Exhibit 10.9

NEW ENERGY TECHNOLOGIES INC.

3905 National Drive, Suite 110

Burtonsville, MD 20866

 

Telephone: (800) 213-0689 • Facsimile (240) 390-0603

 

 

August 9, 2010

 

 

John A. Conklin

3489 Pennsylvania Avenue

Apalachin, New York 13732

 

Re:       Your At-Will Employment With New Energy Technologies, Inc.

 

Dear John:

 

            This letter sets forth the terms and conditions of your continued
employment by New Energy Technologies, Inc. (the “Company”).  For the purposes
of this Agreement, capitalized terms used but not otherwise defined in this
Agreement shall have the meanings ascribed thereto in Paragraph 22 hereof.

 

1.        Position and Duties.

 

            (a)        Executive Positions.  You shall be employed by the
Company as its President and Chief Executive Officer and/or such other positions
as the Company’s Board of Directors (the “Board”) may from time to time
designate (collectively, the “Executive Positions”); in performance of your
duties, you shall be subject to the direction of, and be reporting directly to,
the Company's Board of Directors; anything herein to the contrary
notwithstanding, if requested by the Board, you will immediately resign from the
Executive Positions.

 

            (b)        Full Time Efforts. Except during vacations, holidays and
other leave time, you agree to devote your full time efforts, professional
attention, knowledge, and experience as may be necessary to carry on your duties
pursuant to this agreement and the fulfillment of your responsibilities in
accordance with the Executive Positions.  For purposes of clarity, except with
respect to subsidiaries of the Company, you may not render executive services
to, or serve as a director of, any other Person without the prior approval of
the Board.  However, nothing in this Paragraph 1(a) shall be construed as
preventing you from pursuing any of the following:  (i) investing and managing
your personal assets and investments, so long as such assets and investments are
not in businesses which are in direct competition with the Company or otherwise
present a conflict of interest with the Company; and (ii) participating in
civic, charitable, religious, industry and professional organizations and
functions.

 

            (c)        Board Membership.  Subject to shareholder approval if
required, you may also be requested to serve as a Director on the Board; if so
appointed to the Board and subsequently requested by the Board, you will
immediately resign as a member of the Board.   

 

            (d)        Travel. You shall be available to travel as the needs of
the Company’s Business require.

 

            (e)        Code of Ethics.  During your employment with the Company
you agree to adhere to the Company’s Code of Ethics and Business Conduct, a copy
of which is attached hereto as Appendix A.

 

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2.        At-Will Employment.

 

         Anything herein to the contrary notwithstanding, your employment with
and by the Company is “at-will employment” and may be terminated by you or the
Company at any time, with or without cause, and for any reason whatsoever, upon
written notice as provided in Paragraph 10 hereof.

 

3.          Compensation.

 

             You shall be compensated by the Company for your services hereunder
as follows:

 

                        (a)        Salary.  Commencing August 9, 2010 (the
“Start Date”), you shall be paid a monthly salary of $12,500.00 (and as modified
from time to time hereunder, the “Monthly Payment”) ($150,000.00 per year),
subject to applicable tax withholding, the salary is payable in 24 installments
of $6,250 each on the 15th and last day of each calendar month during the term
of this Agreement.  Your salary shall be subject to periodic review and
adjustment in accordance with the Company's salary review policies and practices
then in effect for its senior management.

 

                        (b)         Stock Options.

 

            As an incentive to enter into and undertake employment pursuant to
this Agreement, and to meet certain Company milestones you will be granted stock
options as follows:

 

                                    (i)         Number, Vesting and Exercise
Price. Subject to your execution and delivery of this Agreement and the
definitive Stock Option Agreement substantially in the form of Appendix B hereto
(the “Stock Option Agreement”) you shall receive a total of 2,000,000 options
(the “Options”) to purchase up to an aggregate of 2,000,000 shares of the
Company’s common stock; the Options are subject to and shall have such further
restrictions, vesting requirements and exercise provisions as are set forth in
the Stock Option Agreement. Subject to the foregoing the Option shall vest:

                                                1. as to 500,000 shares or such
portion thereof as may be determined by the Board at its sole discretion, when
one or more of the following items related the development, production,
manufacturing, and sale of any commercially viable product have been
successfully executed:

:

(a) completion of final design and/or engineering;

(b) the establishment of manufacturing facilities, whether in-house or
outsourced; and

(c) the initial filing of any product safety approval applications, if required,
in order to allow for the commercial sale of products by the Company;

 

                                                2. as to 500,000 shares upon
commencing commercial sales of any of the Company’s products, as reported in the
Company's financial statements, whether to retail customers or wholesale
customers;

 

                                                3. 100,000 shares for each
calendar year of service in an Executive Position for the next five years
(500,000 shares in the aggregate), which shall become exercisable as follows:

 

(a)  as to 100,000 shares on August 9, 2011;

(b)  as to 100,000 shares on August 9, 2012;

(c)  as to 100,000 shares on August 9, 2013;

 

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(d)  as to 100,000 shares on August 9, 2014; and

(e)  as to 100,000 shares on August 9, 2015.

 

                                                4. as to 500,000 shares when, to
the Board’s satisfaction, the Company enters into a favorable business
partnership with a third-party commercial organization in the industry segment
related to the Company’s product development and sales efforts, under any of the
following conditions:

 

(a) a product development relationship whereby the third-party partner makes a
significant financial investment, as determined at the Board’s discretion,
directed towards the development of the Company’s products; or

(b) a product development relationship whereby the third-party partner invests
significant research and development resources, as determined at the Board’s
discretion, directed towards the development of the Company’s products; or

(c) a strategic partnership with the third-party partner where, as determined at
the Board’s discretion, such a partnership provides significant business
advantages to the Company which it would otherwise not have, whether related to
product development, commercial sales, industry position, or business
reputation.     

                 

All determinations and calculations with respect hereto shall be made by the
Board or any committee thereof to which the Board has delegated such authority,
in good faith in accordance with applicable law, the Articles of Incorporation
and By-laws of the Company, in its sole discretion, and shall be final,
conclusive and binding on all persons, including you and the personal
representative of your estate.

                        (ii)        Term of the Options.  Subject to the earlier
termination provisions set forth in the Stock Option Agreement, the Option shall
have a term of ten (10) years from the date hereof.  The granting of the Options
shall be effective only upon delivery of a fully executed Stock Option
Agreement.

           

4.    Additional Benefits.

 

            (a)        Vacation.  You shall be entitled to two weeks of paid
vacation each calendar year.  Vacation will accrue on August 9 of each year,
except that in 2010, vacation will accrue on the Start Date.  No compensation
shall be paid for accrued but untaken vacation.

 

            (b)        Medical Insurance.  During the term of this Agreement,
the Company agrees to pay you a monthly stipend of $1,000.00 per month in
addition to your annual salary to cover medical insurance premiums until such
time that the Company can make available an alternative medical insurance plan.

 

             (c)       Other Expenses.  You shall be entitled to reimbursement
for reasonable travel and other out-of-pocket expenses necessarily incurred in
the performance of your duties hereunder, upon submission and approval of
written statements and bills in accordance with the then regular procedures of
the Company (collectively, “Business Expense Reimbursement”).

 

            (e)        Miscellaneous.  In addition to the other benefits set
forth in this Paragraph 4, you may also participate, subject to Board approval,
in all other present and future employee benefit plans of the Company for its
senior executive staff, provided that you meet the eligibility requirements for
participation in any such plans.  The Company shall use commercially reasonable
efforts to provide you with directors’ and officers’ liability insurance under
the policies for such insurance arranged by the Company from time to time upon
such terms and in such amounts as the Board may reasonably determine in its
discretion.  The Company shall, to the full extent permitted by, and subject to,
applicable law,

 

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defend you, indemnify you and hold you harmless as to all suits, actions, and
claims made against you arising out of your actions as an officer and/or
employee of the Company.

 

5.         Your Representations and Warranties.

 

            You represent and warrant to the Company that:

 

            (a)        The execution, delivery and performance by the Executive
of this Agreement do not conflict with or result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default under any
contract, agreement or understanding, whether oral or written, to which you are
a party or of which you or should be aware and that there are no restrictions,
covenants, agreements or limitations on his right or ability to enter into and
perform the terms of this Agreement, and agrees to indemnify and save the
Company and its affiliates harmless from any liability, cost or expense,
including attorney’s fees, based upon or arising out of any such restrictions,
covenants, agreements, or limitations that may be found to exist;  

 

            (b)        You are under no physical or mental disability that would
hinder your performance of duties under this Agreement;

 

            (c)        Except as set forth in Appendix C attached hereto, you
are not party to any ongoing civil or criminal proceedings, and have not been
party such proceedings within the past ten years, and do not know of any such
proceeding that may be threatened or pending against you; and

 

            (d)        You are not currently engaged in activities and will not
knowingly engage in future activities that may cause embarrassment to the
Company or tarnish the reputation or public image of the Company, including but
not necessarily limited to association with or party to:  any criminal
behavior(s) such as drug use, theft, or any other potential or active violation
of law; political controversy, civil disobedience, or public protest; lewd,
lascivious behavior.

 

6.         Discoveries and Works. 

             

            All Discoveries and Works which are made or conceived by you during
your employment by the Company, solely, jointly or with others, that relate to
the Company's present or anticipated activities, or are used or useable by the
Company within the scope of this Agreement shall be owned by the Company.  You
shall (a) promptly notify, make full disclosure to, and execute and deliver any
documents requested by the Company, as the case may be, to evidence or better
assure title to Discoveries and Works in the Company, as so requested, (b)
renounce any and all claims, including but not limited to claims of ownership
and royalty, with respect to all Discoveries and Works and all other property
owned or licensed by the Company, (c) assist the Company in obtaining or
maintaining for itself at its own expense United States and foreign patents,
copyrights, trade secret protection or other protection of any and all
Discoveries and Works, and (d) promptly execute, whether during his employment
with the Company or thereafter, all applications or other endorsements necessary
or appropriate to maintain patents and other rights for the Company and to
protect the title of the Company thereto, including but not limited to
assignments of such patents and other rights.  Any Discoveries and Works which,
within one year after the expiration or termination of your employment with the
Company, are made, disclosed, reduced to tangible or written form or
description, or are reduced to practice by you and which pertain to the business
carried on or products or services being sold or delivered by the Company at the
time of such termination shall, as between you and, the Company, be presumed to
have been made during your employment by the Company.  You acknowledge that all
Discoveries and Works shall be deemed “works made for hire” under the U.S.
Copyright Act of 1976, as amended 17 U.S.C. Sect. 101.           

 

 

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7.         Intellectual Property.

 

            (a)        Assignment.   

 

                        (i)         You agree to make full written disclosure to
the Company and will hold in trust for the sole right and benefit of the
Company, and hereby assign to the Company, or its designee, all of your right,
title and interest in and to any Intellectual Property.  Without limiting the
foregoing, all copyrightable works that you create during your employment with
the Company shall be considered “work made for hire.” 

 

                        (ii)        Any interest in Intellectual Property which
you now, or hereafter during the period you are employed by the Company, may own
or develop relating to the fields in which the Company may then be engaged shall
belong to the Company; you hereby assign and agree to assign to the Company (or
as otherwise directed by the Company) all of your right, title and interest in
and to all Work Product, including without limitation all patent, copyright,
trademark and other intellectual property rights therein and thereto.  If you
have any such rights that cannot be assigned to the Company, you waive the
enforcement of such rights, and if you have any rights that cannot be assigned
or waived, you hereby grant to the Company an exclusive, irrevocable, perpetual,
worldwide, fully paid license, with right to sublicense through multiple tiers,
to such rights.  Such rights shall include the right to make, use, sell,
improve, commercialize, reproduce, distribute, perform, display, transmit,
manipulate in any manner, create derivative works based on, and otherwise
exploit or utilize in any manner the subject intellectual property.

 

                        (iii)       Your obligation to assign your rights to
Intellectual Property under this Paragraph 7 shall not apply to any inventions
and all Discoveries and Works expressly identified in the attached Appendix D
attached hereto which were developed prior to the your  performance of services
hereunder for the Company, provided however that inventions to be developed by
the you during the term of the Consultant's agreement may be subsequently added
to the Schedule upon the mutual agreement of the you and the Company that such
inventions are outside the scope of the Agreement.  You acknowledges that there
are, and may be, future rights that the Company may otherwise become entitled to
with respect to the Intellectual Property that do not yet exist, as well as new
uses, media, means and forms of exploitation throughout the universe exploiting
current or future technology yet to be developed, and you specifically intends
the foregoing assignment of rights to the Company to include all such now known
or unknown uses, media and forms of exploitation.  You agree to cooperate with
the Company, both during and after the term of your employment , in the
procurement and maintenance of the Company’s rights to the Intellectual Property
and to execute, when requested, any and all applications for domestic and
foreign patents, copyrights and other proprietary rights or other documents  and
to do such other acts (including without limitation the execution and delivery
of instruments of further assurance or confirmation) requested by the Company to
assign the Intellectual Property to the Company, to permit the Company to
enforce any patents, copyrights or other proprietary rights to the Intellectual
Property and to otherwise carry out the purpose of this Agreement.

 

                        (iv)       If the Company is unable because of your
mental or physical incapacity or for any other reason to secure any signature
for any of the assignments, licenses or other reasonably requested documents
pertaining to the intellectual property rights referenced herein within ten (10)
days of the delivery of said documents to you, then you hereby irrevocably
designate and appoint the Company and its duly authorized officers and agents as
your agent and attorney in fact, to act for and on your behalf and stead and to
execute and file said documents and do all other lawfully permitted acts to
further the perfection, defense and enjoyment of the Company’s rights relating
to the subject Intellectual Property with the same legal force and effect as if
executed by you.  You stipulate and agree that such appointment is a right
coupled with an interest, and will survive your incapacity or unavailability at
any future time.

 

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    (b)        Maintenance of Records.  You agree to keep and maintain adequate
and current written records of all Intellectual Property made by you (solely or
jointly with others) during the term of your employment with the Company.  The
records will be in the form of notes, sketches, drawings, electronic or digital
data, and any other format that may be specified by the Company.  The records
will be available to, and remain the sole property of, the Company at all times.

    (c)        Patent and Copyright Registrations.  You agree to assist the
Company, or its designee, at the Company’s expense, in every proper way to
secure the Company’s rights in the Intellectual Property Items and any
copyrights, patents, mask work rights or other intellectual property rights
relating thereto in any and all countries, including the disclosure to the
Company of all pertinent information and data with respect thereto and the
execution of all applications, specifications, oaths, assignments and all other
instruments which the Company shall deem necessary in order to apply for and
obtain such rights and in order to assign and convey to the Company, its
successors, assigns and nominees the sole and exclusive rights, title and
interest in and to such Intellectual Property Items, and any copyrights,
patents, mask work rights or other intellectual property rights relating
thereto.

 

8.         Non-competition and Non-Solicitation and Non-Circumvention. 

 

(a)               Non-competition.  Except as authorized by the Board, during
your employment by the Company and for a period of one (1) year thereafter, you
will not (except as an officer, director, stockholder, employee, agent or
consultant of the Company or any subsidiary or affiliate thereof) either
directly or indirectly, whether or not for consideration, (i) in any way,
directly or indirectly, solicit, divert, or take away the business of any person
who is or was a customer of the Company, or in any manner influence such person
to cease doing business in part or in whole with Company; (ii) engage in a
Competing Business; (iii) except for investments or ownership in public
entities, mutual funds and similar investments, none of which constitute more
than 5% of the ownership or control of such entities, own, operate, control,
finance, manage, advise, be employed by or engaged by, perform any services for,
invest or otherwise become associated in any capacity with any person engaged in
a Competing Business; or (iv) engage in any practice the purpose or effect of
which is to intentionally evade the provisions of this covenant.  For purposes
of this section, “Competing Business” means any company or business which is
engaged directly or indirectly in any business carried on or planned to be
carried on (if such plans were developed while you were employed by the Company)
by the Company or any of its subsidiaries or affiliates

(b)               The following activities shall not be deemed to be Competitive
to the Company’s business, unless the parties mutually agree to modify based
upon developments within the Company:

(i)     A renewable energy design and installation business which shall not make
use of the Company’s products and technologies or the Company’s products and
technologies under development and shall not compete against the Company.  You
may engage in design and installation businesses which include but are not
limited to the installation of solar photovoltaic modules, thermal panels, or
wind turbines.

 

(ii)   A renewable energy operating business (i.e. owner, operator or management
of any renewable energy installation) which shall not make use of the Company’s
products and technologies or the Company’s products and technologies under
development and shall not compete against the Company.

 

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(iii) Notwithstanding, Company acknowledges that you may have other existing
outside interests.  Provided such:

 

a.             interests do not affect your ability to competently perform
obligations hereunder, and

 

b.            Entities do not compete with any Company business, Company hereby
consents to allow you to continue to provide services to such other entities. 
You agree to not compete with any Company business, or with the Company’s
current products and technologies and technologies under development.

 

            (c)        Non-Solicitation and Non-Circumvention.  For a period of
one year following your employment with the company, you will not directly or
indirectly, whether for your account or for the account of any other individual
or entity, solicit or canvas the trade, business or patronage of, or sell to,
any individuals or entities that were investors, customers or employees of the
Company during the period during which you were employed by the Company, or
prospective customers with respect to whom a sales effort, presentation or
proposal was made by the Company or its affiliates, during the one year period
prior to the termination of your employment.  Without limiting the foregoing,
you shall not, directly or indirectly, (i) solicit, induce, enter into any
agreement with, or attempt to influence any individual who was an employee or
consultant of the Company at any time during the time you were employed by the
Company, to terminate his or her employment relationship with the Company or to
become employed you or any individual or entity by which you are employed or
(ii) interfere in any other way with the employment, or other relationship, of
any employee or consultant of the Company or its affiliates. 

 

             (d)       Requirement to Safeguard Confidential Information.  All
Confidential Information of the Company is expressly acknowledged by you to be
the sole property of the Company, and the disclosure of the Confidential
Information shall not be deemed to confer any rights with respect to such
Confidential Information on you.  You will exercise reasonable care to ensure
the confidentiality of the Confidential Information.  All confidential
information which you may now possess, or may obtain or create prior to the end
of the period you are employed by the Company, relating to the business of the
Company, or any customer or supplier of the Company, or any agreements,
arrangements, or understandings to which the Company is a party, shall not be
disclosed or made accessible by you to any other person or entity either during
or after the termination of your employment or used by Executive except during
your employment by the Company in the business and for the benefit of the
Company, without the prior written consent of the Company.  Nothing herein shall
be construed as an obligation of the Company to consent to the terms and
conditions of any such request and under no circumstances shall any such
approval be deemed to waive, alter or modify the terms and conditions of this
Agreement. You shall return all tangible evidence of such confidential
information to the Company prior to or at the termination of your employment.  

 

9.         Enforcement.  

            (a)        Provisions Reasonable.  It is acknowledged and agreed
that:

 

                        (i)         both before and since the Start Date the
Company has operated and competed and will operate and compete in a global
market, with respect to the Company’s Business;

 

                        (ii)        competitors of the Company are located in
countries around the world;

 

 

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                        (iii)       in order to protect the Company adequately,
any enjoinder of competition would have to apply world-wide;

 

                        (iv)       during the course of your employment by the
Company, both before and after the Start Date, on behalf of the Company, you
have acquired and will acquire knowledge of, and you have come into contact
with, initiated and established relationships with and will come into contact
with, initiate and establish relationships with, both existing and new clients,
customers, suppliers, principals, contacts and prospects of the Company, and
that in some circumstances you have been or may well become the senior or sole
representative of the Company dealing with such persons; and

 

                        (v)        in light of the foregoing, the provisions of 
Paragraphs 6, 7 and 8 are reasonable and necessary for the proper protection of
the business, property and goodwill of the Company and the Company’s Business.

 

            (b)        Enforcement.  Nothing herein contained shall be construed
as prohibiting the Company or you from pursuing any remedies available for any
breach or threatened breach of this Agreement.  A waiver by the Company or you
of any breach of any provision hereof shall not operate or be construed as a
waiver of a breach of any other provision of this Agreement or of any subsequent
breach.

 

10.       Termination.

 

            (a)        Manner of Termination.  The Company and you may terminate
this Agreement, with or without cause, for any reason whatsoever, by providing
written notice, in accordance with Paragraph 17,  to the other specifying the
date of termination (the “Termination Date”).

 

            (b)        Effect of Termination.  

 

                        (i)         Payments.       In the event this Agreement
is terminated pursuant to Paragraph 10 (a) your rights and the Company's
obligations hereunder shall cease as of the effective date of the termination;
provided, however, that  the Company shall pay the you  (i) your Monthly Salary,
prorated through the Termination Date, (ii) your Business Expense Reimbursements
through the Termination Date, (iii) your Medical Insurance and any other
benefits due to you, prorated through the Termination Date, (iv) and, if
terminated by the Company, and subject to your compliance with the requirements
of Paragraph 10 (b)(iii), the “Severance Payment” as defined and calculated
pursuant to Paragraph 10 (b)(ii) and (v) your accrued but unused vacation.  All
payments (other than the Severance Payment, which will be made as set forth in
Paragraph 10(b) (ii), will be made in accordance with the Company’s regular
payroll procedures through the Termination Date; and the full payment all of
payments and benefits due to you upon termination shall completely and fully
discharge and constitute a release by you of any and all obligations and
liabilities of the Company to you, including, without limitation, the right to
receive Base Salary, options and all other compensation or benefits provided for
in this Agreement, and you shall not be entitled to any further compensation,
options, or severance compensation of any kind, and shall have no further right
or claim to any compensation, options, benefits or severance compensation under
this Agreement or otherwise against the Company or its affiliates, from and
after the date of such termination, except as provided by the terms of the Stock
Option Agreement, any benefit plan under which you are participating.  

 

                        (ii)        Severance.      In the event of a
termination of this Agreement by the Company you will be entitled to a severance
payment (the “Severance Payment”) equal to one Monthly Payment, in effect on the
date of the Company’s Termination Notice, for every four (4) months that you
have been employed by the Company pursuant to this Agreement up to a maximum
aggregate of four (4) Monthly Payments, provided that  (a) you have delivered to
the Company the General Release substantially in the

 

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form of Appendix E hereto and (b) a written statement of your compliance with
the provisions of this Paragraph 10, including but not limited to clauses (iii)
and (iv) hereof .

 

                        (iii)       Resignation. The termination of this
Agreement pursuant to this Paragraph 10 shall constitute your resignation from
any and all Executive Positions and, if applicable, as a Director of the Company
effective as of the Termination Date.

        

           

                        (iv)       Return of Documents and Property.  Upon the
expiration or termination of your employment with the Company, or at any time
upon the request of the Company, you (or your heirs or personal representatives)
shall deliver to the Company in good order (a) all documents and materials
(including, without limitation, computer files) containing Trade Secrets and
Confidential Information relating to the business and affairs of the Company or
its affiliates; (b) all documents, materials, equipment and other property
(including, without limitation, computer files, computer programs, computer
operating systems, computers, printers, scanners, pagers, telephones, credit
cards and ID cards) belonging to the Company or its affiliates, which in either
case are in the possession or under the your control (or the control of your
heirs or personal representatives); and (c) all corporate records of the
Company, including minute books, accounting related materials, audit related
materials, attorney correspondence, and any other such records which may be in
your possession.

 

                        (v)        Survival of Certain Provisions. 
Notwithstanding anything to the contrary contained herein, if this Agreement is
terminated the provisions of Paragraphs 5, 6, 7, 8, 9, 10, 12 and 13 of this
Agreement shall survive such termination and continue in full force and effect.

 

                        (vi)       Relinquishment of Authority.  Notwithstanding
anything to the contrary set forth herein, upon written notice to you, the
Company may immediately relieve you of all your duties and responsibilities
hereunder and may relieve you of authority to act on behalf of, or legally bind,
the Company.  However, such action by the Company shall not alter the Company’s
obligations to you with regard to the procedure for a termination.

 

11.       Successors and Assigns.

 

            This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns. In view of the personal nature of the
services to be performed under this Agreement by you, you shall not have the
right to assign or transfer any of your rights, obligations or benefits under
this Agreement, except as otherwise noted herein.

 

12.       No Reliance on Representations.

 

            You acknowledge that you are not relying, and have not relied, on
any promise, representation or statement made by or on behalf of the Company
which is not set forth in this Agreement.

 

13.       Entire Agreements; Amendments.

 

            This Agreement and the Stock Option Agreement set forth our entire
understanding with respect to your employment by the Company, supersede all
existing agreements between you and the Company concerning such employment, and
may be modified only by a written instrument duly executed by each of you and
the Company.

 

14.       Waiver.

 

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            Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement.  The failure of a party to insist upon strict adherence to any term
of this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.  Any waiver must be in writing.

 

15.       Construction.

 

            You and the Company have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by you and the Company and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement.  Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.  The
word “including” shall mean including without limitation.  Whenever the context
may require, any pronouns used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular forms of nouns and
pronouns shall include the plural, and vice versa.  The headings in this
Agreement are solely for the convenience of reference and shall be given no
effect in the construction or interpretation of this Agreement.

 

16.       Severability.

 

            Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.

 

17.       Notices.

 

            All notices, demands or requests made pursuant to, under or by
virtue of this Agreement must be in writing and sent to the party to which the
notice, demand or request is being made by (i) certified mail, return receipt
requested, (ii) nationally recognized overnight courier delivery, (iii) by
facsimile transmission provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party or (iv) hand
delivery as follows:

 

To the Company:

 

New Energy Technologies, Inc.

3905 National Drive, Suite 110

Burtonsville, MD 20866

Fax: (240) 390-0603

 

With a copy to:

 

Joseph Sierchio, Esq.

Sierchio & Company, LLP

430 Park Avenue, Suite 702

New York, NY 10022

Fax: (212) 246-3039

 

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To you:

 

John A. Conklin

3489 Pennsylvania Avenue

Apalachin, New York  13732

 

or to such other address, facsimile number, or email address, as is specified by
a party by notice to the other party given in accordance with the provisions of
this Paragraph 17.  Any notice given in accordance with the provisions of this
Paragraph 17 shall be deemed given (i) three (3) business days after mailing (if
sent by certified mail), (ii) one (1) business day after deposit of same with a
nationally recognized overnight courier service (if delivered by nationally
recognized overnight courier service), or (iii) on the date delivery is made if
delivered by hand or facsimile.

 

18.       Counterparts; Delivery by Facsimile.

 

      (a)        This Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by you and the Company
and delivered to the other, it being understood that you and the Company need
not sign the same counterpart.  This Agreement may be executed by facsimile
signature and a facsimile signature shall constitute an original for all
purposes.

 

            (b)        This Agreement, the agreements referred to herein, and
each other agreement or instrument entered into in connection herewith or
therewith or contemplated hereby or thereby, and any amendments hereto or
thereto, to the extent signed and delivered by means of a facsimile machine,
shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person.  At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall re-execute original forms thereof and deliver them to
all other parties.  No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.

 

19.       Disclosure and Avoidance of Conflicts of Interest.

 

            During your employment with the Company, you will promptly, fully
and frankly disclose to the Company in writing:

 

            (a)        the nature and extent of any interest you or your
Affiliates (as hereinafter defined) have or may have, directly or indirectly, in
any contract or transaction or proposed contract or transaction of or with the
Company or any subsidiary or affiliate of the Company;

 

            (b)        every office you may hold or acquire, and every property
you or your Affiliates may possess or acquire, whereby directly or indirectly a
duty or interest might be created in conflict with the interests of the Company
or your duties and obligations under this Agreement;

 

            (c)        the nature and extent of any conflict referred to in
subsection (b) above; and

 

            (d)        You acknowledge that it is the policy of the Company that
all interests and conflicts of the sort described herein be avoided, and you
agree to comply with all policies and directives of the Board

 

11

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from time to time regulating, restricting or prohibiting circumstances giving
rise to interests or conflicts of the sort described herein.  During your
employment with the Company, without Board approval, in its sole discretion, you
shall not enter into any agreement, arrangement or understanding with any other
person or entity that would in any way conflict or interfere with this Agreement
or your duties or obligations under this Agreement or that would otherwise
prevent you from performing your obligations hereunder, and you represent and
warrant that you or your Affiliates have not entered into any such agreement,
arrangement or understanding.

 

20.       Code Section 409A.

 

            This Agreement shall be interpreted, construed and administered in a
manner that satisfies the requirements of Sections 409A of the Internal Revenue
Code of 1986, as amended from time to time and the Treasury Regulations
thereunder (the “Code”), and any payment scheduled to be made hereunder that
would otherwise violate Section 409A of the Code shall be delayed to the extent
necessary for this Agreement and such payment to comply with Section 409A of the
Code.

 

21.       Termination of Consulting Agreement and Forfeiture of Options.

 

            Each of the Consulting Agreement between you and the Company (the
“Consulting Agreement”) and the Stock Option Agreement between you and the
Company dated (the “Initial SOA”) are hereby terminated effective as of the
Start Date; and, you further agree and acknowledge that (i) all payments
required to be made by the Company to you pursuant to the Consulting Agreement,
through the Start Date,  have been made and (ii) the stock purchase options
granted to you pursuant to the Initial SOA, none of which have vested, are
terminated and forfeited as of the Start Date.

 

22.       Definitions.

 

For purposes of this Agreement, the following terms shall have the meanings
ascribed to them below:

 

            “Affiliate” means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person.

 

“Company’s Business” means the Company’s Business as conducted during the term
of this Agreement and all products planned, researched, developed, tested,
manufactured, sold, licensed, leased or otherwise distributed or put into use by
the Company or any of its Affiliates, together with all services provided or
planned by the Company or any of its Affiliates, during your relationship with
the Company.

 

“Confidential Information” shall mean any and all information in addition to
Trade Secrets used by, or which is in the possession of the Company and relating
to the Company’s business or assets specifically including, but not limited to,
information relating to the Company’s products, services, strategies, pricing,
customers, representatives, suppliers, distributors, technology, finances,
employee compensation, computer software and hardware, inventions, developments,
in each case to the extent that such information is not required to be disclosed
by applicable law or compelled to be disclosed by any governmental
authority.  Notwithstanding the foregoing, the terms “Trade Secrets” and
“Confidential Information” do not include information that (i) is or becomes
generally available to or known by the public (other than as a result of a
disclosure by the Executive), provided, that the source of such information is
not known by you to be bound by a confidentiality agreement with the Company; or
(ii) is independently developed by you without violating this Agreement.

 

“Discoveries and Works” includes, by way of example but without limitation,
Trade Secrets and other Confidential Information, patents and patent
applications, service marks, and service mark

 

12

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registrations and applications, trade names, copyrights and copyright
registrations and applications and all materials, information, inventions,
discoveries, developments, methods, compositions, concepts, ideas, writings,
computer code and the like (whether or not patentable or copyrightable or
constituting trade secrets) conceived, made, created, developed or reduced to
practice by you (whether alone or with others, whether or not during normal
business hours and whether on or off Company premises) during the term of this
Agreement that relate to either the Company’s Business or any prospective
activity of the Company or any of its Affiliates.

 

 “Intellectual Property” means with respect to the Company’s Business, all U.S.
and foreign (a) patents and patent applications and all reissues, renewals,
divisions, extensions, provisional patents, continuations and continuations in
part thereof, (b) inventions (regardless of whether patentable), invention
disclosures, trade secrets, proprietary information, industrial designs and
registrations and applications, mask works and applications and registrations,
(c) copyrights and copyright applications and corresponding rights, (d) trade
dress, trade names, logos, URLs, common law trademarks and service marks,
registered trademarks and trademark applications, registered service marks and
service mark applications, (e) domain name rights and registrations, (f)
databases, customer lists, data collections and rights therein, (g)
confidentiality rights or other intellectual property rights of any nature, in
each case throughout the world; (h) ideas, processes, trademarks, service marks,
inventions, designs, technologies, computer hardware or software, original works
of authorship, formulas, discoveries, patents, copyrights, copyrightable works,
products, marketing and business ideas, and all improvements, know-how, data,
rights, and claims related to the foregoing; and (i) Discoveries and Works.

 

“Person” means any natural person, corporation, company, limited or general
partnership, joint stock company, joint venture, association, limited liability
company, trust, bank, trust company, land trust, business trust or other entity
or organization.

 

“Trade Secrets” shall mean all confidential and proprietary information
belonging to the Company (including current client lists and prospective client
lists, ideas, formulas, compositions, inventions (whether patentable or
unpatentable and whether or not reduced to practice), know-how, manufacturing
and production processes and techniques, research and development information,
drawings, specifications, designs, plans, proposals, technical data,
copyrightable works, financial and marketing plans and customer and supplier
lists and information.

 

23.       Further Assurances.  The parties will execute such further instruments
and take such further actions as may be reasonably necessary to carry out the
intent of this Agreement.

 

24.       Governing Law.  All other questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of New York without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.  Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of New York, County of New York for the adjudication of any dispute
hereunder or in connection herewith or therewith, or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper.  Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. 
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

13

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24.       Effective Date of Agreement.

 

            The effective date of this Agreement shall be August 9, 2010,
regardless of the date it is signed by you. If you find the foregoing
acceptable, please acknowledge your acceptance of, and agreement with, the terms
and conditions set forth above by signing the enclosed copy of this letter in
the space provided and returning the same to the undersigned.

 

 

 

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Sincerely,

 

New Energy Technologies, Inc.

 

 

 

By: /s/ Meetesh Patel

          Meetesh V. Patel

          President & CEO, Authorized Signatory

 

 

 

 

Acceptance

 

On this 9th day of August, 2010, I, John A. Conklin agree to and accept
employment with New Energy Technologies, Inc. on the terms and conditions set
forth in this Agreement.

 

 

 

/s/ John A. Conklin

John A. Conklin

 

 

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Appendix A

Company Code of Ethics and Business Conduct

 

OVERVIEW

New Energy Technologies, Inc. (“New Energy”) has adopted a Code of Ethics that
applies to all Officers, Directors, and Employees of the company and its
affiliates (herein collectively referred to as, “Employee” or “Employees”). 

 

In so doing, this Code of Ethics demands the highest standards of business
conduct required of all Employees. 

 

The Code is part of New Energy’s ongoing effort to comply with applicable laws
and have an effective program in place to prevent and detect violations of law;
this code is an effort to train and educate New Energy Employees about ethical
business practices.

 

OBJECTIVE

A key New Energy objective is to conduct business operations in the most ethical
manner possible. New Energy cares about its Employees, shareholders, clients,
suppliers and the communities in which it conducts business operations. During
the course of meeting its business objectives, New Energy believes that it is
essential for all Employees to understand and comply with the Code of Ethics and
in so doing, participate in New Energy’s way of operating its business.

 

STANDARD OF CONDUCT

New Energy insists that all aspects of its business operations be conducted with
honesty, integrity, fairness and with respect for those affected by its business
activities. Similarly, New Energy expects the same in its relationships among
those with whom it does business.

 

All Employees are expected to maintain and promote integrity and honesty in all
business transactions. Employees must conduct themselves according to the
highest ethical standards and are expected to apply ethical business practices
in the administrative and financial affairs of New Energy business operations.

 

There is no Code of Ethics that can expect to define suitable behavior for each
situation, nor should it seek to do so. As such, Employees are expected to
exercise vigilance and make considered judgment of what is right and proper in
any particular situation.

 

While carrying out the business operations of New Energy, Employees are expected
to be accountable, truthful, trustworthy, conscientious, and committed to the
highest standards of ethical business practices. As such, Employees are required
to avoid all impropriety as well as the appearance of impropriety when
conducting New Energy business operations.

 

ACCURACY AND COMPLETENESS OF ACCOUNTING RECORDS

New Energy’s accounting and supporting documents must accurately and completely
describe and represent the nature and result of New Energy’s business
operations. The results and activities of New Energy’s operations must be
presented in a fair and unbiased manner.

 

New Energy business transactions must be appropriately authorized as well as
completely and accurately recorded on the Company’s books. Proposed budgets,
financial assessments, evaluations and fiscal presentations must fairly present
all information relevant to the business transaction. Furthermore, at no time
will the Company establish or maintain cash funds or asset accounts which are
unrecorded.

 

Misappropriation, wrongful allocation, or improper use of the Company’s assets
and property, or the false

 

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entry to records and reports by any Employee or by others must be reported to
Board of New Energy.

 

ACCURATE AND TIMELY COMMUNICATION

New Energy expects Employees to be completely truthful and forthright in all
internal and external interactions and communications, whether with
shareholders, clients, government agencies, or others.

 

Employees will ensure that all statements are accurate and complete with no
misrepresentations which may mislead or misinform. In all cases, Employees are
expected to provide full, prompt and accurate disclosure to governmental
agencies.

 

MAINTAINING AND RETAINING RECORDS

In order to maintain the security and integrity of New Energy’s record-keeping
and reporting systems, all Employees must adhere to applicable records retention
procedures and fully understand how to document and transact entries that fall
within their jurisdiction.

 

All Employees are expected to comply fully with audits and provide timely
response to requests for records or other materials from or on behalf of New
Energy auditors or management.

 

COMPLYING WITH THE LAW

New Energy Employees are expected to fully comply with both the letter and the
spirit of the laws and regulations of the countries in which the Company
conducts business.

 

New Energy Employees are expected to act in accordance with the accepted
business practices in commercial markets and adhere to the contractual terms and
conditions applicable to any business transaction.

 

All Employees must commit to abiding by all applicable laws and regulations.

 

The breach of rules, regulations, ethical standards, and laws cannot be
justified by the pursuit of profit or the departure from acceptable practice by
competitors.

 

INSIDER TRADING

New Energy Employees are strictly prohibited by law from buying or selling the
Company’s shares or any other public security as a result of inside information.

 

Furthermore, it is against the law and unethical to provide such information
about New Energy to other individuals or companies so that they may gain.

In accordance with the Code of Ethics, Employees are strictly prohibited from
trading in shares of New Energy, clients or suppliers as a result of any inside
information.

 

ENVIRONMENTAL ISSUES

New Energy is committed to running its business in an environmentally sound and
sustainable manner. New Energy’s objective is to ensure that its business
operations have the minimum adverse environmental impact commensurate with the
legitimate needs of its business operations.

 

DISCLOSURE OF PERSONAL INTEREST

New Energy Employees are expected to fully disclose any personal interest(s)
which could impinge or might reasonably be considered by others to conflict with
their business dealings with industry.

 

New Energy Employees must not engage in personal activities and financial
interests that may conflict with their responsibilities and obligations to the
Company or give assistance to competitors, in conflict

 

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with the interests of New Energy or its clients.

 

Under all circumstances, Employees must obtain the formal consent of New Energy
management if they intend to become partners, shareholders, or Directors, or
participants in companies outside the New Energy corporate structure.

 

PERSONAL DISCRETION AND CONFIDENTIALITY

At all times, Employees are expected to respect the confidentiality of
information received during the course of business dealings and must never use
such information for personal benefit or gain.

 

Employees are expected to give information during the course of business which
is truthful, complete and fair and never intended to mislead.

Employees cannot disclose New Energy trade secrets, confidential or proprietary
information, or any other such information without the written, formal
authorization of management. Such information may not be disclosed as a means of
making profit, gains or benefits.

 

At no time can Employees use Internet bulletin boards, chat rooms, messaging
services, or other electronic systems to discuss issues, affairs, or opinions
related to New Energy or any of its industries, or to respond to comments about
the Company. New Energy considers electronic postings to be the same as
“speaking to the media”.

 

FAIR COMPETITION

New Energy is committed to vigorous yet fair competition and supports the
development of appropriate competition laws. Each Employee must avoid any
business arrangement that might prevent the effective operation of fair
competition.

 

COMPLIANCE WITH THE COMPANY’S CODE OF ETHICS

New Energy’s Board of Directors is responsible for ensuring that the standards
outlined in the Code of Ethics are fully communicated to all Employees and are
similarly understood and adhered to.

 

Should the Company experience loss of business as a result of adhering to the
Code of Ethics, the Board of Directors will not criticize, condemn or complain.

 

Likewise, should a real or suspected breach of the Company’s Code of Ethics be
brought to the attention of the Company, the Board of Directors will ensure that
the reporting Employee does not suffer as a consequence of doing so.

 

The Company’s Code of Ethics are reflective of New Energy’s ethical standards
and expectations. Accordingly, Employees are expected to fulfill the Company’s
ethical commitments in a way that is clearly visible to all those with whom New
Energy conducts its business.

 

At all times, Employees are expected to fully comply with the standards
established in the Code of Ethics and ensure that their personal conduct is
always above reproach.

 

New Energy expects each Employee to ensure that the conduct of others around him
or her is in compliance with the Code of Ethics and that any breach of the same
is duly reported to management.

 

All breaches of the law or violations of regulations and the standards of
conduct listed in this Code of Ethics may lead to serious consequences for the
Employee concerned; New Energy Employees have a legal, moral, and ethical duty
to report any such real or suspected violation to the Board of Directors and
regulatory authorities.

 

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“CODE OF ETHICS” ENFORCEMENT

New Energy Employees understand and acknowledge that a breach of the Code of
Ethics can result in severe disciplinary action, including but not necessarily
limited to termination.

 

The Company’s Code of Ethics will be fairly enforced at all levels, without
prejudice.

 

ANNUAL ACKNOWLEDGEMENT

Each Employee will be required to sign a statement annually that he or she has
read and understands New Energy’s Code of Ethics. This statement will also
require that the Employee state that he or she is in full compliance with the
Code.

 

EMPLOYEE CERTIFICATION AND ACKNOWLEDGEMENT

I acknowledge and certify that I have read and understood the information set
forth in the Code of Ethics of New Energy Technologies, Inc. and will comply
with these principles in my daily work activities. I am not aware of any
violation of the standards of New Energy’s Code of Ethics.

 

Date:___________________________________

Name (print):___________________________________

Position:___________________________________

Address:___________________________________

Signature:___________________________________

 

 

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Appendix B

 

            THIS NONSTATUTORY STOCK OPTION AGREEMENT (“Agreement”) is made and
entered into as of August 9, 2010, by and between New Energy Technologies, Inc.
a Nevada corporation (the “Company”), and John A. Conklin (“Recipient”):

 

            This Stock Option Agreement has been executed and delivered pursuant
to the Employment Amendment dated August 9, 2010 (the “Employment Agreement,
between the Recipient and the Company (the “Employment Agreement”).

 

            In consideration of the covenants herein set forth, the parties
hereto agree as follows:

 

            1.         Option Grant

 

            (a)        Date option grant authorized:  August 9, 2010 (the “Grant
Date”)

            (c)        Number of shares:                              
2,000,000 

            (d)        Exercise Price:                                     $0.55

 

            2.         Acknowledgements.

 

            (a)        Recipient is the President and Chief Executive Officer of
the Company (collectively, the “Company/Recipient Relationship”).

 

            (b)        The Board has this day approved the granting of this
Option subject to the execution of this Agreement; and

 

             (c)       The Board has authorized the granting to Recipient of a
non-statutory stock option (“Option”) to 2,000,000 purchase shares (the “Option
Shares”) of common stock of the Company (“Common Stock”) upon the terms and
conditions hereinafter stated and pursuant to an exemption from registration
under the Securities Act of 1933, as amended (the “Securities Act”).

 

            3.         Option Shares; Price.

 

The Company hereby grants to Recipient the right to purchase, upon and subject
to the terms and conditions herein stated, the Option Shares for cash (or other
consideration as is authorized hereunder) at the price per Option Share set
forth in Section 1 above (the “Exercise Price”), such price being not less than
[e.g., 100%] of the fair market value per share of the Option Shares covered by
this Option as of the date of grant. 

 

            4.         Term of Option; Continuation of Service.

 

Subject to the early termination provisions set forth in Sections 7 and 8 of
this Agreement, this Option shall expire, and all rights hereunder to purchase
the Option Shares shall terminate 10 years from the Grant Date. Nothing
contained herein shall be construed to interfere in any way with the right of
the Company, or its shareholders, or the Board, to remove or not elect Recipient
as an officer and or a director of the Company, or to increase or decrease the
compensation of Directors from the rate in effect at the date hereof.

             5.        Vesting of Option.

 

Subject to the provisions of Sections 7 and 8 of this Agreement, this Option
shall become exercisable during the term that Recipient serves in the
Company/Recipient Relationship as follows:

 

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Number of Option Shares as to which the Option may vest:

 

Milestone that must be achieved in order for vesting to occur:

a.

500,000

Or such portion thereof as may be determined by the Board at its sole
discretion, when one or more of the following items related the development,
production, manufacturing, and sale of any commercially viable product have been
successfully executed:

 

(i) completion of final design and/or engineering;

(ii) the establishment of manufacturing facilities, whether in-house or
outsourced; and

(iii) the initial filing of any product safety approval applications, if
required, in order to allow for the commercial sale of products by the Company;

 

 

 

b.

500,000

Upon commencing commercial sales of any of the Company’s products, as reported
in the Company's financial statements, whether to retail customers or wholesale
customers;

 

 

 

c.

500,000

As follows:

 

(i)  as to 100,000 shares on August 9, 2011;

(ii)  as to 100,000 shares on August 9, 2012;

(iii) as to 100,000 shares on August 9, 2013;

(iv) as to 100,000 shares on August 9, 2014; and

(v)  as to 100,000 shares on August 9, 2015;

 

 

 

d.

500,000

When, to the Board’s satisfaction, the Company enters into a favorable business
partnership with a third-party commercial organization in the industry segment
related to the Company’s product development and sales efforts, under any of the
following conditions:

 

(i) a product development relationship whereby the third-party partner makes a
significant financial investment, as determined at the Board’s discretion,
directed towards the development of the Company’s products; or

(ii) a product development relationship whereby the third-party partner invests
significant research and development resources, as determined at the Board’s
discretion, directed towards the development of the Company’s products; or

(iii) a strategic partnership with the third-party partner where, as determined
at the Board’s discretion, such a partnership provides significant business
advantages to the Company which it would otherwise not have, whether related to
product development, commercial sales, industry position, or business
reputation.

 

 

 

 

 

 

 

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            All determinations and calculations with respect hereto shall be
made by the Board or any committee thereof to which the Board has delegated such
authority, in good faith in accordance with applicable law, the Articles of
Incorporation and By-laws of the Company. This Option is an uncertificated
security. Accordingly, the Company shall maintain an option registry, consistent
with its current practices, for recording the vesting, exercise and termination
of the Option. 

 

            6.         Exercise.

 

            (a)        This Option shall be exercised, as to the vested shares,
by delivery to the Company of (a) written notice of exercise stating the number
of Option Shares being purchased (in whole shares only) and such other
information set forth on the form of Notice of Exercise attached hereto as
Exhibit A hereto, (b) a check or cash in the amount of the Exercise Price of the
Option Shares covered by the notice, unless Recipient elects to exercise the
cashless exercise option set forth in Section 6(b) below, in which case no
payment will be required (or such other consideration as has been approved by
the Board of Directors consistent with the Plan) and (c) a written investment
representation as provided for in Section 13 hereof. This Option shall not be
assignable or transferable, except by will or by the laws of descent and
distribution, and shall be exercisable only by Recipient during his or her
lifetime.

 

  (b) Anything herein to the contrary notwithstanding, to the extent and only to
the extent vested, the Option may also be exercised (as to the Option Shares
vested) at such time by means of a “cashless exercise” in which the Recipient
shall be entitled to receive a certificate for the number of Option Shares equal
to the quotient obtained by dividing [(A-B) (X)] by (A), where:    

 

              (A) equals the average of the closing price of the Company’s
Common Stock, as reported (in order of priority) on the Trading Market on which
the Company’s Common Stock is then listed or quoted for trading on the Trading
Date preceding the date of the election to exercise; or, if the Company’s Common
Stock is not then listed or traded on a Trading Market, then the fair market
value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Recipient and the Company, the fees and expenses
of which shall be paid by the Company for the three (3) Trading Days immediately
preceding the date of such election;

 

              (B) equals the Exercise Price of the Option, as adjusted from time
to time in accordance herewith; and

 

              (X) equals the number of vested Option Shares issuable upon
exercise of this Option in accordance with the terms of this Option by means of
a cash exercise rather than a cashless exercise (or, if the Option is being
exercised only as to a portion of the shares as to which it has vested, the
portion of the Options being exercised at the time the cashless exercise is made
pursuant to this Section 6).

 

For purposes of this Agreement:

 

 “Trading Day” means a day on which the Common Stock is traded on a Trading
Market.

 

“Trading Market” means, in order of priority, the following markets or exchanges
on which the Common Stock is listed or quoted for trading on the date in
question: the American Stock Exchange, the Nasdaq Capital Market, the Nasdaq
Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the
OTC Bulletin Board or the Pink Sheets.

 

               (c)           No fractional shares shall be issued upon exercise
of this Option.  The Company shall, in lieu of issuing any fractional share, pay
the Recipient entitled a sum in cash equal to such fraction multiplied by the
then effective Exercise Price.

 

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            7.         Termination of Service.

 

If the Employment Agreement is terminated, unless the parties thereto otherwise
agree in writing, as of the date of the termination of the Employment Agreement
(the “Termination Date”), no further installments of the Option shall vest
pursuant to Section 5, and the maximum number of Option Shares that Recipient
may purchase pursuant hereto shall be limited to the number of Option Shares
that were vested as of the Termination Date. Thereupon, Recipient shall have the
right, subject to Section 8 hereof, at any time within 120 days of the
Termination Date (the “Termination Exercise Period”) to exercise this Option to
the extent vested and purchase Option Shares, to the extent, but only to the
extent, that Recipient could have exercised this Option as of the Termination
Date; following the expiration of the Termination Exercise Period the remaining
unexercised vested Options shall terminate and this Agreement shall be of no
further force or effect. 

 

              8.       Death of Recipient.

 

If the Recipient shall die during the term of the Employment Agreement,
Recipient’s personal representative or the person entitled to Recipient’s rights
hereunder may at any time within the then remaining exercise period, exercise
this Option and purchase Option Shares to the extent, but only to the extent,
that Recipient could have exercised this Option as of the date of Recipient’s
death; following the expiration of the aforesaid then remaining exercise period,
this Agreement shall terminate in its entirety and be of no further force or
effect.

           

            9.         No Rights as Shareholder.

 

Recipient shall have no rights as a shareholder with respect to the Option
Shares covered by any installment of this Option until the effective date of
issuance of the Option Shares following exercise of this Option, and no
adjustment will be made for dividends or other rights for which the record date
is prior to the date such stock certificate or certificates.

           

            10.       Recapitalization.  

 

(a)        Subdivision or consolidation of shares. Subject to any required
action by the shareholders of the Company, the number of Option Shares covered
by this Option, and the Exercise Price thereof, shall be proportionately
adjusted for any increase or decrease in the number of issued shares resulting
from a subdivision or consolidation of shares or the payment of a stock
dividend, or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Company; provided however that
the conversion of any convertible securities of the Company shall not be deemed
having been “effected without receipt of consideration by the Company”.

 

            (b)        Reorganizations, Mergers etc.

 

                        (i)         In the event of a proposed dissolution or
liquidation of the Company, a merger or consolidation in which the Company is
not the surviving entity, or a sale of all or substantially all of the assets or
capital stock of the Company (collectively, a “Reorganization”):

 

                                    (1) then, subject to Clause (b)(ii) below,
any and all shares as to which the Option had not yet vested shall vest upon the
date (the “Reorganization Vesting Date”) that the Company provides the Recipient
with the Reorganization Notice (as defined below); and provided, however, that
there has been no termination of the Employment Agreement Recipient shall have
the right to exercise this Option to the extent of all shares subject to the
Option, for a period commencing on the

 

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Reorganization Vesting Date and terminating on the date of the consummation of
such Reorganization.  Unless otherwise agreed to by the Company. The Option
shall terminate upon the consummation of the Reorganization and may not be
exercised thereafter as to any shares subject thereto. The Company shall notify
Recipient in writing (the “Reorganization Notice”), at least 30 days prior to
the consummation of such Reorganization, of its intention to consummate a
Reorganization.

 

                                    (2) anything herein to the contrary
notwithstanding, the exercise of the Option or any portion thereof pursuant to
this Section 10(b) will be consummated simultaneously with the consummation of
the Reorganization.  If after the Company provides the Reorganization Notice to
the Recipient the Company provides the Recipient with a further written notice
notifying the Recipient that the Reorganization will not be consummated, then
the Option will return to its status prior to the Reorganization Notice and the
shares as to which the Option vested solely by virtue of this Section 10(b) (i)
will revert to an unvested status.

 

                        (ii)        Subject to any required action by the
shareholders of the Company, if the Company shall be the surviving entity in any
merger or consolidation, this Option thereafter shall pertain to and apply to
the securities to which a Recipient of Option Shares equal to the Option Shares
subject to this Option would have been entitled by reason of such merger or
consolidation, and the installment provisions of Section 5 shall continue to
apply.

 

                        (iii)       In the event of a change in the shares of
the Company as presently constituted, which is limited to a change of all of its
authorized Stock without par value into the same number of shares of Stock with
a par value, the shares resulting from any such change shall be deemed to be the
Option Shares within the meaning of this Option.

 

                        (iv)       To the extent that the foregoing adjustments
relate to shares or securities of the Company, such adjustments shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as hereinbefore expressly provided, Recipient shall have no
rights by reason of any subdivision or consolidation of shares of Stock of any
class or the payment of any stock dividend or any other increase or decrease in
the number of shares of stock of any class, and the number and price of Option
Shares subject to this Option shall not be affected by, and no adjustments shall
be made by reason of, any dissolution, liquidation, merger, consolidation or
sale of assets or capital stock, or any issue by the Company of shares of stock
of any class or securities convertible into shares of stock of any class.

 

                        (v)        The grant of this Option shall not affect in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes in its capital or business
structure or to merge, consolidate, dissolve or liquidate or to sell or transfer
all or any part of its business or assets.

 

            11.       Taxation upon Exercise of Option.

 

Recipient understands that, upon exercise of this Option, Recipient may
recognize income, for Federal and state income tax purposes, in an amount equal
to the amount by which the fair market value of the Option Shares, determined as
of the date of exercise, exceeds the Exercise Price. The acceptance of the
Option Shares by Recipient shall constitute an agreement by Recipient to report
such income in accordance with then applicable law and to cooperate with Company
in establishing the amount of such income and corresponding deduction to the
Company for its income tax purposes. Withholding for federal or state income and
employment tax purposes will be made, if and as required by law, from
Recipient’s then current compensation, or, if such current compensation is
insufficient to satisfy withholding tax liability, the Company may require
Recipient to make a cash payment to cover such liability as a

 

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condition of the exercise of this Option.

 

            12.       Modification, Extension and Renewal of Options.

 

The Board or a duly appointed committee thereof, may modify, extend or renew
this Option or accept the surrender thereof (to the extent not theretofore
exercised) and authorize the granting of a new option in substitution therefore
(to the extent not theretofore exercised), subject at all times to the Code and
applicable securities laws. Notwithstanding the foregoing provisions of this
Section 12, no modification shall, without the consent of the Recipient, alter
to the Recipient’s detriment or impair any rights of Recipient hereunder.

 

            13.       Investment Intent; Restrictions on Transfer.

 

             (a)       Recipient represents and agrees that if Recipient
exercises this Option in whole or in part, Recipient will in each case acquire
the Option Shares upon such exercise for the purpose of investment and not with
a view to, or for resale in connection with, any distribution thereof; and that
upon such exercise of this Option in whole or in part Recipient (or any person
or persons entitled to exercise this Option under the provisions of Sections 7
and 8 of this Agreement) shall furnish to the Company a written statement to
such effect, satisfactory to the Company in form and substance. If the Option
Shares represented this Option are registered under the Securities Act, either
before or after the exercise this Option in whole or in part, the Recipient
shall be relieved of the foregoing investment representation and agreement and
shall not be required to furnish the Company with the foregoing written
statement.

 

                        (b)        Recipient further represents that Recipient
has had access to the financial statements or books and records of the Company,
has had the opportunity to ask questions of the Company concerning its business,
operations and financial condition, and to obtain additional information
reasonably necessary to verify the accuracy of such information.

 

                         (c)       Unless and until the Option Shares
represented by this Option are registered under the Securities Act, all
certificates representing the Option Shares and any certificates subsequently
issued in substitution therefore and any certificate for any securities issued
pursuant to any stock split, share reclassification, stock dividend or other
similar capital event shall bear legends in substantially the following form:

 

            “THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED
UNDER THE SECURITIES ACT OF 1933 (THE ‘SECURITIES ACT’) OR UNDER THE APPLICABLE
OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES
LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.

 

            THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT
TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED MARCH 25, 2010 BETWEEN
THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH
ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.”

 

and/or such other legend or legends as the Company and its counsel deem
necessary or appropriate. Appropriate stop transfer instructions with respect to
the Option Shares have been placed with the Company’s transfer agent.

 

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             14.      Stand-off Agreement.  Recipient agrees that, in connection
with any registration of the Company’s securities under the Securities Act, and
upon the request of the Company or any underwriter managing an underwritten
offering of the Company’s securities, Recipient shall not sell, short any sale
of, loan, grant an option for, or otherwise dispose of any of the Option Shares
(other than Option Shares included in the offering) without the prior written
consent of the Company or such managing underwriter, as applicable, for a period
(the “Restrictive Period”) as may be specified by the Company or such
underwriter or managing underwriter; provided, however, that the Restrictive
Period shall not exceed one year following the effective date of registration of
such offering.

 

            15.       Transfer Restrictions.  This Option is not transferable by
the Recipient, except as contemplated by Section 8 of this Agreement.

 

            16.       Notices.  Any and all notices (including, but not limited
to the Notice of Exercise) or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given
and effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto on a day that is not a Trading Day
or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the 2nd
 Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given.  The address for such notices and
communications shall be as set forth on the signature pages attached hereto.

 

            17.       Agreement Subject to Plan; Applicable Law. This Option is
made pursuant to the Plan and shall be interpreted to comply therewith. A copy
of such Plan is available to Recipient, at no charge, at the principal office of
the Company. Any provision of this Option inconsistent with the Plan shall be
considered void and replaced with the applicable provision of the Plan. This
Option has been granted, executed and delivered in the State of Nevada, and the
interpretation and enforcement shall be governed by the laws thereof and subject
to the exclusive jurisdiction of the courts therein.

 

[SIGNATURE PAGE FOLLOWS]

 

 

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

 

             New Energy Technologies, Inc. 

 

           

 

            By: /s/ Meetesh Patel

            Name:  Meetesh Patel

            Title:    President and Chief Executive Officer

 

            Address and Facsimile For Notices:    

3905 National Drive, Suite 110, Burtonsville,  
Maryland 20866
800-213-0689

                  

                                                                                        

            Recipient 

 

 

            /s/ John A. Conklin

            John A. Conklin

 

           

3489 Pennsylvania Avenue

Apalachin, New York 13732

 

 

 

 

 

 

(One of the following, as appropriate, shall be signed):

 

I certify that as of August 9, 2010, I am not married.

 

By his or her signature, the undersigned spouse of the Recipient named herein
hereby agrees, as of August 9, 2010, to be bound by the provisions of   the
foregoing NONSTATUTORY STOCK OPTION AGREEMENT.

 

 

 

 

__________________________

John A. Conklin, Recipient 

Recipient’s Spouse: 

 

 

_____________________________

Print Name:     

 

 

 

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Exhibit  A

 

NOTICE OF EXERCISE OF STOCK OPTION

 

To:     NEW ENERGY Technologies, Inc.

            3905 National Drive

             Suite 110,

            Burtonsville, Maryland 20866

            800-213-0689

 

 

            Attention:

           

            The undersigned hereby elects to purchase ______________ shares (the
“Purchased Option Shares”) of the Company pursuant to the terms of the Stock
Option Agreement Dated August 9, 2010 between the undersigned and New Energy
Technologies, Inc. and the undersigned (the “Option Agreement”), herewith
tenders payment of the aggregate exercise price in full, together with all
applicable transfer taxes, if any, for the Purchased Option Shares, by (check
applicable box):

 

[  ] in lawful money of the United States; or

[  ] [if permitted] the cancellation of such number of Option Shares as is
necessary, in accordance with the formula set forth in Section 6(b) of the
Option Agreement with respect to the maximum number of Option Shares purchasable
pursuant to the cashless exercise procedure set forth Section 6(b).

 

            Please issue a certificate or certificates representing said Option
Shares in the name of the undersigned as is specified below and forward the same
to the address set forth below.

 

__________________________________

Signature of Recipient

 

Print Name of Recipient: _______________________________________

 

Address For Delivery of Option Shares:

___________________________________

___________________________________

___________________________________

___________________________________

 

 

           

Appendix C

Litigation List

 

 

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Appendix D

List of Prior Works and Discoveries

 

Prior to the execution of this Employment Agreement, Mr. John A. Conklin has
been actively designing a technology(ies) related to the delivery of
electricity, under specific conditions, generated by solar photovoltaic systems
for thermal application(s).  Such technology(ies) may constitute Works and
Discoveries which result in the issuance of a patent(s).

 

 

 

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Appendix E

FORM OF EXECUTIVE RELEASE

Certain capitalized terms used in this Release are defined in the Employment
Agreement dated as of August 9, 2010 between New Energy Technologies, and John
A. Conklin (the “Agreement”) which I have executed and of which this Release is
a part.

I hereby confirm my obligations under Paragraphs 6, 7 and 8 of the Agreement.

Except as otherwise set forth in this Release, I hereby release, acquit and
forever discharge the Company, its parents and subsidiaries, and their officers,
directors, agents, servants, employees, shareholders, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys fees, damages, indemnities and obligations of
every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed (other than any claim for
indemnification I may have as a result of any third party action against me
based on my employment with the Company), arising out of or in any way related
to agreements, events, acts or conduct at any time prior to the date I execute
this Release, including, but not limited to: all such claims and demands
directly or indirectly arising out of or in any way connected with my employment
with the Company or the termination of that employment, including but not
limited to, claims of intentional and negligent infliction of emotional
distress, any and all tort claims for personal injury, claims or demands related
to salary, bonuses, commissions, stock, stock options, or any other ownership
interests in the Company, vacation pay, fringe benefits, expense reimbursements,
severance pay, or any other form of disputed compensation; claims pursuant to
any federal, state or local law or cause of action including, but not limited
to, the federal Civil Rights Act of 1964, as amended; the federal Age
Discrimination in Employment Act of 1967, as amended (“ ADEA ”); the federal
Employee Retirement Income Security Act of 1974, as amended; the federal
Americans with Disabilities Act of 1990; tort law; contract law; statutory law;
common law; wrongful discharge; discrimination; fraud; defamation; emotional
distress; and breach of the implied covenant of good faith and fair dealing;
 provided ,  however, that nothing in this paragraph shall be construed in any
way to release the Company from its obligation to indemnify me pursuant to the
Company’s indemnification obligation pursuant to agreement or applicable law.

I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under ADEA. I also acknowledge that the consideration given
under the Agreement for the waiver and release in the preceding paragraph hereof
is in addition to anything of value to which I was already entitled. I further
acknowledge that I have been advised by this writing, as required by the ADEA,
that: (A) my waiver and release do not apply to any rights or claims that may
arise on or after the date I execute this Release; (B) I have the right to
consult with an attorney prior to executing this Release; (C) I have twenty-one
(21) days to consider this Release (although I may choose to voluntarily execute
this Release earlier); (D) I have seven (7) days following the execution of this
Release by the parties to revoke the Release; and (E) this Release shall not be
effective until the date upon which the revocation period has expired, which
shall be the eighth day after this Release is executed by me.

 

Executive

 

_____________________

John A. Conklin

Acknowledgement

 

 

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State of ____________________________________}
County of __________________________________} SS.

On this _____________ day of __________, 20____before me _________________ the
undersigned officer, personally appeared John A. Conklin to me personally known
and known to me to be the same person(s) whose name(s) is (are) signed to the
foregoing instrument, and acknowledged the execution thereof for the used and
purposed therein set forth.

IN WITNESS WHEREOF I have hereunto set my hand and official seal.

_______________________________________________

Notary Public/Commissioner of Oaths

(SEAL)

My Commission Expires

 

 

 

 

 

 

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