EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

 

THIS Employment Agreement (“Agreement”) is made and executed effective as of
November 16, 2014 (the “Effective Date”), by and between Midwest Energy
Emissions Corp., a Delaware corporation (the “Company”) and John Pavlish
(“Employee”). The Employee agrees to a start date of November 16, 2014 (Employee
Start Date).

 

RECITALS:

 

WHEREAS, the Company desires to employ the Employee on the terms and conditions
set forth herein; and

 

WHEREAS, the Employee desires to be employed by the Company on such terms and
conditions.

 

NOW, THEREFORE, in consideration of the mutual undertakings of the parties set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
Employee agree as follows:

 

1.  Employment.  The Company hereby employs Employee, and Employee hereby
accepts employment with the Company, on the terms and conditions set forth in
this Agreement.  During Employee’s employment, Employee shall serve as the
Senior Vice President and Chief Technical Officer of the Company.  Employee’s
duties and responsibilities as an employee of the Company shall include
advisory, technical and other services as are reasonably expected from a person
in the position of the Senior Vice President and Chief Technical Officer of the
Company, and/or such other or additional duties and responsibilities as are
reasonably assigned to Employee from time to time by the Chief Executive
Officer. While serving as Senior Vice President and Chief Technical Officer,
Employee shall report directly to the Chief Executive Officer.

 

2.  Devotion to Duties.  Employee shall devote such time, attention, energy,
skill and efforts to his duties and responsibilities hereunder and to the
business of the Company and, as applicable, its Affiliates (as defined below),
as is reasonably necessary to enable Employee to carry out such duties
efficiently and effectively.  During his employment, Employee shall not be
engaged in any other business activity that conflicts with his duties and
responsibilities to the Company or with the business of the Company, whether or
not such business activity is pursued for gain, profit or other pecuniary
advantage.

 

3.  Location.  Employee shall perform his services as Senior Vice President and
Chief Technical Officer remotely or from the Company’s office located at the
Energy & Environmental Research Center in Grand Forks, ND, or at such location
as otherwise mutually agreed to between the Company and Employee.  Employee
shall be required to travel from time to time as is necessary to perform his
duties and responsibilities on behalf of the Company.

 

 
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4.  Compensation.

 

(a) Base Salary.  For all services rendered by Employee under this Agreement,
the Company shall compensate Employee beginning on the Employee Start Date and
continuing during Employee’s employment, at an annual base rate of $300,000 per
year, payable in accordance with the Company’s standard payroll procedures, as
may exist from time to time (such annual salary, as such may be amended from
time to time, the “Base Salary”). 

 

(b) Stock Option Grant.  Pursuant to the terms of a Stock Option Award Agreement
(the “Award Agreement”) under the Company’s 2014 Equity Incentive Plan, the
Company shall grant to the Employee nonqualified stock options to purchase
common stock of the Company (the “Common Stock”) as follows: (i) on November 16,
2014 (the “2014 Grant Date”), Employee shall be granted options to purchase
2,000,000 shares of Common Stock, and (ii) on November 16, 2015 (the “2015 Grant
Date”), Employee shall be granted options to purchase 1,000,000 shares of Common
Stock (such options that have been granted on the 2014 Grant Date and the 2015
Grant Date are collectively, the “Granted Options” and each of the 2014 Grant
Date and the 2015 Grant Date are referred to herein as a “Date of Grant”).  The
exercise price of an option for each share of Common Stock shall equal the Fair
Market Value of the Common Stock on the applicable Date of Grant. Subject to the
terms of this Agreement and the Award Agreement, the Granted Options shall vest
two years after the applicable Date of Grant and expire five years thereafter.

 

Notwithstanding the previous sentence of this Section 4(b), in the event of (i)
Employee’s termination without Cause, (ii) Employee’s resignation for Good
Reason, or (iii) Employee’s death or Disability, all unvested Granted Options
shall immediately vest.  In the event of the occurrence of items (i)-(iii) of
this paragraph, or upon Employee’s voluntary resignation, the Employee may
exercise any vested options on or before the earlier of (1) the expiration date
specified in the Award Agreement, or (2) the expiration of (A) 12 months if
employment ceased due to death or Disability, or (B) 90 days if employment
ceased as a result of Employee’s termination by the Company without Cause,
Employee’s resignation for Good Reason or Employee’s voluntary resignation,
after which time the Company’s obligation to the Employee with regard to the
Granted Options shall be terminated.  In the event of termination of employment
for Cause, Employee’s right to exercise any Granted Options shall be forfeited
in its entirety. Upon a Change in Control (as defined below) of the Company, any
Granted Options shall vest immediately, or as promptly as practical after, the
date that the Change in Control occurs, but in no event later than 10 calendar
days after the Change in Control occurs.  Upon a Change in Control (as defined
below) of the Company that includes a reduction in Employee’s responsibilities
and salary, the Company shall grant all options and the Granted Options shall
vest immediately.

 

“Change in Control” means: (A) the acquisition by any person or group (as that
term is defined in Section 13 of the Securities Exchange Act of 1934, as
amended) of more than 50% of the outstanding Common Stock, (B) a consolidation
or merger of the Company with another entity, unless immediately after the
transaction, at least 50% in voting power of the outstanding shares or other
equity interests in the surviving entity or its ultimate parent entity are owned
by persons who, immediately before the transaction were shareholders of the
Company, or (C) the consummation of the sale or disposition by the Company or
all or substantially all of the Company’s assets. Notwithstanding the foregoing,
no event or condition will constitute a Change in Control to the extent (but
only to the extent) that, if it were a Change of Control, a 20% tax would be
imposed under Section 409A of the Internal Revenue Code of 1986, as amended.

 

 
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(c) Benefits.  During Employee’s employment, Employee may participate in group
health plans, retirement plans, incentive plans and other employee benefits that
may from time to time be made generally available to executive employees of the
Company subject to the eligibility requirements and other terms, conditions,
plans and policies thereof of general applicability (including applicable
employee contributions).  The Company and its Affiliates reserve the right to
change, amend or terminate any perquisites or benefits provided to senior
management, or other employees in their sole discretion.  Eligibility for any
and all such benefits provided in this Section 4(c)shall terminate on the
termination of the Employee’s employment with the Company, except as otherwise
required by law.  Upon Termination without Cause or Resignation for Good Reason,
any stock options granted to Employee shall vest immediately and Employee shall
have 90 days from termination to exercise vested options. Employee shall be
subject to the policies or procedures that the Company or its Affiliates may
adopt or implement from time to time with respect to its senior management.
 Employee shall be entitled, at his election, to (i) participate in the
Company’s group health plan, or (ii) be reimbursed for Employee’s purchase of an
outside individual health plan.

 

(d) Vacation.  While employed  with the Company, Employee shall be entitled to
six weeks of paid vacation per year.

 

(e) Expense Reimbursement. The Company will reimburse Employee for (or, at the
Company’s option, pay) business travel and other out-of-pocket expenses
reasonably incurred by Employee in the performance of his services hereunder
during the period of Employee’s employment with the Company, in accordance with
the policies of the Company, subject to Employee submitting appropriate receipts
and other documentation in reasonable detail to the Chief Financial Officer.

 

(f) Withholding.  The Company shall be entitled to withhold such amounts on
account of employment and payroll taxes and similar matters required by
applicable law, rule or regulation of any appropriate governmental authority.

 

5.  Termination.

 

(a) Termination without Cause.  The Company may terminate this Agreement and
Employee’s employment hereunder at any time upon giving 30 days prior written
notice to Employee.  Should Company terminate Employee without Cause all stock
options shall be granted and shall vest immediately. Should Company terminate
Employee without cause within 2 years of Employee Start Date, Company agrees to
pay remaining base salary through the remainder of the 2-year period.

 

 
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(b) Termination for Cause.  The Company may terminate this Agreement and
Employee’s employment hereunder for Cause, upon giving written notice thereof to
Employee.  For purposes of this Agreement, “Cause” means any of the following:

 

(i) Employee’s conviction of, indictment for (or its procedural equivalent), or
entering of a guilty plea or plea of no contest with respect to any felony or
any crime of moral turpitude;

 

(ii) the commission by Employee of any act of gross negligence, gross
incompetence, intentional misconduct or repeated insubordination in the
performance of Employee’s duties as an employee of the Company or its
Affiliates;

 

(iii) the commission by Employee of any act of fraud, embezzlement, theft or
dishonesty with respect to the Company or its Affiliates or in connection with
Employee’s employment hereunder;

 

(iv) Employee’s continued insobriety, abuse of alcohol or use of illegal drugs
or other acts or conduct that results in material public disgrace or disrepute
for Employee or the Company;

 

(v) Employee’s failure to comply with the directives or policies of the Company;
or

 

(vi) Employee’s material breach of this Agreement.

 

(c) Voluntary Resignation.  Employee may voluntarily resign and thereby
terminate this Agreement and his employment hereunder, at any time upon at least
30 days prior written notice to the Company.

 

(d) Resignation for Good Reason.  Employee may resign and thereby terminate this
Agreement and his employment hereunder for Good Reason if (i) he gives the
Company at least 30 days prior written notice of such termination, which notice
must be given within 30 days after the initial occurrence of the event
constituting Good Reason and set forth in reasonable detail the occurrence act,
deficiency, conduct, breach or failure of the Company that constitutes Good
Reason (“Good Reason Notice”), and (ii) the Company fails to cure (as determined
by the Board in good faith) such occurrence, act, deficiency, conduct, breach or
failure during the period of 30 days immediately following the date such Good
Reason Notice is given to the Company.  For purposes of this Agreement, “Good
Reason” means any of the following undertaken without the consent of Employee:

 

(i) The Company’s breach of this Agreement;

 

(ii) A material reduction by the Company of Employee’s salary; or

 

(iii) A material diminution by the Company in Employee’s level of duties,
authority or responsibilities for the Company.

 

(e) Death.  This Agreement and Employee’s employment hereunder shall terminate
automatically upon Employee’s death.

 

(f) Disability.  In the event that Employee is unable to perform his services
under this Agreement, due to physical or mental disability or incapacity, for a
continuous period of at least 90 days, or a total of at least 120 days during
any 12 month period, during Employee’s employment with the Company, or if
Employee is determined to be disabled under the Company’s or its Affiliates’
long-term disability plan (if such exists) (each, a “Disability”), the Company
may terminate Employee’s employment hereunder upon written notice, subject to
the Americans with Disabilities Act of 1990, as amended, and other applicable
law.

 

 
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(g) Return of Materials.  Upon termination of Employee’s employment hereunder
for any reason, Employee shall deliver promptly to the Company all computers,
keys, telephones, other electronic devices, card keys, credit cards, files,
correspondence, memoranda, notes, records, drawings, sketches, plans, lists or
other documents or property of the Company or its Affiliates, which are in
Employee’s possession, custody or control.

 

(h) Resignation from Boards.  Upon termination of Employee’s employment
hereunder for any reason, Employee agrees to resign, as of the date of such
termination and to the extent applicable, as a director, manager, governor
and/or officer of the Company or its Affiliates.

 

(i) Provisions that Survive Termination of Employment.  All rights and
obligations of the Company and Employee under this Agreement shall cease as of
the effective date of termination or expiration of employment and the Term,
except that Sections 4(b), 5(g), 5(h), 5(i), 6, 7, 8, 9, and 10 shall survive
such termination or expiration in accordance with their terms.

 

6.  Severance Benefits.

 

Earned Salary.  Upon termination of Employee’s employment for any reason,
Employee shall be entitled to the following (collectively, the “Accrued But
Unpaid Compensation”): (a) Any Base Salary earned, but unpaid, prior to such
termination; (b) Reimbursement for any unreimbursed business expenses properly
incurred by Employee in accordance with Section 4(e) hereof prior to the date of
termination, so long as claims for such reimbursement (accompanied by
appropriate receipts and other supporting documentation) are submitted to the
Company within 45 days following the date of termination; and (c) Such employee
benefits, if any, as to which Employee may be entitled under the terms and
conditions of the Company’s retirement plans, incentive plans, or other employee
benefit plans as of such termination.

 

No other compensation or benefits will be due or payable to Employee upon or
after any termination expiration of this Agreement, except as expressly provided
otherwise in Section 4(b), Section 5(a), and in subsection (b) of this Section 6
or as required by law.

 

7.  Cooperation. During the period of Employee’s employment with the Company and
thereafter, Employee shall reasonably cooperate with the Company, as reasonably
requested by the Company, in any internal investigation or administrative,
regulatory or judicial proceeding relating to matters that occurred during
Employee’s employment period.

 

8.  No Conflicting Agreements.  Employee hereby represents and warrants to the
Company that the execution of this Agreement by Employee and his employment by
the Company and the performance of his duties and responsibilities hereunder
will not violate or be a breach of any agreement with a former employer or any
other person.

 

 
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9.  Restrictive Covenants.

 

(a) Definitions.

 

(i) “Affiliate” means a Person Controlling, Controlled by or under common
Control with, another Person.

 

(ii) “Confidential Information” means all information, trade secrets,
inventions, data, processes, or other records relating to the Company’s or its
Affiliates’ business, financial affairs, or operations, including, but not
limited to, information related to past, present or future business plans,
strategic plans, technical data, technology, source code, software, product or
service requirements, customers, financial information, sales information,
product design, research and development, prices and methods of pricing,
marketing techniques and plans, unannounced products, product and process
information, any rates, analyses, summaries, compilations, studies or other
records and any other information which, if disclosed to others, might be
competitively detrimental to the Company, whether disclosed in any tangible,
written, oral, electronic, visual, or other medium.  Confidential Information
shall also include all information, know-how, trade secrets, technical data,
non-technical data, or other confidential information concerning the operations,
projects, organization, business, or finances of the Company or any third party
to which the Company owes a duty of confidentiality, in whatever form (whether
disclosed in any tangible, written, oral, electronic, visual, or other medium),
that Company or its Representatives (as defined below) learns, generates, or
acquires in conjunction with the prospective business or business relationship
with the Company.Notwithstanding the foregoing, Confidential Information shall
not include information or data which: (i) was independently developed by
Company or its Representatives, provided that such information or data is not
subject to another confidentiality agreement or other obligation of secrecy to
the Company; (ii) becomes available to the public other than as a result of
disclosure by Company or its Representatives; (iii) becomes available to Company
or its Representatives on a non-confidential basis from a source other than the
Company or its Representatives, so long as that source is not prohibited from
disclosing such information or data to Company based on another confidentiality
agreement or other obligation of secrecy to the Company; or (iv) was already in
the possession of Company or its Representatives, as evidenced by written
documentation, prior to receiving such information from the Company.

 

(iii) “Control” means possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of another Person, whether
through ownership of voting securities or equity ownership, by contract or
otherwise, including the holding of more than 50% of the outstanding equity
securities or voting rights of another Person.

 

 
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(iv) “Fair Market Value” of a share of Common Stock as of a given date shall be,
if the Common Stock is listed on any established stock exchange or traded on any
established market, the closing price of the Common Stock on the trading day
immediately prior to the applicable date or, if there is no closing price on the
trading day immediately prior to the applicable date, the closing price on the
last preceding date for which such quotation exists.  In any situation not
covered by the above, the Fair Market Value of a share of Common Stock on any
day will be determined in good faith by the Board and in a manner that complies
with Sections 409A and 422 of the Code.

 

(v) “Person” means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or any other legal entity, or a
governmental entity or any department, agency or political subdivision thereof.

 

(vi) “Customer” means any consumer, retailer, wholesaler, dealer, distributor or
other Person (or any Affiliate thereof), which, at any time during the period of
Employee’s employment with the Company, purchased any product or service
distributed, marketed, installed, sold or provided by the Company or any of its
Affiliates.

 

(vii) “Restricted Period” means that period beginning on the Effective Date and
continuing through the period of Employee’s employment with the Company and for
a period thereafter of nine months immediately following the termination of this
Agreement. Should the Employee be terminated without cause, the restricted
period shall end on the date of termination.

 

(viii) “Restricted Territory” means anywhere in the United States or Canada.

 

(ix) “Representatives” mean the partners, members, managers, directors,
officers, employees, agents, advisors (including, without limitation, attorneys,
accountants, investment bankers, and consultants), lenders, and all affiliates,
of a specified party.

 

(b) Acknowledgements.  Employee hereby acknowledges and agrees that: (i) the
covenants and agreements of Employee contained herein are reasonably necessary
to protect the interests of the Company and are not greater than are necessary
for the protection of the Company in light of the substantial harm that it and
its Affiliates might suffer should Employee breach any of the provisions of said
covenants or agreements, (ii) the period of restriction and geographical area of
restrictions contained herein are fair and reasonable, and the nature, kind and
character of the activities Employee is prohibited to engage in are reasonable
and necessary to protect the Company and its Affiliates, (iii) the products and
services of the Company are or are intended to be marketed, distributed, sold,
installed and provided throughout the Restricted Territory, and it competes with
other businesses that are or could be located in any part of the Restricted
Territory, (iv) the covenants and agreements of Employee contained herein are
material inducements for the Company to enter into this Agreement, and Employee
desires that the Company enter into this Agreement and Employee will materially
benefit herefrom, and (v) the disclosure by Employee of any Confidential
Information to competitors or potential competitors of the Company or its
Affiliates may place the Company or its Affiliates at a competitive disadvantage
and may do monetary or other damage to the Company or its Affiliates.  By reason
of the abilities and experience of Employee, the enforcement of the covenants
and agreements set forth in this Section 9will not prevent him from obtaining
other suitable employment or earning a livelihood in his profession.

 

 
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(c) Non-Competition. 

 

(i) Employee acknowledges that the Confidential Information in his possession
would enable Employee to establish goodwill with the Customers and potential
Customers, and vendors and suppliers, who provide products and services to or on
behalf of the Company, or who receive products or services from the Company and
that the Confidential Information constitutes a valuable asset of the Company or
its Affiliates.  Employee also acknowledges that he has developed relationships
with Customers, potential Customers, vendors, suppliers, employees, contractors
or potential contractors and consultants or potential consultants of the
Company.  Employee further acknowledges and agrees that the scope of the
Restricted Territory and Restricted Period is reasonable and necessary to
protect the legitimate business interests of the Company and its Affiliates.

 

(ii) Accordingly, Employee agrees that during the Restricted Period Employee and
each Affiliate of Employee shall not, anywhere in the Restricted Territory,
directly or indirectly, either alone or in conjunction with any other Person,
conduct, engage in, render services or advice to, finance or participate or
become interested in (in any manner, whether as manager, employee, officer,
director, consultant, contractor, owner, partner or otherwise, or through equity
ownership or other investment or financial interest) any company, enterprise,
venture, entity, business or other Person (other than the Company or its
Affiliates) that engages or proposes to engage in the design, development,
manufacture, production, distribution, marketing, installation or sale of any
mercury removal products or business or related equipment, supplies or products,
that is or are, in whole or in part, the same as, similar to, substitutes for or
competitive with any of the Company’s products or services; provided however,
that the foregoing restriction shall not apply to the ownership of equity
securities obtained prior to employment or ownership of less than one percent of
the outstanding equity securities of a Person having securities that are listed
for trading on a national securities exchange, subject to the other restrictions
and covenants in this Agreement.  The Company acknowledges that Employee is
highly experienced and respected in the utility and engineering services
business areas, and this section does not limit Employee’s work in areas,
markets or with customers for matters unrelated to mercury emissions control.

 

(d) Non-Disclosure of Trade Secrets and Confidential Information. 

 

(i) Employee shall not, at any time from and after the Effective Date, directly
or indirectly, in any manner or capacity either alone or in conjunction with any
other Person, transmit or disclose any Confidential Information to any Person,
concern or entity, and shall not make use of any such Confidential Information,
directly or indirectly except to advance the interests of the Company and its
Affiliates; provided, however, that Employee may disclose or use any
Confidential Information to the extent, and only to the extent, that such
Confidential Information is required to be disclosed (i) in the course of
performing Employee’s duties on behalf of the Company as an employee, or (ii) by
law, provided that Employee must give the Company reasonable advance written
notice of the proceeding or legal requirement requiring such disclosure, so that
the Company may seek a protective order if it chooses to do so. 

 

 
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(ii) Upon termination of Employee’s employment or the request of the Company,
Employee shall deliver to the Company all documents and materials reflecting
Confidential Information in the possession or control of Employee, and shall not
knowingly retain any copies of any such documents or materials.

 

(iii) The restrictions of this Section 9(d) shall apply regardless of whether
the Confidential Information is in written, graphic, computer, recorded,
photographic or any machine-readable form, is orally conveyed to or is otherwise
known by Employee. 

 

(e) Non-Solicitation, Non-Interference.

 

(i) Employee acknowledges and agrees that valuable relationships have been or
will be established between the Company or its Affiliates and their respective
Customers or potential Customers, and that such relationships constitute or will
constitute a valuable asset of the Company or its Affiliates. 

 

(ii) Accordingly, Employee agrees that, during the Restricted Period, with
respect to the Business (as defined below) of the Company, neither Employee nor
any Affiliate of Employee shall directly or indirectly, in any manner or
capacity either alone or in conjunction with any other Person, solicit, entice,
divert, take away or sell or market to, or attempt to solicit, entice, divert or
take away or sell or market to, any Customer, or potential Customer having
relations with the Company or any of its Affiliates.  The “Business” means
mercury emissions control, technology relating thereto and the activities
directly related to such business.

 

(iii) Employee further agrees that, during the Restricted Period, neither
Employee nor any Affiliate of Employee shall, directly or indirectly, in any
manner or capacity either alone or in conjunction with any other Person, induce
or entice or attempt to induce or entice any Customer, potential Customer,
vendor, supplier, distributor, dealer or other Person having relations with the
Company or any of its Affiliates to breach, terminate, limit or modify any
existing contract or other business arrangement with the Company or any of its
Affiliates or take any other action intended to damage or impair any
relationship between the Company or any of its Affiliates and any Customer,
potential Customer, vendor, supplier, distributor or other Person having
business relations with the Company or any of its Affiliates.

 

(f) Non-Solicitation of Employees.  Employee acknowledges and agrees that the
Company’s and its Affiliates’ arrangements, agreements and relationships with
their respective employees and independent contractors and the services provided
by such employees and independent contractors are integral to the operations of
the Company and its Affiliates and that the loss of such arrangements,
agreements and relations would result in irreparable damages to the Company and
its Affiliates.  Accordingly, Employee agrees that during the Restricted Period
neither Employee nor any Affiliate of Employee shall, directly or indirectly, in
any manner or capacity either alone or in conjunction with any other Person,
solicit, entice, divert, take away, hire or engage, or attempt to solicit,
entice, divert, take away, hire or engage, any Person who is an employee or
independent contractor of the Company or any of its Affiliates who has been so
employed or contracted at any time during the 24 months prior to such
solicitation, enticement, diversion, taking away, hiring, engagement or attempt
(it being conclusively presumed by the parties so as to avoid disputes that any
such action within such 24 month period is in violation of this clause). 

 

 
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(g) Third Party Information. Employee acknowledges that the Company and its
Affiliates have received and in the future will receive from third parties
confidential or proprietary information (“Third Party Information”) subject to a
duty on the Company’s and/or its Affiliates’ part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. To the extent it is identified by the Company or the third party to
Employee as such, during the period of Employee’s employment with the Company
and thereafter, Employee will hold Third Party Information in the strictest
confidence and will not disclose to anyone (other than Company personnel and
advisors who need to know such information in connection with their work for the
Company) or use Third Party Information, except as necessary in connection with
the performance of his duties on behalf of the Company as an employee.  In
addition, in the performance of his duties on behalf of the Company, Employee
will not improperly disclose, publish, reverse engineer or use any confidential
information or trade secrets of any former employer or other Person to whom
Employee has an obligation of confidentiality, nor bring onto the premises of
the Company or its Affiliates any unpublished documents or any property
belonging to any former employer or any other Person to whom the Employee has an
obligation of confidentiality unless consented to in writing by that former
employer or Person.

 

(h) Nondisparagement. During the period of Employee’s employment with the
Company and thereafter, Employee shall not make any statements or comments that
disparage the Company or any of its Affiliates, nor any of their products,
officers, directors, employees or businesses, other than statements or comments
made in good faith (i) to members of senior management or Board of Directors of
the Company or its Affiliates in the course of carrying out Employee’s duties on
behalf of the Company during the period of Employee’s employment with the
Company, (ii) regarding employees of the Company to members of senior management
of the Company or its Affiliates or the applicable employee in connection with
internal employee evaluations, reviews or terminations in the course of carrying
out Employee’s duties on behalf of the Company during the period of Employee’s
employment with the Company, (iii) in connection with enforcement of this
Agreement or claims hereunder or (iv) to the extent required by applicable law,
legal process or subpoena.  Likewise, the Company will not make any statements
or comments that disparage Employee other than in good faith (i) to Employee,
(ii) in connection with internal evaluations, reviews or terminations, (iii) in
connection with enforcement of this Agreement or claims hereunder, or (iv) to
the extent required by applicable law, legal process or subpoena.

 

 
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(i) Enforcement and Remedies.

 

(i) Employee acknowledges and agrees that the covenants set forth in this
Section 9 are reasonable and valid in time and scope and in all other respects. 
The covenants set forth in this Agreement shall be considered and construed as
separate and independent covenants.  The parties agree that the existence of any
claim or cause of action by the Employee against the Company or any of its
Affiliates on the one hand, or by the Company or any of its Affiliates against
Employee, on the other hand, shall not constitute a defense to the enforcement
of the restrictive covenants set forth herein, but shall be litigated
separately. Should any part or provision of any covenant be held invalid, void
or unenforceable in any court of competent jurisdiction, such invalidity,
voidness or unenforceability shall not render invalid, void or unenforceable any
other part or provision of this Agreement.

 

(ii) The parties hereunder agree that it is their intention that such covenants
be enforced in accordance with their terms to the maximum extent possible under
applicable law.  The parties further agree that, in the event any court of
competent jurisdiction shall find that any of such covenants or restrictions is
invalid or unenforceable, the invalid or unreasonable term shall be redefined,
or a new enforceable term provided, such that the intent of the parties in
agreeing to the provisions of this Agreement will not be impaired and the
provision in question shall be enforceable to the fullest extent of the
applicable laws.

 

(iii) Without limiting the remedies available to the Company, the parties
acknowledge that a breach of any of the covenants contained in this Section
9will result in material, irreparable injury for which there is no adequate
remedy at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of such a breach or threat thereof by Employee,
the Company shall be entitled to obtain a temporary restraining order and/or a
preliminary or permanent injunction restraining Employee from engaging in
activities prohibited by this Agreement or such other relief as may be required
to specifically enforce any of the covenants hereof without the necessity of
posting any bond or proving actual damages.  Employee hereby waives the claim or
defense that an adequate remedy at law for such a breach exists.  If Employee
breaches any covenant in this Agreement, the applicable period of restriction
shall be extended by the period of the duration of such breach.  Further,
without limiting the remedies available to Employee, the parties acknowledge
that a breach of the covenant in Section 9(h) will result in material,
irreparable injury for which there is no adequate remedy at law, that it will
not be possible to measure damages for such injuries precisely and that, in the
event of such a breach or threat thereof by Company, the Employee shall be
entitled to obtain a temporary restraining order and/or a preliminary or
permanent injunction restraining Company from engaging in activities prohibited
by this Agreement or such other relief as may be required to specifically
enforce any of the covenants hereof without the necessity of posting any bond or
proving actual damages, Company hereby waives the claim or defense that an
adequate remedy at law for such a breach exists.

  

 
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10. Inventions. Company recognizes that Employee has numerous patents and
inventions prior to employment that have been discovered, developed, put into
practice, and commercialized related to mercury control.  The Company recognizes
that rights to these inventions are not to be included in this agreement and
must be negotiated and/or licensed separate from this agreement.

 

(a) Employee acknowledges that Employee’s work on and contributions to any
documents, programs, designs, methodologies, protocols, inventions, discoveries,
innovations, trade secrets, ideas, processes, formulas, data, works of
authorship, know-how, improvements, developments, techniques and other
expressions in any medium, whether patentable or copyrightable, which have been
or will be prepared by Employee, or to which Employee has contributed or will
contribute, related to the Company or its Affiliates or their respective
businesses and in connection with Employee’s services to the Company or any of
its Affiliates, during the period of Employee’s employment with the Company
(collectively, “Works”), are and will be within the scope of Employee’s services
and part of Employee’s duties and responsibilities hereunder.  Employee’s work
on and contributions to the Works will be rendered and made by Employee for, at
the instigation of, and under the overall direction of, the Company, and are and
at all times shall be regarded, together with the Works, as “work made for hire”
as that term is used in the United States copyright laws.  However, to the
extent that any court or agency should conclude that the Works (or any of them)
do not constitute or qualify as a “work made for hire,” Employee hereby assigns,
grants, and delivers exclusively and throughout the world to the Company all
rights, titles, and interests in and to any such Works, and all copies and
versions, including all copyrights and renewals.  Employee agrees to cooperate
with the Company and to execute and deliver to the Company and its successors
and assigns, any assignments and documents the Company requests for the purpose
of establishing, evidencing, and enforcing or defending its complete, exclusive,
perpetual, and worldwide ownership of all rights, titles, and interests of every
kind and nature, including all copyrights, in and to the Works, and Employee
constitutes and appoints the Company as his agent to execute and deliver any
assignments or documents Employee fails or refuses to execute and deliver, this
power and agency being coupled with an interest and being irrevocable. Without
limiting the preceding provisions of this Section 10, Employee agrees that the
Company may edit and otherwise modify, and use, publish and otherwise exploit,
the Works in all media and in such manner as the Company, in its sole
discretion, may determine.

 

(b) Employee shall disclose promptly to the Company, and only to the Company,
any invention or idea of Employee in any way related to the Company or its
Affiliates or their businesses and connected with Employee’s services, the
research or development of the Company or its Affiliates or demonstrably
anticipated research or development (developed alone or with others), conceived
or made during the period of Employee’s employment with the Company and hereby
assigns to the Company any such invention or idea.  Employee agrees to cooperate
with the Company and sign all papers deemed necessary by the Company to enable
the Company to obtain, maintain, protect and defend patents covering such
inventions and ideas and to confirm the exclusive ownership by the Company, of
all rights in such inventions, ideas and patents, and irrevocably appoints the
Company as its agents to execute and deliver any assignments or documents
Employee fails or refuses to execute and deliver promptly, this power and agency
being coupled with an interest and being irrevocable.  This constitutes the
Company’s written notification that this assignment does not apply to an
invention for which no equipment, supplies, facility or trade secret information
of the Company was used and which was developed entirely on Employee’s own time,
unless (i) at the time of conception or reduction to practice, the invention
relates directly to the business of the Company or any of its Affiliates, or to
the Company’s or its Affiliates’ actual or demonstrably anticipated research or
development, or (ii) the invention results from any work performed by Employee
for the Company or any of its Affiliates.

 

 
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(c) All records, designs, patents, business plans, financial statements,
manuals, memoranda, customer lists, customer database, rolodex and other
property delivered to or compiled by Employee by or on behalf of the Company or
any of its Affiliates or representatives, vendors or Customers or potential
Customers which pertain to the Company or its Affiliates shall be and remain the
property of the Company or its Affiliates, as applicable, and be subject at all
times to its discretion and control. This does not include customer lists,
customer databases, rolodex or business card files that were the property of
Employee before being hired by the Company, even where they have been used by
the Employee for the Company’s benefit during the period of Employee’s
employment with the Company. Upon the request of the Company and, in any event,
upon the termination of Employee’s employment with the Company, Employee shall
deliver all such non-excluded materials to the Company. Likewise, all
correspondence, reports, records, charts, advertising materials and other
similar data pertaining to the business, activities or future plans of the
Company or its Affiliates which are collected by Employee shall be delivered
promptly to the Company without request by it upon termination or expiration of
Employee’s employment.

 

11. Miscellaneous. 

 

(a) Assignment; Binding Effect.  Employee understands that he has been selected
for employment by the Company on the basis of his personal qualifications,
experience and skills.  Employee agrees, therefore, that he cannot assign all or
any portion of his performance under this Agreement.  The Company may assign
this Agreement, in whole or in part, to any Affiliate of the Company or to any
assignee or successor to the Company, whether by merger, consolidation, sale of
stock, sale of assets or otherwise, provided, however, that, the Company may not
assign this Agreement to a subsidiary without the prior written consent of
Employee.  Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective heirs, legal representatives, successors and assigns.

 

(b) Complete Agreement; Waiver; Amendment.  This Agreement constitutes a single
integrated contract expressing the entire agreement of the parties, and
supersedes and replaces any and all other agreements or offers, whether written
or oral, express or implied, among the parties with respect to the subject
matter hereof.  This Agreement is the final, complete, and exclusive statement
of expression of the agreement among the parties with respect to the subject
matter hereof, and cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous oral or written agreements.  This Agreement may not
be later modified except by a further writing signed by each of the parties, and
no term of this Agreement may be waived except by a writing signed by the party
waiving the benefit of such term.

 

 
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(c) Notice.  All notices and other communications under this Agreement shall be
in writing and shall be delivered in person or by reputable overnight delivery
(delivery charges prepaid), addressed as follows, and shall be deemed effective
and given when delivered in person or on receipt (or when delivery is refused)
after dispatch by reputable overnight delivery:

 

 

Employee:

John Pavlish

42204 210thSt SW

East Grand Forks, MN  56721

 

 

Company:

Midwest Energy Emissions Corp.

500 West Wilson Bridge Road

 

 

Suite 140

Worthington, Ohio  43085

Attention:  R. Alan Kelley, Chief Executive Officer

  

Any party hereto may change its address specified for notices herein by
designating a new address by notice in accordance with this Section 11(c).

 

(d) Remedies on Breach.  In addition to, and not in limitation of, the
provisions of Section 9 hereof, the parties agree that any breach of this
Agreement by either party may cause irreparable damage to the other party, and
that in the event of such breach the damaged party shall have, in addition to
any and all remedies of law, the right to an injunction, specific performance or
other equitable relief to prevent the violation of any obligations hereunder,
without the necessity of posting a bond or other security.  With respect to any
dispute between the Company and Employee as to the interpretation, terms,
validity or enforceability of (including any dispute about the amount of any
payment pursuant to) this Agreement, the losing party in such dispute shall pay
to the prevailing party all of the prevailing party’s costs and expenses,
including reasonable attorneys’ fees in connection with the enforcement of this
Agreement.

 

(e) Waiver of Breach.The waiver by either party of a breach of any provisions of
this Agreement by either party shall not operate or be construed as a waiver of
any subsequent breach by either party.

 

(f) Governing Law; Permitted Venue.  This Agreement shall in all respects be
governed by and construed in accordance with the laws of the State of Ohio.  The
parties agree that any dispute arising out of or relating to this Agreement, may
be brought in the state or federal courts located in Franklin County, Ohio. 
Each party hereby waives any objection to the personal or subject matter
jurisdiction and venue of such courts. 

 

(g) Waiver of Right to Trial by Jury.  EACH PARTY HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY. 
EACH PARTY (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (ii)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

 
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(h) Severability.  If any portion of this Agreement is held invalid or
inoperative, the other portions of this Agreement shall be deemed valid and
operative and, so far as is reasonable and possible, effect shall be given to
the intent manifested by the portion held invalid or inoperative.

 

(i) Counterparts.  This Agreement may be signed in counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. Facsimile or scanned or pdf and e-mailed
counterpart signatures to this Agreement shall be acceptable and binding on the
parties hereto.

 

(j) Construction.  The headings in this Agreement are for convenience only, are
not a part of this Agreement and shall not affect the construction of the
provisions of this Agreement. As used in this Agreement, the words “include” and
“including”, and variations thereof, shall not be deemed to be terms of
limitation but rather will be deemed to be followed by the words “without
limitation.” No provision of this Agreement shall be construed against or
interpreted to the disadvantage of any party by any court or the government or
judicial authority by reason of such party having or being deemed to have
structured or drafted such provision of this Agreement.

 

[Signature page follows. Remainder of page intentionally left blank.]

 

 
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above. 

 

  MIDWEST ENERGY EMISSIONS CORP.           By /s/ R. Alan Kelley       R. Alan
Kelley, Chief Executive Officer          

EMPLOYEE:

 

 

By: /s/ John Pavlish John Pavlish

 

[Signature Page to Employment Agreement]

 

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