EMPLOYMENT AGREEMENT
Exhibit
10(s)
Clean
Diesel Technologies, Inc. – Xxxxxxx X. Xxxxxxxx
AGREEMENT made as of the date set forth
below by and between Xxxxxxx X. Xxxxxxxx, 0000 Xxxxxxxxxx Xxxxx, Xxxxxx,
XX 00000 (“Executive”) and Clean Diesel Technologies, Inc., a
Delaware corporation (the “Company”), having a place of business at Xxxxx 000,
000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000.
WHEREAS, the Company desires certain
services for itself and Executive desires to contract with the Company to
perform such services;
NOW THEREFORE, in consideration of the
mutual covenants hereinafter recited, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Term: This
Agreement shall commence on the date of September 3, 2008, or as reasonably soon
thereafter as may be agreed by Executive’s designated supervisor below (the
“Commencement Date”), and shall continue thereafter until terminated by either
party as provided below, provided that the Commencement Date shall not be any
date earlier than the Executive’s first day of full time
employment.
2. Scope of Work;
Title: On the Commencement Date, Executive shall be Vice
President – Sales Americas of the Company. In such employment,
Executive shall on a full-time basis direct all of Executive’s efforts toward
the performance of such duties as shall be assigned to Executive by the
Executive Vice President American Operations who shall be Executive’s designated
supervisor. “Full time” shall mean no other outside business
activities without the company’s prior consent. Executive will be
proposed for election as Vice President Sales at the Board of Directors meeting
next following the Commencement Date or sooner by written action of the
directors at their convenience. Executive's place of employment shall be the
Company's corporate headquarters, and, pending relocation, the Executive shall
maintain a home office and visit the corporate headquarters whenever
required.
3. Compensation;
Benefits: (a) Salary. The Company
agrees to cause Executive to be paid for Executive’s services hereunder at the
initial rate of Two Hundred Ten Thousand Dollars ($210,000) per
year. Executive shall be paid such amounts by the Company according
to its normal and customary procedures from time to time in effect but not less
often than monthly.
(b) Options. When
employed, Executive from time to time shall be entitled to participate in stock
option Awards under the Company’s 1994 Incentive Plan in the discretion of the
Board of Directors. The Company will arrange for you to receive a
stock option award to purchase Ten Thousand (10,000) shares of the Company's
common stock, $0.01 par value, at an exercise price which shall be the fair
market value of the stock on the Award Date, as determined pursuant to the terms
of the Plan. The option Award Date shall be the Commencement Date. Such option
shall have a term of ten (10) years and shall vest in increments of one-third
(1/3) of the options on the first anniversary of the Commencement Date, and the
second and third one-third (1/3) option portions on the second and third
anniversaries of the Award Date. Such option shall, nevertheless, lapse and be
forfeited in its entirety, if the Executive shall not be employed by the Company
on the first anniversary of the Commencement Date. In the event of a
“Change in Control”, as defined in and in accordance with Company’s 1994
Incentive Plan, any and all eligible Option rights shall become fully vested and
immediately exercisable.
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(c) Bonus. Executive
shall be eligible for a variable compensation performance bonus
program. The bonus shall have an initial targeted payout of up to 50%
of salary, with a portion of this amount, or Twenty Thousand Two Hundred Dollars
($20,200) guaranteed in the first year. After the first year of
employment, Executive will be eligible to participate in such performance
bonus/variable compensation programs of Company in the discretion of the
Directors.
(d) Benefits. Executive
shall participate also in such other benefit programs as the Company may
customarily extend to its Employees as a class. This Agreement may
not be construed to prevent the Company from rescinding any benefit programs for
Executive so long as such rescission applies to Employees as a
class.
4. Expenses: Executive
shall be reimbursed by the Company in accordance with Company policies for all
ordinary and necessary out-of-pocket expenses incurred by Executive in
performing Executive’s services hereunder. Such expenses shall be
reported from time-to-time by Executive on the Company’s customary forms of
expense report and submitted for approval to the Company pursuant to its
policies from time to time in effect.
5. Termination of
Employment: (a) Just
Cause. The Company may at any time terminate this Agreement
for Just Cause. “Just Cause” shall mean, as determined by the Board
of Directors in its sole discretion, conviction of Executive under, or a plea of
guilty by the Executive to, any charge which would constitute a felony under the
laws of Connecticut, regardless of jurisdiction; any instance of fraud,
embezzlement, self-dealing, xxxxxxx xxxxxxx or similar malfeasance with respect
to the Company regardless of the amount involved; any instance of material
disloyalty, insubordination, or disparagement of the Company to an outside
party; or any instance of substance abuse of a controlled substance or,
otherwise, a pattern of substance abuse which limits Executive’s performance of
Executive’s duties.
(b) Disability. The
Company may terminate this Agreement at any time upon the physical disability of
Executive, if the Directors in their sole discretion shall determine that, as a
result of physical disability Executive has for a period of six months been
substantially absent from Executive’s customary place of work and unable to
perform Executive’s customary duties.
(c) At
Will. Either of Executive or Company may terminate this
Agreement at any time on two (2) month’s written notice one to the
other. Where Company shall terminate this Agreement for other than
just cause or physical disability after six (6) months of employment, the
Company shall continue the Executive’s Basic Salary and Benefits (in the amount
and form then enjoyed by the Executive) but offset by any income from personal
services earned by the Executive from sources other than the Company for a
period which ends on the earlier of eight (8) months after termination or until
the Executive accepts other substantially comparable employment. If
this employment is terminated by the Employee, he will, at any time, give two
(2) months advance notice and shall not be entitled to any further compensation
after such notice period. Termination at will under this sub-section (c) shall
also include constructive discharge within one year following a change in
control of the Company. “Constructive discharge” means that the responsibilities
of the Employee have been materially diminished at the time of change in
control. “Change in control” has the same meaning as set out in the Company’s
1994 Incentive Plan.
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6. Discoveries and
Inventions: All patentable and unpatentable inventions,
discoveries and ideas which are made or conceived or reduced to practice by
Executive during the term of Executive’s employment, and which are based upon or
arise out of Executive’s services hereunder (“Developments”) are or shall become
the Company’s property. Executive agrees to disclose promptly to the
Company each such Development and, upon the Company’s request and at its
expense, Executive will assist the Company, or its designee, in making
application for Letters Patent, Trade or Service Marks or Copyrights in any
country in the world. Executive further agrees, at no expense to
Executive, to execute all papers and do all things which may be necessary or
advisable to prosecute such applications, and to transfer to and vest in the
Company, or its designee, all the right, title and interest in and to such
Developments, and all applications for patents and Letters Patent, Trademarks
and Service Marks and Copyrights issued thereon. If for any reason
Executive is unable to effectuate a full assignment of any such Development,
Executive agrees to transfer to the Company, or its designee, Executive’s
transferable rights, whether they be exclusive or non-exclusive, or as a joint
inventor or partial owner of the Development. No action or inaction
by the Company shall in any event be construed as a waiver or abandonment of its
rights to any such Development except an instrument in writing assigned by an
authorized official of the Company by which it specifically states it intends to
be bound in such respect.
7. Proprietary
Information: Executive will not at any time, either during the
term of this Agreement or thereafter, disclose to others, or use for Executive’s
own benefit or the benefit of others, any of the Developments or any
confidential, proprietary or secret information owned, possessed or used by the
Company or any of its subsidiaries or affiliates (collectively, “Proprietary
Information”), which, by way of illustration, but not limitation, includes
devices, structures, machines, data, know-how, business opportunities, marketing
plans, forecasts, unpublished financial statements, budgets, licenses and
information concerning prices, costs, Executives, customers and
suppliers. Executive’s undertakings and obligations under this
Paragraph 7 will not apply to any Proprietary Information which: (a) is or
becomes generally known to the public through no action on the part of the
Executive or (b) is generally disclosed to third parties by the Company or any
of its subsidiaries or affiliates without restriction on such third
parties. Upon termination of this Agreement or at any other time upon
request, Executive will promptly deliver to the Company all keys, notes,
memoranda, notebooks, computers, computer disks or drives, drawings, designs,
three dimensional figures, photographs, layouts, diagrams, records, reports,
files and other documents (and all copies or reproductions of such materials) in
Executive’s possession or under Executive’s control, whether prepared by him or
others, which contain Proprietary Information. Executive acknowledges
that this material is the sole property of the Company or a subsidiary or an
affiliate of the Company.
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8. Subsequent
Employment: Following the termination of Employment for any
reason, Executive agrees that Executive will not recruit, entice, induce or
encourage any of the Company’s other Executives or consultants to engage in any
activity which, were it done by Executive, would violate any provision of
Executive’s Agreement. For a two-year period after termination of employment and
before performing any services for others, as Executive or consultant or
otherwise, in the actual lines of business in which Executive has performed
services for the Company, its subsidiaries or affiliates, Executive will notify
the Company of the general nature of the services to be performed and the party
for whom they will be performed and Executive will, also, prior to undertaking
such service or employment inform the other party of the existence of the
covenants in Sections 6, 7 and 8 of this Agreement. Executive admits that breach
of Executive’s covenants hereunder regarding the Company’s Proprietary
information is likely to cause serious economic injury to the
Company.
9. Assignment: This
Agreement may not be assigned by either party without the prior written consent
of the other party; provided, however, that the acquisition by any
person of all or substantially all of the assets or capital stock of the Company
shall not be considered an assignment of this Agreement by the
Company.
10. Continuing
Obligations: The Executive’s covenants set forth in Sections
6, 7, and 8 above shall continue according to their terms following the
termination of this Agreement.
11. Governing Law; Waiver of
Trial by Jury; Equitable Remedies. This Agreement, the interpretation
hereof and the resolution of any and all disputes between the Company and
Executive shall be governed by and interpreted under the internal substantive
and procedural laws of the State of Connecticut without any reference to
conflicts of laws rules. In the resolution of any disputes the parties agree to
submit to the exclusive jurisdiction of the Superior Court of Connecticut,
Stamford/Norwalk District and waive any claims of forum non conveniens with
respect to that jurisdiction and also waive any claim to trial by jury in any
proceeding. The parties further agree that any violations of Executive’s
covenants set forth in Sections 6, 7 and 8 above may cause irreparable harm to
the Company which harm is not capable of accurate determination and for which
the remedy of damages may be insufficient. Accordingly, in any proceeding to
enforce the Company’s rights under such Sections 6,7 and 8, the Company may
seek, in addition to damages, equitable remedies such as injunctions, temporary
injunctions and restraining orders and the parties hereby waive any requirement
of bond in any such proceeding or in any appeal therefrom.
12. Legal Advice;
Rescission. Executive agrees that this Agreement involves Executive’s
waiver of certain legal rights. Executive may, if Executive so chooses, consult
with an attorney about the terms of this Agreement before signing it. Executive
further acknowledges that (a) the Company has given Executive a twenty one (21)
day period in which to consider the terms and binding effect of this Agreement,
which twenty one (21) day period Executive may waive, and (b) that, if Executive
does sign this Agreement, Executive shall have seven (7) days thereafter to
change Executive’s mind and revoke it. Executive agrees that if Executive
decides to revoke this Agreement, Executive will inform the Company within that
seven (7) day period and obtain a written acknowledgment of the revocation which
the Company agrees to provide. Executive understands that revocation of this
Agreement will affect Executive’s employment status. Executive states that
Executive has carefully read this Agreement; that Executive understands its
final and binding effect and agrees to be bound by its terms; and that Executive
has signed this Agreement voluntarily.
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13. Notices. All
notices hereunder shall be in writing and shall be deemed effective upon
receipt, if hand delivered, or if sent by facsimile and acknowledged
electronically, or by courier and receipted on delivery. Notices by
mail shall be deemed received on receipt, if sent first class or priority mail
postage prepaid return receipt requested and the sender shall have the signed
receipt. Otherwise notices shall be deemed effective five (5) days after
transmission. In each case notices shall be transmitted to the
address first given above or such other address as may be given by notice as
provided herein.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written.
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EXECUTIVE
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CLEAN
DIESEL TECHNOLOGIES, INC.
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| /s/ Xxxxxxx X. Xxxxxxxx | /s/ Xxxxxx X. Xxxxx | ||||
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Name:
Xxxxxxx X. Xxxxxxxx
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Name:
Xxxxxx X. Xxxxx
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Executive
Vice President
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Date:
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August 21, 2008 |
Date:
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August 20, 2008 | ||
| /s/ Xxxxxxxx Xxxxxxx | |||||
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Name:
Xxxxxxxx Xxxxxxx
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President
and Chief Executive Officer
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Date:
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August 20,
2008
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Clean Diesel Technologies,
Inc.
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xxx.xxxx.xxx
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000
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000-0000 Tel: (000) 000-0000 Fax:
(000) 000-0000
Xxxxxxx
X. Xxxxxxxx
0000
Xxxxxxxxxx Xxxxx
Xxxxxx,
XX 00000
August
26, 2008
Employment Agreement
Addendum
Clean
Diesel Technologies, Inc. - Xxxxxxx X. Xxxxxxxx
Dear
Xxxx,
We are
excited about having you join the Clean Diesel team and would like to make this
transition as attractive and convenient as possible for you, Xxxxx and your
growing family. We have discussed alternatives with the Compensation Committee
of the Board and with General Counsel, including standard practices and
expectations around those practices in a public company environment, and have
secured authorization for some additional support for your relocation to the
Connecticut area of the Company headquarters. While we are able to
assist in further defraying some potential costs associated with your move, it
must also be recognized that there are some constraints that need to be taken
into account. We are therefore able to offer the following, which represents the
extent to which we are able to provide additional support.
We hope
this arrangement to provide further assistance meets with your approval, and
look forward to having you join the Clean Diesel team on September 3rd.
If
you are in accord with the following, kindly sign below on the two originals
where indicated, and return one fully executed original to me.
- Relocation
to the company xxxxxxxxxxxx xxxx Xxxxxxxxxx, XX is expected to be as soon as
practical, under the circumstances, and within 12 months of your start
date. The company will pay for two house-hunting visits for you and
your spouse.
- The
company will pay for all customary and reasonable moving (e.g., packing,
shipping, storage, etc.) and closing (both sale and purchase) costs as
reimbursable expenses with receipts to be submitted to the company.
- A
relocation company may be assigned at the company discretion and with your
agreement to assist with coordination of home sale, purchase and relocation,
including selection of broker(s). The relocation company may be
required to take temporary title to your Michigan home as part of providing its
services to you.
- The
company will pay for temporary housing for you for your visits to the company
headquarters area prior to the sale of your home in Michigan. Should
temporary housing become necessary due to the sale of your home and/or the
timing of the closing date of the home purchase in CT, the company will provide
temporary housing for you and your family for a period totaling 60 days, or as
otherwise approved by the Chief Executive Officer of the
Company.
-
The company will provide a one-time incidental expense
allowance of $5,000, payable after you execute an agreement or other binder
document to purchase a new home in CT.
-
Regarding the sale of your home in Michigan, the company is willing to provide
an additional “Housing Relocation Payment” if the actual sales price is below
your original purchase price. This original purchase price is to be
confirmed by written documentation.
-
The company will commission a written appraisal on your Michigan
home.
- As
your relocation is not likely prior to January 2009, the company would like you
to put your home on the market at a price that is agreed by you and your broker,
based on market data.
-
If the home sells at or above your original purchase price, this benefits you
and avoids an expense for the company. Our joint intent is that you do not take
a substantial loss on your home relative to its purchase cost.
- When
you sell your Canton, MI house to a willing buyer, but at a price below your
original purchase price, the company commits to issuing you a further “Housing
Relocation Payment”. The value of this payment will be based on the difference
between the actual selling price and the original purchase price of your home,
up to a maximum Relocation Payment value of $65,000, on a grossed-up
basis. This Relocation Payment may be made by the company in two portions,
but in no case shall the final payment be made later than June 30, 2009, subject
to the prior disclosure of the actual sales price of the
home.
- The
Housing Relocation Payment will vest over two years, with the prorated amount to
be paid back to the company should you resign within two years of the
payment.
In order
to ensure that any of the foregoing costs are reasonable and customary and
entitled to reimbursement, you shall pre-clear in advance with the Chief
Executive Officer of the Company by fax or e-mail any of such expenses which
individually may exceed the amount of $2,500.
Sincerely
yours,
CLEAN
DIESEL TECHNOLOGIES, INC.
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/s/ Xxxxxx X.
Xxxxx
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Xx.
Xxxxxx X. Xxxxx
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Accepted
and Agreed
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Executive
Vice President
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/s/ Xxx X.
Xxxxx
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/s/ Xxxxxxx X.
Xxxxxxxx
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Xxx
X. Xxxxx
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Xxxxxxx
X. Xxxxxxxx
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Chief
Financial Officer
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