EXECUTIVE EMPLOYMENT AGREEMENT
This
Executive Employment Agreement (the “Agreement”) is made and entered into by and
between Iyad Darcazallie (“Executive”) and Energy & Power Solutions, Inc.,
(“EPS”) (collectively the “parties”) as of this 17th day of April
2009. In consideration of the promises set forth in this Agreement,
the parties agree as follows:
1. Term. The
initial term of Executive’s employment hereunder shall commence on April 17,
2009 (the “Effective Date”), and shall continue for a period of three (3) years
from such date, unless terminated earlier in accordance with the terms of this
Agreement (the “Initial Term”). If Executive’s employment is not
terminated earlier as set forth above, Executive’s employment will be
automatically renewed for additional one (1) year periods thereafter (a “Renewal
Term”), unless written notice to the contrary is provided by either party to the
other at least thirty (30) days prior to the expiration of the Initial Term or
any Renewal Term.
2. Employment. EPS
will continue to employ Executive, and Executive accepts continued employment
with EPS, as of the Effective Date. Executive shall work out of EPS’
offices located in San Francisco, California, and at such other locations
designated by EPS from time to time, subject to the limitation set forth in
Section 8 of this Agreement.
3. Position and
Duties. EPS will continue to employ Executive as Executive
Vice President of Corporate Development for EPS. This is a full-time
exempt, salaried position. Executive will report directly to the
Chief Executive Officer of EPS or others as directed from time to time by the
Chief Executive Officer in this
position. Executive will also devote his full time, efforts,
abilities, and energies to promote the general welfare and interests of EPS and
any related enterprises of EPS. Executive will loyally,
conscientiously, and professionally do and perform all duties and
responsibilities of his position, as well as any other duties and
responsibilities as will be reasonably assigned by EPS. Executive
will strictly adhere to and obey all EPS’ rules, policies, procedures,
regulations and guidelines, including but not limited to those contained in EPS’
employee handbook, as well any others that EPS may
establish. Executive will strictly adhere to all applicable state
and/or federal laws and/or regulations relating to his employment with
EPS.
4. Representations By
Executive. Executive represents that he has not entered into
any agreements, understandings, or arrangements with any person or entity that
Executive would breach as a result of, or that would in any way preclude or
prohibit Executive from entering into, this Agreement with EPS or performing any
of the duties and responsibilities provided for in this
Agreement. Executive represents that he does not possess any
confidential, proprietary business information belonging to any other entity,
and will not use any confidential, proprietary business information belonging to
any other entity in connection with his employment with
EPS. Executive represents that he is not resigning employment or
relocating any residence in reliance on any promise or representation by EPS
regarding the kind, character, or existence of such work, or the length of time
such work will last, or the compensation therefor.
5. Compensation and
Benefits
5.1. Base
Salary. While employed by EPS, Executive will earn a fixed
annual base salary in the amount of Two Hundred Ten Thousand Dollars
($210,000), payable in equal bi-weekly installments in accordance with EPS’
regular payroll practices, less applicable withholdings (“Base
Salary”). EPS’ Board of Directors will review this Base Salary at annual
intervals, and may adjust the Executive’s Base Salary from time to time as it
deems appropriate, in its sole and absolute discretion, provided that the
Base Salary may not be adjusted downward without the prior written consent of
Executive.
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5.2. Bonus. Executive
will be eligible to earn an annual bonus based on the terms and conditions set
forth in Exhibit A attached hereto (“Annual Bonus”), as such terms and
conditions may be amended by the Board of Directors from time to
time. EPS’ Board of Directors will determine if Executive has earned
any bonus, in its sole and absolute discretion.
5.3. Benefit
Plans. During Executive’s employment hereunder, Executive and
Executive’s dependents, to the extent they are eligible, shall be entitled to
participate in any medical, dental, life, disability and vision insurance,
401(k), and other employee benefit plans, if any, made available by EPS to
similarly situated employees, at no cost to Executive, all in accordance with
EPS’ policies concerning such plans. EPS shall provide for the
benefit of Executive a life insurance policy equal to five (5) times Executive’s
Base Salary for the Term of this Agreement.
5.4. Paid
Vacation. Executive also shall be entitled to one hundred
sixty (160) hours of paid vacation per year earned on a prorated basis, subject
to the terms and conditions of EPS’ vacation policy.
5.5. Withholdings. EPS
shall, to the extent permitted by law, have the right to withhold and deduct
from any payment hereunder any federal, state or local taxes of any kind
required by law to be withheld with respect to any such payment.
5.6. Section
409A. Anything to the contrary notwithstanding, all payments
made by EPS hereunder to Executive or Executive’s estate or beneficiaries will
be subject to tax withholding pursuant to any applicable laws or
regulations. This Agreement is intended to comply with the
requirements of section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”). In the event this Agreement or any benefit paid to
Executive hereunder is deemed to be subject to section 409A of the Code,
Executive consents to EPS adopting such conforming amendments as EPS deems
necessary, in its reasonable discretion, to comply with section 409A of the Code
and avoid the imposition of taxes under section.
6. Reasonable Business
Expenses. Subject to compliance with EPS’ policies regarding
substantiation and verification of business expenses, Executive is authorized to
incur on behalf on EPS, and EPS will pay, or reimburse Executive for, all
customary and reasonable expenses incurred in connection with the performance of
duties hereunder or for promoting, pursuing or otherwise furthering the business
of EPS or any of its subsidiaries, including but not limited to reasonable
expenses for travel, entertainment, service and usage charges for business use
of cellular phones, and similar items.
7. Proprietary
Information.
7.1. Confidential
Information. As set forth in the Agreement, “Confidential
Information” is defined as EPS’ confidential and proprietary business
information, including but not limited to EPS’ products, services, customers,
contracts, fees, prices, costs, business affairs, marketing, accounting,
financial statements, employees, research, inventions, data, software, and any
other confidential and proprietary business information of any kind, nature or
description, tangible or intangible, in whatever form. Executive
acknowledges that he has been and will be making use of, acquiring and/or adding
to Confidential Information. The Confidential Information is and will
remain the sole and exclusive property of EPS. Executive will not at
any time use, divulge, disclose or communicate, either directly or indirectly,
in any manner whatsoever, any Confidential Information to any person or business
entity, or remove from the premises of EPS any Confidential Information in
whatever form, unless required for Executive to perform the essential functions
of his position with EPS while employed by EPS.
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7.2. Unfair
Competition. While employed by EPS, Executive will not,
directly or indirectly, own an interest in, operate, join, control, participate
in, or be an officer, director, agent, independent contractor, partner,
shareholder, or principal of any person or business entity which, directly or
indirectly, competes with EPS. While employed by EPS, Executive will
not (1) undertake the planning of or organization of any business activity
competitive with EPS’ business, or combine or conspire with other employees or
any third party for the purpose of organizing any such competitive business
activity, (2) interfere with or disrupt, or attempt to interfere with or
disrupt, any business relationship, contractual or otherwise, between EPS and
any other party, including clients or prospective clients, suppliers, agents or
employees of EPS, and/or (3) solicit, induce or influence, or seek to induce or
influence, any customer or prospective customer of EPS for the purpose of
promoting or selling any products or services competitive with those of EPS,
directly or indirectly, or by action in concert with
others. Executive may not hold or being beneficially interested in
more than 5% of any single class of shares or securities of a corporation which
are traded on a recognized public stock exchange.
7.3. Solicitation. While
employed by EPS, and for a period of one (1) year after termination of this
Agreement for whatever reason, Executive will not, directly or indirectly,
solicit, induce or influence, and/or seek to induce or influence, any person who
is engaged as a regular, temporary, introductory, full-time or part-time
employee, agent, or independent contractor by EPS to terminate his or her
employment or engagement with EPS for any reason.
7.4. Injunctive
Relief. Executive acknowledges that the violation of any
provision of Section 7 of this Agreement would cause substantial injury to
EPS and that EPS would not have entered into this Agreement without such
restrictions. In the event of violation of any such provision, EPS
will be entitled, without bond of any kind, to injunctive relief and an
accounting of profits, compensation, remuneration or other benefits received by
Executive, in addition to any other contractual, legal or equitable rights,
damages or remedies available.
7.5. Survivorship. Executive
agrees that his obligations under Section 7 of this Agreement will survive the
termination of the Agreement for any reason.
7.6. Notification to Subsequent
Employer. If, following termination of Executive’s employment
with EPS, Executive accepts other employment or enters into a business
relationship with any business or entity that competes with EPS, Executive
expressly authorizes and consents to EPS informing such competing business of
the terms of Section 7 of this Agreement by written notice.
8. Termination.
8.1. Effect of
Termination. Upon termination of Executive’s employment for
any reason, Executive shall be deemed to have immediately resigned from all
positions as an employee, officer and/or director with EPS, and any of its
affiliates, as of Executive’s last day of employment (the “Termination
Date”). Upon termination, Executive will receive all
salary, accrued vacation, payment of valid unreimbursed expenses, and vested
benefits earned by Executive as of the Termination Date, as required by
law. Executive agrees and provides his express authorization for EPS
to deduct any amounts Executive owes EPS against any amounts EPS owes Executive
hereunder, including deductions from Executive’s final paycheck. On
the Termination Date, or at any other time as required by EPS, Executive will
immediately surrender to EPS all EPS property, including but not limited to
Confidential Information, keys, key cards, computers, telephones, pagers, credit
cards, automobiles, equipment, and/or other similar property
of EPS.
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8.2. Without
Good Cause. If
this Agreement is terminated by EPS without “Good Cause” as defined below in
Section 8.5, EPS will (i) provide severance to Executive of Twelve (12) months
salary (calculated as a pro rata share of Executive’s Base Salary), less
applicable withholdings (the “Severance Payment”), (ii) make the payments for
Executive to continue Executive’s current medical insurance coverage through the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”)
under EPS’ current group medical plan for Twelve (12) months after the
Termination Date, less applicable withholdings, (iii) pay Executive the pro rata
portion of his Annual Bonus if and when approved by the Board of Directors and
paid by EPS in accordance with Exhibit A, and (iv) accelerate the vesting of any
remaining unvested stock options held by Executive on the Termination Date, such
that, after giving effect to such acceleration, 50% of Executive’s stock options
are vested, provided, in each case, that Executive execute and provide EPS with
a separation agreement (which will include without limitation a
non-disparagement provision, a post-termination cooperation provision, a
confidentiality provision, and a covenant not to xxx and general release of
claims) in a form prescribed by EPS (the “Separation Agreement”). The
Severance Payment will be made to Executive in Twelve (12) equal monthly
installments of Seventeen Thousand Five Hundred Dollars ($17,500), with the
first installment payment commencing within ten days after the effectiveness of
Executive’s release of claims under the Separation
Agreement.
8.3. Material
Change. If Executive sustains a Material Change (as defined
below), Executive will have the option to voluntarily terminate (a “Good Reason
Termination”) his employment with the Company as provided
herein. Executive will provide EPS with written notice (“Good Reason
Termination Notice”) of the occurrence of the Material Change (describing in
detail the basis and underlying facts supporting Executive’s belief that a
Material Change has occurred) within sixty (60) days after the date that such
Material Change first occurred (unless Executive has agreed to such Material
Change in writing) and will provide EPS a reasonable opportunity (not to exceed
thirty (30) days) to cure such event. Executive’s Good Reason
Termination will only be effective if Executive has provided the Good Reason
Termination Notice within the 60-day period set forth in the previous sentence,
and the Company has not cured or remedied such event within thirty (30) days
after its receipt of the Good Reason Termination Notice (such effective date to
be deemed the Termination Date). If Executive fails to timely provide
the Good Reason Termination Notice to the Company, Executive will be deemed to
have consented to and waived the Material Change. If the Company does
timely cure or remedy the Material Change, then Executive may voluntarily
terminate his employment as set forth in Section 8.4 or continue to remain
employed subject to the terms of this Agreement. On the Termination
Date, this Agreement will terminate automatically and, subject to the following
sentence, EPS will (i) provide Executive with the Severance Payment, (ii) make
the payments for Executive to continue Executive’s current medical insurance
coverage through COBRA under EPS’ current group medical plan for
Twelve (12) months after the Termination Date, less applicable withholdings,
(iii) pay Executive the pro rata portion of his Annual Bonus if and when
approved by the Board of Directors and paid by EPS or its successor in
accordance with Exhibit A, and (iv) accelerate the vesting of any remaining
unvested stock options (whether EPS or successor company stock options) held by
Executive on the Termination Date, such that, after giving effect to such
acceleration, 50% of Executive’s stock options are vested. As a
condition to receiving the Severance Payment and other benefits described above,
Executive must (i) execute (and not revoke) and provide EPS or its successor
company with an executed Separation Agreement within a time period prescribed by
the Company but which in any event will not be more than the fifty (50) day
period immediately following the Termination Date and (ii) remain in full
compliance with such Separation Agreement. The Company will provide
Executive with the Separation Agreement within five (5) days after the
Termination Date. The Severance Payment will be made to Executive in
Twelve (12) equal monthly installments of Seventeen Thousand Five Hunderd
Dollars ($17,500), with the first installment payment commencing within ten days
after the effectiveness of Executive’s release of claims under the Separation
Agreement. As used herein, “Material Change” will mean (i) a material
change in Executive’s title, duties or responsibilities to a level below the
title, duties, or responsibilities of Executive as of the date of this
Agreement; or (ii) a relocation by EPS of Executive’s principal work site to a
facility or location more than thirty (30) miles from the principal work site
for Executive as of the date of this Agreement.
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8.4. Voluntary
Termination. If Executive voluntarily terminates his
employment with EPS for any reason, this Agreement will terminate automatically,
and Executive will not be entitled to receive any severance.
8.5. With Good
Cause. If this Agreement is terminated by EPS with Good Cause,
Executive will not be entitled to receive any severance or other benefits except
as provided in Section 8.1. As used herein, “Good Cause” will mean
Executive’s (i) illegal and/or criminal conduct, (ii) dishonesty with
respect to EPS’ business, (iii) gross negligence or willful misconduct in
the performance of duties, (iv) habitual neglect of duties,
(v) insubordination, (vi) willful and continuing refusal to perform
duties under this Agreement, (vii) conduct detrimental to the reputation of
EPS, including but not limited to, substance abuse, moral turpitude and the
like, (viii) misrepresentation or concealment of a material fact or facts
for purposes of securing employment with EPS, (ix) conduct that constitutes
unlawful harassment, discrimination or retaliation, (x) material breach of
any terms of this Agreement, and/or (xi) material violations of EPS’ employment
policies; provided, however, that Executive will be provided notice of any
misconduct and/or breach constituting Good Cause and will be given reasonable
opportunity (not to exceed thirty (30) days), to cure the misconduct and/or
breach, unless such misconduct and/or breach is determined by EPS, in its sole
and absolute discretion, not to be susceptible to cure, in which case
termination shall be deemed to be immediate; and provided further that such
30-day cure period shall only be available for the first such misconduct and/or
breach of the same or substantially similar type and subsequent misconduct
and/or breach of the same or substantially similar type shall constitute Good
Cause without regard to Executive’s subsequent cure of same.
8.6. Disability. In
the event of Executive’s Disability, EPS will thereafter have the right, upon
written notice to Executive, to terminate this Agreement, in which case the
Termination Date will be the date of such written notice to
Executive. In the event of termination under this Section, Executive
will not be entitled to receive any severance or other benefits except as
provided in Section 8.1. As used herein, the term “Disability” will mean if the Executive is unable to
perform the essential functions of the Executive’s position, even with reasonable
accommodation, due to legal, physical or mental incapacity, for a period beyond
any protected leave to which Executive is entitled under applicable
law.
8.7. Death. In
the event of Executive’s death, this Agreement will terminate automatically and
Executive will not be entitled to receive any severance or other benefits except
as provided in Section 8.1.
8.8. Employment After Expiration
of the Term. At the expiration of the Term as defined above,
it is expressly understood and agreed that, except as otherwise provided herein,
if Executive continues to be employed by EPS, Executive shall be employed
strictly on an at will basis, and that Executive’s employment may be terminated
with or without Good Cause as defined above, with or without notice, and without
resort to any specific disciplinary procedure or process at any
time. Nothing shall obligate EPS to continue to employ Executive
after the expiration of the Term.
8.9. Payment Upon
Termination. In the event that any payment or benefits
received or to be received by Executive pursuant to this Agreement would (i)
constitute a “parachute payment” within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”), or any comparable
successor provisions, and (ii) but for this subsection, would be subject to the
excise tax imposed by Section 4999 of the Code, or any comparable successor
provisions (the “Excise Tax”), then benefits to which Executive will be entitled
pursuant to this Section shall be either: (i) provided to Executive in full, or
(ii) provided to Executive as to such lesser extent which would result in no
portion of such benefits being subject to the Excise Tax, whichever of the
foregoing amounts, when taking into account applicable federal, state, local and
foreign income and employment taxes, the Excise Tax, and any other applicable
taxes, results in the receipt by Executive, on an after-tax basis, of the
greatest amount of benefits, notwithstanding that all or some portion of such
benefits may be taxable under the Excise Tax. Unless EPS and Executive otherwise
agree in writing, any determination required under this subsection shall be made
in writing in good faith by an accountant selected by the mutual agreement of
Executive and EPS (the “Accountant”). EPS shall bear all costs the
Accountant may reasonably incur in connection with any calculations contemplated
by this subsection.
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8.10. Delayed Payments for
Specified Employee. If, upon Executive’s separation from
service, he is then a “specified employee” (as defined in Code Section 409A),
then to the extent necessary to comply with Code Section 409A and avoid the
imposition of taxes under Code Section 409A, the Company shall defer payment of
“nonqualified deferred compensation” subject to Code Section 409A payable as a
result of and within six (6) months following such separation from service under
this Agreement until the earlier of (i) five (5) days after the Company receives
notification of the Executive’s death or (ii) the first business day of the
seventh month following the Executive’s separation from service. Any
such delayed payments shall be made without interest.
9. Notices. Any
notice required or permitted to be given under this Agreement shall be in
writing and delivered in person or sent by registered or certified United States
mail, postage and fees prepaid, to the addresses of the parties set forth below,
or such other address as shall be furnished by notice hereunder by any such
party as follows: (i) to EPS: Energy & Power Solutions, Inc., 000 Xxxxxxxxx
Xxxxxx, Xxxxx X000, Xxxxx Xxxx, XX 00000, Attn: Chief Executive
Officer; or (ii) to Executive at the address set forth below his signature
hereto. No failure or refusal to accept delivery of any envelope
containing such notice shall affect the validity of such notice or the giving
thereof.
10. Miscellaneous.
10.1. Executive
is free to enter into this Agreement, and is not a party to any non-competition
agreement, non-disclosure agreement or any similar contractual restriction which
might be violated by performance of Executive’s duties under this
Agreement.
10.2. EPS
has the right to assign this Agreement, as well as its rights and obligations
hereunder, to any corporation or other entity with or into which EPS may
hereafter merge or consolidate, or to which EPS may transfer all or
substantially all of its assets, provided such corporation or other entity
assumes all of EPS’ obligations hereunder. Executive cannot assign this
Agreement, in whole or in part, because it is a contract for personal
services.
10.3. It
is the desire and intent of the parties that the provisions of this Agreement
will be enforced to the fullest extent permissible under the laws and public
policies applied in each jurisdiction in which enforcement is
sought. Accordingly, in the event that any one or more of the
provisions of this Agreement will be held invalid, illegal, or unenforceable by
a court of competent jurisdiction, the validity, legality, and enforceability of
the remaining provisions contained herein will not in any way be affected
thereby.
10.4. This
Agreement cannot be changed, modified or terminated except in writing and signed
by both Executive and the President of EPS.
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10.5. No
breach of any provision hereof can be waived unless in
writing. Waiver of any one breach of any provision hereof will not be
deemed to be a waiver of any other breach of the same or any other provision of
this Agreement.
10.6. This
Agreement will be construed in accordance with its fair meaning as if prepared
by all parties hereto, and will not be interpreted against either party on the
basis that it was prepared by one party or the other.
10.7. This
Agreement supersedes any and all other agreements, whether oral or written,
express or implied, between the parties hereto with respect to the subject
matter herein.
10.8. The
validity, interpretation, construction and enforcement of this Agreement will be
governed by the laws of the State of California, without regard to any choice of
law principles.
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IN
WITNESS WHEREOF, the parties hereto acknowledge that they have read this
Agreement, fully understand it, and have freely and voluntarily entered into it
as of the date above.
|
EXECUTIVE
|
ENERGY
AND POWER SOLUTIONS, INC.
|
|
/s/ Iyad
Darcazallie______________
|
/s/ Xxx
Zoellner_______________
|
|
Iyad
Darcazallie
|
Xxx
Xxxxxxxx
|
|
President
& CEO
|
Address:
_____________________________
_____________________________
_____________________________
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