HELIX WIND, Corp., BOARD OF DIRECTORS SERVICE AND INDEMNIFICATION AGREEMENT
Exhibit
10.6
BOARD
OF DIRECTORS
THIS
HELIX WIND, INC., BOARD OF DIRECTORS SERVICE AND INDEMNIFICATION AGREEMENT
(“Agreement”) is executed and entered into effective as ofJune 16, 2009 by and
between Helix Wind, Corp., a Nevada corporation, (the “Company”) and Xxxx
Xxxxxxx, an individual (“Director”), with reference to the following
facts:
A. The
Company has requested that Director serve on its Board of Directors as an
independent director.
B. In order
to induce Director to serve on the Board, the Company has agreed to pay Director
the compensation (the “Compensation”) set forth below and to contractually
obligate itself to indemnify Director to the fullest extent permitted by
applicable law so that Director will serve or continue to serve the Company free
from undue concern that he will not be so indemnified; and Director has agreed
to serve on the Board in consideration of the foregoing.
NOW,
THEREFORE, in consideration of the premises and the covenants contained herein,
the Company and Director hereby covenant and agree as follows:
1. Service
By Director. Director agrees to serve as a member of the Board
of Directors of the Company (the “Board”), for the Term, and in consideration of
the Compensation and other terms and conditions of this Agreement set forth
below. Notwithstanding the foregoing, Director may at any time and for any
reason resign from such position, subject to the provisions of this Agreement
and any contractual or other obligation imposed by operation of
law.
1.1 Duties. As
an independent member of the Board, Director shall use his best efforts to
perform the duties commonly incident to the office and as set forth in the
Company Bylaws, including, without limitation:
1.1.1 attending
or otherwise participating in all regular and special
meetings of the Board;
1.1.2 reviewing
the performance of the officers of the Company;
1.1.3 making
himself reasonably available for consultation with the officers of the Company
immediately before and after Board meetings, as needed;
1.1.4 advising
the Company in development and implementation of its strategic development and
business plans;
1.1.5 assisting
the Company in the development of its capitalization plan; and
1.1.6 doing all
other things reasonably requested by the Board in order to advance the business
and economic interests of the Company and its shareholders.
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1.2 Fiduciary
Duty. Director acknowledges and agrees that in his capacity as
a member of the Board, he has a fiduciary duty to the Company and its
shareholders. Accordingly, Director agrees to use his best efforts to refrain
from and avoid any action or activity that would constitute or be likely to
create a conflict of interest with respect to his duties to the Company.
Director further covenants and agrees to use his best efforts to comply with and
abide by all policies, procedures, guidelines and governing principles as may be
adopted by the Board from time to time; to serve the Company faithfully and to
the best of his ability; and to devote that amount of time, attention and effort
to the Company which is reasonably necessary in order to satisfy the
requirements of the Board.
2. Term. This
Agreement shall be effective as of the date first set forth above (the
“Effective Date”) and shall continue for a period of one (1) year thereafter
(the “Initial Term”), terminating on the first anniversary of the Effective Date
(the “Termination Date”). This Agreement will terminate automatically without
the necessity of further notice or action of any kind upon the Termination Date,
or earlier upon Director’s resignation or removal from the Board for any reason.
Following the expiration of the Initial Term, Director may be elected to serve
on the Board for additional terms, subject to the approval of the shareholders
of the Company, and in such event, it is anticipated that the Company will enter
into a new agreement with Director.
3. Compensation.
3.1 Annual
Stipend. Commencing the first month of the
quarter following the closing of the next $3m in funding
as of the date of this agreement. Director will receive an annual
stipend in the amount of $12,000, payable in four equal quarterly
installments of $3,000 each, in advance on or before the first day of each
calendar quarter throughout Director’s Term. In the event Director is
appointed to serve as the Chairman of any Committee of the Board, Director will
receive an additional annual stipend in the amount of $2,500 payable upon
appointment.
3.2 Business
Expenses Reimbursements. During the term of this Agreement,
the Company will reimburse Director promptly for all reasonable, pre-approved
business expenses incurred by Director, whether or not deductible by Company for
income tax purposes, including without limitation, meals, travel, lodging,
entertainment, parking, business meetings, and such other business expenses
reasonably incurred by Director in the pursuit and furtherance of the Company’s
business. Such expenses shall be reimbursed only upon presentation to the
Company of appropriate documentation substantiating such expense.
3.3 Equity
Compensation. Effective upon execution of this Agreement,
Director will be granted a Non-Qualified Option, pursuant to the Company’s 2008
Omnibus Stock Plan (“2008 Stock Plan”), to purchase 300,000 shares (the “Option
Shares’) of the Company Common Stock at a purchase price equal to the closing
days outstanding selling price (“strike price”) on the day this agreement is
executed. The terms and conditions of the Non-Qualified Stock Options shall be
set forth in a separate Notice of Grant and Stock Option Agreement (collectively
the “Stock Option Agreement”) to be provided by the Company. The Option Shares
will vest as follows:
3.3.1 75,000
shares shall vest upon the execution of this Agreement.
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3.3.2 75,000
shares shall vest upon the 12 month anniversary of this Agreement.
3.3.3 75,000
shares shall vest upon the 24 month anniversary of this Agreement.
3.3.4 75,000
shares shall vest upon the 36 month anniversary of this Agreement.
3.3.5 Notwithstanding
the foregoing, if this Agreement terminates prior to full vesting of the Option
Shares due to Director’s failure to be reelected to the Board or any reason
other than (i) Director’s Removal for “Cause” as defined in the Stock Option
Agreement, or (ii) Director’s voluntary resignation, all unvested Option Shares
shall immediately vest without further notice or action of any kind. In the
event this Agreement terminates prior to full vesting of the Option Shares due
to Director’s removal for “Cause” as defined in the Stock Option Agreement, or
(ii) Director’s voluntary resignation, all unvested Option Shares shall
immediately be cancelled, as of the effective date of termination, in accordance
with the 2008 Stock Plan and the Stock Option Agreement.
4. Protection
of Company Property.
4.1 Restriction
on Use. Director recognizes and acknowledges that he will have
access to Confidential Information (as defined below) relating to the business
or interest of the Company or of persons with whom the Company may have business
relationships. Except as permitted herein or as may be approved by the Company
from time to time, the Director will not during the Term of this Agreement or at
any time thereafter, use, disclose or permit to be known by any other person or
entity, any Confidential Information of the Company (except as required by
applicable law or in connection with the performance of the Director’s duties
and responsibilities hereunder). If Director is requested or becomes legally
compelled to disclose any of the Confidential Information, he will give prompt
notice of such request or legal compulsion to the Company. The Company may waive
compliance with this section 4 or will provide Director with legal counsel at no
cost to Director to seek an appropriate remedy.
4.2 Confidential
Information Defined. The term “Confidential Information” means
information relating to the Company’s business affairs, proprietary technology,
trade secrets, patented processes, research and development data, know-how,
market studies and forecasts, competitive analyses, pricing policies, vendor and
supplier lists, employee lists, employment agreements (other than this
Agreement), personnel policies, the substance of agreements with customers,
suppliers and others, marketing arrangements, customer lists, commercial
arrangements, or any other information relating to the Company’s business that
is not generally known to the public or to actual or potential competitors of
the Company (other than through a breach of this Agreement). This obligation
shall continue until such Confidential Information becomes publicly available,
other than pursuant to a breach of this section 4 by the Director, regardless of
whether the Director continues to be employed by the Company.
5. Indemnification. The
Company shall indemnify Director to the fullest extent permitted by applicable
law in effect on the Effective Date or as such laws may from time to time be
amended. Without diminishing the scope of the indemnification provided by this
Section 5, the rights of indemnification of the Director provided hereunder
shall include but shall not be limited to those rights set forth hereinafter,
except to the extent expressly prohibited by applicable law.
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5.1 Action
Other Than by or in the Right of the Company. The Director
shall be entitled to the indemnification rights provided in this Section 5.1 if
he is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative in nature, other than an action by or in the right of the Company,
by reason of the fact that he is or was a director, officer, employee, agent,
partner or fiduciary of the Company or is or was serving at the request of the
Company as a director, officer, employee, agent, partner or fiduciary of any
other entity or by reason of anything done or not done by him in any such
capacity. Pursuant to this Section 5.1, the Director shall be indemnified
against all expenses, including attorneys’ fees, costs, judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding (including, but not limited to,
the investigation, defense or appeal thereof), if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, he had no
reasonable cause to believe his conduct was unlawful. The Director agrees
promptly to notify the Company in writing upon being served with any summons,
citation, subpoena, complaint, indictment, information or other document
relating to any matter which may be subject to indemnification covered
hereunder, either civil, criminal or investigative.
5.2 Actions
by or in the Right of the Company. The Director shall be
entitled to the indemnification rights provided in this Section 5.2 if he is a
person who was or is made a party or is threatened to be made a party to any
threatened, pending or completed action or suit brought by or in the right of
the Company to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee, agent, partner or fiduciary of the Company
or is or was serving at the request of the Company as a director, officer,
employee, agent, partner or fiduciary of any other entity by reason of anything
done or not done by him in any such capacity. Pursuant to this Section 5.2, the
Director shall be indemnified against all expenses, including attorneys’ fees
and costs actually and reasonably incurred by him in connection with such action
or suit (including, but not limited to, the investigation, defense, settlement
or appeal thereof) if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company; provided,
however, that no such indemnification shall be made in respect of any claim,
issue or matter as to which applicable law expressly prohibits such
indemnification by reason of an adjudication of liability of the Director to the
Company, unless, and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite such
adjudication of liability but in view of all the circumstances of the case, the
Director is fairly and reasonably entitled to indemnification for such expenses
and costs as such court shall deem proper.
5.3 Indemnification
for Costs, Charges and Expenses. Notwithstanding the other
provisions of this Agreement and in addition to the rights to indemnification
set forth in Sections 5.1 and 5.2 hereof, to the extent that the Director has
served as a witness on behalf of the Company or has been successful on the
merits or otherwise, including, without limitation, the dismissal of an action
without prejudice, in defense of any action, suit or proceeding referred to in
Sections 5.1 and 5.2 hereof, or in defense of any claim, issue or matter
therein, he shall be indemnified against all costs, charges and expenses,
including attorneys’ fees, actually and reasonably incurred by him or on his
behalf in connection therewith.
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5.4 Partial
Indemnification. In addition to the rights to indemnification
set forth in Sections 5.1 and 5.2 hereof, if the Director is only partially
successful in the defense, investigation, settlement or appeal of any action,
suit, investigation or proceeding described in Section 5.2 or 5.3 hereof, and as
a result is not entitled under Section 5.1, 5.2 or 5.3 hereof to indemnification
by the Company for the total amount of the expenses, including attorneys’ fees,
costs, judgments, penalties, fines, and amounts paid in settlement actually and
reasonably incurred by him, the Company shall nevertheless indemnify the
Director, as a matter of right pursuant to Section 5.3 hereof, to the extent
that the Director has been partially successful.
5.5 Request
for Indemnification; Presumptions. In order to be eligible for
indemnification pursuant to this Agreement, Director shall promptly provide
written notice regarding the existence of any action, suit, proceeding or claim
(each a “Claim”) for which indemnification is being sought pursuant to this
Agreement, together with a written request for indemnification to the Board.
Such notice shall also include all documentation or information regarding the
Claim which is reasonably available to the Director. Upon delivery of such
written notice and request, the Director shall be presumed to be entitled to
indemnification and shall be indemnified hereunder.
5.6 Advancement
of Expenses and Costs. All reasonable expenses and costs
incurred by the Director (including attorneys’ fees, retainers and advances of
disbursements required of the Director) in connection with the defense of any
Claim shall be paid by the Company in advance of the final disposition of such
Claim, at the request of the Director within ten (10) days after the receipt by
the Company of a statement or statements from the Director from time to time
requesting such advances. Such statement or statements shall reasonably evidence
the expenses and costs incurred by Director in connection therewith and shall
include or be accompanied by an undertaking by or on behalf of the Director to
repay such amount if it is ultimately determined that the Director is not
entitled to be indemnified against such expenses and costs by the Company as
provided by this Agreement or otherwise.
5.7 Remedies
of Director. In the event that a determination is made that
the Director is not entitled to indemnification hereunder or if expenses are not
advanced pursuant to this Agreement, the Director shall be entitled to a final
adjudication in an appropriate court of the State of California or any other
court of competent jurisdiction of his entitlement to such indemnification or
advance. Alternatively, the Director at his option may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the Commercial
Arbitration Rules of the American Arbitration Association, such award to be made
within 60 days following the filing of the demand for arbitration. In either
case, Director shall be presumed to be entitled to indemnification and the
Company shall have the burden of proof in the making of any determination
contrary to such presumption. In addition, the Company shall not oppose the
Director’s right to seek any such adjudication or award in arbitration or any
other claim, but may only oppose the Director’s right to indemnification. Such
judicial proceeding or arbitration shall be made de novo and the Director shall
not be prejudiced by reason of a determination (if so made) that he is not
entitled to indemnification. Notwithstanding any other term or provision of this
Agreement, upon the filing of any such action or complaint by Director, pending
final adjudication of the issue, the Company shall pay and advance all
reasonable expenses and costs incurred by Director in accordance with Section
5.6 of this Agreement, as well as all other amounts payable on Director’s behalf
pursuant to Sections 5.1 and 5.2 of this Agreement. If the court or arbitrator
shall determine that the Director is entitled to any indemnification hereunder,
the Company shall pay all reasonable expenses, including attorneys’ fees and
costs actually incurred by the Director in connection with such adjudication or
award in arbitration (including, but not limited to, any appellate
proceedings).
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5.8 Other
Rights to Indemnification. The indemnification and advancement of
expenses, including attorneys’ fees, and costs provided by this Agreement shall
not be deemed exclusive of any other rights to which the Director may now or in
the future be entitled under any provision of the by-laws, agreement, provision
of the Articles of Incorporation, vote of stockholders or disinterested
directors, provision of law or otherwise.
5.9 Insurance. The
Company shall at all times during the Term of this Agreement maintain a standard
policy of D&O insurance covering the actions of the Board, including those
of Director, on behalf of the Company, in an amount to be determined by the
Board.
6. General
Provisions.
6.1 Modification
and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
6.2 Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which together shall be deemed to be one and
the same agreement.
6.3 Severability. If
any provision of this Agreement (or any portion thereof) is held by an
arbitrator or court of competent jurisdiction to be invalid, illegal or
unenforceable for any reason whatever: (a) such provision shall be limited or
modified in its application to the minimum extent necessary to avoid the
invalidity, illegality or unenforceability of such provision and such modified
provision shall be reduced to a writing and signed by the parties hereto; (b)
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby; and (c) to the
fullest extent possible, the provisions of this Agreement shall be construed so
as to give effect to the intent manifested by the provision (or portion thereof)
held invalid, illegal or unenforceable.
6.4 Notices. Any
notice or other communication in connection with this Agreement may be made and
is deemed to be given as follows: (i) if in writing and delivered in person or
by courier, on the date when it is delivered; (ii) if by facsimile, when
received at the correct number (proof of which shall be an original facsimile
transmission confirmation slip or equivalent); or (iii) if sent by certified or
registered mail or the equivalent (return receipt requested), on the date such
mail is delivered, unless the date of that delivery is not a Business Day or
that communication is delivered on a Business Day but after the close of
business on such Business Day in which case such communication shall be deemed
given and effective on the first following Business Day. Any such notice or
communication given pursuant to this section shall be addressed to the intended
recipient at its address or number (which may be changed by either party at any
time) specified as follows:
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If to
Company:
Attention:
President
0000
Xxxxxxxxxx Xxxxxx
Xxx
Xxxxx, XX 00000
Fax:
000.000.0000
If to
Director:
____________________
____________________
____________________
____________________
6.5 Governing
Law; Venue. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, without regard to
conflicts of law principles thereof. Venue for any suit or action to enforce or
interpret this Agreement shall lie exclusively in the State and Federal courts
of San Diego County, California.
6.6 Attorney
Fees. If any suit or action is instituted to enforce or
interpret this Agreement, the prevailing party shall be entitled, in addition to
the cost of disbursements otherwise allowed by law, such sum as the court or
arbitrator may adjudge reasonable attorneys’ fees in such suit or
action.
6.7 Entire
Agreement. This Agreement and the exhibit hereto constitute the agreement
of the parties as it relates to this subject matter and does hereby supersede
all other agreements of the parties relating to the subject matter
hereof.
IN
WITNESS WHEREOF, the parties hereto have executed this Board of Directors
Service and Indemnification Agreement as of the Effective Date.
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DIRECTOR
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A
Nevada corporation
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______________________________
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______________________________
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By:
___________________________
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[Name]
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Its:
___________________________
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