Document:

Unassociated Document

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into on May 11, 2010 and effective as of May 15, 2010 (the "Effective Date") by and between GREEN ENERGY MANAGEMENT SERVICES, INC., a Delaware corporation (the "Company"), and JOHN MORRA III ("Executive"). In consideration of the mutual covenants and agreements set forth herein, the parties agree as follows:

1.              Employment and Duties. Subject to the terms and conditions of this Agreement, the Company agrees to employ Executive to serve as President and Director of Project Development. Executive accepts such employment and agrees to undertake and discharge the duties, functions and responsibilities commensurate with the aforesaid position and such continuing duties and responsibilities as may be prescribed from time to time by the Chief Executive Officer of the Company.

Said duties and responsibilities shall include the following:

Estimating: determine the labor and material cost by bidding out project to sub-contractors and vendors. Once cost is determined it will be forwarded over to chief operating officer. Purchasing: buy out of all projects which consists of determining contractor has all labor included according to scope of project. Buy out of all materials according to the specs 1 provide for project. Project management: making sure all projects get completed from start to finish. Once project is completed and there is a energy management contract for gem, the management will continue under gem's maintenance program.

Executive shall report to the Chief Executive Officer of the Company. Executive shall devote substantially all of his business time, attention and effort to the performance of his duties hereunder and shall not engage in any other business, profession or occupation, for compensation or otherwise, without the express written consent of the Chief Executive Officer. It shall not be considered a violation of the foregoing for Executive to serve on industry, civic, religious or charitable boards or committees, so long as such service does not individually or in the aggregate significantly interfere with the performance of Executive's responsibilities as an employee of the Company in accordance with this Agreement.

2.              Term. The term of Executive's employment pursuant to this Agreement commences on the Effective Date and, unless terminated as set forth in Section 8, shall continue for a period of two (2) years ending on the second anniversary of the Effective Date (the "Initial Term"). Following the Initial Term, this Agreement shall be extended automatically for successive one (1) year periods (the Initial Term and any extensions being collectively referred to as the "Employment Term"). Either party may terminate this Agreement as of the end of the then current Employment Term by giving written notice at least ninety (90) days prior to the end of that period, Such termination of this Agreement by Executive shall not be considered to constitute a termination of employment subject to the terms of Section 8 or Section 9, but such termination of this Agreement by the Company shall be subject to the terms of Section 10.

3.              Salary. During the Employment Term, the Company shall pay Executive an annual base salary, before deducting all applicable withholdings, of not less than $250,000.00 per year, payable at the time and in the manner dictated by the Company's standard payroll policies, but no less often than semi-monthly. Such annual base salary may be reviewed annually at the discretion of the Board of Directors ("Board") or a committee thereof. (Such annual base salary, including any increases pursuant to this Section 3, shall be referred to herein as the "Annual Base Salary").

  

  

  

4.              Other Compensation and Fringe Benefits. In addition to any executive bonus, retirement, deferred compensation and long-term incentive plans which the Company may from time to time make available to Executive, Executive shall be entitled to the following during the Employment Term:

	
  

	
(a)

	
Company shall pay present automobile loan and insurance for Executive's automobile, which is a Southside Electric existing expense;

	
  

	
(b)

	
all Company benefits generally available to the Company's other senior executives in accordance with the terms of those benefit plans. Company will pay Executive's present COBRA coverage of approximately $ 1200.00/month until the earlier of a) the time at which Executive becomes eligible to participate in and begins participation in the Company's benefits plans or (b) February 1, 2011.

	
  

	
(c)

	
all retirement, life, disability, medical and denial plan benefits generally available to the Company's other senior executives in accordance with the terms of those plans; and

5.              Vacation. For and during each calendar year within the Employment Term, Executive shall be entitled to reasonable paid vacation periods consistent with Executive's position and in accordance with the Company's policies and practices with respect to its senior executives, or as the Board may approve; provided, however, that for each calendar year, Executive shall be entitled to no less than three (3)_weeks of paid vacation. In addition, Executive shall be entitled to such holidays consistent with the Company's policies and practices with respect to its senior executives.

6.              General Expense Reimbursement. In addition to the compensation and benefits provided herein, the Company shall, upon receipt of appropriate documentation, reimburse Executive for his reasonable travel (including gas, tolls, etc.), lodging, entertainment, promotion and other ordinary and necessary business expenses, including, without limitation, lull reimbursement for the use of a cellular phone and other reasonable telephone and communication expenses.

7.              Termination of Employment. The Company or Executive may terminate Executive's employment at any time in accordance with Section 8(a) below. The Employment Term shall be deemed to have ended on the Date of Termination (as defined herein). The Employment Term shall terminate automatically upon Executive's death.

	
  

	
(a)

	
Notice of Termination. Any purported termination of Executive's employment (other than by reason of death) shall be communicated by written Notice of Termination (as defined herein) from one party to the other in accordance with the notice provisions contained in Section 24. For purposes of this Agreement, a "Notice of Termination" shall mean a notice that indicates the Date of Termination (as that term is defined in Section 8(b)) and, with respect to a termination due to Cause (as that term is defined in Section 8(d)), Disability (as that term is defined in Section 8(e) or Good Reason (as that term is defined in Section 8(f)), sets forth in reasonable detail the facts and circumstances that are alleged to provide a basis for such termination. A Notice of Termination from the Company shall specify whether the termination is with or without Cause or due to Executive's Disability. A Notice of Termination from Executive shall specify whether the termination is with or without Good Reason.

  

2

  

	
  

	
(b)

	
Date of Termination. For purposes of this Agreement, "Date of Termination" shall mean the date of Executive's death or the dale specified in the Notice of Termination (but in no event shall such date be earlier than the thirtieth (30th) day following the date the Notice of Termination is given except in the case of termination for Cause, for which the Company may give less than thirty (30) days notice, subject to the procedural requirements set forth in Section 8(d) below).

	
  

	
(c)

	
No Waiver. The failure to set forth any fact or circumstance in a Notice of Termination shall not constitute a waiver of the right to assert such fact or circumstance in an attempt to enforce any right under or provision of this Agreement.

	
  

	
(d)

	
Cause. For purposes of this Agreement, Cause shall mean (i) Executive's admission, confession, plea of "guilty" or "no contest" to or conviction in a court of law of any felony involving misuse or misappropriation of money or other properly of the Company, (ii) a willful act by Executive, which constitutes gross misconduct or fraud, or (iii) a material and willful breach by Executive of the duties and responsibilities of Executive hereunder (other than as a result of incapacity due to physical or mental illness) or any willful breach by Executive of any material term of this Agreement, in each case if such breach is not cured within thirty (30) calendar days after written notice thereof to Executive by the Company. No act or failure to act on the part of Executive shall be considered "willful" unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that his action or omission was in the best interests of the Company. A termination of Executive's employment for Cause shall be effected in accordance with the following procedures. The Company shall give Executive Notice of Termination, setting forth in reasonable detail the specific conduct of Executive that it considers to constitute Cause and the specific provision(s) of this Agreement on which it relies, and stating the date, time and place of the Board Meeting for Cause. The "Board Meeting for Cause" means a meeting of the Board at which Executive's termination for Cause will be considered, that takes place not less than ten (10) and not more than twenty (20) business days after Executive receives the Notice of Termination. Executive shall be given an opportunity, together with counsel, to be heard at the Board Meeting for Cause. Executive's termination for Cause shall be effective when and if a resolution is duly adopted at the Board Meeting for Cause by a majority vote of the entire membership of the Board, stating that in the good faith opinion of the Board, Executive conducted himself as described in the Notice of Termination, and that such conduct constitutes Cause under this Agreement.

  

3

  

	
  

	
(e)

	
Disability. For purposes of this Agreement, a termination based upon "Disability" means a termination of Executive's employment by the Company based upon Executive's entitlement to long-term disability benefits under the Company's long-term disability plan or policy, as in effect on the Date of Termination, or if no such policy exists, based on Executive's inability to engage in any substantial gainful activity for a period of at least six months, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, as determined by the Board in good faith. Until Executive is covered by Company's disability benefits. Company will pay Executive's current disability insurance payments of $73.00/month.

	
  

	
(f)

	
Good Reason. For purposes of this Agreement, a termination for "Good Reason" means a termination by Executive during the Employment Term based upon the occurrence (without Executive's consent) of any of the following:

a material diminution in Executive's Annual Base Salary;

a material diminution in Executive's authority, duties, or responsibilities;

a material breach by the Company of any of its obligations under this Agreement; or

a direction by the Chief Executive Officer of the Company that the Executive take any action that would constitute a violation of law, including without limitation, federal securities laws.

Executive's continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder; provided, however, that no such event described above shall constitute Good Reason unless: (1) Executive gives Notice of Termination to the Company specifying the condition or event relied upon for such termination within ninety (90) days of the initial existence of such condition or event; (2) the Company fails to cure the condition or event constituting Good Reason within thirty (30) days following receipt of Executive's Notice of Termination; and (3) Executive actually terminates his employment within thirty (30) days of the end of the cure period.

8.              Obligations of the Company Upon Termination. Upon the termination of Executive's employment for any reason, with or without Cause, he shall be entitled to his accrued but unpaid expenses under Paragraph 6,_accrued but unpaid vacation and Annual Base Salary through the Date of Termination; any unpaid Annual Bonus for any year prior to the year in which Executive's employment terminates; any benefits mandated under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") or required under the terms of any death, insurance, or retirement plan, program, or agreement provided by the Company to which Executive is a party or in which Executive is a participant, including, but not limited to, any short-term or long-term disability plan or program, if applicable (collectively, the salary and benefits described in the preceding sentence shall be referred to herein as the "Accrued Benefits"). In addition, Company shall pay Executive the equivalent of six (6) months' salary as severance, unless Company terminates Contract for cause pursuant to Paragraph 7(d).

  

4

  

	
  

	
(a)

	
Termination by the Company for a Reason Other than Cause, Termination Due to Death, and Termination by Executive for Good Reason. In addition to the Accrued Benefits, if Executive's employment is terminated during the Employment Term (x) by the Company for any reason other than Cause or Disability, (y) by Executive for Good Reason or (z) due to Executive's death, if Executive elects health care continuation coverage under COBRA, the Company shall pay for such health insurance coverage for a period of twelve (12) months following the termination of Executive's employment, at the same rate as it pays for health insurance coverage for its active employees (with Executive required to pay for any employee-paid portion of such coverage). After the twelve (12) month continuation period concludes, Executive shall be responsible for the payment of all premiums attributable to COBRA continuation coverage at the same rale as the Company charges all COBRA beneficiaries.

	
  

	
(b)

	
Termination by the Company for Cause and Termination by Executive Other Than for Good Reason. If Executive's employment is terminated during the Employment Term by (x) the Company for Cause, or (y) Executive for any reason other than Good Reason, then Executive shall not be entitled to receive any of the compensation set forth in, Sections 8 or 8(a) and shall only be entitled to the Accrued Benefits.

	
  

	
(c)

	
Termination due to Disability. If Executive's employment is terminated during the Employment Term due to Executive's Disability, then Executive shall not be entitled to receive any of the compensation set forth in Sections 8 or 8(a) and shall only be entitled to the Accrued Benefits.

9.             Termination Upon Expiration of the Employment Term. If the Company terminates this Agreement by giving written notice to Executive pursuant to the provisions of Section 2 hereof that it does not intend to extend the Employment Term, then upon the termination of Executive's employment upon or after the expiration of the Employment Term, the Company shall pay Executive the amounts under Section 9(a) hereof as if the Company had terminated Executive's employment during the Employment Term for any reason other than Cause or Disability.

Non-Competition and Non-Solicitation Agreement. Executive acknowledges and agrees that: (i) as President and Director of Project Development of the Company, he will be exposed to some of the most sensitive and confidential information possessed by the Company and its affiliates, including strategic plans, marketing plans, information regarding long-term business opportunities and information regarding the development status of specific Company products, as well as extensive assessments of the competitive landscape of the industries in which the Company competes; and (ii) the aforementioned information represents the product of the Company's substantial investment in research and innovation, is critical to the Company's competitive success, is disclosed to the Company's senior leaders only on a strictly confidential basis, and is not made accessible to the public or to the Company's competitors.

  

5

  

Executive further acknowledges and agrees that the business in which the Company is engaged is intensely competitive and that his employment by the Company has required, and will continue to require, that he have access to, and knowledge of, confidential information of the Company, including, but not limited to, certain or all of the Company's methods, information, systems, plans for acquisition or disposition of products, expansion plans, financial status and plans, customer lists, client data, personnel information and trade secrets of the Company.

For and in consideration of this exposure to confidential and sensitive information, and further in consideration of the salary, bonuses, stock and other incentives set forth in this Agreement. Executive agrees that during his employment with the Company and for twenty four (24) months following the termination of his employment by any party or for any reason, he will not directly or indirectly engage in or associate in the United States with any (a) entity engaging in the business engaged in by the Company or (b) any competitor of the Company; or (c) solicit, for competitive business purposes, any customer of the Company with which Executive was involved as part of his job responsibilities with the Company. Executive further agrees that during his employment with the Company and for the twenty (24) month period following the termination of his employment by any party or for any reason, Executive will not directly or indirectly within the United States hire, solicit or make an offer to any executive employee of the Company to be employed or perform services outside of the Company.

Executive acknowledges that the Company would suffer irreparable harm if he fails to comply with the provisions of this section, and that the Company would be entitled to any appropriate relief, including money damages, equitable relief and attorneys' fees. Executive further acknowledges that enforcement of the covenants in this section is necessary to ensure the protection and continuity of the business and goodwill of the Company and that, due to the proprietary nature of the business of the Company, the restrictions set forth herein are reasonable as to geography, duration and global scope.

Executive agrees that if he were to breach, or threaten to breach, any provision of this Agreement, the Company would be entitled to injunctive relief in a court of appropriate jurisdiction, without the need to post any bond, and Executive further consents and stipulates to the entry of such injunctive relief in such a court prohibiting him from breaching this Agreement. This section shall not, however, diminish the right of the Company to claim and recover damages in addition to injunctive relief.

10.            Nondelegation of Executive's Rights. The obligations, rights and benefits of Executive hereunder arc personal and may not be delegated, assigned or transferred in any manner whatsoever, nor are such obligations, rights or benefits subject to involuntary alienation, assignment or transfer.

11.            Nondisclosure of Confidential Information. During the course of Executive's employment with the Company, Executive will have access to certain Confidential Information. Executive agrees to hold in strictest confidence and not to use, except for the benefit of the Company, or except as provided below, the Company's Confidential Information, for purposes of this Agreement, "Confidential Information" means any information, without regard to form, relating to the Company's and its subsidiaries' and affiliates' clients, operations, finances, and business that derives economic value, actual or potential, from not being generally known to other persons or entities, including but not limited to technical or non-technical data, compilations (including compilations of customer, supplier, or vendor information), programs, methods, devices, techniques, processes, inventions, improvements, writings, memoranda, reports, drawings, sketches, financial data, pricing methodology, formulas, patterns, strategies, studies, business development, software systems, marketing techniques and lists of customers (including identifying information about customers), whether or not in writing. Confidential Information includes information disclosed to the Company by third parties that the Company is obligated to maintain as confidential. Confidential Information shall not include any information that: (i) at the time of the disclosure was generally known to the public; (ii) becomes known to the public through no violation of this Agreement; or (iii) is disclosed to Executive by a third party that is not under an obligation to maintain the confidentiality of the information. In the event that Executive becomes legally compelled to disclose any Confidential Information, Executive shall provide the Company with prompt written notice of such requirement prior to any disclosure to allow the Company to seek a protective order or other remedy and Executive will fully cooperate with the Company in attempting to obtain that order or remedy. Confidential Information shall cease to be treated as Confidential Information under this Agreement following the second anniversary of the termination of Executive's employment with the Company for any reason.

  

6

  

12.            Non Solicitation of Employees. Executive agrees that while Executive is employed with the Company or its affiliates, and for two (2) years after Executive's employment with the Company terminates for any reason. Executive shall not, directly or indirectly, whether on behalf of Executive or others, solicit, lure, attempt to hire away or hire any individual who is or, within six (6) months of the date of such action, was an employee of the Company or any of its affiliates. Executive agrees that in the event of a breach of this Section 13, damages will not be an adequate remedy and the Company will be entitled, inter alia, to seek injunctive relief, without the need to post a bond, to restrain any such breach, threatened or actual.

13.            Proprietary Rights. Executive assigns all of Executive's interest in any and all inventions, discoveries, improvements and patentable or copyrightable works initiated, conceived or made by Executive, either alone or in conjunction with others, during the Employment Term and related to the Company's business to the Company or its nominee. Whenever requested to do so by the Company, Executive shall execute any and all applications, assignments or other instruments that the Company shall in good faith deem necessary to apply for and obtain trademarks, patents or copyrights of the United States of America or any foreign country or otherwise protect the interests of the Company and its affiliates therein. These obligations shall continue beyond the conclusion of the Employment Term with respect to inventions, discoveries, improvements or copyrightable works initiated, conceived or made by Executive during the Employment Term.

14.            Return of Company Property. Upon termination of Executive's employment for any reason or earlier, upon the Company's request. Executive shall promptly return to the Company all Property (as defined herein) that has been entrusted or made available to Executive by the Company. For purposes of this Agreement, "Property" means all records, files, electronic storage media, memoranda, reports, price lists, customer lists, drawings, plans, sketches, keys, codes, computer hardware and software, equipment and other property of any kind or description prepared, used or possessed by Executive during Executive's employment with the Company and, if applicable, any of its affiliates (and any duplicates of any such property), which relate to the Company or its affiliates, or the Company's or its affiliates' business, products or services.

  

7

  

15.            Survival. Executive hereby acknowledges that obligations under Sections 12, 13, 14, and 15 shall survive the termination of Executive's employment and of the Employment Term and be binding by their terms at all times subsequent to the termination of employment for the periods specified therein. Except relating to any actions involving Section 13 of this Agreement and as otherwise provided in this Agreement, any disputes relating to enforcement and/or breach of this Agreement shall be resolved by arbitration to be held in New York City, New York in accordance with the Employment Arbitration Rules and Mediation Procedures ("Rules") of the American Arbitration Association through a single arbitrator selected in accordance with the Rules. The decision of the arbitrator shall be rendered within thirty (30) days of the close of the arbitration hearing and shall include written findings of fact and conclusions of law reflecting the appropriate substantive law. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof in the Slate of New York. In reaching his or her decision, the arbitrator shall have no authority (a) to authorize or require the parties to engage in discovery (provided, however, that the arbitrator may schedule the time by which the parties must exchange copies of the exhibits that, and the names of the witnesses whom, the parties intend to present at the hearing), (b) to interpret or enforce Paragraph 13 of the Agreement (for which Paragraph 19 shall provide the sole and exclusive venue), (c) to change or modify any provision of this Agreement, or (d) to award punitive damages or any other damages not measured by the prevailing parly's actual damages and may not make any ruling, finding or award that does not conform to this Agreement. Each party shall bear all of his or its own legal fees, costs and expenses of arbitration and one-half (14) of the costs of the arbitrator.

16.            No Mitigation. The Company agrees that, if Executive's employment hereunder is terminated during the Employment Term, Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to Executive by the Company hereunder, further, the amount of any payment or benefit provided for hereunder shall not be reduced by any compensation earned by Executive as the result of employment by another employer, by retirement benefits or otherwise.

17.            Entire Agreement and Amendment. This Agreement embodies the entire agreement and understanding of the parlies hereto in respect of the subject matter of this Agreement, and supersedes and replaces all prior agreements, understandings and commitments with respect to such subject matter. This Agreement may be amended only by a written document signed by both parties to this Agreement.

18.            Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction, and any action brought hereunder shall, except as set forth in Section 16, be brought in a court of competent jurisdiction in the State of New York.

  

8

  

19.            Successors. This Agreement may not be assigned by Executive. In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the stock, business and/or assets of the Company, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place, failure of the Company to obtain such assumption by a successor shall be a material breach of this Agreement. Executive agrees and consents to any such assumption by a successor of the Company, as well as any assignment of this Agreement by the Company for that purpose. As used in this Agreement, "the Company" shall mean the Company as herein before defined as well as any such successor that expressly assumes this Agreement or otherwise becomes bound by all of its terms and provisions by operation of law. This Agreement shall be binding upon and inure to the benefit of the parties and their permitted successors or assigns.

20.            Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

21.            Indemnification and Insurance Related to Employment by the Company. During the Employment Term, and after Executive's termination of employment, the Company shall maintain directors' and officers' liability insurance that is applicable to Executive and shall indemnify Executive and hold Executive harmless from and against any claim, loss or cause of action arising from or out of Executive's performance prior to or alter the Effective Date (and within the scope of his employment) as an officer, director or employee of the Company or any of its subsidiaries or other affiliates or predecessors or in any other capacity, including any fiduciary capacity, in which Executive serves at the Company's request, in each case to the maximum extent permitted by law and, to the extent more favorable, to the maximum extent permitted under the Company's Certificate of Incorporation and By-Laws. The Company shall, consistent with applicable laws, provide for the advancement to Executive, within ten (10) days of his presentation of invoices or other appropriate documentation, of expenses incurred or sustained in connection with any action, suit or proceeding to which Executive or his legal representatives may be made a party by reason of his being or having been an officer, director or employee of the Company or any of its subsidiaries or other affiliates or predecessors or his being or having been engaged in any other capacity at the Company's request. The rights under this Section 22 shall in all cases be on terms no less favorable to Executive than to other senior executives of the Company and shall survive the termination of employment and the Employment Term until the expiration of the applicable statute of limitations.

22.            Severability. If any section, subsection or provision hereof is found for any reason whatsoever to be invalid or inoperative, that section, subsection or provision shall be deemed severable and shall not affect the force and validity of any other provision of this Agreement. If any covenant herein is determined by a court to be overly broad thereby making the covenant unenforceable, the parlies agree and it is their desire that such court shall substitute a reasonable judicially enforceable limitation in place of the offensive part of the covenant and that as so modified the covenant shall be as fully enforceable as if set forth herein by the parties themselves in the modified form.

  

9

  

23.            Notices. Any notice, request, or instruction to be given hereunder shall be in writing and shall be deemed given when personally delivered or three (3) days after being sent by United States Certified Mail, postage prepaid, with Return Receipt Requested, to the parties at their respective addresses set forth below:

To the Company:

Green Energy Management Services, Inc.

Attention: Michael Samuel

381 Teaneck Road, Suite 4

Teaneck, NJ 07666-4069

To Executive:

John Morra

381 Teaneck Road, Suite 3

Teaneck, NJ 07666-4069

24.            Waiver of Breach. The waiver by any party of any provisions of this Agreement shall not operate or be construed as a waiver of any prior or subsequent breach by the other party.

25.            Tax Withholding. The Company or an affiliate may deduct from all compensation and benefits payable under this Agreement any taxes or withholdings the Company is required to deduct pursuant to state, federal or local laws.

  

10

  

26.            Code Section 409A. To the extent applicable, it is intended that this Agreement and any payment made hereunder shall be exempt from or comply with the requirements of Section 409A of the Code, and any related regulations or other guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service ("Code Section 409A"). Any provision that would cause the Agreement or any payment hereof to fail to be exempt from or satisfy Code Section 409A shall have no force or effect until amended to comply with Code Section 409A, which amendment may be retroactive to the extent permitted by Code Section 409A. Without limiting the generality of the foregoing: (i) for all purposes under this Agreement, reference to Executive's "termination of employment" (and corollary terms) with the Company shall be construed to refer to Executive's "separation from service" (as determined under Treasury Regulation Section 1.409A-l(h), as uniformly applied by the Company) with the Company; and (ii) to the extent that any reimbursement, fringe benefit or other, similar plan or arrangement in which Executive participates during the term of Executive's employment under this Agreement or thereafter provides for a "deferral of compensation" within the meaning of Code Section 409A of the Code, (x) the amount eligible for reimbursement or payment under such plan or arrangement in one calendar year may not affect the amount eligible for reimbursement or payment in any other calendar year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid), and (y) subject to any shorter time periods provided in any expense reimbursement policy of the Company, any reimbursement or payment of an expense under such plan or arrangement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred. In the event that Executive is, at the Date of Termination, a "specified employee" within the meaning of Code Section 409A and any related regulations, no amount which is nonqualified deferred compensation subject to such Code Section and regulations shall be paid to Executive prior to the date which is six months after Executive's separation from service. If the payments arc delayed as a result of the previous sentence, then on the first business day following the end of such six (6) month period (or such earlier date upon which such amount can be paid under Section 409A of the Code without resulting in a prohibited distribution), the Company shall pay Executive a lump-sum amount equal to the cumulative amount that would have otherwise been payable to Executive during such period, plus interest credited from the date of Executive's separation from service to the date of payment at the "applicable federal rate" provided for in Section 7872(f)(2)(A) of the Code in effect as of the dale of such separation from service.

[Signature Page Follows]

  

11

  

IN WITNESS WHEREOF the parties have executed this Agreement on the date first set forth above.

	  	  	
GREEN ENERGY MANAGEMENT SERVICES, INC., Company

	  
	  	  	  	  
	  	  	  	  
	  	
By:

	
/ s/ Michael Samuel as C.E.O. G.E.M.S.

	  
	  	  	
MICHAEL SAMUEL

	  
	  	  	
Chief Executive Officer

	  
	  	  	  	  
	  	  	  	  
	  	  	
/s/ John Morra III

	  
	  	  	
JOHN MORRA III, Executiveexh108formofoptagmt.htm - Generated by SEC Publisher for SEC Filing

 

STOCK OPTION AGREEMENT

 

                        THIS STOCK OPTION AGREEMENT (the “Agreement”) is made and entered into to be effective as of the 1st day of May, 2010

 

BETWEEN:

Alaska Pacific Energy Corp., a company incorporated under the laws of the State of Nevada and having an address for notice and delivery located at;

 

                        2005 Costa Del Mar Road, 

                        Carlsbad CA, 92009

 (the “Company”);

 

                                                                                                OF THE FIRST PART

 

AND:

                        

having an address for notice and delivery located at;

 

            

                        the “Optionee”).

 

                                                                                                OF THE SECOND PART

 

whereas, effective as of May 1, 2010 the Board of Directors of the Company determined that the Optionee should receive an option to purchase shares of the Company’s common stock (the “Common Stock”) in order to provide the Optionee with an opportunity for investment in the Company and additional incentive to pursue the success of the Company, said option to be for the number of shares, at the price per share and on the terms as set forth in this Agreement;

 

            AND WHEREAS the Optionee desires to receive an option on the terms and conditions set forth in this Agreement;

 

            NOW, THEREFORE, the parties to this Agreement agree as follows:

 

1.         Grant of Option.

 

            The Company hereby grants to the Optionee, as a matter of separate agreement and not in lieu of salary or any other compensation for service, the right and option (the “Option”) to purchase all or any part of an aggregate of five hundred thousand (500,000) common shares of the authorized and unissued $0.001 par value Common Stock of the Company (collectively, the “Option Shares”) pursuant to the terms and conditions as set forth in this Agreement.

 

2.         Option Price.

 

            At any time when shares are to be purchased pursuant to the Option, the purchase price for each Option Share shall be $0.25 (the “Option Price”).

 

 

3.         Option Period.

 

 

 

 

            The option period with respect to all of the Option Shares shall commence from the Date of Grant and shall terminate on April 30, 2012, unless terminated earlier as provided in this Agreement.  If the Optionee’s employment is terminated for any reason other than death or for cause, any options granted to the Optionee which have not been exercised shall terminate at the sole discretion of the Company, within up to ten calendar days after the effective date of such termination and shall be exercisable during such ten-day period only to the extent they were exercisable on the effective date of termination.  If the Optionee’s employment terminates because of death, the Option may be exercised by the Optionee’s estate in full for one year after such death; provided, always, that payment is tendered within one year after the date of death.  If the Optionee’s employment is terminated for cause, any unexercised portion of the Option shall immediately expire.

 

4.         Exercise of Option.

 

(a)        The Option may be exercised by delivering to the Company:

 

(i)         a Notice and Agreement of Exercise of Option (the “Notice and Agreement of Exercise of Option”), substantially in the form attached hereto as Exhibit “A”, specifying the number of Option Shares with respect to which the Option is exercised, and

 

(ii)        full payment of the Option Price for such shares, either in cash or by certified check, or a combination thereof.

 

(b)        Promptly upon receipt of the Notice and Agreement of Exercise of Option and the full payment of the Option Price by the Optionee (including payment or provision for payment of any applicable withholding or similar taxes), the Company shall deliver to the Optionee a properly executed certificate or certificates representing the Option Shares being purchased.

 

5.         Securities Laws Requirements.

 

No Option Shares shall be issued unless and until, in the opinion of the Company, any applicable registration requirements of the United States Securities Act of 1933, as amended (the “Securities Act”), any applicable listing requirements of any securities exchange on which stock of the same class has been listed, and any other requirements of law or any regulatory bodies having jurisdiction over such issuance and delivery have been fully complied with.  Pursuant to the terms of the Notice and Agreement of Exercise of Option that shall be delivered to the Company upon each exercise of the Option, the Optionee, and the Optionee’s designate if applicable, shall acknowledge, represent, warrant and agree as follows:

 

(a)        all Option Shares shall be acquired solely for the account of the Optionee, or for the account of the Optionee’s designate if applicable, for investment purposes only and with no view to their resale or other distribution of any kind;

 

(b)        no Option Shares shall be sold or otherwise distributed in violation of the Securities Act or any other applicable federal or state securities laws;

 

(c)        if the Optionee, or the Optionee’s designate if applicable, is subject to reporting requirements under Section 16(a) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Optionee, or the Optionee’s designate if applicable, shall:

 

 

 

 

(i)         be aware that the grant of the Option to purchase Option Shares is an event that may require reporting on Forms 3, 4 or 5 under Section 16(a) of the Exchange Act;

 

(ii)        be aware that any sale by the Optionee or the Optionee’s immediate family of the Company’s Common Stock or of any of the Option Shares within six months before or after any grant or exercise of the Option may create liability for him under Section 16(b) of the Exchange Act;

 

(iii)       consult with his counsel regarding the application of Section 16(b) of the Exchange Act prior to any exercise of the Option, and prior to any sale of the Company’s Common Stock or the Option Shares within six months after any grant or exercise of the Option;

 

(iv)       assist the Company with the filing of the applicable Forms 3, 4 or 5 with the Securities and Exchange Commission; and

 

(v)        timely file all reports required under the federal securities laws;

 

(d)        the Optionee, or the Optionee’s designate if applicable, shall report all sales of Option Shares to the Company in writing on a form prescribed by the Company; and

 

(e)        if any of the Option Shares are being acquired solely for the account of the Optionee’s designate, each of the Optionee and the Optionee’s designate is either a consultant or advisor to the Company, the Optionee is under privity of contract or arrangement with the Company and each of the Optionee and the Optionee’s designate, in such capacity, has rendered bona fide services to the Company which include, but are not limited to, financial, administrative and/or managerial services; provided that neither the Optionee nor the Optionee’s designate rendered or renders services, directly or indirectly, to promote or maintain a market for the Company’s securities and, furthermore, provided that no such services were rendered or are being rendered in connection with the offer or sale of securities in a capital-raising transaction on behalf of the Company; failing any of which any Option Shares acquired hereunder may not be or may not have been registerable under the Securities Act and may not be sold unless they are sold pursuant to an exemption from registration under the Securities Act.

 

            The foregoing restrictions or notice thereof shall be placed on the certificates representing the Option Shares purchased pursuant to the Option and the Company may refuse to issue the certificates or to transfer the shares on its books unless it is satisfied that no violation of such restrictions will occur.

 

6.         Transferability of Option.

 

            The Option shall not be transferable, and any attempt to do so shall void the Option.  During the Optionee’s lifetime the Option is exercisable only by the Optionee.

 

7.         Adjustment by Stock Split, Stock Dividend, etc.

 

            If at any time the Company increases or decreases the number of its outstanding shares of Common Stock, or changes in any way the rights and privileges of such shares, by means of the payment of a stock dividend or the making of any other distribution on such shares payable 
in its Common Stock, or through a stock split or subdivision of shares, or a consolidation or combination of shares, or through a reclassification or recapitalization involving its Common Stock, the numbers, rights and privileges of the shares of Common Stock included in the Option shall be increased, decreased or changed in like manner as if such shares had been issued and outstanding, fully paid and non-assessable at the time of such occurrence.

 

 

 

 

8.         Merger or Consolidation.

 

(a)        Effect of transaction.  Upon the occurrence of any of the following events, if the notice required by paragraph 8(b) hereinbelow has been given, the Option shall automatically terminate and be of no further force or effect whatsoever:

 

(i)            the dissolution or liquidation of the Company

 

(ii)           the appointment of a receiver for all, or substantially all, of the Company’s assets or business:

 

(iii)          the appointment of a trustee for the Company after a petition has been filed for the Company’s reorganization under applicable statutes; or

 

(iv)         the sale, lease or exchange of all, or substantially all, of the Company’s assets and business.

 

(b)        Notice of such occurrence.  At least 30 days’ prior written notice of any event described in paragraph 8(a) hereinabove, except the transactions described in subparagraphs 8(a)(ii) and (iii) as to which no notice shall be required, shall, at the Company’s option, be given by the Company to the Optionee.  After receipt of such notice the Optionee may, at any time before the occurrence of the event requiring the giving of notice, exercise the unexercised portion of the Option as to all the shares covered thereby.  Such notice shall be deemed to have been given when delivered personally to the Optionee or pursuant to the provisions of paragraph 11 of this Agreement.  If no such notice shall be given with respect to a transaction described in subparagraphs 8(a)(i), (ii) or (iv), the provisions of paragraph 8(a) shall not apply and the Option shall not terminate upon the occurrence of such transaction.

 

9.         Common Stock to be Received upon Exercise.

 

            The Optionee understands that the Company is under no obligation to register the Option Shares under the Securities Act, and that, in the absence of any such registration, the Option Shares cannot be sold unless they are sold pursuant to an exemption from registration under the Securities Act.  The Company is under no obligation to comply, or to assist the Optionee in complying with, any exemption from such registration requirement, including supplying the Optionee with any information necessary to permit routine sales of the Option Shares under Rule 144 of the United States Securities and Exchange Commission (the “Rule”).  The Optionee also understands that, with respect to the Rule, routine sales of securities made in reliance upon such Rule only can be made in limited amounts in accordance with the terms and condition of the Rule, and that in cases in which the Rule is inapplicable, compliance with a disclosure exemption under the Securities Act will be required.  Thus, the Option Shares will have to be held indefinitely in the absence of registration under the Securities Act or an exemption from registration.

 

                        Furthermore, the Optionee fully understands that the Option Shares have not been registered under the Securities Act and that they will be issued in reliance upon an 
exemption which is available only if Optionee, or the Optionee’s designate if applicable, acquires such shares for investment and not with a view to distribution.  The Optionee is familiar with the phrase “acquired for investment and not with a view to distribution” as it relates to the Securities Act and the special meaning given to such term in various releases of the Securities and Exchange Commission.

 

 

 

 

10.       Privilege of Ownership.

 

                        The Optionee and the Optionee’s designate shall not have any of the rights of a shareholder with respect to the Option Shares covered by the Option except to the extent that one or more certificates for such Option Shares shall be delivered to them upon exercise of the Option.

 

11.       Notices.

 

                        Any notices required or permitted to be given under this Agreement shall be in writing and they shall be deemed to be given upon receipt by sender or sender’s return receipt for acknowledgment of delivery of said notice by postage prepaid registered mail.  Such notice shall be addressed to the party to be notified as shown below:

 

                        The Company:            2005 Costa Del Mar Road, 

                                                            Carlsbad CA, 92009

 

                        The Optionee:             

 

 

            Any party may change its address for purposes of this paragraph by giving the other party written notice of the new address in the manner set forth above.

 

12.       General Provisions.

 

(a)        Amendments.  This Agreement may not be amended nor may any rights hereunder be waived except by an instrument in writing signed by the party sought to be charged with such amendment or waiver.

 

(b)        Proper law.  This Agreement shall be construed in accordance with, and governed by, the laws of the State of Nevada.

 

(c)        Time of the essence.  Time shall be of the essence of this Agreement.

 

(d)          Gender.  All pronouns contained herein and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural as the identity of the parties hereto may require.

 

(e)        Entire agreement.  The provisions contained herein constitute the entire agreement between the parties hereto and supersede all previous understandings and agreements with respect to the granting of the within Option.

 

(f)        Approvals.  This Agreement is or may be subject to the prior approval of all regulatory authorities having jurisdiction over the Company where required by the laws, regulations and by-laws to which the Company is subject, and, where not already obtained, is or may be subject, prior to exercise of the Option, to the 
approval by the shareholders of the Company to the granting of options in the capital stock of the Company.

 

 

 

 

            IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the day and year first above written.

 

                                    

ALASKA PACIFIC ENERGY CORP.

 

 

 

 

                                                                                    

James R. King,                                               

 

 

 

SIGNED and ACCEPTED by

 

 

 

 

 

 

 

                                                            

{Optionee Signature}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ALASKA PACIFIC ENERGY CORP.

 

STOCK OPTION AGREEMENT
 NOTICE AND AGREEMENT OF EXERCISE OF OPTION

 

The Optionee hereby exercises its Stock Option dated, ______________ ____, 20____ as to _______________________ shares of Alaska Pacific Energy Corp. Common Stock.

 

Enclosed are the documents and payment as specified in paragraph 2, 3 and 4 of the Optionee’s Option Agreement.

 

                        The Optionee understands that no Option Shares will be issued unless and until, in the opinion of Alaska Pacific Energy Corp. (the “Company”), any applicable registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), exchange on which stock of the same class is then listed, and any other requirements of law or any regulatory bodies having jurisdiction over such issuance and delivery, shall have been fully complied with.  The Optionee hereby acknowledges, represents, warrants and agrees, to and with the Company as follows:

 

(a)        the Option Shares the Optionee is purchasing are being acquired for the Optionee’s own account for investment purposes only and with no view to their resale or other distribution of any kind, and no other person (except if the Optionee is married, that person’s spouse) will own any interest therein;

 

(b)        the Optionee will not sell or dispose of the Option Shares in violation of the Securities Act or any other applicable federal or state securities laws;

 

(c)        if and so long as the Optionee is subject to the reporting requirements under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Optionee recognizes that any sale by the Optionee of the Company’s Common Stock within six months before or after any grant or exercise of the Optionee’s stock Option may create liability for the Optionee under Section 16(b) of the Exchange Act (“Section 16(b)”);

 

(d)        the Optionee has consulted with the Optionee’s counsel regarding the application of Section 16(b) to this exercise of the Optionee’s stock Option;

 

(e)        the Optionee will consult with his counsel regarding the application of Section 16(b) before the Optionee makes any sale of the Company’s Common Stock, including the Option Shares, within six months after the date of this Agreement;

 

(f)        the Optionee, will report all sales of Option Shares to the Company in writing.

 

(g)        the Optionee will and will timely file all reports that the Optionee may be required to file under the federal securities laws;

 

(h)        the Optionee agrees that the Company may, without liability for its good faith actions, place legend restrictions upon the Option Shares and issue “stop transfer” instructions requiring compliance with applicable securities laws and the terms of the Optionee’s stock Option; and

 

 

 

 

(i)         the Optionee confirms that the Optionee is under privity of contract or arrangement with the Company and in such capacity, has rendered bona fide services to the Company which include, but are not limited to, financial, administrative and/or managerial services; provided that the Optionee has not rendered or renders services, directly or indirectly, to promote or maintain a market for the Company’s securities and, furthermore, provided that no such services were rendered or are being rendered in connection with the offer or sale of securities in a capital-raising transaction on behalf of the Company; failing any of which any Option Shares acquired hereunder may not be or may not have been registerable under the Securities Act and may not be sold unless they are sold pursuant to an exemption from registration under the Securities Act.

 

                        The foregoing restrictions or notice thereof may be placed on the certificates representing the Option Shares purchased pursuant to the Option and the Company may refuse to issue the certificates or to transfer the Option Shares on its books unless it is satisfied that no violation of such restrictions will occur.

 

                        The number of Option Shares specified above are to be issued in the following registration manner as directed by the Optionee and,  as set forth hereinbelow:

 

 

Registration respecting the Optionee (must be completed by the Optionee)

 

 

 

                                                                                    __________________________            

  (Print Optionee’s name)                                                      (Optionee’s signature)

 

 

 

 

 

(Address of Optionee)

 

 

                                                            

                                                                                    

 

                                                            

 

 

                                                                                    

            

 

                                                                                    

            Date of Exercise

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}]]