EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made on the 14th day of
January, 2000, by and between Electric City Corp., a Delaware corporation, with
its principal place of business at 0000 Xxxxxxxxx Xxxx, Xxx Xxxxx Xxxxxxx,
Xxxxxxxx (the "Company"), and Xxxxxxx Xxxxxxx, whose residence address is
("Mistarz").
WITNESSETH
WHEREAS, the Company desires to assure itself of the services of
Mistarz, and Mistarz desires to be employed by the Company; and
WHEREAS, the Company and Mistarz desire to clearly define and clarify
all material terms and conditions of this employment relationship through a
written agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Term Of Employment.
1.1 The Company agrees to employ Mistarz, and Mistarz agrees to serve
in the employ of the Company, for the term set forth in paragraph 1.2,
in the position and with the responsibilities, duties and authority set
forth in paragraph 2, and on the other terms and conditions set forth
in this Agreement.
1.2 The term of Mistarz's employment under this Agreement shall be for
a period commencing on January 1, 2000 and continuing through December
31, 2002 unless sooner terminated in accordance with this Agreement.
1.3 As used in this Agreement, the "Company" shall be defined as the
Company, and any of its subsidiaries, affiliates, satellites, branches,
or parent entities, and including, without limitation, the Company's
successors, purchasers and assigns.
2. Position And Duties.
2.1 The Company agrees to employ Mistarz in the position of Chief
Financial Officer, to render such services as would be customary for a
Chief Financial Officer, including, but not limited to, management,
oversight and supervision of the Company's financial affairs, budgets,
financial planning, tax reporting and compliance activities, cash
management, accounting functions, and such other responsibilities,
consistent with Mistarz's position as Chief Financial Officer, as the
Chief Executive Officer or Board of Directors, in their sole and
exclusive discretion, shall assign. In the performance of his
duties, Mistarz shall report to the Chief Executive Officer, or such
other official as the CEO or Board of Directors may designate.
2.2 Performance. Mistarz agrees to devote his full time and best
efforts to the diligent, loyal, faithful, timely, complete, and
professional performance of all job duties as set forth in paragraph
2.1 or assigned or reassigned from time to time by the Company. Without
limiting the generality of the foregoing, Mistarz is expected to work
full time (not less than five days per week, during normal business
hours Monday through Friday), except for vacations and regular business
holidays observed by the Company, plus any additional hours required by
the Company or reasonably necessary to timely and expeditiously
complete Mistarz's work assignments.
2.3 No Prior Employment Restrictions. Mistarz warrants that he is not
restricted by any restrictive covenant or confidentiality agreement
from any prior employment from performing all of the duties required by
this Agreement. Should a prior employer or such prior employer's
assignee or successor in interest assert claims that Mistarz is so
restricted, Mistarz shall indemnify, defend and hold harmless the
Company from any reasonable attorneys' fees and costs incurred in
defending such claims, and any damages resulting either from a final
judgment or reasonable settlement of any such claims.
3. Compensation.
3.1 Salary. During the term of this Agreement, in consideration of the
performance by Mistarz of the services set forth in paragraph 2 and his
observance of the other covenants set forth herein, the Company shall
pay Mistarz, and Mistarz shall accept a salary at the rate of One
Hundred Seventy-Five Thousand Dollars ($175,000.00) per year, less any
applicable withholdings or deductions, payable in accordance with the
Company's standard payroll practices. Mistarz's salary may be subject
to annual review by the CEO and the Board of Directors.
3.2 Bonus. Mistarz shall be eligible for an annual bonus, if in the
discretion of the Company's senior management, Mistarz's performance
warrants payment of a bonus, as measured by Mistarz's attainment of
performance goals to be mutually established and agreed upon by Mistarz
and the Chief Executive Officer or his designee. The annual bonus for a
calendar year shall be payable on February 15th of the following year,
provided that Mistarz is actively employed by the Company on such date.
If the Company establishes a formal annual bonus plan, Mistarz will be
eligible consistent with the treatment of other senior executives of
the Company.
3.3 Benefits. Mistarz shall be eligible for the vacation and non-wage
benefits the Company provides generally for its other senior
executives, including four weeks paid vacation. Mistarz shall also be
eligible to participate in the group insurance benefits provided by the
Company for senior executives, including short-term and long-term
disability insurance, life insurance, and medical and dental insurance,
subject to the terms and conditions of the applicable insurance benefit
plans. The Company will also provide
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officer liability insurance coverage for Mistarz, in such amount as may
be determined by the Board of Directors or as may be required by law.
Mistarz shall submit to any medical or other examination and execute
and deliver any application or other instrument in writing, reasonably
necessary to effectuate any such insurance benefits.
3.4 Business Expense. The Company shall reimburse Mistarz for the
reasonable, ordinary and necessary expenses incurred by him in
connection with the performance of his duties, including but not
limited to all cellular telephone expense related to Company business,
and ordinary and necessary travel expense and entertainment expenses
approved by the President and Chief Executive Officer. Mistarz shall
provide the Company with an accounting of his expenses, including an
identification of those expenses for which reimbursement by the Company
is sought, and such supporting documentation and receipts as the
Company may require from time to time, in conformance with Internal
Revenue Service or other requirements.
3.5 Stock Options. The Company hereby grants to Mistarz an option to
purchase shares of the common stock of the Company subject to and in
accordance with the following (the "Option"):
(a) Options. During the term of employment with the Company,
the Company hereby grants options to Mistarz to purchase
200,000 shares of the Company's common stock, subject to the
vesting provisions described below:
(i) On December 31, 2000, unless Mistarz has
been terminated for Cause prior thereto or
if Mistarz has resigned voluntarily, Mistarz
shall become immediately vested in options
to purchase 66,667 of the issued and
outstanding shares of the Company's Common
stock for Seven Dollars ($7.00) per share.
Mistarz will have the right to exercise the
options in accordance with the following
schedule:
December 31, 2000 - One-third
December 31, 2001 - An additional one-third
December 31, 2002 - Remaining one-third
(ii) On December 31, 2001, unless Mistarz has
been terminated for Cause prior thereto or
if Mistarz has resigned voluntarily, Mistarz
shall become immediately vested in options
to purchase 66,667 of the issued and
outstanding shares of the Company's Common
stock for Seven Dollars ($7.00) per share.
Mistarz will have the right to exercise the
options in accordance with the following
schedule:
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December 31, 2001 - One-third
December 31, 2002 - An additional one-third
December 31, 2003 - Remaining one-third
(iii) On December 31, 2002, unless Mistarz has
been terminated for Cause prior thereto or
if Mistarz has resigned voluntarily, Mistarz
shall become immediately vested in options
to purchase 66,666 of the issued and
outstanding shares of the Company's Common
stock for Seven Dollars ($7.00) per share.
Mistarz will have the right to exercise the
options in accordance with the following
schedule:
December 31, 2002 - One-third
December 31, 2003 - An additional one-third
December 31, 2004 - Remaining one-third
(b) Registration Rights. Mistarz shall have piggy-back
registration rights for all shares of stock obtained through
the exercise of any options described in paragraph 3.5(a)
above for any registration statement the Company files with
the Securities and Exchange Commission registering shares of
the Company's common stock that are similar to the shares to
be issued hereunder. The Company will use its best efforts to
file an S-8 registration statement covering the shares
underlying the Options when Company becomes eligible to file
an S-8 Registration Statement. The Company will bear the cost
of registering the shares pursuant to this paragraph.
(c) Sale of Assets: Change in Control. Upon the sale of more
than forty percent (40%) of the net assets or shares of stock
of the Company to a person or entity not affiliated with the
Company or its parent company or subsidiaries, all of the
options described in Sections 3.5(a) (i) (ii) and (iii) above
shall be automatically granted to Mistarz and shall
immediately vest and be immediately exercisable by Mistarz
subject to the terms of this Agreement.
(d) Termination of Options. The term of the Options hereunder
shall be until December 31, 2009. Notwithstanding any other
provision of this Agreement, upon any of the Options described
above being granted, such granted but unexercised Options may
not be terminated prior to December 31, 2009. If Mistarz is
terminated without Cause or for death or disability, the
granted Options shall survive under the terms of this
Agreement.
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4. Termination Of Employment.
4.1 Termination for Cause, Death or Disability.
4.1.1 The Company may terminate Mistarz's employment at any
time for Cause, including without limitation: (a) breach by
Mistarz of his covenants under this Agreement if unremedied
within 21 days after written notice by the Company; (b)
commission by Mistarz of theft or embezzlement of property of
the Company or other acts of dishonesty; (c) commission by
Mistarz of a crime resulting in injury to the businesses,
properties or reputation of the Company, (d) commission of an
act by Mistarz in the performance of his duties hereunder
reasonably determined by a majority of the board of directors
of the Company to amount to gross, willful, or wanton
negligence, (e) willful refusal to perform or substantial
neglect of the duties assigned to Mistarz pursuant to
paragraph 1 hereof if unremedied within 21 days after written
notice by the Company; (f) any significant violation of any
statutory or common law duty of loyalty to the Company. All
compensation shall cease immediately upon termination for
Cause hereunder except for accrued and unpaid compensation.
4.1.2 Mistarz's employment will be terminated immediately upon
his death. All compensation shall cease immediately upon
termination for death hereunder except for accrued and unpaid
compensation.
4.1.3 Mistarz's employment hereunder will be terminated for
Permanent Total Disability, immediately upon written notice
from the Company, if an independent physician selected jointly
by the parties shall have determined that Mistarz has been
unable due to illness or a physical or mental disability, to
perform substantially all of the services required hereunder
for a continuous period of 180 days, or for a period
aggregating 180 days in any twelve month period. All
compensation shall cease immediately upon termination for
Permanent Total Disability hereunder except for accrued and
unpaid compensation.
4.2 Surrender of Properties. Upon termination of Mistarz's employment
with the Company, regardless of the cause therefor, or otherwise
immediately upon request of the Company, Mistarz shall promptly
surrender to the Company all property provided to him by the Company
for use in relation to his employment and in addition, Mistarz shall
surrender to the Company any and all financial and accounting
materials, lists of customers and prospective customers, price lists,
files, patent applications, records, models, or other materials and
information of or pertaining to the Company or its customers or
prospective customers or the products, businesses, finances, or
operations of the Company.
4.3 Survival of Covenants. The covenants of Mistarz set forth in
paragraphs 4.2, 5, and 6 of this Agreement shall survive the
termination of his employment hereunder.
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5. Recognition of Company's Rights and Non-Disclosure.
5.1 Non-Disclosure. At all times during Mistarz's employment by the
Company and thereafter, Mistarz will hold in strictest confidence and
will not disclose, use, or otherwise publish in any manner, including
by any electronic medium, any of the Company's "Confidential
Information" (defined below), except as such disclosure, use or
publication may be required in connection with Mistarz's services for
the Company, or unless a senior officer of the Company expressly
authorizes such disclosure, use or publication in writing in advance.
5.2 Confidential Information. The term "Confidential Information" means
trade secrets, confidential knowledge, data and all other proprietary
information of the Company. By way of illustration but not limitation,
"Confidential Information" includes (a) inventions, trade secrets,
ideas, processes, formulas, source and object codes, data, programs,
other works of authorship, know-how, improvements, discoveries,
developments, materials, designs, and techniques regarding any of the
foregoing; and (b) information regarding, or plans for, research,
development, new products, marketing and selling, business plans,
budgets and unpublished financial statements, licenses, prices and
pricing structures, costs, customer lists, the identity of suppliers
and customers, and information regarding the skills and compensation of
employees of the Company.
5.3 Inventions. Mistarz: (a) shall, from the time of entering the
Company's employ until such employment is terminated and within the one
(1) year period immediately following such termination, promptly
disclose to the Company all inventions, ideas, devices, and processes,
made or conceived by him alone or jointly with others, that are
relevant or pertinent in any way, whether directly or indirectly, to
the businesses or production operations of the Company or resulting
from or suggested by any work which he may have done for or at the
request of the Company; (b) shall, at all times during his employment
with the Company, assist the Company in every reasonable way (entirely
at the expense of the Company) to obtain and develop for the benefit of
the Company patents on such inventions, ideas, devices, and processes,
whether or not patented; and (c) shall do all such acts and execute,
acknowledge and deliver all such instruments as may be necessary or
desirable in the opinion of the Company to vest in the Company, the
entire interest in such inventions, ideas, devices, and processes
referred to in this paragraph 5.3.
6. Non-Competition and Non-Solicitation. Mistarz acknowledges that but for
his employment with the Company: (i) Mistarz would not have had contact
with the Company's customers, with many of whom the Company enjoys a
near permanent relationship; (ii) Mistarz would not have had access to
the Company's Confidential Information; and (iii) the Company's
business is national in scope and cannot be confined to any particular
geographic area of the United States or the State of Illinois. In
consideration of the receipt of the Company's Confidential Information
under the terms and conditions of this Agreement, for a period of two
(2) years after termination of employment for any reason, Mistarz shall
not, without the prior written consent of the Company's Chief Executive
Officer, in any manner, directly or indirectly, own, manage, operate,
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control, be employed by, participate in, or be connected in any manner
with the ownership, management, operation or control of, any other
business (conducted for profit or not for profit) that is competitive
with the business of the Company (business of the Company is defined by
the business of the Company at the time of termination). The foregoing
restrictions shall not preclude Mistarz from the ownership of not more
than three percent (3%) of the voting securities of any corporation
whose voting securities are registered under Section 12(g) of the
Securities Exchange Act of 1934. Additionally, Mistarz agrees that,
among other things, he shall not during the one (1) year period after
termination of employment for any reason, directly or indirectly:
A. Contact or solicit the trade or patronage of any customer of
the Company for Mistarz or any other entity or person, with
respect to the Company or the business engaged in by Company.
The term "customers" shall for purposes of this Agreement be
deemed to include, without limitation, the officers,
directors, agents, employees, parents, subsidiaries and
affiliates of any person or organization who is a customer at
the time of Mistarz's termination of employment or was a
customer within the twelve-month period immediately preceding
such termination, and with whom Mistarz has been in contact on
behalf of the Company, or with respect to whom Mistarz has
used any Confidential Information.
B. Solicit, induce or attempt to induce any employee of the
Company to leave the Company's employ or engagement to become
connected in any way with, or employ, engage or otherwise
utilize any such employee in, any other business that is
competitive with the Company or is engaged in the business of
the Company.
7. Injunction.
7.1 In view of Mistarz's access to the Company's customer base and
the Company's Confidential Information, and in consideration of
the value of such property to the Company, Mistarz agrees that the
covenants contained in paragraphs 4.2, 5 and 6 hereof are
necessary to protect the interests of the Company in its
Confidential Information, and to protect and maintain near
permanent customer relationships and other legitimate, proprietary
interests of the Company, both actual and potential, which Mistarz
would not have had access to or any involvement in but for his
employment relationship with the Company. Mistarz confirms and
agrees that enforcement of the covenants in paragraphs 4.2, 5 and
6 hereof would not prevent Mistarz from earning a livelihood.
Mistarz further agrees that in the event of an actual or
threatened breach by Mistarz of any of the covenants set forth
herein, the Company would be irreparably harmed and the full
extent of injury resulting therefrom would be impossible to
calculate and the Company therefore will not have an adequate
remedy at law. Accordingly, Mistarz agrees that temporary and
permanent injunctive relief would be appropriate remedies against
such breach, without bond or security; provided, however, that
nothing herein shall be construed as limiting any other legal or
equitable remedies available to the Company. The parties to this
Agreement consent to the jurisdiction of the courts of general
jurisdiction of
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the State of Illinois, and to the federal courts situated in the
State of Illinois, for any proceedings under paragraphs 6 or 7 of
this Agreement.
7.2 The Company shall have the right to disclose the contents of
this Agreement or to deliver a copy of this Agreement bearing
Mistarz's signature to any person to whom or for whose benefit the
Company reasonably believes Mistarz has solicited, or has or may
disclose or use any Confidential Information in violation of this
Agreement.
7.3 Mistarz and the Company agree that if, in any proceeding, the
court or other authority shall refuse to enforce the covenants
herein set forth because such covenants cover too extensive a
geographic area or too long a period of time, any such covenant
shall be deemed appropriately amended and modified in keeping with
the intention of the parties to the maximum extent permitted by
law.
8. General Provisions.
8.1 Notice. Any Notice required or permitted hereunder shall be made
in writing (a) either by actual delivery of the notice into the
hands of the party thereunder entitled, or (b) by the mailing of
the notice in the United States mail, certified or registered
mail, return receipt requested, all postage prepaid and addressed
to the party to whom the notice is to be given at the party's
respective address set forth below, or such other address as the
parties may from time to time designate by written notice as
herein provided.
If to the Company: Electric City Corp.
0000 Xxxxxxxxx Xxxx
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
With a copy (which shall not constitute notice) to:
Wildman, Harrold, Xxxxx & Xxxxx
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxx
If to CFO: Xxxxxxx Xxxxxxx
This notice shall be deemed to be received in case (a) on the date
of its actual receipt by the party entitled thereto and in case
(b) on the date of its mailing.
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8.2. Amendment and Waiver. No amendment or modification of this
Agreement shall be valid or binding upon: a) the Company unless
made in writing and signed by an officer of the Company, duly
authorized by the board of directors of the Company or; b) Mistarz
unless made in writing and signed by him. The waiver by the
Company or Mistarz of the breach of any provision of this
Agreement by the other party shall not operate or be construed as
a waiver of any subsequent breach by such party.
8.3. Governing Law. The validity and effect of this Agreement and
the rights and obligations of the parties hereto shall be
construed and determined in accordance with the internal law, and
not the conflicts law, of the State of Illinois.
8.4. Entire Agreement. This Agreement contains all of the terms
agreed upon by the parties with respect to the subject matter
hereof and supersedes all prior agreements, arrangements and
communications between the parties dealing with such subject
matter, whether oral or written.
8.5. Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the transferees, successors and
assigns of the Company, including, any company or corporation with
which the Company may merge or consolidate.
8.6. Costs of Enforcement. In the event of any suit or proceeding
seeking to enforce the terms, covenants, or conditions of this
Agreement, the prevailing party shall, in addition to all other
remedies and relief that may be available under this Agreement or
applicable law, recover his or its reasonable attorneys' fees and
costs as shall be determined and awarded by the court.
8.7. Headings. Numbers and titles to paragraphs hereof are for
information purposes only and, where inconsistent with the text,
are to be disregarded.
8.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all
of which when taken together, shall be and constitute one and the
same instrument.
8.9. Public Announcements. The parties hereto agree no
announcement shall be made, unless required by law and with legal
counsel's advice, as it relates to this Agreement or the
employment of Mistarz with the Company without the joint written
approval of Mistarz and the Company.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
ELECTRIC CITY CORP.
By: /ss/ Xxxx Xxxxxx
-------------------------------------------
Xxxx Xxxxxx
Its: Chief Executive Officer
By: /ss/ Xxxxx Xxxxxxxx
-------------------------------------------
Xxxxx Xxxxxxxx
Its: President and Chief Operating Officer
/ss/ Xxxxxxx Xxxxxxx
-------------------------------------------
XXXXXXX XXXXXXX
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