
other entity, attempt to employ or enter into any contractual arrangement with
any employee or former employee of the Company.
5.3 Covenant
Not to Compete. Executive will not, at any time, during the Term of
this Agreement, and for a period of twelve (12) months thereafter, either
directly or indirectly, engage in, with or for any enterprise, institution,
whether or not for profit, business, or company, competitive with the business
(as identified herein) of the Company as such business may be conducted on the
date thereof, as a creditor, guarantor, or financial backer, stockholder,
director, officer, consultant, advisor, employee, member, or otherwise of or
through any corporation, partnership, association, sole proprietorship or other
entity; provided, that an investment by Executive, his spouse or his children is
permitted if such investment is not more than four percent (4%) of the total
debt or equity capital of any such competitive enterprise or
business. As used in this Agreement, the business of Employer shall
be deemed to include any business which directly competes with the
Company.
5.4 Injunction. It
is recognized and hereby acknowledged by the parties hereto that a breach by the
Executive of any of the covenants contained in Sections 5.1, 5.2 or 5.3 of
this Agreement will cause irreparable harm and damage to the Company, the
monetary amount of which may be virtually impossible to ascertain. As
a result, the Executive recognizes and hereby acknowledges that the Company
shall be entitled to an injunction from any court of competent jurisdiction
enjoining and restraining any violation of any or all of the covenants contained
in this Section 5 by the Executive or any of his affiliates, associates,
partners or agents, either directly or indirectly, and that such right to
injunction shall be cumulative and in addition to whatever other remedies
the Company may possess.
6.
Re-negotiate. This contract may be re-negotiated by the Executive should
the circumstances and the economic situation of the Company change beyond the
Company’s forecast.
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7. Entire
Agreement. This instrument contains the entire agreement of the
parties, and supersedes any prior or contemporaneous statements or
understandings by or between the parties. This Agreement may be
changed only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought, and any such modification on behalf of the Company must be approved by
the Board.
8. Governing
Law/Jurisdiction. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida, excluding choice of
law provisions.
The
parties hereby irrevocably and unconditionally agree to submit any legal action
or proceeding relating to this Agreement to the non-exclusive general
jurisdiction of the courts of the State of Florida located in Broward County and
the courts of the United States located in Florida and, in any such action or
proceeding, consent to jurisdiction in such courts and waive any objection to
the venue in any such court. Executive agrees that service of process upon
Executive in any such action or proceeding may be made by United States mail,
certified or registered, return receipt requested, postage
prepaid. Unless otherwise agreed, the prevailing party in any
litigation relating to the interpretation or enforcement of this Agreement shall
be entitled to reasonable costs and attorneys' fees.
9.
Notices: Any
notice required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been given (a) when delivered by hand, (b)
when deposited in the United States mail, by registered or certified mail,
return receipt requested, postage prepaid, or via overnight courier, (c) one day
after electronically mailed either in the text of an email message or attached
in a commonly readable format, and the sender has received no generated notice
that the email message has not been successfully delivered, or (d) upon receipt
of proof of sending thereof when sent by facsimile, addressed as
follows:
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If
to the Company:
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Attention:
Board of Directors
BioPower
Operations Corporation
0000
Xxxxx Xx. Xxxxx 000
Xxxxxxx
Xxxxx, Xxxxxxx 00000
Email:
xxxxx@xxxxxxxxxxxx.xxx
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with
a copy to:
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Xxxxxxx
Savage LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention: Xxxxx
X. Xxxxxxx, Esq.
Fax: 000-000-0000
Email:
xxxxxxxx@xxxxx.xxx
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If
to the Executive:
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Attention:
Xxxxxx X. Xxxx
0000
Xxxxx Xx. Xxxxx 000
Xxxxxxx
Xxxxx, Xxxxxxx 00000
xxxxx@xxxxxxxxxxxx.xxx
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or to
such other addresses as either party hereto may from time to time give notice of
to the other in the aforesaid manner.
10. Successors.
(a) This
Agreement is personal to the Executive and without the prior written consent of
the Company shall not be assignable by the Executive otherwise than by will or
the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by the Executive's legal
representatives.
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(b) This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.
(c) 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 expressly assume 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. As used
in this Agreement, “Company” shall mean the
Company as hereinbefore defined and any successor to its business and/or assets
which assumes and agrees to perform this Agreement by operation of law or
otherwise.
11. Severability. The
invalidity of any one or more of the words, phrases, sentences, clauses or
sections contained in this Agreement shall not affect the enforceability of the
remaining portions of this Agreement or any part thereof, all of which are
inserted conditionally on their being valid in law, and, in the event that any
one or more of the words, phrases, sentences, clauses or sections contained in
this Agreement shall be declared invalid, this Agreement shall be construed as
if such invalid word or words, phrase or phrases, sentence or sentences, clause
or clauses, or section or sections had not been inserted. If such
invalidity is caused by length of time or size of area, or both, the otherwise
invalid provision will be considered to be reduced to a period or area which
would cure such invalidity.
12. Waivers. The
waiver by either party hereto of a breach or violation of any term or provision
of this Agreement shall not operate nor be construed as a waiver of any
subsequent breach or violation.
13. Damages. Nothing
contained herein shall be construed to prevent the Company or the Executive from
seeking and recovering from the other damages sustained by either or both of
them as a result of its or his breach of any term or provision of this
Agreement.
14. No
Third Party Beneficiary. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
(other than the parties hereto and, in the case of Executive, his heirs,
personal representative(s) and/or legal representative) any rights or remedies
under or by reason of this Agreement.
15. Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
16. Executive’s
Recognition of Agreement. Executive
acknowledges that Executive has read and understood this Agreement, and agrees
that its terms are necessary for the reasonable and proper protection of the
Company’s business. Executive acknowledges that Executive has been
advised by the Company that Executive is entitled to have this Agreement
reviewed by an attorney of Executive’s selection, at Executive’s expense, prior
to signing, and that Executive has either done so or elected to forgo that
right.
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IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date first above
written.
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COMPANY:
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By:/s/ Xxxxxx
Xxxxxx
Xxxxxx
Xxxxxx, Director
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EXECUTIVE:
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By:/s/ Xxxxxx
X. Xxxx
Xxxxxx
X. Xxxx
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