Document:

exv10w11w1

 

Exhibit 10.11.1

AMENDMENT TO EXECUTIVE EMPLOYEE AGREEMENT DATED

February 25, 2008

     This AMENDMENT TO THE EXECUTIVE EMPLOYMENT AGREEMENT dated July 1, 2006 (“Amendment”) is made
as of July 1, 2008 (“Amendment Effective Date”) by and between Energy Recovery Inc., a Delaware
corporation, with its principal offices at 1908 Doolittle Drive, San Leandro, CA 94577 (the
“Company”) and MariaElena Ross, an individual (the “Executive”) (together, the “Parties”).

     Pursuant to Article 5.11 of the Executive Employment Agreement, the Parties hereby amend that
Agreement as follows:

Article 1.2. The Parties amend and replace Article 1.2 to read as follows:

Term. The term of Executive’s employment is hereby extended through
December 31, 2008. Thereafter, the Executive Employment Agreement, as amended,
shall automatically terminate and Executive’s employment with the Company will
become “at will.” “At will” employment means that either the Company or Executive
may terminate Executive’s employment at any time with or without cause and with
or without notice. Such at-will employment cannot be changed except by a writing
signed by the Executive and a duly authorized executive or Board member of the
Company.

Article 2.1(a). The Parties amend and replace Article 2.1(a) to read as follows:

Base Salary. Effective as of January 1, 2008, Executive’s base salary
will be $12,083.34 per month ($145,000 per annum), less any deductions required
by law, which shall continue to be paid in accordance with the Company’s normal
and customary payroll practices, but no less frequently than monthly. The
Executive’s base salary shall be reviewed annually and may be reasonably adjusted
in the sole discretion of the Company.

Article 2.1(b). The Parties amend and replace Article 2.1 (b) to read as follows:

Annual Bonus.

(i) The Executive shall be eligible to participate in the Company’s annual
bonus program and shall be eligible to earn an annual bonus in an amount not to
exceed one (1) times Executive’s base salary. If the Executive is eligible to
earn an annual cash bonus, the exact amount of the Executive’s annual cash
bonus, if any, shall be determined by the Company pursuant to the attainment of
performance goals as set forth in the attached performance matrix prepared by
the Company.

 

 

(ii) Notwithstanding Article 2. l(b)(i) to the contrary, however, in the event that
the scheduled IPO is not consummated through no fault of the Executive, as
determined by the Board (with the recusal by the Executive from such Board
determination, as necessary) in good faith, although the Executive may not be
eligible to receive any annual cash bonus in 2008, all of the Executive’s stock
options granted under Executive’s 2006 Equity Compensation Grant pursuant to Article
2.1(c) of Executive’s Executive Employment Agreement shall immediately and fully
vest effective as of December 31, 2008,

Article 3.1(a)(iv).
The Parties amend and replace Article 3.1(a)(iv) to read as
follows:

Executive’s violation of the Company’s Code of Conduct, if any, and as amended from
time to time, confidentiality obligations to the Company or misappropriation of
Company assets; or

Article 3.2(e)(i)(D). The Parties amend and replace Article 3.2(e)(i)(D) to read as
follows:

any material reduction, limitation or failure to pay or provide any of the
compensation provided to the Executive under Article 2.1 of this Agreement or any
other agreement or understanding between the Executive and the Company, or pursuant
to the Company’s policies and past practices, as of the date immediately prior to
the Change in Control; or

Article 3.2(e)(ii). The Parties add Article 3.2(e)(ii)(E) as follows:

“Change in Control,” as defined above, shall not in any instance be construed
to include the Company’s IPO or any event occurring in connection with or as a
result of the Company’s IPO.

All other terms contained in the Executive Employment Agreement shall continue in full force and effect.

WITNESS, the execution of this Amendment as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	“Executive”	 	 	 	“Company”	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Energy Recovery Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ MariaElena Ross                    3/4/08
	 	 
	 	By:
	 	/s/ G.G. Pique
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	MariaElena Ross
	 	 	 	 	 	Title:  President and CEO	 	 

 

 

	 	 	 
	TO:

	 	MariaElena Ross
	FROM:

	 	GG Pique
	DATE:

	 	March 3, 2008
	SUBJECT:

	 	2008 Performance Bonus
	 

ERI will pay a maximum of 30% of base salary at the end of the year for exceeding the
following performance objectives:

	1)	 	Hire Sr. HR person to delegate HR administrative function
	 
	2)	 	Establish long-term incentive program for retention
	 
	3)	 	Up-graded benefits program
	 
	4)	 	Employee training seminars on taxes, IPO, stock, estate planning, etc.

The actual amount payable will be based on a subjective appraisal of each performance objective per
the following rating schedule:

	 	 	 
	100%

	 	Exceeded objective
	75%

	 	Met objective
	50%

	 	Met objective late or incompletely
	25%

	 	Substantially initiated effort to meet objective
	0%

	 	Did not meet objective

	 	 	 	 	 	 	 	 	 
	/s/ G.G. Pique

	 	 	 	 	 	/s/ MariaElena Ross
	 	3/4/08
	 	 	 	 	 
	G.G. Pique

	 	Date
	 	 	 	MariaElena Ross
	 	Dateexv10w12

 

     Exhibit 10.12

INDEPENDENT CONTRACTOR AGREEMENT

          This Independent Contractor Agreement (“Agreement”) is entered into as of January 23, 2008,
by and between Darby Engineering, LLC (“Independent Contractor”) and Energy Recovery, Inc., a
Delaware corporation (“Company”).

          1. Position. Company agrees to engage Contractor as an independent contractor to
provide engineering consulting services (“Services”) for the Company identified on the attached
Appendix A. Contractor will furnish at Contractor’s sole expense, all applicable licenses
and permits required to perform the Services.

          2. Term and Termination. This Agreement will become effective as of January 23, 2008
and shall continue for an initial minimum period of twelve (12) months after that date, and
thereafter on a month-to-month basis.

          This Agreement may be terminated by Company at any time for cause effective immediately upon
notice of termination from Company. Upon termination for cause, Contractor shall be entitled to
receive only accrued but unpaid compensation as of the date of termination for authorized Services
of its Employee actually performed as of that date. For purposes of this Agreement, “termination
for cause” shall include, but not be limited to: (a) material violation of this Agreement not cured
within thirty (30) days after written notice of the breach from Company; (b) any act of Contractor
or the Employee exposing Company to liability to others for personal injury or property damage; or
(c) automatically on the occurrence of any of the following: (i) bankruptcy or insolvency of
Contractor, (ii) any attempted assignment of this Agreement by Contractor, or (iii) the death or
permanent and total disability of the Employee.

          This Agreement may be terminated by Contractor by providing thirty days written notice. Said
notice shall be properly addressed and delivered to the Company in accordance with the provisions
of Section 12 of this Agreement. Contractor will insure that all property belonging to the Company
will be returned by the effective date of termination. In addition, Contractor will insure that all
invoices for services performed prior to the date of termination will be submitted no later than
thirty days from the termination effective date.

          3. Compensation. In consideration for Services to be rendered by Contractor, and
provided that Contractor performs all of its obligations hereunder, Company shall pay Contractor
pursuant to the terms set forth in the attached Appendix B. Except for the compensation
specified in this Agreement, Contractor shall receive no other compensation or reimbursement of any
nature from Company, with respect to the services to be provided under this Agreement by Employee,
and specifically shall not receive medical, life or other insurance, workers’ compensation,
vacation, sick days or holiday benefits, or any other benefits. If any local, state or federal or
other governmental license, excise or other taxes are imposed on any sums due Contractor, Company
is authorized, if so required, to withhold or deduct such taxes applicable or proportionate to the
sums otherwise due Contractor.

          4. No Reimbursement. Contractor will not be reimbursed for any expenses, whether or
not reasonable and necessary, incurred in the rendering of services under this Agreement, unless
the Company has approved such expenses in writing in advance.

 

 

          5. Contractor’s Responsibilities.

          (a) Contractor shall not have the power to enter into contracts on behalf of Company, nor
shall Contractor represent that it has such power.

          (b) Contractor will determine the method, details, and means of performing the Services and
may at its own expense, employ such agents or employees as it deems necessary to perform the
Services. Company may not control, direct, or supervise Contractor’s agents or employees in the
performance of the Services and it shall not be liable for any expenses or costs relating to
Contractor’s agents or employees unless Company has agreed in writing, prior to the time such
expenses or costs are incurred, to reimburse Contractor for such expenses.

          (c) Contractor agrees to accept exclusive liability for the payment of any and all payroll
taxes, self-employment taxes, and social security and other contributions that are based on the
compensation paid to Contractor hereunder or on the wages, salaries, or other remuneration paid to
the agents or employees of Contractor, if any. Contractor shall reimburse and indemnify and defend
Company for and against any such taxes or contributions that Company may be compelled to pay.

          (d) Contractor may select its own specific time or period of time to perform the
Services.

          (e) Contractor agrees to act in a manner that will not detrimentally affect the operation or
reputation of Company while performing the Services pursuant to this Agreement. Company will not
provide Contractor with any training as to the methods or techniques to be used by Contractor in
performing Services, and Company shall have no control as to the manner and means, techniques or
methods by which Contractor accomplishes the Services.

          (f) Contractor and Employee acknowledge that the Company will continually develop Confidential
Information, that the Employee may develop Confidential Information for the Company and that the
Employee may learn of Confidential Information during the course of employment under this
engagement. Each of Contractor and the Employee agrees that, except as required for the proper
performance of their respective duties for the Company, they will not, directly or indirectly, use
or disclose any Confidential Information, as defined below. The Employee understands and agrees
that this restriction will continue to apply after his employment terminates, regardless of the
reason for termination. The term “Confidential Information” shall mean any and all confidential
and/or proprietary knowledge, data or information of the Company. By way of illustration but not
limitation, “Proprietary Information” includes (i) trade secrets, inventions (including computer
programs and any upgrades thereto), mask works, ideas, processes, formulas, source and object
codes, data, programs, other works of authorship, know-how, improvements, discoveries,
developments, designs and techniques whether in draft, preliminary or final form; and (ii)
information regarding plans for research, development, new products, marketing and selling,
business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers
and customers; and (c) information regarding the skills and compensation of other employees of the
Company.

          (g) Contractor agrees that all Confidential Information which it creates or to which it has
access as a result of its engagement is and shall remain the sole and exclusive property of the
Company. Except as required for the proper performance of their respective duties, neither the

 

 

Contractor nor the Employee will copy any documents, discs, tapes or other media containing
Confidential Information (“Documents”). Each will return to the Company immediately after this
engagement terminates, and at such other times as may be specified by the Company, all Documents
and copies of Confidential Information and all other property of the Company then in their
respective possession or control, including, but not limited to, computers, mobile telephones,
facsimile machines, and paging and other communications devices.

          (h) The parties agree that the damages to Company caused by breach of this Agreement by
either Contractor or Employee are impracticable of ascertainment, and that Company’s remedy at
law would therefore be inadequate; consequently, the obligations of each of Contractor and the
Employee hereunder may be specifically enforced by injunction or other equitable remedies. The
existence of a claim of any nature by either of them against Company shall not constitute a
defense to the enforcement by Company of this Agreement.

          6. Independent Contractor Status. The Services rendered pursuant to this Agreement
are for a specified price for a specified result, and Contractor is under the control of
Company as to the result of the Services only, and not as to the means by which such result is accomplished.
Contractor acknowledges that it is an independent contractor and that:

          (a) Company is under no obligation to Contractor to maintain public, professional, product or
other liability insurance to covet risks, if any, to Contractor.

          (b) Contractor is excluded from the benefits of any workers’ compensation insurance maintained
by Company. To the extent desired by Contractor, adequate levels of medical and disability
insurance coverage should be maintained by Contractor to provide benefits in the event that
Contractor or its personnel sustain injuries while performing Services pursuant to this Agreement.
Contractor is excluded from receiving any unemployment and disability insurance benefits through
Company.

          (c) Company shall not make deductions from the compensation of Contractor for any foreign,
federal or state income tax withholding, Federal Insurance Contribution Act, state disability
funds, or Federal Unemployment Tax Act

          (d) Contractor is excluded from coverage of any foreign, state and/or federal labor laws that
regulate the payment of wages, included but not limited to, minimum wage and overtime provisions.

          7. Outside Activities. During the term of this Agreement, Contractor is free to offer
its services to the general public. This Agreement is not intended to create an exclusive
contractual relationship between Contractor and Company.

          8. Cooperation After Notice of Termination of Agreement. Following any notice of
termination of this Agreement or the expiration of this Agreement pursuant to Section 2 above,
Contractor shall cooperate with Company in all matters relating to the winding up of its pending
work on behalf of Company and the orderly transfer of any such pending work to such other persons
as may be designated by Company prior to termination.

          9. Assignment. The rights and obligations of Company under this Agreement shall inure
to the benefit of and shall be binding upon the successors and assigns of Company. The rights and

 

 

obligations of Contractor are personal in nature and may not be assigned without Company’s
prior written consent, which may be withheld in the absolute discretion of Company.

          10.
Arbitration —Damages —Governing Law. Any dispute, claim or controversy arising out
of or related to this Agreement, except with respect to a claim for equitable relief, shall be
resolved by arbitration in San Francisco, California, USA, under the Commercial Rules and auspices
of the American Arbitration Association , San Francisco Regional Office (the “Association”). Any
such arbitration shall be conducted by a panel of three arbitrators, one nominated by each of
Company, on the one hand, and all other parties, on the other hand, within 15 days after
confirmation of notice of filing of the demand is sent by the Association, and the third, who shall
be an attorney at law admitted to practice in California, and who shall be selected by the
Association from its Commercial Panel of Arbitrators in accordance with Rule R-15 of the Commercial
Rules of the Association. THE ARBITRATORS SHALL HAVE NO POWER TO AWARD, NOR SHALL ANY PARTY HAVE
ANY RIGHT TO, ANY PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, SUCH AS, BUT NOT LIMITED TO, LOSS OF
USE OR LOST PROFITS, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. The
award of the arbitrators shall be in writing and shall be in accord with applicable law and shall
be binding and conclusive on all parties, and an award based thereon may be entered in any court of
competent jurisdiction. All costs, (including without limitation arbitrators’ fees and reasonable
attorneys’ fees) of the prevailing party (or parties) shall be borne by the losing party; or in the
event of a partial award for a party hereto, such costs shall be awarded in proportion to such
partial award as determined by the arbitrators. Furthermore, in any action with respect to a claim
for equitable relief, or for any provisional remedy pending arbitration, or for confirmation of the
awards of the arbitrators following arbitration, the prevailing party shall be entitled to recover
its costs and reasonable attorneys’ fees. Notwithstanding the foregoing, nothing in this Section 10
shall be construed to preclude either party from seeking provisional remedies, including, without
limitation, temporary restraining orders and preliminary injunctions, from any court of competent
jurisdiction, in order to protect its rights under this Agreement pending arbitration (provided
that no such provisional remedies shall be sought as a means to avoid arbitration. This Agreement
shall be construed in accordance with the laws of the State of California, USA, applying to
contracts made and to be performed in California, USA.

          11. Entire Agreement. This Agreement and its attached appendices constitute the entire
Agreement between the parties respecting the provision of Services on behalf of Contractor to
Company, and there are no other representations, warranties or commitments concerning such subject
matter. This Agreement supersedes all prior or contemporaneous agreements, commitments,
representations, writings, and discussions with respect to the subject matter of this Agreement
between Contractor and Company, whether oral or written. This Agreement may be amended only by an
instrument in writing executed by each party. CONTRACTOR AND EMPLOYEE EXPRESSLY ACKNOWLEDGE THAT
THEY HAVE READ THE TERMS OF THIS AGREEMENT AND HAVE HAD THE OPPORTUNITY TO DISCUSS THOSE TERMS WITH
CONTRACTOR’S COUNSEL.

          12. Notices. Any notice, request, demand or other communication hereunder shall be in
writing and shall be deemed to be duly given when personally delivered by hand or facsimile
transmission to any officer of Company or to Contractor, as the case may be, transmitted or
addressed as provided beneath each party’s signature to this Agreement (or such other address as
either party may designate by written notice to the other party in accordance with this Section
12).

 

 

          13. Section Headings. Section and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or interpretation of this
Agreement.

          14. Savings Clause. Should any valid and applicable foreign, federal or state law or
final determination of any administrative agency or court of competent jurisdiction affect any
provision of this Agreement, the provision or provisions so affected shall be automatically
conformed to the law or determination and otherwise this Agreement shall continue in full force and
effect.

          15. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original.

          16. Number and Gender. As used in this Agreement, the singular number shall include
the plural, and the masculine gender shall include the feminine and neuter, and vice versa, as the
context requires.

          17. Language. This Agreement is written in the English language. If it is translated
into any other language, the provisions of the English language version shall prevail over those of
any translation.

          IN WITNESS WHEREOF, Company and Contractor have executed this Agreement as of the day and year
first hereinabove set forth.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Contractor:	 	 	 	Company:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Darby Engineering, LLC	 	 	 	Energy Recovery, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ C. Peter Darby	 	 	 	By:	 	/s/ Rick Stover	 	 
	 	 	 

Print Name  C. Peter Darby	 	 	 	 	 	 

Print Name  Rick Stover	 	 
	 

	 	Title:
	 	Managing Member
	 	 	 	 	 	Title:
	 	CTO	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	1421 Glenwood Drive	 	 	 	Address: 1908 Doolittle Drive	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Gardnerville, NV 89460	 	 	 	San Leandro, California 94577 USA	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	FAX: 775-265-1023	 	 	 	Fax: 510-483-7371	 	 

Contractor’s Employee Information if Different from above: (as to Sections 5, 10 and 11 only):

	 	 	 	 	 	 	 	 	 	 	 
	Name:

	 	 

	 	 
	 	Telephone:
	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Address:

	 	 	 	 	 	Mobil Phone:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	 	 
	 

	 	 	 	 	 	Fax:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	 	 

 

 

APPENDIX A

DESCRIPTION OF SERVICES TO BE PERFORMED

Consulting engineering and project management services on various projects specified from time to
time by the Company and generally described as product and business development projects.

 

APPENDIX B

Payment of Fees for Services

The Company and Contractor mutually commit to providing a minimum of eight days of work per
month.

Billing and payment shall be monthly in an amount equal to the sum total of the amount due for each
day worked in the month, or in the case of partial days worked, day equivalents based on ten hours
per day, according to the following schedule:

	 	 	 	 	 
	1. For each day worked at Darby Engineering LLC office:

	 	$1,000		 
	 
	 	 	 	 
	2. For each day worked at ERI, San Leandro:

	 	$1,200 plus reimbursement of

	 
	 	 	 	 
	 

	 	* out-of-pocket expenses for
transportation only

	 
	 	 	 	 
	3. For each day worked away from Contractor’s office and ERI:

	 	$1,200 plus reimbursement of all normal and customary

	 

	 	

	 

	 	* out-of-pocket travel
expenses

 

			
	*	 	Expenses out of scope of assigned projects

     Where service is requested by the Company for a client, Contractor will be provided a request
in writing with a description of services to be performed as well as payment method.

     Where service is contracted independently by a third party approved by Company, Contractor
shall bill the third-party client directly unless instructed otherwise in writing.

 

 

     Expenses that are outside the scope of this agreement shall be reimbursed to the Contractor by
Company upon presentation of original receipts. Expenses for airfare will be “economy” rate; hotels
must be at 3-star hotels if possible.

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