EXHIBIT 99.1
EMPLOYMENT AGREEMENT
Employment Agreement dated as of October 13, 2005, between ABLE ENERGY,
INC., a Delaware corporation (with its successors and assigns, referred to as
the "Corporation"), and XXXXXXX X. XXXXX (hereinafter referred to as "FROST").
PRELIMINARY STATEMENT
The Corporation desires to employ FROST as Chairman of the Board and
Chief Executive Officer of the Corporation, and FROST wishes to be so employed
by the Corporation, upon the terms and subject to the conditions set forth in
this Agreement. The Corporation and FROST also wish to enter into the other
agreements set forth in this Agreement, all of which are related to FROST's
employment under this Agreement.
AGREEMENT
FROST and the Corporation therefore agree as follows:
1. TERM OF EMPLOYMENT. The Corporation hereby employs FROST and
FROST hereby accepts employment with the Corporation for the period (the
"Initial Term") commencing on the date hereof (the "Commencement Date"), and
ending on the first anniversary of the date hereof or upon the earlier
termination of the Initial Term pursuant to Section 6. The Initial Term will be
extended automatically for additional one year periods (each, an "Additional
Term"; together with the Initial Term, the "Term"), subject to the rights of the
parties generally to terminate this Agreement in accordance with the provisions
of Section 6(a). The termination of the Term for any reason shall end FROST's
employment under this Agreement, but, except as otherwise set forth herein,
shall not terminate FROST's or the Corporation's other agreements in this
Agreement.
2. POSITION AND DUTIES. During the Term, FROST shall serve as
Chairman of the Board and Chief Executive Officer of the Corporation. FROST
shall also hold such additional positions and titles as the Board of Directors
of the Corporation (the "Board") may determine from time to time, including
positions and titles with subsidiaries of the Corporation. FROST shall report to
the Board. During the Term, FROST shall devote the majority of his business time
and attention to performing his duties hereunder; provided, however, that FROST
shall not be precluded from spending time on other business and professional
ventures and activities.
3. COMPENSATION.
(A) BASE SALARY. The Corporation shall pay FROST
compensation, beginning on the first day of the Initial Term and ending on the
last day of the Initial Term, of not less than an aggregate of $250,000 per
annum, payable in accordance with the Corporation's practices for other senior
executives.
(B) OTHER AND ADDITIONAL COMPENSATION.
(i) Section 3(a) establishes the minimum base salary
compensation during the Term and shall not
preclude the Compensation Committee of the Board
(the "Compensation Committee") and the Board
from awarding FROST a higher base salary,
commensurate with performance. Similarly, the
Compensation Committee and the Board may award
bonuses and stock options to FROST, in their
discretion.
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(ii) During the Term, FROST may also receive an
annual stock option grant, the exact number of
which, as well as the vesting schedule, term and
exercise price shall be determined annually by
the Compensation Committee and the Board in
their discretion.
(iii) During the Term, FROST may also receive an
annual cash bonus based upon the attainment of
agreed upon goals and milestones as determined
and approved annually by the Compensation
Committee and the Board.
4. EMPLOYEE BENEFITS.
(A) GENERAL. During the Term, FROST shall receive and the
Corporation shall be responsible for the payment and/or maintenance of the
employee benefits generally available to senior executives of the Corporation,
including profit sharing and pension plans, health, life and disability
insurance, 4 weeks paid vacation, and those other benefits described in this
Section 4.
(B) CORPORATION AUTOMOBILE. FROST shall have the use of a
Corporation automobile appropriate for his position as the Chief Executive
Officer of the Corporation or, alternatively, shall be reimbursed for the
reasonable and customary monthly or upfront lease payments FROST makes on any
existing personal automobile which FROST uses for business purposes. The
Corporation shall reimburse FROST for gasoline expenses and all reasonable
expenses related to the use and maintenance of such automobile, including
insurance, on presentation of appropriate documentation.
(C) ELECTRONIC EQUIPMENT. FROST shall be reimbursed for all
home telephone expenses incurred on a separate telephone line in furtherance of
the business of the Corporation provided that such line be used only for
business purposes and FROST submits appropriate documentation for the expenses.
The Corporation shall provide FROST with a home computer and laptop computer for
business use, home internet access, and a mobile telephone and blackberry or
other portable email device and shall reimburse FROST for all monthly expenses
related thereto upon submission of appropriate documentation by FROST.
5. EXPENSES. During the Term, the Corporation shall reimburse FROST
for actual out-of-pocket expenses incurred by him in the performance of his
services for the Corporation upon the receipt of appropriate documentation of
such expenses. In addition, the Corporation will make available to FROST a
company credit card for use by him for expenses related to the Corporation's
business.
6. TERMINATION.
(A) GENERAL; DEATH OR DISABILITY; NOTICE AND TIMING. The
Term shall end immediately upon FROST's death, and for Cause or Disability, as
defined in Section 7. Upon termination of the Term due to FROST's death or
Disability, all compensation due FROST under this Agreement will cease, except
for (i) payment of his base salary to him or his estate or representative for
the remainder of the fiscal year in which his death or Disability occurred, (ii)
additional benefits as set forth in Section 9. Any payments to FROST, his estate
or representative in the event of death or Disability shall be reduced by any
proceeds received from insurance obtained on his behalf by the Corporation. Upon
the Corporation's termination of the Term for Cause, FROST shall have ten (10)
days to cure said Cause, if curable. With respect to the termination of FROST
pursuant to Section 6(e), the Corporation may elect to terminate this Agreement
at any time during the
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Term by giving 90 days' prior written notice. With respect to termination by
FROST other than pursuant to Section 6(f), FROST may elect to terminate this
Agreement at any time by giving 60 days' prior written notice at any time during
the Term, and, upon such termination, all compensation due FROST under this
Agreement will cease, except as set forth in Section 9.
(B) NOTICE OF TERMINATION. The Corporation shall notify
FROST in writing of its termination of his employment hereunder. The
Corporation's failure to give notice under this Section 6(b) shall not, however,
affect the validity of the Corporation's termination of the Term.
(C) TERMINATION BY THE CORPORATION FOR CAUSE. If terminated
by the Corporation for Cause, the Corporation shall describe to FROST the
grounds for his termination. Upon the Corporation's termination of the Term for
Cause, all compensation due FROST under this Agreement will cease, except as set
forth in Section 9. Moreover, all options to purchase Common Stock of the
Corporation shall expire upon such termination.
(D) TERMINATION BY THE CORPORATION UPON A CHANGE OF CONTROL.
In the event that the Corporation terminates its relationship with FROST within
one (1) year of a "Change of Control", as defined in Section 7, FROST shall
receive the following:
(i) an amount equal to twelve (12) months of base
salary for the then current year (in addition to
the base salary paid to FROST after the
Corporation's delivery of notice of termination
pursuant to Section 6(a) and the actual date of
termination);
(ii) Other Compensation (as defined in Section 9);
and
(iii) the full vesting of FROST's stock options, and
extended exercisability thereof until their
respective expiration dates.
FROST shall be entitled to the foregoing benefits once notice of termination is
given by the Corporation, regardless of his subsequent Death, Disability or
termination for Cause.
(E) TERMINATION BY THE CORPORATION OTHER THAN UPON CHANGE OF
CONTROL, DEATH, DISABILITY OR CAUSE. In the event that the Corporation
terminates its relationship with FROST, including a termination by the
Corporation effective upon the expiration of the Initial Term or an Additional
Term but other than upon a Change of Control, Death, Disability or Cause, FROST
shall receive the following:
(i) an amount equal to twelve (12) months of base
salary for the then current year (in addition to
the base salary paid to FROST after the
Corporation's delivery of notice of termination
pursuant to Section 6(a) and the actual date of
termination);
(ii) Other Compensation; and
(iii) the full vesting of FROST's stock options, and
extended exercisability thereof until their
respective expiration dates.
(F) TERMINATION BY FROST UPON GOOD REASON OR CHANGE OF
CONTROL. In the event FROST terminates his relationship with the Corporation for
"Good Reason" as defined in Section 7, within one (1) year of the occurrence of
the event which established the "Good Reason", or within one (1) year of a
Change of Control, FROST shall receive the following:
(i) an amount equal to twelve (12) months of base
salary for the then current year (in addition to
the base salary paid to FROST after his delivery
of notice of termination pursuant to Section
6(a) and the actual date of termination);
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(ii) Other Compensation; and
(iii) the full vesting of FROST's stock options and
warrants, and extended exercisability thereof
until their respective expiration dates.
FROST shall provide prior written notice to the Corporation of his
termination pursuant to this Section 6(f), and such notice shall describe the
particular "Good Reason(s)" at issue.
7. DEFINITIONS.
(A) "CAUSE" DEFINED. "Cause" means (i) willful malfeasance
or willful misconduct by FROST in connection with his employment; (ii) FROST's
gross negligence in performing any of his duties under this Agreement; (iii)
FROST's conviction of, or entry of a plea of guilty to, or entry of a plea of
nolo contendere with respect to, any felony; (iv) FROST's habitual drunkenness
or excessive absenteeism not related to illness; (iv) FROST's material breach of
any written policy applicable to all employees adopted by the Corporation; or
(vi) material breach by FROST of any of his agreements in this Agreement.
(B) "DISABILITY" DEFINED. "Disability" shall mean FROST's
incapacity due to physical or mental illness that results in his being unable to
substantially perform his duties hereunder for six consecutive months (or for
six months out of any nine-month period). During a period of Disability, FROST
shall continue to receive his base salary hereunder, provided that if the
Corporation provides FROST with disability insurance coverage, payments of
FROST's base salary shall be reduced by the amount of any disability insurance
payments received by FROST due to such coverage. Upon termination, after the end
of the period of Disability, all compensation due FROST under this Agreement
shall cease, except as set forth in Section 9.
(C) "CHANGE OF CONTROL" DEFINED. "Change of Control" shall
mean the occurrence of any one or more of the following events:
(i) An acquisition (whether directly from the
Corporation or otherwise) of any voting securities of the Corporation
(the "Voting Securities") by any "Person" (as the term person is used
for purposes of Section 13(d) or 14(d) of the Securities and Exchange
Act of 1934, as amended (the "1934 Act")), immediately after which such
Person has "Beneficial Ownership" (within the meaning of Rule 13d-3
promulgated under the 0000 Xxx) of fifty percent (50%) or more of the
combined voting power of the Corporation's then outstanding Voting
Securities.
(ii) The individuals who, as of the date hereof, are
members of the Board (the "Incumbent Board"), cease for any reason to
constitute at least fifty-one percent (51%) of the Board; or
(iii) Approval by the Board or stockholders of the
Corporation of, or execution by the Corporation of any agreement with
respect to, or the consummation of:
(A) A merger, consolidation or
reorganization involving the Corporation, where either or both
of the events described in Section 7(c)(i) or 7(c)(ii) would be
the result;
(B) A liquidation or dissolution of or
appointment of a receiver, rehabilitator, conservator or similar
person for, the Corporation; or
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(C) An agreement for the sale or other
disposition of all or substantially all of the assets of the
Corporation to any Person (other than a transfer to a subsidiary
of the Corporation).
(iv) Notwithstanding the foregoing, a "Change of
Control" shall not include any transaction between the Corporation and
All American Plazas, Inc. ("All American") or any of its stockholders
that results in any of the changes identified in Sections 7(c)(i)-(iii)
hereof.
Notwithstanding anything contained in this Agreement to the contrary, if
FROST's employment is terminated prior to a Change in Control and FROST
reasonably demonstrates that such termination (i) was at the request of a third
party who has indicated an intention or taken steps reasonably calculated to
effect a Change in Control and who effectuates a Change in Control (a "Third
Party") or (ii) otherwise occurred in connection with, or in anticipation of, a
Change in Control which actually occurs, then for all purposes of this
Agreement, the date of a Change in Control with respect to FROST shall mean the
date immediately prior to the date of such termination of FROST's employment.
(D) "GOOD REASON" DEFINED. "Good Reason" shall mean the
occurrence, whether or not after a Change in Control, of any of the events or
conditions described below:
(i) a change in FROST's status, title, position or
responsibilities (including reporting responsibilities) which represents
an adverse change from his status, title, position or responsibilities
as in effect immediately prior to such change; the assignment to FROST
of any duties or responsibilities which are inconsistent with his
status, title, position or responsibilities as in effect immediately
prior to such change; or any removal of FROST from any of such offices
or positions;
(ii) the Corporation's requiring FROST to be based
more than 50 miles from New York City, except for reasonably required
travel on the Corporation's business which is not materially greater
than such travel requirements prior to such time; or
(iii) any material breach by the Corporation of any
provision of this Agreement which is not cured within ten (10) days
after the receipt of written notice by the Corporation of a description
of the breach.
8. PAYMENT TERMS. Payment of any amounts to which FROST shall be
entitled pursuant to the provisions of Sections 6 and 7 shall be made no later
than sixty (60) days following receipt of notice of termination or the event
giving rise to such termination. Any amounts payable pursuant to Sections 6 and
7 which are not made within the period specified in this Section 8 shall bear
interest at a rate equal to the lesser of (i) the maximum interest rate
allowable pursuant to applicable law or (ii) five points above the "prime rate"
of interest as published from time-to-time in the Eastern Edition of the Wall
Street Journal.
9. BENEFITS.
(A) GENERAL. Except if FROST resigns without Good Reason
(other than retirement on or after the age of 62), in the event FROST's
employment with the Corporation is terminated for any reason prior to the end of
the Term, FROST and his dependents, if any, will continue to participate in any
group health plan sponsored by the Corporation in which FROST was participating
on the date of such termination, at a cost to FROST and his dependents equal to
the amount charged by the Corporation to similarly situated employees while
employed by the Corporation, for the remainder of the Initial Term or, if
termination occurs within an Additional Term, for the remainder of such
Additional Term. Thereafter, FROST and his dependents, if any, shall be entitled
to elect to continue such health coverage, at a cost to FROST and his
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dependents equal to the amount charged by the Corporation to similarly situated
employees while employed by the Corporation, for the longest period of time
permitted by the agents of the Corporation who arrange for such health coverage,
with such period to last at least twelve (12) months from the date of
termination. Upon termination for any reason, in addition to any payments to
which FROST may be entitled upon termination of his Employment pursuant to any
provision of this Agreement, FROST shall be entitled to any benefits under any
pension, supplemental pension, savings, or other employee benefit plan (other
than life insurance) in which FROST was participating on the date of any such
termination.
(B) OTHER BENEFITS. In addition to the rights provided in
Section 9(a), in the event of a termination of FROST's employment for any
reason, FROST shall retain his use of the Corporation automobile provided under
Section 4(b) for the remainder of its lease term. Such benefits, together with
the benefits provided in Section 9(a), shall be referred to herein,
collectively, as "Other Compensation".
10. CONFIDENTIALITY.
(A) "CORPORATION INFORMATION" DEFINED. "CORPORATION
INFORMATION" means all information, knowledge or data of or pertaining to (i)
the Corporation, its employees and all work undertaken on behalf of the
Corporation, and (ii) any other person, firm, corporation or business
organization with which the Corporation may do business during the Term, that is
not in the public domain (and whether relating to methods, processes,
techniques, discoveries, pricing, marketing or any other matters).
(B) CONFIDENTIALITY. FROST hereby recognizes that the value
of all trade secrets and other proprietary data and all other information of the
Corporation not in the public domain disclosed by the Corporation in the course
of his employment with the Corporation is attributable substantially to the fact
that such confidential information is maintained by the Corporation in strict
confidentiality and secrecy and would be unavailable to others without the
expenditure of substantial time, effort or money. FROST therefore, except as
provided in the next two sentences, covenants and agrees that all Corporation
Information shall be kept secret and confidential at all times during and after
the end of the Term and shall not be used or divulged by him outside the scope
of his employment as contemplated by this Agreement, except as the Corporation
may otherwise expressly authorize by action of the Board. In the event that
FROST is requested in a judicial, administrative or governmental proceeding to
disclose any of the Corporation Information, FROST will promptly so notify the
Corporation so that the Corporation may seek a protective order or other
appropriate remedy and/or waive compliance with this Agreement. If disclosure of
any of the Corporation Information is required, FROST may furnish the material
so required to be furnished, but FROST will furnish only that portion of the
Corporation Information that legally is required.
11. SUCCESSORS AND ASSIGNS.
(A) FROST. This Agreement is a personal contract, and the
rights and interests that the Agreement accords to FROST may not be sold,
transferred, assigned, pledged, encumbered, or hypothecated by him. All rights
and benefits of FROST shall be for the sole personal benefit of FROST, and no
other person shall acquire any right, title or interest under this Agreement by
reason of any sale, assignment, transfer, claim or judgment or bankruptcy
proceedings against FROST. Except as so provided, this Agreement shall inure to
the benefit of and be binding upon FROST and his personal representatives,
distributees and legatees.
(B) THE CORPORATION. This Agreement shall be binding upon
the Corporation and inure to the benefit of the Corporation and of its
successors and assigns.
12. ENTIRE AGREEMENT. This Agreement represents the entire agreement
between the parties concerning FROST's employment with the Corporation and
supersedes all prior negotiations, discussions,
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understandings and agreements, whether written or oral, between FROST and the
Corporation relating to the subject matter of this Agreement.
13. AMENDMENT OR MODIFICATION; WAIVER. No provision of this
Agreement may be amended or waived unless such amendment or waiver is agreed to
in writing signed by FROST and by a duly authorized officer of the Corporation.
No waiver by any party to this Agreement of any breach by another party of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same time, any prior time or any subsequent time.
14. NOTICES. Any notice to be given under this Agreement shall be in
writing and delivered personally or sent by overnight courier or registered or
certified mail, postage prepaid, return receipt requested, addressed to the
party concerned at the address indicated below, or to such other address of
which such party subsequently may give notice in writing:
If to FROST: XXXXXXX X. XXXXX
Xxxxxx Frost Chan and Xxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
If to the Corporation: 000 Xxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Chief Financial Officer
with a copy to: Xxxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Any notice delivered personally or by overnight courier shall be deemed
given on the date delivered and any notice sent by registered or certified mail,
postage prepaid, return receipt requested, shall be deemed given on the date
mailed.
15. SEVERABILITY. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the application
of such provision to such person or circumstances other than those to which it
is so determined to be invalid and unenforceable shall not be affected, and each
provision of this Agreement shall be validated and shall be enforced to the
fullest extent permitted by law. If for any reason any provision of this
Agreement containing restrictions is held to cover an area or to be for a length
of time that is unreasonable or in any other way is construed to be too broad or
to any extent invalid, such provision shall not be determined to be entirely
null, void and of no effect; instead, it is the intention and desire of both the
Corporation and FROST that, to the extent that the provision is or would be
valid or enforceable under applicable law, any court of competent jurisdiction
shall construe and interpret or reform this Agreement to provide for a
restriction having the maximum enforceable area, time period and such other
constraints or conditions (although not greater than those contained currently
contained in this Agreement) as shall be valid and enforceable under the
applicable law.
16. SURVIVORSHIP. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
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17. HEADINGS. All descriptive headings of sections and paragraphs in
this Agreement are intended solely for convenience of reference, and no
provision of this Agreement is to be construed by reference to the heading of
any section or paragraph.
18. WITHHOLDING TAXES. All salary, benefits, reimbursements and any
other payments to FROST under this Agreement shall be subject to all applicable
payroll and withholding taxes and deductions required by any law, rule or
regulation of and federal, state or local authority.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together constitute one and same instrument.
20. APPLICABLE LAW; JURISDICTION. The laws of the State of New York
shall govern the interpretation, validity and performance of the terms of this
Agreement, without reference to rules relating to conflicts of law. Any suit,
action or proceeding against FROST with respect to this Agreement, or any
judgment entered by any court in respect thereof, may be brought in any court of
competent jurisdiction in the State of New York, as the Corporation may elect in
its sole discretion, and FROST hereby submits to the exclusive jurisdiction of
such courts for the purpose of any such suit, action, proceeding or judgment.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
/s/ Xxxxxxx X. Xxxxx
----------------------------------------
XXXXXXX X. XXXXX
ABLE ENERGY, INC.
By: /s/ Xxxxxxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: President
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