EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is made and entered
into this 25th day of January, 2008 (the "Commencement Date"), by and between
ENTECH, Inc., a Delaware corporation (hereinafter called "ENTECH" or the
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"Company"), and Xxxx X. X'Xxxxx (hereinafter called the "Executive").
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W I T N E S S E T H.
WHEREAS, the Executive desires to enter into an executive employment
relationship with the Company;
WHEREAS, on October 29, 2007, ENTECH, Inc., a Delaware corporation and
predecessor to the Company ("Original ENTECH"), all of the shareholders of
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Original ENTECH (the "Shareholders"), including Executive, WorldWater & Solar
Technologies Corp., a Delaware corporation ("WorldWater"), and WorldWater Merger
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Corp., a Delaware corporation ("Merger Corp."), consummated the transactions
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contemplated by that certain Agreement and Plan of Merger, dated as of October
29, 2007 (the "Merger Agreement"), pursuant to which Original ENTECH was merged
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with and into Merger Corp.;
WHEREAS, upon the closing of the merger of Original ENTECH with and into
Merger Corp., the name of Merger Corp. was changed to ENTECH, Inc.; and
WHEREAS, both the Company and Executive have read and understood the terms
and provisions set forth in this Agreement, have been afforded a reasonable
opportunity to review this Agreement with their respective advisors and intend
that this Agreement supersede and replace in their entirety any and all written
or oral employment or other compensation agreements between Original ENTECH and
Executive, except that Original ENTECH's agreements with Administaff for the
provision of certain payroll, insurance and retirement benefit administration
services shall remain in effect together with the accompanying co-employment
agreement among Executive, Original ENTECH and Administaff.
WHEREAS, the Executive was the President and a stockholder of Original
ENTECH, and, but for the Executive's entering into this Agreement, WorldWater
would not have entered into the Merger Agreement;
WHEREAS, the Company and the Executive desire that the Executive enter into
an executive employment relationship with the Company on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises of each, and other
good and valuable consideration, the parties hereby covenant and agree as
follows:
1. SERVICES AND DUTIES
a. POSITIONS. The Executive shall serve as President of the Company. The
Executive shall report to the Chief Executive Officer of WorldWater and shall
perform such duties, functions and responsibilities consistent with this
position and as shall be prescribed from time to time by the Chief Executive
Officer of WorldWater or the Board of Directors of the Company (the "Board"),
except that in no circumstances shall the Executive be required to relocate
his residence from Tarrant County, Texas (or any county contiguous thereto).
b. DEVOTION OF TIME. During the Employment Period (as defined below)
excluding periods of paid time off and holidays, the Executive shall (i) devote
substantially all of his time, during normal working hours and at such other
times as the Executive's duties may require, to the business and affairs of the
Company, (ii) discharge the responsibilities assigned to the Executive under
this Agreement and (iii) use the Executive's reasonable best efforts to perform
faithfully, effectively and efficiently such responsibilities. During the
Employment Period, it shall not be a violation of this Agreement for the
Executive to (1) serve on corporate, civic or charitable boards or committees,
(2) deliver lectures or fulfill speaking engagements and (3) manage personal
investments, so long as any of the foregoing activities do not materially
interfere with the performance of the Executive's responsibilities in accordance
with this Agreement.
2. TERM; CONTINUATION OF PRIOR AGREEMENTS
a. Subject to Section 4, the Company agrees to employ the
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Executive, and the Executive agrees to be employed by the Company, in accordance
with the terms of this Agreement, for the period commencing on the Commencement
Date and ending on the three year anniversary of the Commencement Date (the
"Original Term" and as extended or shortened in accordance with the terms of
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this Agreement, the "Employment Period"). Thereafter, this Agreement shall
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automatically renew for successive one (1) year term(s) (each, a "Renewal
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Term"), unless either party provides at least sixty (60) days' prior written
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notice of his or its desire not to so renew the then current term (in which case
the term shall expire without renewal.
b. This Agreement is in addition to that certain co-employment
agreement among Executive, as an Original ENTECH employee, and Administaff,
dated January 6, 1999, and that certain agreement between Original ENTECH and
Administaff for the provision of certain payroll, insurance and retirement
benefit administration services, originally signed January 6, 1999 and subject
to an updated rate schedule effective January 7, 2008 through January 6, 2009
(collectively, the "Prior Agreements"); provided, however, that in the event of
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any conflict between this Agreement and the Prior Agreements, the terms of this
Agreement shall control and the Prior Agreements shall be amended as necessary
to conform to the terms of this Agreement. The Company, as successor in
interest to Original ENTECH shall be bound by the terms of such Prior
Agreements
3. COMPENSATION AND RELATED MATTERS
a. BASE SALARY. During the Employment Period, the Executive shall receive
an initial base salary (the "Base Salary") payable by the Company of no less
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than $16,354.00 per month (i.e., $196,248.80 per annum), payable in immediately
available funds as and when the Company regularly pays payroll, but in no
case less frequently than biweekly. The Executive's Base Salary shall be
reviewed periodically and may be adjusted upward, but not downward, as shall be
determined in the sole discretion of the Board.
b. BONUS. The Executive may receive a bonus at any time during the
Employment Period if the Board, in its sole discretion, determines that a bonus
should be paid to the Executive on the basis of the Executive's performance
and/or the Company's performance.
c. STOCK OPTIONS. The Executive shall receive an initial grant of 300,000
stock options, vesting 1/3rd simultaneously with the execution of this
Agreement, 1/3rd on the first anniversary and 1/3rd on the second anniversary
according to the terms of the WorldWater 1999 Incentive Stock Option Plan, as
the same may be amended from time to time.
d. MANAGEMENT INCENTIVE COMPENSATION. In addition to the other compensation
described in this Section 3, the Company will pay to Executive , as additional
consideration, Incentive Compensation (herein so called), calculated as 0.2% of
Gross Revenues (defined below). Incentive Compensation will be paid until the
accumulated total of such Incentive Compensation paid by the Company to the
Executive equals $1,000,000, after which no additional Incentive Compensation
will be paid pursuant to this Section.
x. XXXXX REVENUES. As used herein, the term "Gross Revenues"
shall mean all gross revenues, determined in accordance with generally accepted
accounting principles, of the Company, and all gross revenues of WorldWater and
all affiliates of the Company and WorldWater arising from the sale or licensing
of products, services or assets of the Company.
ii. COMPUTATION AND PAYMENT. Incentive Compensation will be
computed on a quarterly basis, within 30 days after the end of each calendar
quarter. The Company will cause Incentive Compensation in respect of any quarter
to be delivered to the Executive within 45 days after the end of such quarter.
Payments will be made by certified or cashier's check, payable to the order of
the Executive, or by wire transfer to an account designated by the Executive.
Each such payment shall be accompanied by a report, certified by the Chief
Financial Officer of WorldWater, providing in reasonable detail a summary of the
computation of the Earn-Out Payment (which shall include a summary of the
components of Gross Revenues upon which the payment is based). Upon request,
but not more than twice per year, the Company and WorldWater will allow
Executive to review the consolidated financial records of WorldWater and the
Company related to Gross Revenues, at the expense of the Executive, for purposes
of determining compliance with the provisions of this Section 3(d).
iii. CHANGE IN CONDUCT OF COMPANY'S BUSINESS. It is the
intent of the parties that the Incentive Compensation payable to Executive be
based on the success of the business and operations of the Company, as such
business and operations may change following the Closing. Accordingly, if for
any reason part or all of the business of the Company immediately following the
execution of this Agreement is conducted by any entity other than the Company
(whether voluntary, or involuntary, by license, agreement, franchise or
otherwise), the provisions of this Section 3(d) shall apply to the business,
operations (and gross revenues) of such other entity, with the intent that the
Executive will be afforded the full benefit of the provisions of this Section
3(d) as these provisions would apply to such other entity and based on the
assumption that Executive was employed by such other entity.
e. EXPENSES. During the Employment Period, the Executive shall be entitled
to receive prompt reimbursement for all reasonable business and entertainment
expenses incurred by him in performing services hereunder, provided that the
Executive properly accounts therefor to the Company in accordance with Company's
policy concerning reimbursement of business expenses.
f. OTHER BENEFITS. During the Employment Period, the Executive shall be
entitled to participate in and shall receive full benefits under the benefit
plans established by the Board for the employees and executives of the Company
(including without limitation medical, dental, disability and group life
insurance plans and programs), and all incentive, savings and retirement plans,
practices, policies and programs applicable to other employees and
executives of the Company (collectively, the "Company Benefits"), provided, that
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the Company Benefits shall be no less favorable in any manner to the Executive
than the benefits provided by Original ENTECH to the Executive immediately prior
to the Commencement Date (the "Existing Original ENTECH Benefits"), a
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description of which is set forth on Exhibit A hereto. If the Company Benefits
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are at any time less favorable to the Executive than the Existing Original
ENTECH Benefits, the Company may fulfill its obligations under this Section 3(e)
by either providing to the Executive or reimbursing the Executive for the costs
of benefits no less favorable than the Existing Original ENTECH Benefits.
g. PAID TIME OFF & HOLIDAYS. During the Employment Period, the Executive
shall be entitled to reasonable Paid Time Off (PTO) and holidays, consistent
with his position and the Company's vacation policy as determined in the sole
discretion of the Board. The Executive shall be entitled to a minimum of four
(4) weeks (160 hours) of PTO and ten (10) days for holidays during any
employment year without loss or diminution of compensation. The PTO policies of
the Company as determined by the Board in accordance with this Agreement,
shall apply to the Executive, and shall supersede and replace the policies of
Original ENTECH in all respects, provided that the Executive will be deemed to
have served as of the Commencement Date the same number of years of employment
for the Company as he previously served as an employee of Original ENTECH. All
days of PTO shall accrue to the Executive, and the Executive, at his sole
option, shall be able to either: (i) carry-forward any unused days that were
earned during a calendar year into the next succeeding calendar year, but not
thereafter, or (ii) as an alternative, Executive may elect to be paid in full on
December 31st for unused days that he earned during the same calendar year (or
the days carried forward from the prior year), if Executive provides written
notice to the Company prior to December 15th of the then current year of
Executive's election to receive payment in lieu of carry-forward.
4. TERMINATION
The Executive's employment hereunder may be terminated by the Company
or the Executive under the following circumstances:
A. MUTUAL AGREEMENT. The Executive's employment shall terminate upon the
execution of a mutual written agreement between the Executive and the Company.
B. DEATH. The Executive's employment shall terminate upon the death of the
Executive.
C. DISABILITY. The Company may terminate the Executive's employment if the
Executive is unable to perform his duties on a full-time basis because of
the Executive's inability, during the Employment Period, to perform his duties
under this Agreement, with or without reasonable accommodation, for a period of
more than one hundred eighty (180) days due to mental or physical incapacity as
determined by a physician selected by the Company or its insurers and reasonably
acceptable to the Executive or the Executive's legal representative
("Disability"). In the event of a Disability, the Executive's employment with
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the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive so long as Executive has not returned to full-time
performance within thirty (30) days of his receipt of such notice.
D. TERMINATION FOR CAUSE. The Company may terminate the Executive's
employment for "Cause." For purposes of this Agreement, "Cause" means:
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i. the failure by the Executive to substantially perform his duties as
outlined hereunder or to follow the reasonable directions of the Board after
written demand for substantial performance is delivered by the Board and failure
to substantially perform such duties or follow such directions within
thirty (30) days following receipt of such written demand;
ii. the engaging by the Executive in conduct that is materially injurious to
the Company, monetarily or otherwise, including, without limitation,
conduct which violates Sections 1(a) or 10(a) of this Agreement, or Sections
7.1, 7.2 or 7.3 of the Merger Agreement, or any other material breach of
Executive's post-closing covenants and obligations thereunder, and failure to
desist from such conduct after being notified in writing that such conduct is
materially injurious to the Company;
iii. the engaging by the Executive in criminal conduct or conduct
constituting moral turpitude; or
iv. the engaging by the Executive in employment practices which violate
federal, state or local law.
e. TERMINATION WITHOUT CAUSE. Notwithstanding any provisions of this
Agreement to the contrary, the Company may terminate the Executive's employment
Without Cause. For purposes of this Agreement, "Without Cause" shall mean
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a termination by the Company of the Executive's employment for no reason or for
any reason other than those specified in the foregoing paragraphs (a), (b), (c)
or (d) at any time effective upon delivery of thirty (30) days written notice by
the Chief Executive Officer of the Company or the Board.
f. TERMINATION WITH "GOOD REASON." Notwithstanding any provision of this
Agreement to the contrary, Executive may terminate his employment hereunder for
Good Reason, subject to the requirement that Executive shall provide the
Company with a minimum of thirty (30) days prior written notice of his intent to
terminate, except in the case of nonpayment of compensation hereunder in which
event Executive may terminate on fifteen (15) days prior written notice. For
purposes of this Agreement, Executive shall have "Good Reason" to terminate his
employment hereunder upon the occurrence, without Executive's written consent,
of any of the following: (i) a failure by the Company to pay to Executive any
amounts due under this Agreement in accordance with the terms hereof, which
failure is not cured within fifteen (15) days following receipt by the Company
of written notice from Executive of such failure; (ii) any other material breach
by the Company of this Agreement that remains uncured for thirty (30) days after
written notice thereof by Executive to the Company (provided, the mere change or
rearrangement of the Executive's title, responsibilities or duties shall not be
considered a breach by the Company of this Agreement as long as the Executive
continues in a capacity as a part of the executive management team of the
Company following such change); (iii) WorldWater's material breach of Section 2
of the Merger Agreement or any other post closing covenants and obligations of
WorldWater thereunder or WorldWater's material breach of its obligations under
that certain Registration Rights Agreement, dated of even date herewith, between
WorldWater and the stockholders of Original ENTECH; or (iv) the relocation of
the Company's principal offices to a location outside Tarrant County, Texas (or
any county contiguous thereto), or a requirement by the Board that the Executive
relocate the Executive's residence, from Tarrant County, Texas (or any county
contiguous thereto).
g. VOLUNTARY RESIGNATION. The Executive may terminate this Agreement
("Voluntary Resignation"), effective upon thirty (30) days' written notice to
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the Board.
5. COMPENSATION AND PAYMENTS UPON TERMINATION
The Executive shall be entitled to the following compensation from the
Company (in lieu of all other sums payable to the Executive hereunder) upon the
date of termination of Executive's employment (the "Termination Date").
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a. MUTUAL AGREEMENT. If the Executive's employment is terminated as a
result of mutual agreement, the Company shall pay to Executive the Executive's
Base Salary through the Termination Date as and when the Company regularly pays
payroll, and the Company shall pay within thirty (30) days after the
Termination Date, a lump sum payment for the value of all accrued, earned and
unused benefits under the Company Benefits through the Termination Date, and the
Executive will be entitled to receive any vested pension and retirement benefits
(for all purposes of this Agreement, all such accrued, vested, earned and unpaid
items through the applicable Termination Date, other than Base Salary, are
referred to as the "Earned Amounts").
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b. DEATH. If the Executive's employment is terminated as a result of death,
the Company shall pay the Executive's Base Salary through the Termination
Date as and when the Company regularly pays payroll, and the Company shall pay
within thirty (30) days after the Termination Date the remaining Earned Amounts
to the Executive's estate.
c. DISABILITY. If the Executive's employment is terminated as a result of
Disability, the Executive will be provided all short and long term disability
benefits to which he may be eligible (if any) in accordance with the Company's
then existing Company Benefits, and the Company shall pay the Executive's Base
Salary through the Termination Date as and when the Company regularly pays
payroll, and the Company shall pay within thirty (30) days after the Termination
Date the remaining Earned Amounts.
d. WITHOUT CAUSE; GOOD REASON. If the Executive's employment is terminated
Without Cause, or if the Executive terminates his employment for Good
Reason and Executive is not in material breach of this Agreement or the Merger
Agreement, and no grounds exist for the Company to terminate Executive for
Cause, the Company shall pay to the Executive: (i) the Executive's Base Salary
through the Termination Date as and when the Company regularly pays payroll (ii)
the remaining Earned Amounts in a lump sum in cash within thirty (30) days after
the Termination Date; and (iii) beginning on the day after the Termination Date,
and payable as and when the Company regularly pays payroll, an amount equal to
the aggregate total of the Executive's then current Base Salary as would
otherwise be payable for the period from the Termination Date until the
expiration of the Original Term or the Renewal Term in effect when the
Termination Date occurs. If the Company fails to make any payment required to be
made pursuant to this Section 5(d) and such failure continues for a period of
three days after notice of such failure is provided in writing by Executive to
the Company, then in such event the Company shall be deemed not to have made
"timely payments in full compliance with its obligations under Section 5(d) of
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this Agreement".
e. TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. If the Executive's
employment is terminated for Cause or the Executive terminates his employment
without Good Reason, or Executive voluntarily elects to terminate this Agreement
pursuant to the provisions of Section 4(g), the Company shall pay the
Executive the Earned Amounts in a lump sum in cash within thirty (30) days after
the Termination Date and the Company shall have no further obligations to the
Executive, except as provided under Section 5(f) below.
f. EFFECT OF TERMINATION/CHANGE OF CONTROL ON STOCK OPTIONS. The Options
granted under Section 3(c) of this Agreement, and any further grant of options
to purchase WorldWater common stock to the Executive, if any, as approved in the
sole discretion of the Board, shall include applicable provisions
pertaining to the effect on all such options of the termination of Executive's
employment hereunder. In addition, the terms of such options shall provide that
vesting of such options shall accelerate upon a change of control of WorldWater.
6. NON-DISCLOSURE
a. CONFIDENTIAL INFORMATION. By virtue of his employment with the Company,
Executive will have access to confidential, proprietary, and highly
sensitive information relating to the business of the Company and WorldWater and
in each case, which is a valuable, competitive and unique asset of the Company
and of WorldWater ("Confidential Information"), the confidentiality of which is
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essential to each of the Company's and WorldWater's ability to differentiate its
products and services. Such Confidential Information includes all information
which relates to the business of the Company and of WorldWater, which is or has
been disclosed to Executive orally or in writing by the Company or WorldWater or
obtained by virtue of work performed for the Company or WorldWater, is or was
developed by the Company or WorldWater, and is not generally available to or
known by individuals or entities within the industry in which the Company is or
may become engaged or readily accessible by independent investigation. The
Confidential Information sought to be protected includes, without limitation,
information pertaining to: (i) the identities of customers and clients with
which or whom the Company or WorldWater does or seeks to do business, as well as
the point of contact persons and decision-makers at these customers and clients,
including their names, addresses, e-mail addresses and positions; (ii) the past
or present purchasing history and the past and/or current job requirements of
each past and/or existing customer and client; (iii) the volume of business and
the nature of the business relationship between the Company and WorldWater and
their respective customers and clients; (iv) the pricing of the Company's and
WorldWater's respective products and services, including any deviations from
their standard pricing for particular customers and clients; (v) the Company's
and WorldWater's business plans and strategies, including customer or client
assignments and rearrangements, sales and administrative staff expansions,
marketing and sales plans and strategies, proposed adjustments in compensation
of sales personnel, revenue, expense and profit projections, industry analyses,
and any proposed or actual implemented technology changes; (vi) information
regarding the Company's and WorldWater's respective employees, including their
identities, skills, talents, knowledge, experience, and compensation; (vii) the
Company's and WorldWater's respective financial results and business condition;
and (viii) computer programs and software developed by the Company and/or
WorldWater and tailored to the Company's and/or WorldWater's needs by any of
their employees, independent contractors, consultants or vendors; (ix)
information relating to the Company's and WorldWater's respective architects,
designers, contractors, or persons likely to become architects, designers, or
contractors; (x) any past or present merchandise or supply sources in the
future; (xi) technical and non-technical information including patent,
copyright, trade secret, proprietary information, methods, ideas, concepts,
designs, inventions, know-how, processes, software programs, software source
documents and formulae related to the current, future and proposed products and
services of the Company and/or of WorldWater including research, experimental
work, development, design details and specifications and engineering, financial
statements, forecasts, plans (whether business, strategic, marketing or other),
client lists, prospective client lists, sales data, sales analysis, equipment
and other assets, prices, costs, sources of supplies, pricing methods,
personnel, marketing research, and business relationships, whether or not marked
"Confidential" or "Proprietary". Confidential Information may be contained on
the Company's and/or WorldWater's computer network, in computerized documents or
files, or in any written or printed documents, including any written reports
summarizing such information.
b. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. The Executive acknowledges that
the WorldWater's and the Company's Confidential Information will be disclosed to
the Executive throughout his employment with the Company in order to enable
Executive to perform his duties for the Company. The Executive further
acknowledges that, prior to his employment with the Company, Executive was
either unfamiliar with the Company's Confidential Information or Executive
developed such Confidential Information for the benefit of the Company and was
otherwise compensated for such services outside of the terms of this Agreement.
Finally, Executive acknowledges that the unauthorized disclosure of Confidential
Information could place the Company or WorldWater at a competitive disadvantage.
Consequently, the Executive agrees, except in connection with the specific
duties of the Executive in connection with his employment for and on behalf of
the Company under this Agreement: (i) not to use, publish, disclose or divulge,
directly or indirectly, at any time, any Confidential Information for his own
benefit and for the benefit of any person, entity, or corporation other than the
Company or WorldWater, to any person who is not a current employee of the
Company or WorldWater, without the express, written consent of the Company; (ii)
not tA. make copies of Confidential Information without prior written consent of
the Company; (iii) to take reasonable precautions to protect against the
inadvertent disclosure of such Confidential Information or theft or
misappropriation by others; and (iv) not to use such Confidential Information.
c. Notwithstanding the foregoing, the confidentiality and nondisclosure
provisions contained herein with respect to any portion of the Confidential
Information shall terminate when the Executive can document that the
Confidential Information:
i. was in the public domain at the same time it was communicated to the
Executive by the Company;
ii. entered the public domain subsequent to the time it was communicated to
the Executive by the Company through no fault of the Executive;
iii. was in the Executive's possession free of any obligation of confidence
at the time it was communicated to the Executive by the Company;
iv. was rightfully communicated to the Executive free of any obligation of
confidence subsequent to the time it was communicated to the Executive by the
Company;
v. was developed by the Executive independently of and without any reference
to any information communicated to the Executive by the Company; or
vi. was communicated in response to a valid subpoena or order by a court or
by a governmental body, provided that the Executive complies with the
provisions of Section 6(e) below.
d. SURVIVAL OF EXECUTIVE'S OBLIGATIONS. The Executive understands and
agrees that his obligations under this Section 6 shall survive the termination
of this Agreement and/or his employment with the Company for a period of two (2)
years after the last day of the Employment Period regardless of the reason
for such termination. The Executive further understands and agrees that his
obligations under this Section 6 are in addition to, and not in limitation or
preemption of, all other obligations of confidentiality which he may have to the
Company under general legal or equitable principles, or other policies
implemented by the Company and under the Merger Agreement.
e. CERTAIN DISCLOSURES. In the event that the Executive receives a
request to disclose all or any part of the Confidential Information under the
terms of a subpoena or order issued by a court or by a governmental body, the
Executive agrees (i) to notify the Company immediately of the existence, terms,
and circumstances surrounding such request, (ii) to consult with the Company on
the advisability of taking legal available steps to resist or narrow such
request with the Company bearing the responsibility for payment for such
possible legal steps; and, and (iii) if disclosure of such Confidential
Information is required to prevent the Executive from being held in contempt or
subject to other penalty, to furnish only such portion of the Confidential
Information as, in the opinion of counsel to the Executive, and/or counsel to
the Company, it is legally compelled to disclose and to exercise its best
efforts to obtain an order or other reliable assurance that confidential
treatment will be accorded to the disclosed Confidential Information.
7. RETURN OF COMPANY PROPERTY
The Executive acknowledges that all memoranda, notes, correspondence,
databases, computer discs, computer files, computer equipment and/or
accessories, pagers, telephones, passwords or pass codes, records, reports,
manuals, books, papers, letters, CD Roms, keys, Internet database access codes,
client profile data, job orders, client and customer lists, contracts, software
programs, information and records, drafts of instructions, guides and manuals,
and other documentation (whether in draft or final form), and other sales,
financial or technological information relating to the Company's business, and
any and all other documents containing Confidential Information furnished to
Executive by any representative of the Company or otherwise acquired or
developed by him with Company funds in connection with his association with the
Company (collectively, "Recipient Materials") shall at all times be the property
of the Company. Within five (5) business days of the termination of his
employment for any reason, Executive will return to the Company any Recipient
Materials which are in his possession, custody or control.
8. NON-SOLICITATION OF CUSTOMERS/CLIENTS
a. ACCESS TO CONFIDENTIAL INFORMATION. Executive acknowledges that the
special relationship of trust and confidence between him, the Company, and its
clients and customers creates a high risk and opportunity for Executive to
misappropriate the relationship and goodwill existing between the Company and
its clients and customers. Executive further acknowledges and agrees that it is
fair and reasonable for the Company to take steps to protect itself from
the risk of such misappropriation. Executive further acknowledges that, at the
outset of his employment with the Company and/or throughout his employment with
the Company, Executive has been or will be provided with access to and informed
of the Company's Confidential Information, which will enable him to benefit from
the Company's goodwill and know-how.
B. INEVITABLE DISCLOSURE. During the period in which the non-competition
covenant in Section 10 hereof is applicable to the Executive, the Executive
acknowledges that it would be inevitable in the performance of his duties as a
director, officer, employee, investor, agent or consultant of any person,
association, entity, or company that competes with the Company, or that intends
to or may compete with the Company, to disclose and/or use the Company's
Confidential Information, as well as to misappropriate the Company's goodwill
and know-how, to or for the benefit of such other person, association, entity,
or company. Executive also acknowledges that, in exchange for the execution of
the non-solicitation restriction set forth in Section 8(c), he has received
substantial, valuable consideration, including the consideration set forth in
Sections 3 and 5 above. The parties acknowledge that, notwithstanding the
provisions of this Section 8 (b), the Executive's performance of any duties as a
director, officer, employee, investor, agent or consultant of any person,
association, entity, or company that competes with the Company, or which intends
to or may compete with the Company, outside of the period in which the
non-competition covenant in Section 10 hereof is applicable to the Executive
shall not inevitably result in the disclosure and/or use the Company's
Confidential Information or the misappropriation of the Company's goodwill and
know-how, to or for the benefit of such other person, association, entity, or
company. Executive further acknowledges and agrees that this consideration
constitutes fair and adequate consideration for the execution of the
non-solicitation restriction set forth in this Section 8.
c. NON-SOLICITATION OF CUSTOMERS. Ancillary to the enforceable promises set
forth in this Agreement, including, without limitation, the promises
contained in Sections 3, 6 and 7, as well as to protect the vital interests
described in those Sections and the value of the Company's business purchased by
WorldWater on the Commencement Date from Executive as one of the selling
stockholders, the Executive agrees that, (i) during the Employment Period and
the time thereafter during which the Company is making timely payments in full
compliance with its obligations under Section 5(d) of this Agreement or (ii) if
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the Executive's employment is terminated for Cause or the Executive terminates
his employment without Good Reason, for a period of twenty four (24) months
following the last day of the Employment Period, Executive will not, without the
prior written consent of the Company, directly or indirectly, alone or for his
own account, or as owner, partner, investor, member, trustee, officer, director,
shareholder, employee, consultant, distributor, advisor, representative or agent
of any partnership, joint venture, corporation, trust, or other business
organization or entity, (i) contact, solicit sales of, or sell, deliver or place
any product, service or system of the kind and character sold, provided,
distributed or placed by Executive on behalf of the Company to any person,
association, corporation or other business organization or entity that Executive
contacted, solicited, called upon, or served, or that he directed others to
solicit, call upon, or serve, on behalf of the Company, during his employment at
the Company; or (ii) contact, solicit, or seek to divert the business or
patronage of any person, association, corporation, or other business
organization or entity with whom or which Executive had business relations on
behalf of the Company or with whom or which he met or communicated, or with whom
or which he directed others to meet or communicate, for the purpose of offering
to sell or place or soliciting for sale or placement any product, service, or
system of the kind and character sold, provided or distributed by him, on behalf
of the Company, during his employment at the Company.
d. BREACH. If Executive is found to have violated any of the provisions of
this Section, Executive agrees that the restrictive period of each covenant
so violated shall be extended by a period of time equal to the period of such
violation by him. Executive understands that his obligations under this Section
shall survive the termination of his employment with the Company and shall not
be assignable by him.
9. NON-SOLICITATION OF EMPLOYEES AND CONSULTANTS
Executive acknowledges that, as part of his employment or association with
the Company, he will become familiar with the salary, pay scale, capabilities,
experiences, skill and desires of the Company's employees. In order to protect
the confidentiality of such information, as well as to protect the value of the
Company's business purchased by WorldWater on the Commencement Date from
Executive as one of the selling stockholders, the Executive agrees that, (i)
during the Employment Period and the time thereafter during which the Company is
making timely payments in full compliance with its obligations under Section
5(d) of this Agreement or (ii) if the Executive's employment is terminated for
Cause or the Executive terminates his employment without Good Reason, for a
period of twenty four (24) months following the last day of the Employment
Period, Executive shall not recruit, hire, solicit, or attempt to recruit,
hire or solicit, directly or by assisting others, any other employees or
consultants employed by or associated with the Company, nor shall he contact
or communicate with any other employees or consultants of the Company for the
purpose of inducing other employees or consultants to terminate their employment
or association with the Company. For purposes of this covenant, "other employees
or consultants" shall refer to permanent employees, temporary employees, or
consultants who were employed by, doing business with, or associated with the
Company within six (6) months of the time of the attempted recruiting, hiring or
solicitation. The Executive's obligations under this Section 9 shall survive the
termination of this Agreement and the Executive's employment with the Company.
10. RESTRICTIONS ON COMPETITIVE EMPLOYMENT
a. COVENANT OF THE EXECUTIVE. In consideration of the Company's entering
into this Agreement, the Company's agreement to provide the Executive with
Confidential Information and specialized training, and the Company's agreement
to provide the Base Salary and other benefits to the Executive, the receipt and
sufficiency of which are hereby acknowledged by the Executive, the Executive
covenants as follows:
i. during the Employment Period and the time thereafter during
which the Company is making timely payments in full compliance with its
obligations under Section 5(d) of this Agreement, the Executive will not,
------------
directly or indirectly, participate in the ownership, management, operation,
financing or control of, or be employed by or consult for or otherwise render
services to, any person, corporation, firm or other entity that is engaged in a
Competing Business (as defined below) within the Restricted Territory (as
defined below), nor shall the Executive engage in any such other activities
that conflict with the Executive's obligations to the Company. Notwithstanding
the foregoing, the Executive is permitted to own up to five percent (5%) of any
class of securities of any corporation that is traded on a national securities
exchange.
ii. if the Executive's employment is terminated for Cause or the
Executive terminates his employment without Good Reason, for a period of twenty
four (24) months following the Employment Period, the Executive will not,
directly or indirectly (a) engage in a Competing Business within the Restricted
Territory, or (b) participate in the ownership, management, operation, financing
or control of, or be employed by or consult for or otherwise render services to,
any person, corporation, firm or other entity that is engaged in a Competing
Business within the Restricted Territory, or (c) undertake planning for or
organization of any Competing Business or conspire with agents, employees,
consultants, or other representatives of the Company for the purpose of
organizing any such Competing Business. Notwithstanding the foregoing, the
Executive is permitted to own up to five percent (5%) of any class of securities
of any corporation that is traded on a national securities exchange.
b. REFERENCES TO COMPANY. All references to the Company set forth in this
Section 10 shall be deemed to include all subsidiaries or other entities which
are controlled by, or under common control with, the Company.
c. DEFINED TERMS. For purposes of this section, "Restricted Territory" shall
mean within a fifty (50) mile radius of any city in which the Company has
provided and currently provides or intends to provide its products or services.
For purposes of this section, the term "Competing Business" shall mean any
business which (1) designs, develops, markets or operates any concentrating
solar technology or collimating tubular skylight technology that competes with
the Company's solar technology; (ii) designs, develops or markets any
concentrating solar technology or collimating tubular skylight technology
related to, or similar to the Company's solar technology; (iii) conducts
business activities related to or similar to the Company business (or its
affiliates) as conducted or as proposed to be conducted.
11. REASONABLE RESTRICTIONS
The Executive agrees that the restrictions set forth above are ancillary to
an otherwise enforceable agreement, is supported by independent valuable
consideration, and that the limitations as to time, geographical area, and scope
of activity to be restrained by Sections 6, 7, 8, 9 or 10 are reasonable and
acceptable, and do not impose any greater restraint than is reasonably necessary
to protect the goodwill and other business interests of the Company. Executive
agrees that if, at some later date, a court of competent jurisdiction determines
that any of the restrictive covenants set forth in this Agreement do not meet
the applicable requirements under Texas law, such restrictive covenants may be
reformed by the court and enforced to the maximum extent permitted under Texas
law.
12. REMEDIES
In the event that the Executive violates any of the provisions set forth in
Sections 6, 7, 8, 9 or 10 of this Agreement, he acknowledges that the Company
and WorldWater will suffer immediate and irreparable harm which cannot be
accurately calculated in monetary damages. Consequently, the Executive
acknowledges and agrees that the Company shall be entitled to seek immediate
injunctive relief, either by temporary or permanent injunction, to prevent such
a violation. Executive further acknowledges and agrees that any injunctive
relief shall be in addition to any other legal or equitable relief, including
monetary damages, to which the Company would be entitled. In the event that the
Company fails to make timely payments in full compliance with its obligations
under Section 5(d) of this Agreement, the Executive shall, in addition to any
other legal or equitable relief, including monetary damages, to which the
Executive would be entitled, automatically and without any further action being
required on the part of Executive be released from the obligations and
restrictions set forth in Sections 7, 8, 9, 10 and 13 of this Agreement.
13. INVENTIONS, IDEAS/PATENTABLE INVENTIONS
a. INVENTIONS. Any discovery, invention, design, improvement, concept or
other intellectual properties, either patentable or not, made, developed or
conceived by the Executive during the Employment Period and the time thereafter
during which the Company is making timely payments in full compliance with its
obligations under Section 5(d) of this Agreement, which relate to the business
in which the Company is engaged at the time of termination of Executive's
employment with the Company, and which may or may not also constitute
Confidential Information (the "Inventions"), shall be the exclusive property of
the Company and its successors.
b. DISCLOSURE TO THE COMPANY. The Executive agrees to disclose promptly,
in writing, if so requested, to the Company, any Inventions that the Executive
may make, develop or conceive during the Employment Period and the time
thereafter during which the Company is making timely payments in full compliance
with its obligations under Section 5(d) of this Agreement.
c. WORK FOR HIRE. The Executive agrees that the Inventions shall be
deemed "work made for hire" and hereby assigns, and agrees to assign, to the
Company all the Executive's rights, title and interest in any such Inventions,
whether or not during the term of this Agreement such Inventions may be reduced
to practice, and to execute all patent applications, copyright applications,
assignments and other documents, and to take all other steps necessary (but all
at the Company's expense), to vest in the Company the entire right, title and
interest in and to those Inventions and in and to any patents or copyrights
obtainable therefor in the United States and in foreign countries.
d. OBLIGATION TO ASSIGN INVENTIONS TO THE COMPANY. The Executive shall
not be obligated to assign to the Company any Invention made by him during or
after the Employment Period and the time thereafter during which the Company is
making timely payments in full compliance with its obligations under Section 5
(d) of this Agreement which does not relate to any business or activities in
which the Company or WorldWater is or may become engaged, except that the
Executive is so obligated if the same relates to or is based on Confidential
Information to which the Executive shall have had access during and by virtue
of his employment or arises out of work assigned to him by the Company.
14. SUCCESSORS; BINDING AGREEMENT
This Agreement shall be binding upon, and inure to the benefit of, the Company,
WorldWater, the Executive, and their respective successors, assigns, personal
and legal representatives, executors, administrators, heirs, distributees,
devisees, and legatees, as applicable. Without limiting the generality of the
foregoing, the Company may assign this Agreement (or the same may remain with
the Company as a subsidiary of a larger institution), without the consent of
Executive, with such assignee being required to perform the obligations of the
Company hereunder, to any successor of the Company.
15. COMPLETE AGREEMENT
This Agreement sets forth the entire agreement between the Company and Executive
concerning the subject matter hereof, and supersedes all prior written or oral
understandings among or between the Executive and Original ENTECH and
WorldWater.
16. NOTICE
For purposes of this Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be deemed to have been duly
given when (i) delivered personally; (ii) sent by telecopy or similar electronic
device and confirmed; (iii) delivered by overnight express; or (iv) sent by
registered or certified mail, postage prepaid, addressed as follows:
If to the Executive:
Xxxx X. X'Xxxxx
000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Telecopy: N/A (Please send via e-mail instead to
xxxxxxxxxxx@xxxxxxxxxx.xxx, with delivery receipt
request and read receipt request to verify delivery)
with a copy (which shall not constitute notice) to:
Xxxxxxx & Xxxxxx, P.C.
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxx X. Xxxxxxx, Esq.
IF TO THE COMPANY:
ENTECH, Inc.
c/o Worldwater and Solar Technologies Corp.
000 Xxxxxx Xxxxx
Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Telecopy: 609.818.0720
with a copy (which shall not constitute notice) to:
Salvo, Landau, Gruen & Xxxxxx
000 Xxxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
OR TO SUCH OTHER ADDRESS AS ANY PARTY MAY HAVE FURNISHED TO THE OTHER IN WRITING
IN ACCORDANCE HEREWITH, EXCEPT THAT NOTICES OF CHANGE OF ADDRESS SHALL BE
EFFECTIVE ONLY UPON RECEIPT.
17. MISCELLANEOUS
No provision of this Agreement may be modified, waived, or discharged unless
such waiver, modification, or discharge is agreed to in writing signed by the
Executive and the Company. No waiver by either party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.
18. GOVERNING LAW; VENUE
This Agreement shall be governed by and construed in accordance with the laws of
the State of Texas, U.S.A. and its validity, construction, interpretation and
legal effect shall be governed by the laws of the State of Texas, U.S.A.
applicable to contracts entered into and performed entirely therein. The parties
hereby agree that any dispute which may arise between or among them in
connection with this Agreement shall be adjudicated before a court located in
Fort Worth, Texas, and they hereby submit to the exclusive personal jurisdiction
of the courts of the State of Texas located in Fort Worth, Texas and of the
Federal District Courts in or for disputes arising in Fort Worth, Texas with
respect to any action or legal proceeding commenced by any party. Each of the
parties irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. Each of the
parties hereby consents to the service of process in any such action or legal
proceeding on any party anywhere in the world.
19. ATTORNEY FEES
All legal fees and costs incurred in connection with the resolution of any
dispute or controversy under or in connection with this Agreement shall be borne
by the non-prevailing party.
20. COUNTERPARTS
This Agreement may be executed in several counterparts, each of which shall be
deemed to be an original, but all of which together will constitute one and the
same agreement.
21. VOLUNTARY AGREEMENT
The parties acknowledge that each has had an opportunity to consult with an
attorney or other counselor concerning the meaning, import, and legal
significance of this Agreement, and each has read this Agreement, as signified
by their respective signatures hereto, and each is voluntarily executing the
same after, if sought, advice of counsel for the purposes and consideration
herein expressed.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date and year first above written.
COMPANY:
ENTECH, INC.
By: /s/ X. X. Xxxxx
----------------------------------
Name: X. X. Xxxxx
Title: Chief Executive Officer
EXECUTIVE:
/s/ Xxxx X. X'Xxxxx
----------------------------------
Name: Xxxx X. X'Xxxxx
EXHIBIT A
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COMPANY BENEFITS
EXISTING ORIGINAL ENTECH BENEFITS
---------------------------------
The Employee Benefit Plan for Company (ENTECH) employees is provided by
Administaff Companies, Inc., under a service agreement with Company that has
been referenced in earlier sections. The summary of all the benefits is provided
in the Disclosure Schedule provided by ENTECH to WorldWater as part of the
pre-closing documents related to the merger of ENTECH and WorldWater. Details of
the Administaff agreement are provided in Schedule 3.21 (j) of the Disclosure
Schedules.
Adminstaff provides health insurance, dental insurance, life insurance, and a
401k retirement plan for Company employees with the individual employee
selecting his or her contribution rate for the plan. Under a safe-harbor
provision, the Company matches this employee contributions 100% for the first 3%
of the employee's compensation, and 50% for the next 2% of the employee's
compensation, for a total maximum match of 4% of the individual employee's
compensation. This pension/retirement plan provided through Administaff has been
the complete and total pension/retirement provided by Company.
For health and dental benefits, Company has historically paid 82% of the total
cost and the employees have paid 18% of the total cost, resulting in the
employee monthly contributions shown in Schedule B of Schedule 3.21(j) of the
Disclosure Statements.
As part of the Employment Agreements provided in Exhibits D-l to D-5 of the
Merger Agreement, Purchaser agrees that the Administaff benefits plan will be
continued without interruption.
The Administaff plan is negotiated annually. The current effective date is
January 07, 2008 to January 06, 2009.
For employees with 10 years of service, including the employee covered by this
employment agreement, the Company also provides 20 days of Paid Time Off (PTO)
per year. The Company also provides 10 paid holidays per year.
