COMVERGE, INC. EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT
10.31
THIS
EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of this
18th day of February, 2010, by and between R. Xxxxx Xxxxx, an individual
(“Executive”), and Comverge, Inc., a Delaware corporation (the
“Company”). The Executive and Company are collectively referred
to as “Parties” and individually as “Party”.
WHEREAS,
the Company has wishes to employ
Executive to provide personal services to the Company and wishes to provide
Executive with certain compensation and benefits in return for such
services;
WHEREAS,
the Company has retained Executive in the past to serve as an independent
director to the Board, and the Company and Executive desire for the Executive to
remain as a “non-independent” director on the board, pursuant to the this
Agreement, and to assume the position and duties as provided herein;
and
WHEREAS,
Executive wishes to be employed by the Company, and to provide personal services
to the Company in return for certain compensation and benefits.
NOW,
THEREFORE, in consideration of the mutual promises and covenants contained
herein, the Executive and the Company hereby agree as follows:
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SECTION
1.
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EMPLOYMENT
BY THE COMPANY.
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1.1 Employment
Agreement. Executive’s
relationship with the Company has been solely as an independent director of the
board. Upon the date of execution of this Agreement and conditioned upon the written consent of the
Board of Directors (the “Employment Date”), Executive’s continued employment with the Company shall
be pursuant to the terms stated herein.
1.2 Position and
Duties. Executive shall serve in the position of President and
Chief Executive Officer (collectively “President & CEO”), with such powers,
duties, and/or responsibilities as are assigned to Executive by the Company’s
Board of Directors or their delegate. Executive will devote his best
efforts, time, and attention exclusively to the business of the Company, and
shall faithfully and efficiently discharge all duties and responsibilities
assigned to him hereunder. Executive
shall comply with all Company policies, procedures and practices as may now
exist or which from time to time be implemented. In order to fulfill the
duties as described in this Section 1.2, Executive shall cease performing any
business activities through or for any business entity other than the Company,
including but not limited to any consulting activities in which Executive
engaged prior to his execution of this Agreement.
1.3 Location. Executive’s
primary office location shall be Atlanta, Georgia, where for the first nine
months the Executive may live in Houston, Texas and commute to Atlanta, Georgia,
with the understanding that the Executive shall permanently relocate within next
nine months of his start date to Atlanta, Georgia. Executive acknowledges that the Company’s business
extends across the entire United States and elsewhere and that, from time
to time, however, Executive’s duties may require him to travel and to work at
other locations, including but not limited
to other Company office locations.
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1.4 Term. The
term of Executive’s employment hereunder shall commence as of the Employment
Date and shall continue through February 18, 2013 unless earlier terminated
pursuant to the provisions of this Agreement. The Board may elect to
extend this Agreement by providing ninety (90) days advanced written notice
prior to any then-scheduled expiration.
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SECTION
2.
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COMPENSATION,
BENEFITS AND OWNERSHIP.
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2.1 Compensation. Executive
shall be paid a salary, and shall be eligible to receive incentive compensation,
as described in Exhibit A attached
hereto. All compensation payable pursuant to any plan or program
described in Exhibit
A shall be governed by and subject to the applicable plan or program
documents, which may from time to time be amended, modified or terminated on
such terms and in such manner as is permitted in respect of the applicable plan
or program. The Parties understand that, with the exception of the
Company’s withholding and payroll tax obligations, the Executive is responsible
for all income tax obligations and that there are no additional payments to be
made by the Company to the Executive for such obligations.
2.2 Company
Benefits. Subject to the satisfaction of the general rules for
eligibility and participation under the Company’s standard employee benefit
plans and practices, Executive shall be allowed to participate in the Company’s
standard employee benefit plans and practices which may be in effect from time
to time during the term of Executive’s employment and are provided by the
Company to its employees generally. Such participation shall be
governed by the applicable plan documents, and the Company reserves the right,
in its discretion, to amend, modify, or discontinue any benefit plan or
practice.
2.3 Section 280G
Limitation. In the event that any payments to which Executive
becomes entitled in accordance with the provisions hereof, or in connection with
any plans or programs referred to in Exhibit A or Section
2.2 hereof, would otherwise be deemed to constitute “parachute payments” (each
one, a “Parachute Payment”) within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended and the regulations and administrative guidance
thereunder (the “Code”), then such Parachute Payments will be subject to
reduction to the extent necessary to assure that Executive receives only the
greater benefit of receiving (a) the amount of those payments which would
constitute such a Parachute Payment or (b) the amount which yields Executive the
greatest after-tax amount of benefits after taking into account any excise tax
imposed on the payments provided to Executive pursuant to this Agreement (or on
any other benefits to which Executive may be entitled in connection with the
Change in Control or the subsequent termination of service) under Section 4999
of the Code.
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SECTION
3.
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ASSIGNMENT
OF INTELLECTUAL PROPERTY.
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3.1 Ownership and
Assignment of Intellectual Property. All processes, products,
methods, improvements, discoveries, inventions, ideas, creations, trade secrets,
know-how, machines, programs, designs, routines, subroutines, techniques, ideas
for formulae, writings, books and other works of authorship, business concepts,
plans, projections and other similar items, as well as all business
opportunities discovered, conceived, designed, devised, developed, perfected or
made by Executive, whether alone or in conjunction with others, and within the
course of Executive’s job responsibilities to the Company, and related in any
manner to the actual or anticipated business of the Company or to actual or
anticipated areas of research and development of the Company (all of the
foregoing collectively, the “Intellectual Property”), shall be promptly
disclosed to and are the property of the Company, and Executive hereby assigns,
transfers and conveys all of the Intellectual Property and all of Executive’s
rights therein to the Company. The term “Intellectual Property” shall
be given the broadest interpretation possible and shall include any Intellectual
Property conceived, designed, devised, developed, perfected or made by Executive
during off-duty hours and away from the Company’s premises, as well as those
conceived, designed, devised, developed, perfected or made in the regular course
of Executive’s performance under this Agreement.
3.2 Post-Employment
Assignment of
Intellectual Property. In consideration of the benefits
provided pursuant to this Agreement, particularly those benefits conferred by
Section 6.5 and any stock option or similar rights pursuant to any Company plans
in which Executive was a participant, all Intellectual Property discovered,
conceived designed, devised, developed, perfected or made by Executive following
the termination of this Agreement shall be Intellectual Property covered by the
scope of Section 3.1 if it was conceived, in whole or in part, while this
Agreement remains in effect. All Intellectual Property conceived,
designed, devised, developed, perfected or made by Executive within twelve (12)
months after termination of this Agreement shall be disclosed to the Company,
and shall be presumed to have been conceived, designed, devised, developed,
perfected or made by Executive during the Term, and Executive shall have the
burden of proving otherwise in order to successfully rebut such
presumption.
3.3 Written
Assignments. Executive shall execute and deliver, both during
the Term and thereafter in connection with a severance agreement required under
Section 7.5(g) to and in favor of the Company such assignments (including
patent, trademark and copyright assignments), documents, instruments and
applications (including patent, trademark or copyright applications) as the
Company may deem appropriate or necessary to claim, secure, acquire, perfect,
defend, enforce and/or assign any and all rights and privileges in and to or
arising from the Intellectual Property. Executive shall also, both
during the Term and thereafter, cooperate with the Company, and to render such
assistance as the Company may reasonably require, in connection with any process
(whether administrative, judicial or otherwise) associated with the Company’s
efforts to claim, secure, protect, perfect, defend, assign and/or enforce such
rights and privileges in favor of the Company and its successors, licensees and
assigns. Executive shall also, both during the Term and thereafter,
promptly disclose to the Company fully and in writing any Intellectual Property
that Executive may conceive, make, or develop, in whole or in part, by himself
or jointly with others during his Term with the Company, (a) whether or not the
Intellectual Property was created at the suggestion of the Company; and (b)
whether or not the Intellectual Property was reduced to drawings, written
description, documentation, models or other tangible form.
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3.4 Work Made for
Hire. Executive acknowledges and agrees that any work of
authorship comprising Intellectual Property shall be deemed to be a “Work Made
for Hire,” to the extent permitted by the United States Copyright Act (17 U.S.C.
§ 101 (2000)). To the extent that any such work of authorship may not
be deemed to be a Work Made for Hire, Executive hereby irrevocably assigns all
ownership rights in and to such work to the Company. If any such work
of authorship cannot be assigned, Executive hereby grants to the Company an
exclusive, assignable, irrevocable, perpetual, worldwide, sub-licensable
(through one or multiple tiers), royalty-free, unlimited license to use, copy,
reproduce, distribute, modify, adapt, alter, translate, improve, create
derivative works of, practice, publicly perform, publicly display and digitally
perform and display such work in any media now known or hereafter
known. Outside the scope of his employment, Executive agrees not to
(a) practice, display, copy, reproduce, distribute, transfer, modify, adapt,
alter, translate, improve, or create derivative works from, or otherwise use,
any such work of authorship or (b) incorporate any such work of authorship into
any product or invention unrelated to the Company’s business. To the
extent moral rights (as defined by applicable law) may not be assignable under
applicable law and to the extent the following is allowed by the laws in the
various countries where moral rights exist, Executive hereby irrevocably waives
such moral rights and consents to any action of the Company that would violate
such moral rights in the absence of such consent.
3.5 No License
Granted. Executive acknowledges and agrees that nothing in
this Agreement shall be deemed to grant, by implication, estoppel, certain rules
of construction, or otherwise, (a) a license from the Company to Executive to
make, develop, use, license, disclose, or transfer in any way a Intellectual
Property or (b) a license from the Company to Executive regarding any of the
Company’s existing or future ownership rights.
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SECTION
4.
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CONFIDENTIALITY.
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4.1 Confidentiality
Obligation. Executive acknowledges and agrees that he has and
will have access to Proprietary, Trade Secret and Confidential Information (as
those terms are defined below in Section 4.2) as a result of his employment with
the Company, and that such information constitutes valuable, special and unique
property of the Company. Without limiting the generality of the
foregoing, Executive expressly acknowledges that, in the course of performing
his services pursuant to this Agreement, he will obtain or learn Confidential
and Proprietary Information regarding the Company including, without limitation
information regarding the Company’s operations, financial results, pricing,
customers, suppliers and other matters. Accordingly, at all times
while employed by the Company, and continuing for a period of three (3) years
with respect to Proprietary and Confidential Information, and for whatever time
Trade Secret Information remains a Trade Secret under applicable law, following
the termination of his employment with the Company for whatever reason,
Executive shall neither use nor disclose, nor permit any person or entity within
his reasonable control to use or disclose, any Proprietary, Trade Secret, and
Confidential Information, and shall maintain and protect the secrecy of the
Proprietary, Trade Secret, and Confidential Information, except to the extent
required in the ordinary course of Executive’s employment with the Company, and
then only subject to the direction and control of the
Company. Additionally, Executive shall cause all persons and entities
within his reasonable control to use their respective best effort(s), to
maintain and protect the secrecy of the Proprietary, Trade Secret and
Confidential Information. Executive further acknowledges that in the
performance of his job duties to this Agreement, he will have access to and be
informed of the Proprietary and Confidential Information (as described in
Section 4.2) belonging to customers of Company, and that he shall return to the
Company any such information within his actual or indirect position and comply
with any restrictions concerning such information within his possess and comply
with any restrictions concerning such information that have been imposed upon by
its customer with respect to the use, disclosure, or return
information.
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4.2 Definition
of
Proprietary, Trade Secret and Confidential
Information. As used in this
Agreement the term “Proprietary, Trade Secret and Confidential Information”
means any non-public knowledge, information or property relating to, or used or
possessed by, the Company (or its customers, as the case may be), and includes,
without limitation, the following: trade secrets, patents,
copyrights, software (including, without limitation, all programs,
specifications, applications, routines, subroutines, techniques, code and ideas
for formulae); ideas, information, concepts, data, drawings, designs and
documents; names of clients, customers, but not limited to employees, agents,
contractors and suppliers; business plans, marketing plans and marketing
information; financial, pricing, and cost information and other business
records; and all copies of any of the foregoing. Trade Secrets
shall be such information defined by applicable law as a Trade
Secret.
4.3 Return of
Confidential Information. Executive agrees that he shall
immediately, upon the request of the Company, return to the Company all
Proprietary, Trade Secret, and Confidential Information and any other
tangible material containing, prepared on the basis of, or reflecting any
Proprietary, Trade Secret, and Confidential Information (whether
prepared by the Company, Executive or otherwise) and shall not retain any
copies, extracts or other reproductions, in whole or in part, of such
Proprietary, Trade Secret, and Confidential Information.
4.4 Return of Company
Property. All products, records, designs, patents, trademarks,
copyrights, plans, manuals, memoranda, lists and other documents or other
property of the Company or any of its affiliates in the possession or control of
Executive and all records compiled by the Executive which pertain to the
business of the Company or its affiliates, shall be and remain the property of
the Company and shall be subject at all times to its discretion and
control. Likewise, all correspondence with customers or affiliates of
the Company, all reports, records, charts, and advertising materials and any
data pertaining to the Company, its affiliates or the business of the Company or
its affiliates that are held by or on behalf of Executive shall be delivered
promptly to the Company without request on the date Executive’s employment with
the Company terminates or at any other time promptly upon request by the
Company.
4.5 Nature of
Obligation. The obligations of Executive set forth in this
Section 4 are in addition to, and not in lieu of, any of Executive’s duties or
the Company’s rights and remedies, at law or in equity, with respect to the
Company’s Proprietary, Trade Secret, and Confidential Information and
property. The Company may pursue all such rights and remedies, as
well as remedies for the breach of the provisions set forth
herein. Also, the Proprietary, Trade Secret,
and Confidential Information and other property referenced in this
Section 4 constitute valuable property of the Company or its customers, the
ownership of which is not dependent upon the performance by the Company of any
of its obligations under this Agreement or the performance of any legal,
statutory or other duty, if any, to Executive. Accordingly, Executive
shall perform its obligations under this Section 4 regardless of any alleged or
actual breach or failure to perform by the Company.
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4.6 Post Termination
Activities. Executive
acknowledges and agrees that, during the course of his employment with the
Company, he had access to the Company’s Proprietary, Trade Secret and
Confidential Information, and that disclosure to or use of such information by a
competitor of the Company would cause the Company irreparable
harm. Executive agrees and acknowledges that should he engage in the
restricted activities as set forth in Section 5 hereof, he will inevitably
disclose the Company’s Proprietary, Trade Secret and Confidential
Information.
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SECTION
5.
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NONCOMPETITION
AGREEMENT.
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In
consideration of the compensation paid or payable to Executive by the Company
pursuant to this Agreement (including, but not limited to, Section 2 hereof),
Executive hereby agrees as follows:
5.1 With
respect to the provisions contained in Sections 5 and 6 of this Agreement,
Executive acknowledges:
(a) That in his position as described herein, he will learn,
develop and/or have access to all of the Company’s Proprietary, Trade Secret and
Confidential Information as defined by Section 4.2 of this
Agreement. Executive further acknowledges that if he were to engage
in the Restricted Activities that violate Sections 5.2 or 5.3 of this Agreement,
he would be required to inevitably disclose some or all of the Company’s
Proprietary, Trade Secret and Confidential Information in the performance of
such Restricted Activities, and such inevitable disclosure would harm the
Company if not prevented. To avoid such inevitable disclosure and the
harm to the Company resulting therefrom, which Executive agrees is a legitimate
business interest of the Company, Executive agrees that the Restricted
Activities and the Territory as defined by Sections 5.2 and 5.3 of this
Agreement are reasonable and designed solely to protect the Company’s legitimate
business interest.
(b) That the Company’s business is nationwide in scope, that
its customers are not restricted to any single state in the United States, and
that in the performance of his duties as set forth in this Agreement, Executive
shall perform services on behalf of the Company in all states in which the
Company does business. During the term of this Agreement,
Executive will devote all of his working time and energies to the Company, and
will not, without the Company’s express written permission, work for or provide
services to any other entity, whether as a consultant, independent contractor,
owner, partner, agent, representative, officer, director or
employee. This restriction, however, shall not apply to any
Executive’s ownership of, or investments in, business entities that do not
compete with Company during the term of this Agreement or
afterward. Executive also is permitted to own up to 1% of any class
of securities of any corporation in competition with the Company that is
actively traded on a national securities exchange or through
NASDAQ.
(c) That
Executive shall have significant involvement in the development and maintenance
of the Company’s relationships with its Customers, as defined by Section 6.2 of
this Agreement, on a nationwide basis as well as the implementation, continuance
and quality of the services provided by the Company to those Customers and that
Executive’s efforts on behalf of the Company will significantly contribute to
the Company’s goodwill within the marketplace.
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(d) That
in his position, Executive shall participate in the direct solicitation of
prospective Customers of the Company, and that through such participation, will
learn of the Company’s sales strategies for those prospective Customers and that
such sales strategies constitute a competitive advantage of the
Company.
(e) Reasonable
Covenants. Executive
acknowledges and agrees that the covenants set forth in Sections 5 and 6 of this
Agreement are necessary and reasonable to protect the Company and the conduct of
its business and are a fair and reasonable restraint on Executive in light of
the activities and business of the Company on the date of execution of this
Agreement and the future plans of the Company; and that such covenants also be
construed and enforced in light of the activities and business of the Company
(including business activities in the planning stage) on the date of termination
of Executive’s employment with the Company. Executive acknowledges
that he will not suffer any undue hardship as a result of the covenants set
forth in Sections 4, 5 and 6 and that he will be able to pursue his occupation
notwithstanding his obligations under Sections 4, 5 and 6.
5.2 In the
event Executive’s employment with the Company ends or is terminated pursuant to
Sections 7.5(b), or (c) of this Agreement, and as consideration for the payments
to Executive as provided in Sections 7.5(b) or (c), Executive hereby covenants
that he will not, (i) within the Territory and during the Noncompetition Period,
without the prior written consent of the Company, engage in any Restricted
Activities for or on behalf of any corporation, partnership, venture or other
business entity which is engaged in the Restricted Business in the same or
similar capacity as Executive performed for the Company. The term “Noncompetition Period” means
the period beginning on the date of this Agreement and ending two (2) years
after the date Executive’s employment with the Company ends or is terminated.
The term “Restricted
Activities” means having ownership of or being employed by as an
employee, agent, or representative, or as an independent contractor or
otherwise, and providing services similar to the services Executive provides to
the Company. The term “Restricted Business” includes
(i) demand response and energy efficiency, and related services, hardware and
software applications, and (ii) any other business in which the Company (y) is
engaged or (z) can demonstrate, through documentation reviewed by the Executive
during his employment and in his capacity as President and CEO, has contemplated
being engaged in at the time of termination; and where such Restricted Business
shall not include working as an employee at a utility. The term “Territory” means
the United States of America.
5.3 In the
event Executive’s employment ends or is terminated pursuant to Section 7.5(a) of
this Agreement, Executive shall be prohibited from engaging in the Restricted
Activities as defined in Section 5.2 of this Agreement for a period of one (1)
year after the date the Executive’s employment with the Company ends or is
terminated. The definitions contained in Section 5.2 are incorporated
by reference in this Section 5.3.
SECTION 6. NONSOLICITATION
AGREEMENT
6.1 During
the term of this Agreement and for a period of one (1) year after Executive’s
employment is terminated for any reason, Executive will not, directly or
indirectly, individually or on behalf of any other person, firm, partnership,
corporation, or business entity of any type, solicit, assist or in any way
encourage any current employee or consultant of the Company, whom Executive
supervised or had responsibility for during the twelve (12) months prior to the
termination of employment, to terminate his or her employment relationship or
consulting relationship with or for the Company, nor will Executive solicit the
services of any former employee or consultant of the Company whom Executive
supervised or had responsibility for during the twelve (12) months prior to the
termination of employment, whose service with the Company has been terminated
for less than six (6) months.
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6.2
(a) During the
term of this Agreement and for a period of one (1) year after Executive’s
employment ends or is terminated for any reason, Executive will not, directly or
indirectly, individually or on behalf of any other person, firm, partnership,
corporation, or business entity of any type, solicit, divert, or take away, or
attempt to solicit, divert, or take away, in whole or in part, any Customer of
the Company or otherwise interfere with the Company’s relationship with any
Customer, for the purpose of competing with the Company in the
Business. For purposes of this Agreement, “Customer”
shall mean any person, company or business entity to which the Company sells or
licenses goods or services at the time Executive’s employment with the Company
terminated and with whom Executive had material business contact during the
twelve months (12) months prior to his termination of employment, and “Business”
shall mean providing energy related services, including without limitation
energy load control or demand response products and services, energy capacity,
energy efficiency, advanced metering solutions, or other alternative energy
solutions engaged in by the Company.
(b) During
the term of this Agreement, and for a period of six (6) months after Executive’s
employment ends or is terminated for any reason, Executive will not, directly or
indirectly, individually or on behalf of any person, firm, partnership,
corporation, or business entity of any type, solicit, divert or take
away, or attempt to solicit, divert or take away, in whole or in part, any
Prospective Customer of the Company or otherwise interfere with the Company’s
relationship with any Prospective Customer, for the purpose of competing with
the Company in the Business. For purposes of this Agreement, “Prospective Customer” shall
mean those persons, companies or businesses to whom Executive personally made a
proposal for the purchase of the Company’s goods or services on behalf of the
Company for such Prospective Customer to within the six (6)
months prior to the end or termination of Executive’s employment with
the Company.
6.3 Enforcement. The existence of
any claim or cause of action of Executive against the Company, whether
predicated on this Agreement or otherwise, shall not preclude the Company’s
enforcement of these covenants.
6.4 Survival. The provisions of
this Section 6 shall survive any termination of this Agreement and are subject
to paragraph 8 of this Agreement.
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SECTION 7. TERMINATION OF
EMPLOYMENT.
7.1Certain Definitions. As
used herein, the following terms shall have the following
definitions:
(a) Affiliate. “Affiliate”
shall mean an affiliate of the Company, as defined in Rule 12b-2 promulgated
under Section 12 of the Securities Exchange Act of 1934, as amended from time to
time.
(b) Cause. A
termination by the Company with “Cause” shall include (without limitation) (i)
non-performance in the roles and duties, as assigned; (ii) Executive’s breach of
any material provision of this Agreement; (ii) Executive’s material breach of
any written Company policy contained in the Company’s manual of policies and
procedures; or material non-compliance with any lawful direction given by the
Company’s Board of Directors or its delegate; (iii) Executive’s Disability
(subject to Company’s legal obligations); (iv) Executive’s fraud with respect of
the business or affairs of the Company; (v) the commission by Executive, or
entering of a plea of nolo
contendere with regard to, a felony or a crime involving moral turpitude;
or (vi) alcohol abuse or illegal drug use by Executive; provided however, that in the
event of Executive’s breach as set forth in Sections 7(b)(i) and (ii) above, no
Cause for termination shall be deemed to exist for any such breach that is
curable and which in fact is cured by Executive within thirty (30) days after
notice of such termination has been delivered to Executive, and in the event of
Executive’s breach, as set forth in Section 7(b)(vi) above, no Cause shall be
deemed to exist if the Executive and Company agree on a remedial program for
Executive and so long as Executive in all respects complies with the
requirements of such program. During the time of Executive’s
participation in any remedial program as set forth above, Executive shall, if
directed by the Company, be on a paid leave of absence away from the Company’s
premises.
(c) Change in
Control. For purposes of this Agreement, “Change in Control”
means the occurrence of any of the following events if, following such
occurrence, a Board Change (as hereinafter defined) occurs:
(i) any
person becomes the beneficial owner, directly or indirectly, of securities of
the Company (not including in the securities beneficially owned by such person
any securities acquired directly from the Company or its affiliates)
representing fifty percent (50%) or more of the combined voting power of the
Company’s then outstanding voting securities; or
(ii) any
merger, amalgamation, acquisition, or consolidation of the Company is
consummated with any other corporation, other than (A) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving or
parent entity) more than fifty percent (50%) of the combined voting power of the
voting securities of the Company or such surviving or parent equity outstanding
immediately after such merger or consolidation; or
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(iii) there is
consummated an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets (or any transaction having a similar
effect), other than a sale or disposition by the Company of all or substantially
all of the Company’s assets to an entity, at least fifty percent (50%) of the
combined voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale, provided that such
transferee entity confirms in writing that it is bound by the terms of this
Agreement.
In the
event that the foregoing definition of Change in Control does not comply with
the requirements of Section 409A of the Code, and an amount, benefit or item of
compensation hereunder would be subject to Section 409A of the Code, but would
not be so subject if the definition of Change in Control above complied with the
requirements of Section 409A of the Code, then with respect only to such amount,
benefit or item of compensation, the term “Change in Control” shall mean a
“change in control event” within the meaning of Treas. Reg.
§1.409A-3(i)(5).
(d) Board
Change. “Board Change” means any change in directors after
giving effect to any of the transactions described above as a result of which
the individuals serving on the Board prior to such transaction no longer
comprise at least a majority of the directors on the Board immediately after
giving effect to such transaction.
(e) Good Reason. A
termination by the Executive for “Good Reason” means termination by Executive
following (i) a reduction in Executive’s Annual Salary or other material
component of compensation (excluding stock options or similar grants) required
to be paid pursuant hereto without Executive’s prior written consent; (ii) the
Company’s relocation of the Executive, without the Executive’s consent, to a
permanent location more than seventy-five (75) miles from the location specified
in Section 1.2 of this Agreement, with the understanding that Executive shall
have nine months to move to Atlanta, Georgia; or (iii) the appointment of any
officer that would displace Executive as the highest-ranking executive officer
of the Company; provided
however, that no Good Reason for Executive’s termination shall be deemed
to exist unless (i) Executive gives notice to the Company of the action or
condition which would constitute Good Reason within sixty (60) days of the
initial existence of such action or condition, (ii) the action or condition
which would constitute Good Reason is not cured by the Company within the 30-day
period after the timely provision of the notice required herein, and (iii)
Executive effects the termination for Good Reason within thirty (30) days after
the expiration of the 30-day cure period. After such thirty (30) day period, Executive shall be
deemed to have waived any right to terminate this Agreement pursuant to this
Section 7.1(e).
(f) Non-Renewal. A
non-renewal of this Agreement as provided in Section 1.4 shall not be considered
a termination under any provision of this Section 7 and, upon such non-renewal
by either party and the termination of this Agreement, and Company shall be
required to pay to Executive only the amounts specified in Section 7.5
(a).
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7.2 Death by
Executive. This Agreement shall
terminate upon Executive’s death.
7.3 By the
Company. The Company shall have the right to terminate
Executive’s employment with the Company, at any time, with or without
Cause. For avoidance of doubt, the parties agree that Executive has
no right to continue at any time in any office of the Company after being
removed from such office in the manner provided in the Company’s bylaws or other
applicable provisions of the Company’s governing law and
instruments.
7.4 By
Executive. Executive may terminate his employment with the
Company at any time, upon providing thirty (30) days advance notice, either with
or without Good Reason. In the event Executive terminates his
employment with the Company with Good Reason, such notice shall specify the
grounds for such termination, and the Company shall have the opportunity to cure
such grounds for termination in accordance with the provisions of Section
7.1(e).
7.5
Severance Pay, Other Post-Employment Payments and Acceleration of Benefits Upon
Certain Terminations.
(a) Termination by the Company
for Cause or by Executive
without Good Reason. If the Company terminates Executive’s
employment for Cause, or Executive terminates his employment without Good
Reason, then in either such event, Executive shall not be entitled to any
severance pay, and shall only be entitled to (i) any unpaid, but earned, salary,
medical benefits, vested stock options, and vested restricted stock; (ii) any
unpaid but earned vacation in accordance with Company policy then in effect; and
(iii) any incurred but unpaid ordinary and necessary business expenses properly
documented by Executive in accordance with the Company’s then effective expense
reimbursement policy.
(b) Termination by the Company Without
Cause, or by Executive for Good Reason. Subject to subsection
7.5(c) below, if the Company terminates Executive’s employment without Cause, or
Executive terminates his employment with Good Reason, then in such event
Executive shall be entitled to all compensation, benefits, and amounts allowed
pursuant to subsections 7.5(a)(i), (ii), and (iii) above and severance pay in
the amount of two times his annual base salary as specified in Exhibit A plus an
amount equal to two times the Executive’s target annual cash incentive. The benefits provided pursuant to this Section 7.5(b)
shall not include any stock option or similar grants and Executive’s rights
concerning any stock option or similar grants shall be exclusively determined by
applicable Company policies or plans concerning such grants except as provided
in Exhibit A.
(c) Certain
Terminations Following a Change in Control. Notwithstanding the
provisions of Section 7.5(b) above, in the event the Company terminates
Executive’s employment without Cause, or Executive terminates his employment
with Good Reason, concurrently with or within twenty-four (24) months following
a Change in Control, then, in lieu of the payments specified in Section 7.5(b),
Executive shall be entitled to all compensation, benefits, and amounts allowed
pursuant to subsections 7.5(a)(i), (ii), and (iii) above and severance pay in
the amount of three times his annual base salary as specified in Exhibit A plus an
amount equal to three times the Executive’s target annual cash incentive.
In such event, all unvested options to purchase Company stock held by Executive
shall immediately vest and become exercisable and all unvested restricted stock
granted to Executive shall immediately vest and the legend providing
restrictions on the sale or transfer of such stock related to such vesting shall
be removed at the request of the Executive.
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(d) Continuation of
Benefits. In the event the Company terminates Executive’s
employment and Executive qualifies for and becomes entitled to the severance pay
provided pursuant to Section 7.5(b) or (c) above, as applicable, the Company
shall continue to provide medical benefits as noted in Section 2.2 and continue
to pay on behalf of Employee the Company’s portion of the premium for such
medical benefits for the applicable COBRA period (currently 18
months). After the applicable COBRA period, the Company shall pay
Executive a lump sum equal to six times the Company’s portion of the premium for
such medical benefits. The above payments are subject to and in
accordance with Executive’s COBRA rights and the provisions of the applicable
plan documents, and the Company reserves the right, in its discretion, to amend,
modify, or discontinue any benefit plan or practice. If the Executive
elects to participate in COBRA coverage for which he and/or his family is
eligible under the Company’s then-effective health plans, the Executive shall
pay to the Company on a monthly or quarterly basis, as the case may be, an
amount equal to the co-payment amount for which the Executive would have been
responsible had he remained an employee during the COBRA coverage period and the
Company shall pay to the plan administrator on behalf of Executive the entire
cost of the COBRA coverage. Executive agrees to a netting of payments
where applicable.
(e) Death or
Disability. Any termination of this Agreement by reason of
Executive’s death or disability shall not give rise to any severance payment
hereunder, but shall be without prejudice to any benefits payable to Executive
or his estate under applicable company benefits relating to such
event. For purposes of this Agreement, the term “Disability” shall
mean the Executive’s inability to perform his duties, in all material respects,
because of illness, physical or mental disability, or other incapacity that
continues for an uninterrupted period of one hundred eighty (180)
days. Executive’s unvested stock options and restricted stock not
otherwise vested shall vest upon the death or disability of Executive as
provided in, and subject to the provisions of, applicable Company policies or
plans concerning the grants to Executive of unvested stock options and
restricted stock.
(f) Timing of
Payments. All severance payments provided above shall be paid
in pursuant to Section 7.5(b) above, as applicable, that are measured by
Executive’s annual base salary shall begin as provided by Section 7.5(g) (except
as otherwise required by Section 10.11) and shall thereafter be paid at such
times and in accordance with the Company’s payroll policies and procedures as if
Executive were still employed by the Company; and all amounts of severance pay
with respect to bonus payments shall be pro rated over the period of one (1)
year, and payments of a proportional amount of such bonus payments shall begin
as provided by Section 7.5(g) (except as otherwise required by Section 10.11)
and shall thereafter be paid at such times as base salary payments are
made. All severance payments provided pursuant to Section
7.5(c) above, as applicable, that are measured by Executive’s annual base salary
shall be paid in one lump sum amount as provided by Section 7.5(g) (except as
otherwise required by Section 10.11).
(g) Requirements Regarding Eligibility
to Receive Severance Payments. Notwithstanding any of the
other provisions hereof, the Company shall not be obligated to make and shall
not make the severance payments provided under Section 7.5(b) or (c) above
unless Executive executes and delivers to the Company within thirty (30) days
from the date on which the Executive’s employment is terminated, and does not at
any time after execution and delivery withdraw or revoke, a Severance Agreement substantially in the form as Exhibit B, which is
attached hereto and the assignment as set forth in Section 3.3.
Furthermore, in the event Executive initially qualifies to receive the payments
and benefits provided under this Section 7.5, but then fails to comply with his
obligations under this Agreement (including without limitation Sections 3, 4, 5
and 6 hereof), the Company’s obligations under this Section 7.5 shall
terminate.
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(h) Termination
of other Compensation and Benefits. Except as otherwise required by
applicable law or as provided above in this Section 7.5, Executive’s eligibility
for or entitlement to any other compensation or benefits shall cease immediately
upon termination of this Agreement and Executive’s employment with the
Company.
(i) Characterization
of Payments under Section 409A. For purposes of Section 409A of the
Code (including, but not limited to, to application of the exceptions for
short-term deferrals and for “separation pay only upon an involuntary separation
from service”): (i) each payment provided for under this Section 7.5 is hereby
designated as a separate payment, rather than a part of a larger single payment
or one of a series of payments; and (ii) with respect to the severance payments
and benefits to which Executive may become entitled under Section 7.5 of this
Agreement and which are not in substitution or replacement of “nonqualified
deferred compensation” (within the meaning of Section 409A of the Code), a
termination of Executive’s employment by the Company without Cause or by
Executive for Good Reason is intended to constitute an “involuntary separation
from service” and, in turn, a “substantial risk of forfeiture” (within the
meanings of Section 409A of the Code).
7.6 Effect of
Termination. Termination of Executive’s employment with the
Company shall not limit, affect, or discharge Executive’s obligations under
Sections 3, 4 5 and 6 of this Agreement and shall not release the Company from
its obligations to make payments or provide benefits required by Sections 2.2
and 7.5 of this Agreement following such termination (subject to the limitations
provided in Section 7.3). All other obligations as to periods after
the date of termination shall cease, without prejudice to the rights and
remedies for events or breaches prior to the date of termination.
7.7 Waiver. The
Company may waive or defer exercising its power to terminate this Agreement, but
such waiver or deferral shall not thereby (a) establish a policy,
interpretation, or course of performance that may be used to construe, limit or
affect the express terms of this Agreement, (b) preclude the Company from
exercising its rights or remedies hereunder or otherwise on any other occasion
or from using the breach as support for the exercise of its power to terminate
on any future occasion or (c) limit the ability of the Company to revoke such
waiver or deferral and exercise its power to terminate this Agreement if it
determines that the condition giving rise to a power to terminate has continued,
or if the Company determines in good faith that it was not fully aware of all
facts and circumstances of such condition, or if such waiver or deferral may be
retracted at common law.
7.8 Board
Resignation. The parties agree that upon termination of
Executive’s employment (whether by the Company, Executive or other operation of
this Agreement), the Executive shall provide to the Company Executive’s
unconditional resignation from the Company’s Board of Directors within five days
of receiving a request to do so from the Company’s Chairman or a majority of the
directors then in office excluding Executive. The parties hereby
agree and acknowledge that the foregoing provision does not represent a present
decision to resign as a director of the Company.
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SECTION 8. CERTAIN
REMEDIES.
With
respect to each and every breach or violation or threatened breach or violation
by Executive of Sections 3, 4, 5 and 6 of this Agreement, the Company, in
addition to all other remedies available at law or in equity, including, but not
limited to, specific performance of the provisions hereof, shall be entitled to
enjoin the commencement or continuance thereof and may, without notice to
Executive, apply to any court of competent jurisdiction for entry of an
immediate restraining order or injunction, without the necessity of proving
either inadequacy of legal remedies or irreparable harm and without the
necessity of posting a bond. The Party that obtains a favorable
judgment shall be entitled to the recovery of reasonable attorney’s fees and
expenses incurred in conjunction with any such proceeding.
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SECTION
9. SEVERABILITY AND
REFORMATION.
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The
provisions of this Agreement are severable, and any judicial determination that
one or more of such provisions, or any portion thereof, is invalid or
unenforceable shall not affect the validity or enforceability of any other
provisions, or portions thereof, but rather shall cause this Agreement to first
be construed in all respect as if such invalid or unenforceable provisions, or
portions thereof, were modified to valid and enforceable terms that effectuate
the compensation package that this Agreement provides for Executive and that
provide the greatest protection to the Company’s business and interests; provided, however, that if
necessary to render this Agreement enforceable, it shall be construed as if such
invalid or unenforceable provisions, or portions thereof, were
omitted.
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SECTION
10. GENERAL PROVISIONS.
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10.1 Notices. Any
notices provided hereunder must be in writing and shall be deemed effective upon
the earlier of personal delivery (including personal delivery by fax) or the
third day after mailing by first class mail, to the Company at its primary
office location and to Executive at Executive’s address as listed on the Company
payroll.
10.2 Waiver. If
either party should waive any breach of any provision of this Agreement, he or
it shall not thereby be deemed to have waived any preceding or succeeding breach
of the same or any other provision of this Agreement.
10.3 Complete
Agreement. This Agreement constitutes the complete, final and
exclusive embodiment of the agreement of the Company and Executive with regard
to the subject matter hereof, and supersedes and replaces in all respects any
previous agreements solely regarding Executive’s employment by the Company or
the terms thereof. This Agreement is entered into without reliance on
any promise or representation other than those expressly contained herein, and
this Agreement cannot be modified or amended except in a writing signed by
Executive and an authorized officer of the Company.
10.4 Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same instrument.
13
10.5 Headings. The
headings of the sections hereof are inserted for convenience of reference only
and shall not be deemed to constitute a part hereof or affect the meaning or
interpretation of any of the provisions hereof.
10.6 Successors and
Assigns. This Agreement is intended to bind, inure to the
benefit of, and be binding upon, the successors and assigns of the Company,
including the surviving entity of any merger, consolidation, share exchange or
combination of the Company with any other entity. Notwithstanding the
foregoing, Executive may not assign, transfer or delegate any of Executive’s
duties or obligations hereunder, and Executive may not assign or transfer any of
Executive’s rights hereunder without the written consent of the
Company.
10.7 Choice of Law and
Venue. All questions concerning the construction, validity and
interpretation of this Agreement shall be governed by the law of the State of
Texas. Any dispute arising out of, or concerning, this Agreement or
the employment relationship between the parties, shall be resolved exclusively
in a federal or state court of competent jurisdiction located in Texas. To the extent necessary,
the parties hereby submit to, and agree not to contest, the jurisdiction of such
courts.
10.8 Representations. Each
party represents and warrants to the other that he or it has full power and
authority to enter into and perform this Agreement and that his or its execution
and performance of this Agreement shall not constitute a default under or breach
of any of the terms of any agreement to which he or it is a party or under which
he or it is bound. Each party represents that no consent or approval
of any third party is required for his or its execution, delivery and
performance of this Agreement or that all consents or approvals of any third
party required for his or its execution, delivery and performance of this
Agreement have been obtained.
10.9 Withholding. Any
and all amounts payable under this Agreement, including without limitation,
amounts payable under Section 2.1 or Section 6.1(c) hereof, are subject to
withholding for such federal, state, and local taxes as the Company, in its
reasonable judgment, determines to be required pursuant to any applicable law,
rule or regulation.
10.10 Survival. The
provisions of Sections 3, 4, 5, 7, 8, 9 and 10 of this Agreement shall survive
the termination of this Agreement for whatever reason.
10.11 Section
409A. If the Executive is a “key employee,” as defined
in Section 416(i) of the Code (without regard to paragraph 5 thereof), except to
the extent permitted under Section 409A of the Code, no benefit or payment that
is subject to Section 409A of the Code (after taking into account all applicable
exceptions to Section 409A of the Code, including but not limited to the
exceptions for short-term deferrals and for “separation pay only upon an
involuntary separation from service”) shall be made under this Agreement on
account of the Executive’s “separation from service,” as defined in Section 409A
of the Code, with the Company until the later of the date prescribed for payment
in this Agreement and the first day of the seventh calendar month that begins
after the date of the Executive’s separation from service (or, if earlier, the
date of death of the Executive).
(Signature
Pages Follow)
14
IN
WITNESS WHEREOF, the Company and Executive have executed this Agreement to be
effective as of the day and year first above written.
THE
“COMPANY”
By:
/s/ Xxxx
Xxxxxx
Name:
Xxxx
Xxxxxx
Title: Chairman, Comverge Board of
Directors
“EXECUTIVE”
By:
/s/ R. Xxxxx
Xxxxx
Name:
R. Xxxxx
Xxxxx
Title:
President & Chief
Executive Officer
15
Exhibit
A
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Annual
Salary*
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Executive
shall be paid at the rate of $450,000 per annum.
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Annual
Cash
Incentive1
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Executive
will have the opportunity to earn an annual bonus equal to 37.5%
(threshold), 75% (target) or 150% (maximum) of his annual salary based on
the achievement of performance criteria established by the Compensation
Committee. This cash incentive is available for the
Executive’s first year of employment (calendar year 2010) and shall be
prorated based on the start date of the Executive’s services.
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Annual
Equity
Incentive1
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Executive
will have the opportunity to earn an annual equity award comprised of a
combination of restricted stock and options valued at 2.25 times salary
(threshold), 3.00 times salary (target) or 3.75 times salary (maximum)
based on the achievement of performance criteria established by the
Compensation Committee. This annual equity incentive is not
available for Executive’s first year of employment (calendar year
2010). Executive would be eligible for this incentive for
calendar year 2011.
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Initial
Equity/Stock Option Grants
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Upon
execution of the Agreement, and in consideration of Executive’s
obligations contained therein, including but not limited to the
discontinuance of any business or business activities in which Executive
was engaged prior to the execution of this Agreement, Executive shall be
granted 92,000 shares of restricted stock and 368,000 stock
options.
Restricted
stock shall vest 46,000 shares on February 18th, 2012, which is the second
year after the date this Agreement is executed, with the remaining 46,000
vesting on February 18th, 2013, which is the third year after the date
this Agreement is executed.
The
stock options granted under this Agreement shall be at a strike price of
the closing price of the Company’s common stock as of the date that the
Board consents to the appointment of Executive as CEO, and shall vest
quarterly on a pro
rata basis over the next four years.
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Living
& Relocation Expenses
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Company
shall pay to Executive a relocation stipend as follows:
Company
will pay all reasonable household moving expenses on behalf of Executive
and his family for their relocation to Atlanta, Georgia. These
household moving expenses will be direct-billed to the
Company.
In
addition, in consideration of other relocation expenses that Executive and
his family will incur, $125,000 will be paid upon execution of the
Agreement and $125,000 will be paid upon final relocation to Atlanta,
Georgia. This relocation stipend includes without limitation
expenses required for selling Executive’s residence in Houston, Texas, to
purchasing his Atlanta, Georgia house, and all living and travel expenses
during the process.
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Attorney’s
fees
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Company
shall reimburse Executive for all reasonable attorney’s fees associated
with the review and negotiation of this Agreement within thirty (30) days
of receiving the invoice for such fees and where such fees/invoice shall
not exceed $5000.
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Vacation
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Executive
is entitled to four weeks of paid vacation each year. Vacation
shall be prorated during the course of the
year.
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1 The
compensation committee will set Target, Threshold, and Maximum performance
levels for Annual Cash and Equity incentives. The Threshold
performance level is the minimum level of performance required as a condition of
earning any incentive. The Target performance level is the level of
performance at which the executive, operating division or company is expected to
perform. The Maximum performance level is the highest level of
payout. The committee has discretion to grant or not grant such
Annual Cash or Annual Equity Incentives, if in its reasonable discretion, is in
the best interests of the Company.
EXHIBIT
B
SEPARATION
AGREEMENT AND GENERAL RELEASE
COMPANY
CONFIDENTIAL
This Separation Agreement and General
Release (“Agreement”) is made and entered into on this ___ day of _________,
______ by and between Comverge, Inc., a Delaware corporation (hereinafter
referred to as “the Company”), and R. Xxxxx Xxxxx (hereinafter referred to as
“Employee”).
W
I T N E S S E T H
WHEREAS, Employee has been
employed by the Company in the position of President and Chief Executive Officer
pursuant to an Executive Employment Agreement (“Employment Agreement”) dated
________________, 2010; and
WHEREAS, the Company has
decided not to renew the Employment Agreement and to terminate the Employment
Agreement and Employee’s employment with the Company
effective_____________________, subject to the terms of this Agreement;
and
WHEREAS, the parties have
decided to settle all rights, claims, and demands which either party has against
or may have against the other arising from the non-renewal and termination of
the Employment Agreement, Employee’s employment or termination of his employment
with the Company; and
WHEREAS, the Company and
Employee desire to set forth their respective rights, duties and obligations and
desire complete accord and satisfaction of all claims arising
therefrom;
NOW THEREFORE, for and in
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Employee hereby agree as follows:
1. Company’s
Agreements.
(a) The
Employment Agreement will terminate and Employee’s employment with the Company
will end on _________________________. Upon Employee’s execution and
non-revocation of this Agreement, Employee shall be entitled to the benefits set
forth in Section _________ of the Employment Agreement, which is incorporated
hereby by reference. Employee’s entitlement to the benefits or
payments from the Company, except as expressly stated herein, is subject to
Employee’s acceptance of this Agreement and his compliance with the conditions
set forth herein. At all times preceding and including his
termination date, Employee shall be responsible for cooperating with the Company
and its directors, officers, employees, agents and
representatives. Employee agrees to exercise his best efforts to
perform all job duties and responsibilities, and any task to which he is
assigned to perform, in a competent and satisfactory manner, to comply with all
policies, procedures and work directives, and to assist and facilitate in the
transition of his job responsibilities and functions. Upon
termination of his employment, the Company agrees to pay Employee the severance
pay as set forth in Section _____ of the Employment Agreement, less any
withholdings that are required under federal and state law. Except as
specifically set forth in this Agreement, Employee shall be entitled to no other
payments under this Agreement or the Employment Agreement.
(b) Whether
or not Employee signs this Agreement, (i) the Company will pay to Employee an
amount constituting Employee’s accrued, unused vacation days and reimburse
Employee for business expenses in accordance with Company policies, and (ii)
Employee’s Group Medical and Dental benefits may be continued for up to eighteen
(18) months at Employee’s expense by completion and submittal of the form
provided by COBRA Administration Services. Pursuant to Section
_______, the Company will continue to provide certain benefits assuming Employee
continues to pay his required payment amounts.
2. Employee’s
Agreements.
(a) As
a material inducement to the Company to enter into this Agreement, Employee
hereby irrevocably and forever releases the Company and its parent and/or
related companies, subsidiaries, or affiliates, and their past, present and
future officers, directors, employees, agents and attorneys (collectively
“Releasees”) from any and all charges, claims, complaints, demands, liabilities,
rights, obligations, promises, causes of action, costs, damages at law, expenses
(including attorneys’ fees and costs actually incurred), and suits hidden, of
any nature whatsoever, known or unknown, which Employee ever had, may have, or
now has arising from or related to, directly or indirectly, Employee’s
Employment Agreement, his employment by the Company or any other events which
have occurred as of the date of this Agreement, including but not limited to any
claims arising under Title VII of the Civil Rights Act of 1964, as amended, the
Civil Rights Act of 1991, the Americans with Disabilities Act, the Family
Medical Leave Act, the Age Discrimination in Employment Act and any and all
other federal and state laws or statutes. Notwithstanding the
foregoing, Employee does not release (i) any claims under this Agreement or
under the Age Discrimination in Employment Act that may arise after the
execution of this Agreement, or (ii) any rights that Employee may have to
indemnification under applicable law or the Company’s articles of incorporation
and by-laws, or benefits under any directors and officers insurance that is or
may have been in existence at or prior to the date hereof, or (iii) any vested
benefits under any Company benefit plans or programs.
(b) Employee
agrees not to commence any legal proceeding or lawsuit against the Company or
any Company Affiliate arising out of or based upon Employee’s employment with
the Company or the end of Employee’s employment with the Company; provided,
however, this provision does not apply to any claims or causes of action not
released pursuant to Section 2(a) above, including without limitation any claims
or causes of action accruing and based upon conduct occurring after the
Effective Date of this Agreement, including, without limitation, any claims or
causes with respect to Executive’s rights to payments or benefits under this
Agreement.
(c) Employee represents and
agrees that he will keep the terms, the amount, and the fact of this Agreement
completely confidential and he will not hereafter disclose such information to
anyone except members of his family, his professional advisers (who have agreed
to confidentiality obligations), or otherwise as he may be required to do so by
law. Employee further agrees that, with the exception of allegations,
representations, or statements made in formal legal or arbitration proceedings,
he will not engage in any conduct which is designed to disparage or has the
effect of disparaging the Company or any of its officers, parent, subsidiary,
affiliate, or related companies or their agents, employees or
representatives. Company agrees that it will not engage in any
conduct which is designed to disparage or has the effect of disparaging
Employee.
(d) In
the event that the Company becomes involved in any civil or criminal litigation,
administrative proceeding or governmental investigation, Employee shall, upon
request during the twelve-month period following the End Date, provide
reasonable cooperation and assistance to the Company, including without
limitation, furnishing relevant information that he remembers or is in his
possession, attending meetings and providing statements and testimony; provided,
however, that such cooperation and assistance does not unreasonably interfere in
any subsequent employment of Employee. The Company will reimburse
Employee for all reasonable and necessary costs and expenses Executive incurs in
complying with this Section.
(e) Employee
represents and warrants that he has been encouraged to seek advice from anyone
of his choosing, including his attorney, accountant or tax advisor prior to his
signing it; that this Agreement represents written notice that he do so; that he
has been given the opportunity and sufficient time to seek such advice; that he
has carefully read and fully understands all of the provisions of this
Agreement; and that he is voluntarily entering into this
Agreement. Employee
understands that he may take up to twenty-one (21) days to consider whether or
not he desires to enter into this Agreement. Employee further
represents and warrants that he was not coerced, threatened or otherwise forced
to sign this Agreement, and that his signature appearing hereinafter is
genuine.
(f) Employee
represents and acknowledges that, in executing this Agreement, he does not rely
and has not relied upon any representation or statement made by any of the
Releasees or by any of the Releasees’ agents, representatives, or attorneys with
regard to the subject matter, basis, or effect of this Agreement.
(g) Employee
hereby acknowledges, that during his employment, he agreed to certain
post-termination obligations restrictive covenants which are contained in the
Employment Agreement at Sections 3, 4, 5, and 6 and which are incorporated
herein by reference. Employee further acknowledges and agrees that
Sections 3, 4, 5, and 6 shall remain in full force and effect after the
termination of the Employment Agreement and Employee’s employment with the
Company and that he will comply with his obligations as set forth in Sections 3,
4, 5, and 6.
(h)
For a period of one year from the date hereof, unless specifically invited in
writing by the Company, neither you nor any of your representatives acting on
your behalf or on behalf of other persons acting in concert with you will in any
manner, directly or indirectly effect or seek, offer or propose (whether
publicly or otherwise) to effect, or announce any intention to effect or cause
or participate in or in any way assist, facilitate or encourage any other person
to effect or seek, offer or propose (whether publicly or otherwise) to effect or
participate in any “proxy” “solicitation” (as such terms are used in the proxy
rules of the Securities and Exchange Commission) or consents to vote any voting
securities of the Company, or make any communication exempted from the
definition of “solicitation” by Rule 14a-1(1)(2)(iv) under the Exchange
Act.
3. Other Agreements.
(a) Employee
understands and acknowledges that he has seven (7) days after his acceptance and
execution of this Agreement to revoke this Agreement. Should Employee
choose to revoke his acceptance and execution of this Agreement within that
seven (7) day period, he must submit such revocation in writing to the General
Counsel of the Company prior to the expiration of the seven (7) day
period. After such seven (7) day period, this Agreement will be
irrevocable.
(b) This
Agreement supercedes and terminates any prior agreements, whether written or
otherwise, between Employee and the Company or any predecessor of the
Company.
(c) Employee
warrants that he will deliver to the Company all property belonging to the
Company no later than his date of termination. Employee acknowledges
and agrees that payment from the Company under this Agreement is contingent upon
the return of all Company property.
(d) The
Company and Employee agree that the failure of the Company to insist upon any
one or more instances relating to the performance of any of the terms,
covenants, or conditions of this Agreement shall not be construed as a waiver or
relinquishment of any right granted hereunder or of the future performance of
any such term, covenant, or condition.
(e) The
Company and Employee agree that this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors, heirs,
executors, administrators, and representatives. Neither this
Agreement nor any right hereunder may be assigned by Employee.
(f) The
Company and Employee agree that this Agreement sets forth the full and complete
understanding of the parties with respect to the matters addressed herein and
that the validity of this Agreement and any of the provision hereof shall be
interpreted, construed, and determined under and according to the laws of the
State of Texas.
4. Employee
Statement.
I have
read and understand this entire Agreement. I understand that I have
twenty-one (21) days to consider whether or not I desire to enter into this
Agreement. I understand that I have seven (7) days to revoke this
Agreement even after I provide a signed copy to the Company. After
the expiration of such seven (7) day period, this Agreement will be binding upon
me and will be irrevocable.
I
understand that by signing this Agreement, I am giving up rights I may
have. I understand I do not have to sign this
Agreement.
___________________________
R. Xxxxx
Xxxxx
___________________________
Date:
By: ________________________
Date: ______________________
