Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Arista Power, Inc. | f8k111309b_windtamer.htm |
| EX-99.1 - PRESS RELEASE ISSUED NOVEMBER 16, 2009 - Arista Power, Inc. | f8k111309bex99i_windtamer.htm |
| EX-10.2 - STOCK OPTION AGREEMENT BETWEEN WINDTAMER CORPORATION AND WILLIAM SCHMITZ, DATED AS OF NOVEMBER 15, 2009 - Arista Power, Inc. | f8k111309bex10ii_windtamer.htm |
| EX-10.3 - SUBSCRIPTION AGREEMENT BETWEEN WINDTAMER CORPORATION AND WILLIAM SCHMITZ, DATED NOVEMBER 14, 2009 - Arista Power, Inc. | f8k111309bex10iii_windtamer.htm |
Exhibit 10.1
EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT (the
“Agreement”)
is dated as of November 15, 2009 between WINDTAMER CORPORATION, a New
York corporation (the “Company”),
and Mr. William Schmitz (“Mr.
Schmitz” or “Executive”).
R
E C I T A L S:
WHEREAS, the Company is in the
business of developing, manufacturing, licensing and selling wind
turbines;
WHEREAS, the Company desires
to engage Mr. Schmitz as its President and subsequently as its Chief Executive
Officer on the terms and conditions set forth herein;
WHEREAS, amounts paid pursuant
to this Agreement are intended to qualify as performance-based compensation
under Section 162(m) of the Internal Revenue Code (“Code”); and
WHEREAS, Schmitz desires to
accept such employment on the terms and conditions set forth
herein.
P
R O V I S I O N S:
NOW, THEREFORE, in
consideration of the mutual promises and covenants set forth herein, the parties
agree as follows:
1. Employment;
Duties.
(a) The
Company hereby agrees to employ Mr. Schmitz as its President. Mr.
Schmitz hereby accepts such employment. Mr. Schmitz will report to
the Company’s Chief Executive Officer. Mr. Schmitz will perform those
duties and have such authority and powers as are customarily associated with his
position of President and such other duties as the Chief Executive Officer may
reasonably request from time to time. On April 15, 2010, unless the
Board of Directors of the Company unanimously votes otherwise prior to such
date, Executive shall be named Chief Executive Officer of the Company, shall
report to the Board of Directors of the Company and shall perform those duties
and have such authority and powers as are customarily associated with his
position of Chief Executive Officer.
(b) Mr.
Schmitz shall be employed on a full time basis and shall devote substantially
all of his professional business time to the performance of his
duties. Mr. Schmitz shall be based in the Rochester metropolitan
area, or such other mutually agreeable location.
2. Term. The
term (the “Term”) of
this Agreement shall commence on November 15, 2009 (the “Start
Date”), and shall continue for three (3) years from the Start Date unless
otherwise terminated as provided herein (together with any Renewal Term, as
hereafter defined, shall be referred to as the “Term”). This
Agreement shall automatically be extended for successive one (1) year terms
pursuant to the terms and conditions of this Agreement (each, a
“Renewal
Term”), unless otherwise terminated by written notice from one party to
the other no less than sixty (60) days prior to the end of the Term or any
subsequent Renewal Term.
3. Compensation.
(a) Annual
Salary. In consideration for the services rendered by Mr.
Schmitz on behalf of the Company during the Term, the Company shall pay Mr.
Schmitz, commencing on the Start Date, an annual salary equal to: (1) $225,000
during the first year of the Term and (2) $250,000 after the first year of the
Term (the “Base
Salary”), payable in accordance with the Company’s regular payroll
practices. All forms of compensation referred to in this Agreement
are subject to withholding for applicable federal, state and local
taxes.
(b) Bonuses. In
addition to his Base Salary, Mr. Schmitz shall receive a bonus equal to $25,000
upon the Company recording an aggregate of $2.5 million prior to December 31,
2010 of (1) revenue and (2) grants from the federal government or any state
government. In addition to the bonus referred to in the immediately
preceding sentence, Mr. Schmitz shall be eligible to receive a bonus on
approximately the anniversary of the Start Date in an amount, if any, determined
by the Company’s Compensation Committee.
(c) Stock Options. On the
Start Date, Mr. Schmitz shall be issued pursuant to the Company’s 2008 Equity
Incentive Plan stock options to purchase 1,500,000 shares of the Company’s
Common Stock with an exercise price equal to the last trade of the common stock
on its first day of trading on the over-the-counter bulletin board (the “Pricing
Date”) which shall vest 250,000 shares on the first anniversary of the
Start Date, 250,000 on the second anniversary of the Start Date and 1,000,000 on
the third anniversary of the Start Date.
4. Benefits. In
addition to the compensation set forth above, the Company shall provide Mr.
Schmitz with the following benefits during the Term:
(a) Mr.
Schmitz shall be entitled to four (4) weeks of vacation during each
calendar year (pro-rated for any partial calendar year) that he is employed
hereunder during which vacation his annual salary shall be paid in
full. Any vacation not taken by Mr. Schmitz shall not carryover into
the succeeding year. All unused and accrued vacation shall be paid to
Mr. Schmitz (or his estate) upon Mr. Schmitz’ termination of
employment. Such vacation may only be taken at such time or times as
are not inconsistent with the reasonable business needs of the
Company.
(b) The
Company shall provide Mr. Schmitz with up to 5 days of paid sick leave each
calendar year (pro-rated for any partial calendar year); unused sick days shall
not carryover into the succeeding year. The Company also shall
provide Mr. Schmitz with holiday pay as provided by the Company to its other
executives.
(c)
The Company shall make available family medical insurance for Mr. Schmitz under
the medical insurance plan provided to other executives of the Company or a
substantially similar plan. In addition, Mr. Schmitz and his dependents shall be
entitled to
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participate
in such other benefits as may be extended to active employees of the Company and
their dependents including retirement, profit-sharing, 401(k), group insurance,
hospitalization, medical or other benefits made available by the Company to its
employees generally. Further, in the event that the Company desires
to obtain “key man” life insurance on the life of Mr. Schmitz during the Term,
Mr. Schmitz shall cooperate with the Company in obtaining such
insurance.
5. Expenses. Mr.
Schmitz will be entitled to be paid or reimbursed for all expenses reasonably
incurred by him in connection with Mr. Schmitz's responsibilities to the
Company, including, without limitation, for travel, lodging, food, and
entertainment.
6. Confidential
Information. Mr. Schmitz shall not, during the Term or at anytime during
the five (5) years after termination of his employment, disclose, except as
required or necessary in the course of his employment by the Company or as
otherwise authorized by the Company, any Confidential Information (as defined
herein). “Confidential
Information” shall mean any information existing as of the date of this
Agreement, or thereafter developed, in which the Company has a proprietary
interest, including, but not limited to, information relating to its patents,
technology, research and development, technical data, trade secrets, know-how,
products, services, finances, operations, sales and marketing, customers and
customer information, licenses, orders for the purchase or sale of products,
personnel matters and/or other information relating to the Company, whether
communicated orally, electronically or in writing, or otherwise obtained by Mr. Schmitz as a result
of his employment, or through observation or examination of the Company’s
business.
7. Non-Competition
Covenant; Non Solicitation Covenant.
(a) During
the Term and for a period of one year thereafter, Mr. Schmitz agrees that he
will not, directly or indirectly (including, without limitation, whether as
consultant, an officer, employee or director), engage in any business that
manufactures, sells, designs, develops or distributes of wind turbines, or any
business similar to the business in which the Company or similar to those
operated or provided by the Company at such time.
(b) Notwithstanding
anything herein to the contrary, Mr. Schmitz shall not be prevented or limited
from (i) investing in the stock or other securities of any corporation whose
stock or securities are publicly owned and regularly traded on any public
exchange, (ii) serving as a director, officer or member of professional, trade,
charitable and civic organizations, or (iii) passively investing (not to exceed
being a beneficial owner of more than 1% of the outstanding Common Stock) his
assets in such a form and manner as will not conflict with the terms of this
Agreement and will not require services (whether as consultant, an officer,
employee or director) on the part of Mr. Schmitz in the operation of the
business of the entities in which such investments are made.
(c) In
furtherance of the foregoing, Mr. Schmitz shall not, during the aforesaid period
of non-competition as provided in Section 7(a), directly or indirectly, in
connection with any business involved in the manufacture, sale, design,
development or distribution of wind turbines, or any business similar to the
business in which the Company was engaged, or in the
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process
of developing during Mr. Schmitz’s tenure with the Company, solicit any customer
or employee of the Company who was a customer or employee of the Company during
the tenure of his employment.
(d) Mr.
Schmitz agrees that the prohibitions contained herein are reasonable and
valuable to the Company, and are express conditions of the Company’s decision to
employ him. If any court shall hold that the duration, scope or any other
provision of non-competition or any other restriction contained in this Section
7 is unenforceable, it is our intention that same shall not thereby be
terminated but shall be deemed amended to delete therefrom such provision or
portion adjudicated to be invalid or unenforceable or, in the alternative, such
judicially substituted term may be substituted therefore.
8. Termination
of Agreement. This Agreement shall terminate upon the
occurrence of the following events:
(a) This
Agreement shall terminate upon Executive’s death.
(b) The
Company may terminate this Agreement upon Executive’s “total disability” (“Disability”),
which shall mean incapacity due to physical or mental illness or disability,
which renders him absent, or unable to perform his duties hereunder on a full
time basis for a period of six (6) months, whether consecutive or cumulative,
within any twelve (12) month period.
(c) The
Company may terminate this Agreement for “Good Cause” as defined below upon
thirty (30) days prior written notice to Executive, which notice shall specify
the reason(s) for termination. For purposes of this Agreement, “Good
Cause” means (i) willful disobedience by the Executive of a material and
lawful instruction of the Board of Directors or, prior to April 15, 2009 the
Chief Executive Officer, of the Company; (ii) conviction of the Executive of any
misdemeanor involving fraud or embezzlement or similar crime or any felony;
(iii) an order is entered by the Securities and Exchange Commission, a state
regulatory agency or an exchange on which the Company’s securities are traded
finding that Executive has violated the securities laws; (iv) breach by the
Employee of any material term, condition or covenant of this Agreement; (v)
excessive absences from work, other than for illness or Disability, in the case
of breach which is capable of being cured, is not cured within thirty (30) days
after Company has provided Executive with written notice thereof.
(d) Executive
may terminate this Agreement upon sixty (60) days prior written notice to the
Company.
(e) This
Agreement may be terminated upon the mutual agreement of Company and
Executive.
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|
9.
|
Obligations
Following Termination of
Agreement.
|
(a) If this
Agreement is terminated pursuant to Section 8, the Company shall have no
obligation to pay any Severance Payments (as defined below) or benefits to
Executive; provided, however, Company shall be obligated to pay Executive (or in
the case of his death, his spouse, estate or representative) all unpaid salary,
earned bonuses, vacation and other benefits accrued through the date of
termination of this Agreement and shall provide such other benefits, such as
health insurance continuation in the manner required by Section 4980B of
the Code or other applicable law (“COBRA
Coverage”).
(b) If this
Agreement is terminated by Company without “Good Cause” as defined in Section
8:
(i) Executive
shall be paid all unpaid salary, earned bonuses, vacation and other benefits
accrued through the date of termination and shall receive such other benefits,
as may be required by statute, such as health insurance continuation coverage
under COBRA;
(ii) Executive
shall receive as severance payment an amount equal to the Executive’s annual
salary at the rate in effect as of the date of Executive’s termination for the
remainder of the Term; provided, however, the aggregate amount of such severance
payments shall not be less than two times the Executive’s annual
salary. Any severance payments are payable on normal pay dates during
the remainder of the Term in accordance with the Company’s pay policies in
effect prior to termination date. In addition, for the twelve (12)
month period immediately after the termination of this Agreement, Company shall
continue to provide and pay the premium for the health insurance provided to
Executive (and his family, if applicable) immediately prior to the termination
of this Agreement and the Company shall take such actions as are necessary to
cause such COBRA Coverage not to be offset by the provision of benefits under
this Section 9(b)(ii) and to cause the period of COBRA Coverage under the
Company’s health insurance to commence at the end of the twelve (12) month
period. The Executive shall be responsible for the payment of any COBRA premium
during the subsequent continuation period (collectively, the payments under this
clause (ii) are referred to as “Severance
Payments”);
(iii) Executive
shall not be required to mitigate damages of the amount of any salary
continuation payments provided for under this Section by seeking other
employment or otherwise, nor shall the amount of any payments provided for under
this Section be reduced by any compensation earned by Executive as a result of
employment by another employer or by any self employment after the date of
termination;
(iv) All
options for Company capital stock and restricted stock granted to Executive
pursuant to the Company’s 2008 Equity Incentive Plan including, without
limitation, those granted pursuant to Section 3(c) hereof, or otherwise, that
remain unvested shall immediately vest, and Executive shall have a period of 120
days following termination to exercise his vested options, subject to the
provisions of the Company’s 2008 Equity Incentive Plan and applicable IRS
regulations (provided that any delays in payment or settlement set forth
5
in such
grant or award agreements that are required under Section 409A of the Code
shall remain effective).
(c) Upon the
termination of this Agreement for any reason, any and all restrictions (other
than restrictions which are the result of applicable Federal securities laws and
regulations and those restrictions which Executive has entered into with a third
party on a contractual basis) on the transfer of shares of Company’s capital
stock then owned by Executive (which shall include any and all option shares
unvested at the time of the termination) shall be terminated as of the date of
termination of this Agreement.
(d) All of
the obligations of the Company set forth in this Section 9 are contingent upon
the Executive complying with the provisions of section 6 (Confidential
Information) and Section 7 (Non-Competition Covenant; Non Solicitation
Covenant). In the event that Executive does not comply with the
aforementioned sections of this Agreement, then Company shall not be obligated
to provide Executive with any of the benefits set forth in this Section
9.
(e) Notwithstanding
the foregoing provisions of this Section 9 or anything in this Agreement to
the contrary, the Medical Benefits that are not non-taxable medical benefits,
“disability pay” or “death benefit” plans within the meaning of Treasury
Regulation Section 1.409A-1(a)(5) shall be provided and administered in a
manner that complies with Treasury Regulation Section 1.409A-3(i)(1)(iv),
which requires that (i) the amount of such benefits provided during one
taxable year shall not affect the amount of such benefits provided in any other
taxable year, except that to the extent such benefits consist of the
reimbursement of expenses referred to in Section 105(b) of the Code, a
maximum, if provided under the terms of the plan providing such Medical Benefit,
may be imposed on the amount of such reimbursements over some or all of the
period in which such benefit is to be provided to the Executive, as described in
Treasury Regulation Section 1.409A-3(i)(iv)(B), (ii) to the extent
that any such benefits consist of reimbursement of eligible expenses, such
reimbursement must be made on or before the last day of the Executive’s taxable
year following the taxable year in which the expense was incurred and
(iii) no such benefit may be liquidated or exchanged for another
benefit.
10. Indemnification.
The Company shall, to the maximum extent permitted by law, indemnify and hold
harmless Mr. Schmitz against any and all damages, liabilities and expenses,
including, without limitation, reasonable attorneys’ fees, judgments, fines,
expenses, fees, losses, claims, settlements, and other amounts actually and
reasonably incurred in connection with any actual or threatened action, suit or
proceeding, whether civil, criminal, arbitrational, administrative or
investigative, arising by reason of Mr. Schmitz’s employment by, or provision of
services to, the Company other than the willful violation of law by Mr.
Schmitz. The Company agrees to obtain Directors and Officers
Liability insurance, and to include Mr. Schmitz in the coverage of this policy
during the term of this Agreement and for a period of two (2) years
thereafter. The Company shall promptly advance, prior to the final
disposition of any proceeding, promptly following request therefor, all fees and
expenses incurred by Executive in connection with such action, suit or
proceeding upon receipt of an undertaking by or on behalf of
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Executive
to repay said amounts if it shall be determined ultimately that Executive is not
entitled to be indemnified under the provisions of this Agreement.
12. Work-for
Hire. Except as otherwise may be agreed by the Company in
writing, in consideration of the employment of Mr. Schmitz by the Company, and
free of any additional obligations of the Company to make additional payment to
him, Mr. Schmitz agrees to irrevocably assign to the Company any and all
inventions, software, manuscripts, documentation, improvements or other
intellectual property whether or not protected by any state or federal laws
relating to the protection of intellectual property, relating to the present or
future business of the Company that are developed by Mr. Schmitz prior to the
termination of his employment with the Company, either alone or jointly with
others, and whether or not developed during normal business hours or arising
within the scope of his/her duties of employment. Mr. Schmitz agrees
that all such inventions, software, manuscripts, documentation, improvement,
trade secrets or other intellectual property shall be and remain the sole and
exclusive property of the Company and shall be deemed the product of work for
hire. Mr. Schmitz hereby agrees to execute such assignments and other
documents as the Company may consider appropriate to vest all right, title and
interest therein to the Company and hereby appoints the Company as Mr. Schmitz’s
attorney-in-fact with full powers to execute such document itself in the event
Mr. Schmitz fails or is unable to provide the Company with such signed
documents. This provision does not apply to an invention for which no
equipment, supplies, facility, or intellectual property or trade secret
information of the Company was used and which was developed entirely on Mr.
Schmitz’ own time, unless (a) the invention relates (i) to the business of the
Company, or (ii) to the Company’s actual or demonstrably anticipated research or
development, or (b) the invention results from any work performed by Mr. Schmitz
for the Company.
13. Miscellaneous.
(a) This
Agreement:
(i) shall
constitute the entire agreement between the parties hereto and supersedes all
prior agreements, written or oral, concerning the subject matter herein between
the Company and the Mr. Schmitz and there are no oral understandings, statements
or stipulations bearing upon the effect of this Agreement which have not been
incorporated herein;
(ii) may
be modified or amended only by a written instrument signed by each of the
parties hereto;
(iii) shall
bind and inure to the benefit of the parties hereto and their respective heirs,
successors and assigns;
(iv) may
not be assigned by either party without a written agreement signed by all
parties hereto. Any assignment not signed by all parties is null and
void; and
(b) If
any provision of this Agreement shall be held invalid or unenforceable by
competent authority, such provision shall be construed so as to be limited or
reduced to be
7
enforceable
to the maximum extent compatible with the law as it shall then
appear. The total invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
(c) This
Agreement shall be construed in accordance with and governed by the laws of the
State of New York without reference to conflict of laws
principles. Any litigation involving this Agreement shall be
adjudicated in a court with jurisdiction located in Monroe County, New York and
the parties irrevocably consent to the personal jurisdiction and venue of such
court.
(d) All
notices and other communications under this Agreement must be in writing and
must be given by personal delivery or first class mail, certified or registered
with return receipt requested, or by overnight currier service and will be
deemed to have been duly given upon receipt if personally delivered, five (5)
days after mailing, if mailed, or upon delivery if sent by overnight courier
service, to the respective persons named below:
If to the Company:
WindTamer
Corporation
Attn: Chief
Executive Officer
156 Court
Street
Geneseo,
NY 14454
If to Mr. Schmitz:
9 Claret
Drive
Fairport,
NY 14450-4609
Any party
may change such party’s address for notices by notice duly given pursuant to
this Section.
(e) This
Agreement may be executed simultaneously in one or more counterparts, each one
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The parties may execute this Agreement
by facsimile signature.
(f) Failure
of either party at any time to require performance of any provision of this
Agreement shall not limit the party’s right to enforce the provision, nor shall
any waiver of any breach of any provision be a waiver of any succeeding breach
of any provision or a waiver of the provision itself for any other
provision.
8
(g) If
any provision of this Agreement, or the application of such provision to any
person or circumstance, shall be held invalid, the remainder of this Agreement,
or the application of such provision to persons or circumstances other than
those as to which it is held invalid, shall not be affected
thereby.
(h) THE
PARTIES ACKNOWLEDGE THAT MR. SCHMITZ AND THE COMPANY HAVE EACH BEEN ADVISED THAT
IT IS IMPORTANT FOR EACH OF THEM TO SEEK SEPARATE LEGAL ADVISE AND
REPRESENTATION IN THIS MATTER.
[Signature
Page Follows]
9
IN WITNESS WHEREOF, the
parties have executed this Agreement on the day and year first above
written.
WINDTAMER
CORPORATION
By: ___/s/ Gerald E.
Brock______
Name: Gerald
Brock
Title: Chief
Executive Officer
/s/ William
Schmitz________
William Schmitz
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