HOST AMERICA CORPORATION AMENDED EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 99.1
HOST
AMERICA CORPORATION
AMENDED
EXECUTIVE EMPLOYMENT AGREEMENT
THIS
AMENDED EMPLOYMENT AGREEMENT (“Agreement”), dated this 23rd
day of February, 2007, is by and between Host America Corporation, a Colorado
corporation with its principal place of business in the State of Connecticut
(hereinafter called the “Employer”), and Xxxxx
X. Xxxxxx,
an individual residing at 0 Xxxxxxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000
(hereinafter called the “Executive”).
WHEREAS,
the Employer provides contract food service management and electrical and energy
conservation services; and
WHEREAS,
the Employer wishes to provide assurance to the Executive that his duties,
responsibilities and authority are considered by the Employer to be essential
to
the Employer’s business success; and
WHEREAS,
the Employer wishes to employ the Executive on terms that are competitive in
the
marketplace and that reflect the Executive’s experience and expertise related to
the business activities of the Employer; and
WHEREAS,
the parties wish to amend the previous Executive Employment Agreement effective
January 21, 2004, to reflect accurately that the salary of the Executive was
changed in July 2005 and remains at the July 2005 level, and also to reflect
that the Executive’s title and position have been formally changed to Chief
Executive Officer and President ; and
WHEREAS,
the Employer desires to continue to employ the Executive, and the Executive
desires to continue such employment, all upon the terms and conditions set
forth
below.
NOW,
THEREFORE, in consideration of the premises and mutual promises hereinafter
set
forth, the parties hereto hereby mutually agree as follows:
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1.
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Employment.
The Employer hereby employs the Executive, and the Executive hereby
accepts such employment, upon and subject to the terms and conditions
set
forth herein.
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2.
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Effective
Date and Term.
This Agreement shall take effect as of the date specified above (the
“Effective Date”) and shall continue thereafter in full force and effect
until January 21, 2009.
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3.
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Title
and Duties; Extent of Services.
The Executive shall promote the business and affairs of the Employer
as
Chief Executive Officer and President. The Executive shall report
and be
responsible to the Board of Directors of the Employer, and shall
devote
his full efforts, time, attention and energies to the business and
affairs
of the Employer.
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4.
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Other
Interests.
Nothing in this Agreement or in the Executive’s employment relationship
with the Employer shall prevent the Executive from having an ownership
interest in, and from rendering services to, other companies or entities
so long as such companies are not competing or conducting business
with
the Employer, and so long as such ownership interest of the Executive
or
services rendered by the Executive to the other companies or entities
do
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not
interfere with the reasonable performance of the Executive’s duties and
responsibilities to the Employer.
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5.
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Compensation
and Benefits.
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5.1.
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Salary.
The Employer shall pay the Executive a salary at an annual rate of
$190,000 (one hundred ninety thousand dollars). The Executive’s salary,
which may be increased from time to time by the Compensation Committee
(in
the absence thereof, by the Board of Directors) of the Executive
(hereinafter, the “Salary”), shall not be decreased without the consent of
the Executive. The Executive’s salary shall be paid in accordance with the
Employer’s payroll practices as in effect from time to
time.
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5.2.
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Fringe
Benefits.
In addition to the Salary provided for in Section 5.1 above, in connection
with the Executive’s employment by the Company, the Executive shall be
entitled to receive all fringe benefits customarily offered by the
Company
to its officers, including without limitation, an expense account,
an
automobile expense account, and reimbursement of reasonable country
club
membership dues and related business
expenses.
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5.3.
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Health
and Dental Insurance.
The Executive shall be entitled, on a family coverage basis and at
the
Employer’s sole cost and expense, to participate in the health insurance
plan (the “Employer’s Health Plan”) and the dental insurance plan (the
“Employer’s Dental Plan”) generally made available to the Employer’s
officers.
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5.4.
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Disability
Insurance.
The Executive shall be entitled to participate, at the Employer’s sole
cost and expense, in the long-term disability insurance plan generally
made available to other officers of the Employer (the “Long Term
Disability Plan”).
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5.5.
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Life
Insurance.
The Executive shall be entitled to participate, at the Employer’s sole
cost and expense, in the life insurance plan of the Employer (the
“Life
Insurance Plan”) generally made available to other officers of the
Employer.
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5.6.
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D&O
Liability Insurance.
The Employer shall maintain at all times a directors and officers
liability insurance policy (the “D&O Policy”) and the Executive shall
be covered in his capacity as an officer of the Employer under the
D&O
Policy. The cost of such coverage shall be borne by the Employer.
In
addition, the Executive shall be entitled to indemnification from
the
Employer for any claim, loss, damage or expense made against or suffered
by the Executive in his capacity as an officer of the
Employer.
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5.7.
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401(k)
Plan.
The Executive shall be entitled to participate in the Employer’s 401(k)
Plan and profit-sharing plans on the same basis as other officers
of the
Employer.
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5.8.
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Vacation.
The Executive shall be entitled to five weeks of vacation per fiscal
year
during which time his compensation shall be paid in full, and any
unused
vacation and personal time shall accrue from year to year.
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5.9.
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Expense
Reimbursement.
The Executive may incur reasonable expenses in connection with the
promotion of the Employer’s business, all upon presentation by the
Executive of documentation, expense statements, vouchers and/or such
other
supporting documentation as the Employer may reasonably request.
The
Employer shall directly pay, or shall reimburse the Executive for
all of
such reasonable expenses.
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5.10.
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Other
Benefits.
The Executive shall be entitled to receive such other fringe benefits
as
are customarily provided by the Employer to other
officers.
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6.
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Additional
Compensation.
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6.1
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Stock
Options.
The Executive shall be entitled to participate in the Employer’s stock
option plans on a basis consistent with other officers of the
Employer.
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7.
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Termination.
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7.1.
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Termination
Rights of the Parties.
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(a)
Termination
by Executive for Good Reason.
The Executive may terminate his employment at any time for Good Reason (as
defined below) by giving the Employer thirty (30) days’ prior notice thereof,
whereupon such employment shall terminate on the earlier of (i) the
30th
day following the date on which such notice is given to the Employer by written
notice to the Employer or (ii) any date prior to such 30th
day that is specified by the Employer by written notice to the Executive. For
purposes of this Agreement, the term “Good Reason” shall mean (i) material
breach by the Employer of any of the terms or provisions of this Agreement,
(ii)
any event of bankruptcy or insolvency in respect of the Employer, (iii) any
diminution on a cumulative basis, of the Executive’s position, duties,
responsibilities or authority as an officer of the Employer, (iv) a change
in
the principal place of business at which the Executive performs his duties
to a
location more than 30 miles away from its present location, or (v) the
occurrence of a Change of Control (as defined in Section 7.3 hereof).
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(b)
Voluntary
Termination by Executive.
The Executive may terminate his employment for any reason whatsoever at any
time
by giving thirty (30) days’ prior written notice of such termination, whereupon
such employment shall terminate on the earlier of (i) the 30th
day following the date on which such notice is given or (ii) any date prior
to
the 30th
day that is specified by the Employer by written notice to the
Executive.
(c)
Involuntary
Termination by Employer for Cause.
The Employer may terminate the Executive’s employment for Cause, as defined
below in this subsection (c). In the event that the Employer determines that
Cause exists under subsection (i) or (ii) below for the termination of the
Executive’s employment, the Employer shall provide in writing (the “Notice of
Cause”) the basis for that determination and the manner, if any, in which the
breach or neglect can be cured. If either the Employer has determined that
the
breach or neglect cannot be cured, as set forth in the Notice of Cause, or
has
advised the Executive in the Notice of Cause of the manner in which the breach
or neglect can be cured, but the Executive fails to substantially effect that
cure within 30 calendar days after his receipt of the Notice of Cause, the
Employer shall be entitled to give the Executive written notice of the
Employer’s intention to terminate Executive’s employment for Cause (the “Notice
of Intent to Terminate”).
Executive
shall have the right to object to any Notice of Intent to Terminate Executive’s
Employment for Cause by furnishing the Employer, within ten calendar days of
receipt by Executive of the Notice of Intent to Terminate Executive’s Employment
for Cause, with a written response specifying the reasons Executive contends
either (1) Cause under subsection (i) or (ii) does not exist or has been timely
cured, or (2) in the circumstance of a Notice of Intent to Terminate Executive’s
Employment for Cause under subsection (iii), (iv), or (v), that such Cause
does
not exist (the “Notice of Intent to Join Issue over Cause”). The failure of
Executive to timely furnish the Employer with a Notice of Intent to Join Issue
over Cause shall serve to conclusively establish Cause hereunder, and the right
of the Employer to terminate the Executive’s Employment for Cause. In the event
that the Employer determines that Cause exists under Section (iii), (iv), or
(v)
for the termination of the Executive’s employment, the Employer shall be
entitled to immediately furnish Executive with a Notice of Intent to Terminate
Executive’s Employment without providing a Notice of Cause or any opportunity
prior to that notice to contest that determination.
After
the foregoing procedures have been followed, the Employer shall have the right
to terminate the Executive’s Employment for Cause, under any of the subsections
below, by providing a written notice specifying the Cause(s) for termination,
subject to the Executive’s right to contest the termination under the
arbitration provisions of the Agreement. Any termination of the Executive’s
employment for Cause pursuant to this section shall be effective immediately
upon the Executive’s receipt of the
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Employer’s
written notice of termination. Should the Executive wish to challenge his
termination by invoking the arbitration provisions, he must provide written
notice of his request for arbitration within 30 calendar days of the effective
date of termination.
For
purposes of this document, the term “Cause” shall mean (i) any willful
misconduct by the Executive that materially injures the Employer, (ii) any
material breach of this Agreement by the Executive that is not cured by the
Executive within thirty (30) days after receiving written notice thereof from
the Employer, (iii) any substantial act of dishonesty in the Executive’s
relations with the Employer or any of its directors, employees, or vendors
that
materially injures the Employer, (iv) any act of larceny, embezzlement,
conversion or any other similar act involving the misappropriation of Employer
funds in the course of the Executive’s employment, or (v) the conviction of the
Executive of any felony that involves moral turpitude.
(d)
Termination
by Death or Disability.
The Executive’s employment shall terminate automatically (i) upon the
Executive’s death or (ii) on the thirtieth (30th)
day following any determination of Disability (as defined below) in accordance
with the procedures specified in this Section 7.1(e). For purposes of this
Agreement, the term “Disability” shall mean an inability to perform the
essential functions of the Executive’s position, with or without reasonable
accommodation, for a period of six consecutive months. A determination of
Disability shall be made by a physician or other medical provider selected
by
the Executive, provided that, if the Employer were to disagree with the medical
provider’s determination, the determination would be considered a dispute
subject to the arbitration provision of this Agreement.
(e)
The effective date of any termination of the Executive’s employment is
hereinafter referred to as the “Termination Date.”
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7.2.
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Executive’s
Right to Compensation Following Termination; Severance
Benefits.
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(a)
Upon the Executive’s voluntary termination of employment, upon termination of
the Executive’s employment on account of his death, or as a minimum in any other
termination by either the Employer or the Executive, the Employer shall (1)
pay
to the Executive all Salary accrued by the Executive through the Termination
Date, (2) pay to the Executive any accrued but previously unpaid bonuses and
(3)
pay and make available to the Executive all other benefits accrued by or
reimbursable to the Executive through the Termination Date pursuant to Section
5
hereof, all in the manner and at the time provided in said Section 5. Any
payments due or benefits owed to the Executive by the Employer under this
Section 7.2(a) shall be paid or made available by the Employer to the
Executive’s legal representative or heirs, as the case may be, upon the
Executive’s death or Disability.
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(b)
Upon
the termination of the Executive’s employment by the Executive for Good Reason
pursuant to Section 7.1(a), or termination by the Employer for any reason except
Cause as defined in Section 7.1(c), the Employer shall provide severance to
the
Executive by (1) continuing to pay to the Executive the Salary through (i)
the
second anniversary of the Termination Date, or (ii) the Expiration Date,
whichever period is longer, in the manner and at the time provided in Section
5.1 hereof, and (2) paying and making available to the Executive through
(i) the second anniversary of the Termination Date, or (ii) the Expiration
Date,
whichever period is longer, all fringe benefits set forth in Section 5.3 through
5.10 hereof. Except as provided under Section 7.3(c) below with respect to
Special Severance Upon a Change of Control, the provisions of this Section
7.2(b) shall be applicable with respect to any termination of the Executive’s
employment hereunder to the extent that the Executive shall be entitled to
severance. At the Executive’s option, any payment to which he is entitled under
this section will be paid in a single lump sum within thirty (30) days after
the
Termination Date, or may be paid out in payments on a monthly, quarterly,
annual, or other periodic basis as selected by the Executive. Any payments
due
or benefits owed to the Executive by the Employer under this Section 7.2(b)
shall be paid or made available by the Employer to the Executive’s legal
representative or heirs, as the case may be, upon the Executive’s
death.
(c)
Upon termination of the Executive’s employment because of Disability, the
Employer shall pay severance of one year’s Salary and shall pay or make
available through the last business day of the same period the fringe benefits
set forth in Section 5.3 through 5.10.
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7.3.
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Special
Severance Benefit upon Termination After a Change of
Control.
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(a)
Notwithstanding anything in this Agreement (including, without limitation,
Section 7.2) to the contrary, at any time after a Change of Control as defined
below, if the Executive’s employment under this Agreement is terminated by the
Employer for any reason whatsoever, or by the Executive with Good Reason (which
for purposes of this Section 7.3(a) shall mean the occurrence of any of the
events described in clauses (i), (ii), (iii) or (iv) of the definition of the
term Good Reason as set forth in Section 7.1(a)), the Employer shall, in
addition to performing its obligations under 7.2(a), provide severance to the
Executive by (i) continuing to pay to the Executive the Salary through the
last
business day of the Special Severance Period (as defined in Section 7.3(c)
below) in the manner and at the time provided in Section 5.1, and (ii) paying
and making available to the Executive through the last business day of the
Special Severance Period all fringe benefits set forth in Section 5.3 through
5.10.
(b)
For purposes of this Agreement, a “Change of Control” shall be deemed to have
occurred upon any of the following events:
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(i)
when, pursuant to any transaction or series of transactions, any “person” (as
such term is used in Section 13(d) and 14(d)(2) of the Securities Exchange
Act
of 1934, as amended (the “1934 Act”)) becomes a “beneficial owner” (as such term
is defined in Rule 13d-3 promulgated under the 1934 Act), directly or
indirectly, of securities of the Employer representing thirty-five percent
(35%)
or more of the total number of votes that may be cast for election of directors
of the Employer;
(ii)
any contested election of directors, the result of which is that the individuals
who were directors of the Employer immediately before such election shall cease
to constitute a majority of directors serving on the Board of Directors of
the
Employer or any successor thereof;
(iii)
any merger of consolidation of the Employer with or into another corporation
or
entity where the Employer is not a survivor;
(iv)
a sale or disposal by the Employer of substantially all of its assets to another
corporation, entity or person; or
(v)
any tender of exchange offer, or other business combination, the result of
which
is the persons who were directors of the Employer before such transaction shall
cease to constitute a majority of the directors serving on the Board of
Directors of the Employer or any successor thereof.
(c)
For purposes of Section 7.3(a) above, the term “Special Severance Period” shall
mean a period of time, commencing on the Termination Date, equal to six (6)
months for each calendar year through which the Executive shall have been
employed by the Employer; provided, however, that in no event shall such period
have a total duration of less than the severance period applicable under Section
7.2(b) above. At the Executive’s option, any payment to which he is entitled
under this section will be paid in a single lump sum within thirty (30) days
after the Termination Date, or may be paid out in payments on a monthly,
quarterly, annual, or other periodic basis as selected by the Executive. Any
payments due or benefits owed to the Executive by the Employer under this
Section 7.3(c) shall be paid or made available by the Employer to the
Executive’s legal representative or heirs, as the case may be, upon the
Executive’s death or Disability.
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7.4.
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Mitigation.
The Executive shall be under no obligation to mitigate the amount
of any
severance payments provided for in Sections 7.2 and 7.3 hereof or
to seek
other employment following any termination of employment hereunder,
and
any amounts he may earn in any other employment shall not reduce
or offset
the severance payments or other amounts due
hereunder.
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7.5.
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No
Offset.
The Employer shall not be entitled to setoff, offset, reduce or otherwise
withhold any compensation due by the Employer to the Executive hereunder.
In the event that the Employer shall have any claim against the Executive
hereunder, the Employer’s only remedy shall be to commence an action at
law or in equity against the Executive seeking damages or injunctive
relief.
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8.
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General
Provisions.
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8.1.
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Acceleration.
In the event of any failure by the Employer to pay any of the amounts
due
and payable by the Executive under Section 7.2 or 7.3 hereof, or
in the
event of the filing of any bankruptcy petition by or against the
Employer
or the appointment of a receiver to wind up and liquidate the Employer,
at
any time after the Termination Date, the Executive shall be entitled
to
accelerate any and all amounts due and payable by the Employer to
the
Executive under this Agreement. Any such right of acceleration shall
not
be in lieu of, or otherwise limit, any remedies available to the
Executive
at law or in equity.
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8.2.
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Entire
Agreement.
This Agreement represents the entire agreement of the parties and
supersedes any prior understandings, agreements or representations
by and
between the Employer and the Executive with respect to the arrangements
contemplated hereby. No prior agreement, whether written or oral,
shall be
construed to change, amend, alter, repeal or invalidate this Agreement.
This Agreement may be amended only by a written instrument executed
in one
of more counterparts by the
parties.
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8.3.
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Waiver.
No consent to or waiver of any breach or default in the performance
of any
obligations hereunder shall be deemed or construed to be a consent
to or
waiver of any other breach or default in the performance of any of
the
same or any other obligations hereunder. Failure on the part of either
party to complain of any act or failure to act of the other party
or to
declare the other party in default, irrespective of the duration
of such
failure, shall not constitute a waiver of rights hereunder and no
waiver
hereunder shall be effective unless it is in writing, executed by
the
party waiving the breach or default
hereunder.
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8.4.
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Assignment.
This Agreement shall be binding upon and inure to the benefit of
the
parties hereto, their respective successors and assigns and, in the
case
of the Executive, his heirs. Neither the Executive nor the Employer
may
assign or transfer any or all of their respective rights or obligations
under this Agreement.
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8.5.
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Venue.
In the case of any dispute hereunder, the parties submit to the exclusive
jurisdiction and venue of any court of competent jurisdiction sitting
in
the State of
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Connecticut,
and will comply with all requirements necessary to give such court jurisdiction
over the parties and the controversy.
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8.6.
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Severability.
In the event that any provision of this Agreement should be held
unenforceable by a court of competent jurisdiction, such court is
hereby
authorized to amend such provision so as to be enforceable to the
fullest
extent permitted by law, and all remaining provisions shall continue
in
full force without being impaired or invalidated in any
way.
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8.7.
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Governing
Law.
This Agreement shall be governed by and construed in accordance with
the
laws of the State of Connecticut, without regard to its conflict
of laws
principles.
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8.8.
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Notices.
All notices required or permitted under this Agreement shall be in
writing
and shall be deemed effective upon personal delivery or three days
after
deposit in the United States Post Office, by registered or certified
mail,
postage prepaid, return receipt requested, addressed to the other
party at
the address shown above, or at such other address or addresses of
which
either party shall notify the other in accordance with this Section
8.9.
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8.9.
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Counterparts.
This Agreement may be executed in counterparts, all of which together
shall for all purposes constitute one Agreement, binding on each
of the
parties hereto notwithstanding that each such party may not have
signed
the same counterpart.
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8.10.
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Attorney
Fees.
Each party agrees that the losing party in any suit or action shall
reimburse the prevailing party for its reasonable costs, expenses
and
attorney fees incurred in any action or suit brought to determine
the
rights of the parties hereunder.
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8.11.
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Arbitration.
Any disputes arising out of this Agreement between the Executive
and the
Employer shall be settled by the binding arbitration to held in the
State
of Connecticut, in accordance with the rules of the American Arbitration
Association. Judgment upon any award rendered by any arbitrator may
be
entered in any court having jurisdiction. The statute of limitations,
estoppel, waiver, laches, and similar doctrines that would otherwise
be
applicable in any action brought by a party shall be applicable in
any
arbitration proceeding, and the commencement of an arbitration proceeding
shall be deemed the commencement of any action for these
purposes.
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8.12.
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Indemnification.
Employer shall indemnify, defend and hold harmless Executive from
and
against any and all actions, claims, liabilities, demands and proceedings
asserted against the Executive by reason of the fact that Executive
is or
was an Executive or officer of the Employer on or after the date
hereof to
the fullest extent permitted under the laws of the State of Connecticut.
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IN
WITNESS WHEREOF, the parties have signed this Agreement effective as of the
date
written above as a sealed instrument.
EXECUTIVE
EMPLOYER
HOST
AMERICA CORPORATION
/s/
Xxxxx
Xxxxxx
By: /s/ Xxxx X'Xxxxxx
Xxxxx Xxxxxx Name: Xxxx X’Xxxxxx
Xxxxx Xxxxxx Name: Xxxx X’Xxxxxx
February
23,
2007 February
23, 2007
Date Signed Date Signed
Date Signed Date Signed
