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EXHIBIT 10.23
EMPLOYMENT AND NON-COMPETITION AGREEMENT
THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (this "Agreement") is made
and entered into as of the 8th day of May, 2000 by and between PowerSpring Inc.,
a Delaware corporation (the "Company"), and Xxxxxx Xxxxxx, an individual who
presently resides in Wake Forest, North Carolina (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to employ Employee, and Employee desires to
serve the Company, upon the terms and subject to the conditions set forth
herein; and
WHEREAS, the Company and the Employee desire to set forth the terms and
conditions of such employment in this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements set forth herein, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Employee, intending to be legally bound hereby, agree as follows:
SECTION 1. EMPLOYMENT. The Company hereby employs Employee, and Employee
hereby accepts such employment and agrees to serve the Company, upon the terms
and subject to the conditions set forth herein.
SECTION 2. TERM. The term of Employee's employment hereunder shall
commence on the date first above written and shall expire two years from such
date, unless earlier terminated in accordance with the provisions of Section 5.
In the event that this Agreement has not been earlier terminated in accordance
with the provisions of Section 5, the term of Employee's employment hereunder
shall be automatically extended without further action by the Company or
Employee for additional successive one-year periods unless either party, for any
reason or no reason, shall have given written notice of termination to the other
party no less than thirty (30) days prior to the commencement of any one-year
extension period. The term of Employee's employment hereunder is sometimes
hereinafter referred to as the "Employment Term."
SECTION 3. DUTIES OF EMPLOYEE.
(a) GENERAL DUTIES AND RESPONSIBILITIES. During and throughout the
Employment Term, Employee shall faithfully and diligently, to the best of his
ability, serve as the President and Chief Executive Officer and a member of the
Board of Directors of the Company, and in such additional management offices and
capacities and with such additional titles and duties as shall be designated by
the Company's Board of Directors (the "Board") during the Employment Term, shall
have the authority and perform the duties and responsibilities customary for
such offices, and shall have such other duties as may be assigned to him from
time to time by the Board or by the Chairman of the Board (the "Chairman").
Employee shall perform his duties hereunder in accordance with the policies from
time to time established and amended by the Company and in accordance with all
applicable laws and regulations. Employee shall use his best efforts to promote
the best interests of the Company. Employee shall always be subject to the
direction, approval and control of the Board and the Chairman in the performance
of his
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duties. Employee acknowledges and agrees that he may be required by the Company,
without additional compensation, to perform services for any other entity
controlling, controlled by, under common control with or otherwise affiliated
with, the Company (any such entity hereinafter referred to as an "Affiliate"),
and to accept such office or position with any Affiliate as the Board may
reasonably require, including but not limited to service as an officer and/or
director of an Affiliate.
(b) PERFORMANCE OF SERVICES. During and throughout the Employment
Term, Employee shall devote his full time, attention, skill, ability and energy
during normal business hours (and outside such hours when reasonably necessary
to perform Employee's duties hereunder) exclusively to the business and affairs
of the Company and the performance of his duties under this Agreement. Employee
shall not, directly or indirectly, render any services of a business, commercial
or professional nature to any person or organization without the prior written
consent of the Board; provided, however, that the provisions this Section 3(b)
shall not preclude Employee from devoting time, ability, energy and attention
outside normal business hours throughout the Employment Term to reasonable
participation in community, civic, charitable or similar organizations, or the
pursuit of personal legal and financial affairs which do not interfere or
conflict with the performance of Employee's duties hereunder and are not adverse
to the business or best interests of the Company.
(c) PLACE OF EMPLOYMENT. Employee shall perform his services
hereunder (i) out of his personal office in Raleigh, North Carolina, until the
completion of the Venture Capital Financing (as defined below), provided he
shall spend as much time in the Company's Denver, Colorado office as is
reasonably required in connection with the business of the Company, and (ii)
after completion of the Venture Capital Financing, at the Company's principal
executive offices in Denver, Colorado or at such other location as mutually
agreed with the Board; provided, however, that Employee agrees at all times,
before or after the completion of the Venture Capital Financing, to undertake
all reasonable travel required by the Company to be conducted in connection with
the business of the Company and the performance of Employee's duties hereunder.
SECTION 4. COMPENSATION. During and throughout the Employment Term, as
compensation for the services performed and other covenants made by Employee to
the Company hereunder, the Company shall pay and provide or cause to be provided
to Employee the following:
(a) BASE SALARY. The Company shall pay Employee a base salary equal
to $250,000 per year (the "Base Salary"), payable in approximately equal
installments in accordance with the Company's customary payroll practices.
Employee's Base Salary shall be increased to $300,000 per year upon the
successful completion of the Company's initial public offering ("IPO") of its
common stock, par value $.01 per share ("Common Stock"). Employee's Base Salary
may be reviewed by or under the authority of the Board and may be increased at
the sole discretion of the Board or its designee (although the Board has no
obligation to do so) based upon whatever factors the Board or its designee deems
appropriate including, but not limited to, Employee's individual performance,
the overall performance, profitability and prospects of the Company and
prevailing economic and industry factors.
(b) BONUSES. So long as he remains employed with the
Company, Employee shall be entitled to receive the following bonuses:
(i) SIGNING. Employee shall be entitled to receive a $25,000
cash bonus upon his execution of this Agreement.
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(ii) VENTURE CAPITAL FINANCING. Employee shall be entitled to
receive a $50,000 cash bonus upon the Company's successful completion of the
sale of its equity securities to one or more venture capital firms or other
large investors (the "Venture Capital Financing").
(iii) IPO. Employee shall be entitled to receive a $50,000
cash bonus upon the Company's successful completion of the IPO.
(iv) GENERAL BONUS PROGRAM. If the Company shall adopt a bonus
program or any other form of profit-sharing participation for senior executive
officers of the Company, Employee shall be eligible to participate in such
program in a manner and capacity commensurate with his position and duties.
(c) COMPANY STOCK OPTION. In consideration in part for inducing
Employee to enter into this Agreement and to perform his services hereunder, the
Company shall grant to Employee an option (the "Company Stock Option") to
purchase 750,000 shares of Common Stock at an exercise price of $0.30 per share.
The Company Stock Option shall be subject to the terms and conditions of the
Company's 2000 Stock Incentive Plan and the stock option agreement used under
such plan. The Company Stock Option shall vest in three equal installments as
follows:
(i) options to purchase 250,000 shares of Common Stock shall
vest and become exercisable on the date hereof;
(ii) options to purchase an additional 250,000 shares of
Common Stock shall vest and become exercisable on the first anniversary of the
date hereof, provided Employee remains employed with the Company on such date;
and
(iii) options to purchase an additional 250,000 shares of
Common Stock shall vest on the day preceding the second anniversary of the date
hereof, provided Employee remains employed with the Company on such date.
(d) EMPLOYEE BENEFIT PLANS. Employee shall be entitled to
participate in all pension, 401(k), retirement, life, disability and health
insurance, hospitalization, major medical and other the employee benefit plans
and arrangements, if any (as in effect and as amended from time to time), to the
extent that his position, tenure, salary, age, health and other qualifications
make his eligible to participate, generally made available by the Company to
comparable level employees, subject to and on a basis consistent with the terms,
rules and regulations, conditions and overall administration of such plans and
arrangements. Notwithstanding the foregoing sentence, the Company may
discontinue at any time any such the employee benefit plan or arrangement, to
the extent permitted by the terms of such plans or arrangements, and shall not
be required to compensate Employee for the elimination of any such employee
benefit plans or arrangements.
(e) EXPENSES. The Company shall, upon presentment by Employee of
appropriate receipts and vouchers therefor, reimburse Employee for all
reasonable, ordinary and necessary out-of-pocket business expenses incurred by
Employee in connection with the performance of his duties under this Agreement,
provided that such expenses are incurred and accounted for in accordance with
and subject to the normal policies and procedures of the Company.
(f) VACATION. Employee shall be entitled to reasonable paid vacation
time in accordance with the policies of the Company applicable to executive
officers of the Company.
(g) METRETEK STOCK OPTION. Because the Company is a subsidiary of
Metretek Technologies, Inc., a Delaware corporation ("Metretek"), employees of
the Company are eligible to
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receive stock options under the Metretek 1998 Stock Incentive Plan. In
consideration in part for inducing Employee to enter into this Agreement and for
his services hereunder, the Company shall use its best efforts to cause Metretek
to grant to Employee an option (the "Metretek Stock Option") to purchase 20,000
shares of Common Stock, par value $.01 per share ("Metretek Common Stock"), of
Metretek, with an exercise price equal to the last sale price of the Metretek
Common Stock as reported on the Nasdaq National Market on the date hereof. The
Metretek Stock Option shall vest in three equal installments: one - third on the
date hereof, one-third on the first anniversary of the date hereof and one-third
on the day proceeding the second anniversary of the date hereof, provided
Employee is still employed by the Company on such dates. The Metretek Stock
Option shall be subject to the terms and conditions of the Metretek 1998 Stock
Incentive Plan, and the stock option agreement used under the plan.
(h) RELOCATION EXPENSES. The Company shall reimburse the reasonable
out-of-pocket expenses of Employee and his family in relocating to Denver,
Colorado, including moving costs, travel expenses, real estate commissions and
other out-of-pocket expenses attributed to the sale of Employee's principal
residence in Wake Forest, North Carolina (the "North Carolina Principal
Residence"), and up to a one percent (1%) loan origination fee paid by Employee
in connection with the financing of Employee's purchase of a new principal
residence in the Denver, Colorado area, promptly after receipt of written
supporting documentation of such expenses. In addition, in the event Employee
has been unable to sell his principal residence by the time of the closing of
the Venture Capital Financing, then the Company shall purchase the North
Carolina Principal Residence from Employee at a mutually acceptable price, and
or if the parties are unable to agree on a price within 30 days thereof, at a
price determined by a qualified appraisal selected by the Company and reasonably
acceptable to Employee.
SECTION 5. TERMINATION OF EMPLOYMENT. Notwithstanding the provisions of
Section 2 hereof, the Employment Term and Employee's employment hereunder shall
terminate as follows:
(a) DEATH. Employee's employment hereunder shall automatically
terminate upon his death, and the Company shall pay to his designated
beneficiary (or, if none, to his estate) the pro rata portion of his Salary and
all other accrued and vested but unpaid compensation through the date of his
death.
(b) DISABILITY. The Company shall have the right, in its sole
discretion, to terminate Employee's employment hereunder in the event of
Employee's "Disability" upon giving at least 30 days written notice to Employee
of its intention to terminate Employee's employment. For purposes of this
Agreement, "Disability" means the physical or mental inability of Employee, due
to illness, accident or other incapacity, to effectively perform the essential
functions of his duties hereunder for any period of 90 consecutive days, or 180
days during any twelve-month period, or which results from an incapacity
determined to be total and permanent as determined by an independent physician
selected by the Company.
(c) BY THE COMPANY FOR CAUSE. The Company shall have the right, in
its sole discretion, to terminate Employee's employment hereunder at any time
for "Cause" immediately upon giving written notice of termination to Employee.
Upon his termination for Cause, Employee shall be entitled to receive only the
accrued but unpaid portion of his Base Salary through the date of termination,
plus any accrued and vested but unpaid bonuses as of such date, but Employee
shall not be entitled to any other bonus or incentive compensation for the year
in which he was terminated. In addition, any unvested portion of the Company
Stock Option and the Metretek Stock Options
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(collectively, the "Stock Options") shall expire without vesting. Employee shall
have no right to receive any other or further compensation or benefits. For
purposes of this Agreement, "Cause" includes the following:
(i) The failure or refusal by Employee to perform any of his
duties hereunder, or the breach by Employee of any of his obligations,
covenants, representations, warranties or acknowledgments hereunder, which
failure, refusal or breach remains unremedied or uncured for a period of 15 days
after specific written notice thereof is given to Employee by the Board or the
Chairman;
(ii) Any act of dishonesty, disloyalty, insubordination,
fraud, breach of fiduciary duty or bad faith by Employee that is materially
detrimental to the Company or that results in substantial personal enrichment of
Employee;
(iii) The conviction of Employee, or the entering of a guilty
plea or a plea of no contest by Employee with respect to (A) a felony, or (B) a
misdemeanor that involves theft, fraud or dishonesty, results in Employee's
imprisonment or impairs Employee's ability to perform his duties hereunder or
damages the reputation or business of the Company;
(iv) Except as authorized by the Board or by any the Chairman,
the failure of Employee to comply with any applicable law, rule, regulation or
any order, injunction, ruling or similar decree of any court, arbitrator or
governmental authority which results in material injury to the property,
business, operations or reputation of the Company;
(v) The misappropriation (or attempted misappropriation) or
embezzlement by Employee of any funds, property, business opportunity or rights
of the Company, including securing (or attempting to secure) any personal profit
in connection with any transaction entered into on behalf of the Company without
the prior consent of the Board;
(vi) The breach by Employee of, or failure or refusal of
Employee to adhere to, any written code of conduct, policy or instructions of
the Company applicable to executive officers of the Company that is not remedied
by Employee within twenty (20) business days after receipt of written notice
thereof given by the Company;
(vii) The use by Employee of drugs, alcohol or narcotics which
interferes with the performance of Employee's duties and responsibilities under
this Agreement;
(viii) The excessive absence by Employee unrelated to illness
or permitted leave time; or
(ix) Gross dereliction, misconduct, neglect, incompetence or
insubordination of Employee or mismanagement by Employee in connection with
Employee's duties or responsibilities hereunder.
(d) BY THE COMPANY WITHOUT CAUSE. The Company shall have the right,
in its sole discretion, to terminate Employee's employment hereunder at any time
effective upon the giving of written notice of such termination to Employee (or
at such later date as the notice provides). In such event, Employee shall be
entitled to receive (i) all amounts of the Base Salary and any bonuses that are
accrued but unpaid through the date of termination, (ii) an amount equal to the
Base Salary at the rate in effect on the date of termination for a period the
shorter of twelve months or the remainder of the
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Employment Term, (iii) any rights and benefits of any of the employee benefits
accruing to him (including any plans in which he was participating) as of the
date of such termination, subject to the terms and conditions of such plans and
benefits, but Employee shall not attain vested status in any plans or benefits
in which he is not vested on the date of termination (except as provided in
clause (iv) below), and (iv) the Stock Options shall immediately vest and become
exercisable and remain exercisable for the periods set forth in the respective
stock option agreements. In the event of the termination of Employee's
employment hereunder by the Company without Cause, Employee shall use his best
efforts to mitigate the amounts payable under this Section 5(d) hereof by
seeking other employment; provided, however, that Employee shall not be required
to accept a position: (i) of substantially different character than the position
held by Employee with the Company during the Employment Term, or (ii) that might
reasonably be expected to by result in a violation by Employee of the provisions
of Section 6. To the extent that Employee shall receive compensation and
benefits from such other employment for services rendered during the remainder
of the Employment Term computed without regard to the termination, the payments
and benefits to be made or provided by or at the direction of the Company under
the provisions of this Section 5(d) shall be correspondingly reduced.
(e) VOLUNTARY TERMINATION BY EMPLOYEE. Employee agrees not to
voluntarily terminate his employment hereunder except by giving at least 60 days
written notice to the Company. Upon such voluntary termination by Employee,
Employee shall be entitled to receive only the accrued but unpaid portion of his
Base Salary (but not any bonus) through the date of termination and the accrued
and vested rights and benefits under any Employee benefits plan which he was
entitled to receive at the date of such termination, subject to the terms and
conditions of such plans. Any unvested portion of the Stock Options shall expire
without vesting.
(f) COMPENSATION UPON TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE
IN CONTROL.
(i) AMOUNT OF COMPENSATION. If, during the Employment Period,
a "Change in Control" (as defined below) of either the Company or Metretek
occurs, and within three years after such date the Company shall terminate
Employee's employment without "Cause" or the employment of Officer shall be
terminated by Employee for "Good Reason" (as defined in below), then:
(A) The Company shall pay to Employee in a lump sum in cash within
30 days after the date of termination the aggregate of the
following amounts:
(I) To the extent not theretofore paid, the Base Salary
through the date of termination at the rate in effect on the
date the notice of termination was given along with any earned
but unpaid bonuses; and
(II) One times Employee's annual Base Salary at the rate in
effect on the date the notice of termination was given; and
(III) In the case of compensation previously deferred by
Employee, all amounts of such compensation previously deferred
and not yet paid by the Company; and
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(B) The Company shall, promptly upon submission by Employee of
supporting documentation, pay or reimburse to Employee all costs
and expenses paid or incurred by Employee prior to the date of
termination which would have been payable under this Agreement if
Employee's employment had not terminated; and
(C) For a period of one year from the date of termination, Employee
and his family shall be permitted to continue to participate in all
life, accidental death, disability, medical, dental and other
insurance plans of the Company. If, despite the provisions of this
Section 5(f), benefits shall not be available under any of such
plans because Employee is no longer an employee of the Company,
then the Company itself shall, to the extent necessary, pay or
provide for payment of benefits to Employee and/or Employee's
family, or where applicable, pay or provide to Employee and/or
Employee's family the difference between the benefits payable
pursuant to this Section 5(f) and the benefits actually payable
pursuant to the terms of such plans, in each case at the time such
payments would be payable pursuant to the terms of such plans,
programs and policies.
(ii) DEFINITION OF CHANGE IN CONTROL. For the purpose of this
Agreement, a "Change in Control" of either the Company or Metretek (each a
"Corporation" in this Section 5 (f)(ii) shall be deemed to have occurred only
if:
(A) Any person or group (as such terms are used in Sections 13 (d)
(3) and 14 (d) (2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") acquires the beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of 50% or more of the aggregate voting
power of all classes of the Corporation's then outstanding voting
securities entitled to vote generally in the election of directors
of the Corporation; provided, however, that the following
acquisitions shall not constitute a Change in Control: (I) any
acquisition directly from the Corporation (excluding an acquisition
by virtue of the exercise of a conversion privilege), (II) any
acquisition by the Corporation or any subsidiary of the Corporation,
or (III) any acquisition by any employee benefit plan (or related
trust) for employees or any subsidiary of the Corporation; or
(B) Individuals who, as of the date hereof, constitute the Board of
Directors of the Corporation (the "Board" generally, and as of the
date hereof, the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the date hereof whose
election, or nomination for election by the Corporation's
stockholders, was approved by a vote of at least two-thirds of the
directors then comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election
contest relating to the election of the directors of the
Corporation, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) shall be, for purposes of this
Agreement, considered as though such individual were a member of the
Incumbent Board; or
(C) Approval by the Corporation of a reorganization, merger,
combination, or consolidation, in each case, unless, following such
reorganization, merger, combination, or consolidation, (I) more than
50% of, respectively, the then outstanding shares of
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common stock of the corporation or other entity resulting from such
reorganization, merger, combination or consolidation and the
aggregate voting power of the then outstanding voting securities of
the resulting corporation or other entity entitled to vote generally
in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
outstanding Common Stock and outstanding voting securities of the
Corporation immediately prior to such reorganization, merger,
combination, or consolidation, in substantially the same proportion
as their ownership immediately prior to such reorganization, merger,
combination, or consolidation, and (II) at least a majority of the
members of the board of directors of the corporation or other entity
resulting from such reorganization, merger, combination or
consolidation were members of the Incumbent Board at the time of the
execution of the initial agreement providing for such
reorganization, merger, combination or consolidation; or
(D) Approval by the Corporation of the sale or other disposition of
all or substantially all of the assets of the Corporation, other
than to a corporation or other entity with respect to which
following such sale or other disposition the conditions described in
clauses (I) and (II) of Section 5 (f)(ii)(c) are satisfied.
(iii) DEFINITION OF GOOD REASON. For purposes of this
Agreement, "Good Reason" means:
(A) (I) The assignment to Employee of any position, authority,
duties or responsibilities inconsistent in any respect with
Employee's position (including, without limitation, status, offices,
title and reporting requirements), authority, duties or
responsibilities, prior to the Change in Control, or (II) any other
action by the Corporation which results in a diminution in such
position, authority, duties or responsibilities, other than an
insubstantial and inadvertent action which is remedied by the
Corporation promptly after receipt of notice thereof given by
Employee;
(B) Any reduction in Employee's base salary or in the extent of
Employee's entitlement to the employee benefits, expenses, fringe
benefits or perquisites referred to in Section 3;
(C) The Corporation's requiring Employee to be based at an office
location or to maintain his personal residence other than where it
is on the date of the change in control;
(D) The failure of the Corporation to obtain a satisfactory
agreement from any successor to the Corporation to assume and agree
to perform this Agreement;
(E) The imposition on Employee of business travel obligations
substantially greater than his business travel obligations during
the fiscal year prior to the Change in Control;
(F) Any purported termination by the Corporation of Employee's
employment other than as expressly permitted by this Agreement; or
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(G) Any other failure by the Corporation to comply with any
provision of this Agreement, other than an insubstantial and
inadvertent failure which is remedied by the Corporation promptly
after receipt of notice thereof given by Employee.
(g) NO FURTHER OBLIGATION TO EMPLOYEE. The payments and benefits (if
any) required to be made or provided to Employee pursuant to this Section 5
shall be in full and complete satisfaction of, and shall constitute the full
settlement and release of the Company by Employee with regard to all obligations
of the Company owed to Employee pursuant to this Agreement. After the date of
termination of Employee's employment hereunder, the Company shall have no
further obligations to Employee under this Agreement except as otherwise set
forth herein.
(h) SURVIVAL OF EMPLOYEE'S OBLIGATIONS. Notwithstanding the
termination of this Agreement by either party hereto for any reason, the
obligations of Employee under Section 6 hereof and the other provisions thereof
shall survive the termination or expiration of this Agreement or Employee's
employment hereunder and shall remain in full force and effect for the period
provided therein.
SECTION 6. COVENANTS. In consideration in part for the compensation to be
paid to Employee hereunder by the Company, and in order to induce the Company to
enter into this Agreement and the Stock Purchase Agreement, Employee hereby
makes the following covenants to the Company:
(a) COVENANT NOT TO COMPETE. During the Employment Term and for a
period of one year thereafter (the "Restricted Period"), Employee shall not,
directly or indirectly, alone or in association with others, whether as owner,
shareholder, employee, Employee, director, partner, manager, member, lender,
investor, consultant, principal, agent, independent contractor, co-venturer or
in any other capacity, invest in, engage in, have a financial interest in, be in
any other way connected or affiliated with, or render advice or service to, any
Person that is in competition with the Company in the United States or in any
other country in which the Company does a material amount of business or
otherwise has material operations.
(i) COMPETITION WITH THE COMPANY. For purposes of this
Agreement, (A) the phrase "in competition with the Company" shall be deemed to
include competition with the Company and its subsidiaries and Affiliates, or
their respective successors or assigns, or the businesses of any of them, and
(B) a business shall be deemed to be in competition with the Company if it is
engaged in any business activity or has products or services that are the same
or similar to the business activities, products or services of the Company
during the Employment Term. Notwithstanding the foregoing, nothing herein
contained shall prevent Employee from acquiring and holding for investment up to
two percent (2%) of any class of securities of any corporation, if such
securities are listed or traded on a national securities exchange or the Nasdaq
Stock Market or in the over-the-counter market.
(ii) INTERPRETATION OF COVENANT. The parties hereto
acknowledge and agree that the duration and area for which the covenant not to
compete set forth in this Section 6(a) is to be effective are fair and
reasonable and are reasonably necessary for the protection of the Company and
its business and good will, and Employee hereby waives any objections to or
defenses in respect thereof. In the event that any court determines that any
portion of the time period or the area, or both of them, are unreasonable,
arbitrary or against public policy, and that such covenant is to such extent
unenforceable, illegal or invalid, the parties hereto agree that this Section
6(a) shall be deemed amended to delete therefrom such provisions or portions
adjudicated to be unenforceable, illegal or invalid so that the covenant shall
remain in full force and effect for the greatest time period and in the greatest
geographical area that would render it enforceable, legal and valid. The parties
intend that the covenant set forth in the
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Section 6(a) shall be deemed to be a series of separate covenants, one for each
and every county of each and every state of the United States of America and one
for each and every political subdivision of each and every other country where
the covenant is intended to be effective and is not proscribed by law.
(b) COVENANT REGARDING DISCLOSURE OR USE OF CONFIDENTIAL
INFORMATION.
(i) Employee acknowledges that during the Employment Term and
as a result of his employment by the Company, he will learn, obtain and have
access to confidential and proprietary information regarding the business and
affairs of the Company and its Affiliates. Employee hereby agrees that at all
times during and after the Employment Term he shall keep strictly confidential
and hold in confidence all Confidential Information (as defined below), and
shall not, directly or indirectly, use any Confidential Information for
Employee's own benefit or for the benefit of any other Person or divulge,
disclose, communicate or otherwise reveal any Confidential Information to any
Person in any manner whatsoever, other than to the directors, employees and
agents of the Company, and then only in the course of the Company's affairs to
the extent necessary for them to perform services to and responsibilities on
behalf of the Company.
(ii) As used herein, "Confidential Information" means any and
all information, however documented, which is confidential property or otherwise
non-public, related to the business and affairs of the Company and its
Affiliates, including, but not limited to, their assets, properties, operations,
finances, practices, procedures, policies, methods, contracts, agreements and
arrangements, lending policies, pricing policies, price lists, financial plans,
business plans, financial information, financial projections, budgets, marketing
strategies and techniques; the identity and location of all past, present and
prospective customers, suppliers, affiliates, debtors, creditors, lenders,
employees, consultants, advisors, agents, distributors, wholesalers, clients and
others who have dealings with the Company; trade secrets, processes,
photographs, graphics, product specifications, formulas, compositions, samples,
inventions, ideas, research and development; patents, patent applications;
copyrights and copyright applications (in any such case, whether registered or
to be registered in the United States or any foreign country) applied for,
issued to or owned by the Company; any and all processes, computer programs and
software (including object code and source codes, database, technologies,
engineering or technical data, drawings, sketches or designs, manufacturing or
distribution methods or techniques; and any other information known to Employee
to be confidential, proprietary, secret or otherwise non-public information.
(iii) Employee hereby acknowledges and agrees that, as between
the Company and Employee, all of the Confidential Information, however
documented, whether or not developed, created or modified by Employee, is the
exclusive property of the Company.
(iv) Upon the termination or expiration of the Employment
Term, Employee shall leave with or return to the Company, without making or
retaining any copies, or other records of, all Confidential Information
including all copies, summaries, abstracts thereof and all memoranda, notes,
records, reports, books, letters, customer lists, manuals and other writings or
documents whatsoever pertaining thereto. Notwithstanding the foregoing, as used
herein "Confidential Information" does not mean or include any information that
is generally available to the public other than as a result of a direct or
indirect disclosure by Employee.
(c) COVENANTS REGARDING BUSINESS RELATIONSHIPS. Employee agrees that
during and throughout the Employment Term and the Restricted Period, except when
acting on behalf of the Company, he shall not, directly or indirectly, (i)
employ, solicit, induce, engage or cause any director, officer, employee,
independent contractor, consultant, salesman or other agent of the Company
(whether
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now or hereafter engaged by the Company) to (A) terminate his employment or
engagement with the Company, (B) accept employment or engagement or otherwise
render services to any other Person or business (wherever located, and
regardless of type of business conducted), or (C) interfere with the business of
the Company; or (ii) solicit any clients or customers of the Company or
interfere in any business relationship between the Company and any other person,
firm or entity, including any person who was at any time an employee,
consultant, contractor, advisor, supplier, lender or customer of the Company.
Employee shall not, at any time during or after the Employment Term, disparage
the business reputation of the Company or any of its shareholders, directors,
Employees, employees or agents or take actions that are harmful to the Company's
good will with others.
(d) INTELLECTUAL PROPERTY. During and throughout the Employment Term
and the Restricted Period, Employee agrees to disclose to the Company any and
all ideas, improvements, techniques, modifications, processes, inventions,
developments, discoveries, trade secrets, trademarks, service marks, copy
rights, trade names, business plans and any work of authorship ("Intellectual
Property") developed, conceived, created, made, devised, discovered, acquired or
acquired knowledge of, by Employee during the Employment Period, either by
himself or in conjunction with any other person, which relates in any way,
directly or indirectly, or may be useful in any manner in the business of the
Company or its Affiliates, and any such item that is based upon or utilizes
Confidential Information, whether or not the Company or its Affiliates obtains a
patent, trademark, service xxxx or copyright thereon. Employee hereby agrees
that the Intellectual Property shall become and remain the sole and exclusive
property of the Company. Employee hereby acknowledges that all of Employee's
writing, works of authorship and other Intellectual Property are works made for
hire and the property of the Company, including patents, trademarks, service
marks, copyrights and other intellectual property rights pertaining thereto.
Employee shall, at the request and cost of the Company or any of its Affiliates,
render assistance as the Company deems necessary or desirable to secure,
prosecute and/or defend the rights thereto by patent, trademark, service xxxx,
copyright to otherwise to the Company or its Affiliates, including without
limitation the assignment, transfer and conveyance to the Company or its
Affiliates of all of Employee's right, title and interest in and to the
Intellectual Property.
(e) EMPLOYEE'S ACKNOWLEDGMENT. The Company spends considerable
amounts of time, money and effort in developing and maintaining good will in its
industry. Employee agrees the covenants contained within this Section 6 (i) are
reasonable and necessary in all respects to protect the goodwill, trade secrets,
confidential information, and business interests of the Company; (ii) are not
oppressive to Employee; (iii) do not impose any greater restraint on Employee
than is reasonably necessary to protect the goodwill, trade secrets,
confidential information and legitimate business interests of the Company; and
(iv) will not, upon the termination, of Employee's employment with the Company
for any reason whatsoever, cause Employee to be unable to earn a living that is
suitable and acceptable to Employee.
(f) EQUITABLE RELIEF. Employee hereby acknowledges and agrees that
his services to be rendered to the Company hereunder and his obligations
contained in this Section 6 are of special, unique and personal character which
gives them a peculiar value to the Company, that the Company cannot be
reasonably or adequately compensated in money damages in an action at law in the
event Employee breaches any obligations under this Section 6, and that the
provisions of this Section 6 are reasonable and necessary to protect the
business of the Company. Employee therefore expressly agrees that, in addition
to any other rights or remedies which the Company may have at law or in equity
or by reason of any other agreement, the Company shall be entitled to injunctive
and other equitable relief in the form of temporary, preliminary and permanent
injunctions without posting bond or other security in the event of any actual or
threatened breach of any such obligation by Employee and without the
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necessity of proving actual damages, and to discontinue any salary, bonus,
benefits and/or insurance continuation provided hereunder. Nothing in this
Agreement shall be construed to prohibit the Company from pursuing any other
remedy, and Employee agrees that all remedies of the Company are cumulative.
(g) NATURE OF COVENANTS. Employee's covenants in Section 6 hereof
are independent covenants, and the existence of any claim by Employee against
the Company under this Agreement or otherwise will not excuse Employee's breach
or waive Employee's obligation to perform, any covenant in this Section 6. If
Employee's employment hereunder terminates for any reason, or the Employment
Term expires, this Section 6, and the other terms and conditions of this
Agreement necessary or appropriate to enforce the covenants of Employee in
Section 6, shall survive and remain in full force and effect.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE. Employee represents
and warrants to the Company that (a) Employee is under no contractual or other
restriction, arrangement or obligation which is or will be breached by or in
conflict or inconsistent with his execution and delivery of this Agreement, the
performance of his duties hereunder, or the other rights of the Company
hereunder, and (b) Employee is under no physical or mental disability or
incapacity that would hinder the performance of his duties under this Agreement.
SECTION 8. CONSOLIDATION, MERGER OR SALE OF ASSETS. Nothing in this
Agreement shall preclude the Company from consolidating with, merging into, or
transferring all or substantially all of its assets to another entity which
assumes all of the Company's obligations and undertakings hereunder. Upon such a
consolidation, merger or transfer of assets, the term "Company" as used herein
shall mean such other entity, and this Agreement shall continue in full force
and effect.
SECTION 9. EMPLOYEE ACKNOWLEDGMENT; COUNSEL. Employee acknowledges by
executing this Agreement and delivering it to the Company that (i) he has read
all of the terms and conditions hereof, including his obligations, covenants,
representations and warranties to the Company; (ii) the covenants of Employee in
Section 6 hereof are essential elements of this Agreement, and the Company would
not have entered into this Agreement or the Stock Purchase Agreement without
Employee's agreement to comply with such covenants; (iii) each and every term,
covenant and restriction is reasonable and necessary for the proper protection
of the Company's business; and (iv) he has been advised by the Company that he
should consult with independent counsel of his choice and have such counsel
review this Agreement and render advice thereon to Employee, and Employee has
either done so or voluntarily elected not to do so.
SECTION 10. TAXES. All payments required to be made by the Company
hereunder to Employee shall be subject to withholding of such amounts relating
to taxes as the Company may reasonably determine it should withhold pursuant to
any applicable federal, state or local law or regulation. In lieu of withholding
such amounts, in whole or in part, the Company may, in its sole discretion,
accept other provision for payment of taxes, provided it is satisfied that all
requirements of law affecting its responsibilities to withhold such taxes have
been satisfied.
SECTION 11. NO ATTACHMENT. Except as required by law, no right to receive
payment under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to
execution, attachment, levy, or similar process of assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect.
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SECTION 12. ARBITRATION. Any dispute, controversy or claim arises out of,
under or in connection with, or otherwise relating to, this Agreement (other
than the Company's rights under Section 6) (a "Dispute"), including but not
limited to the parties' rights and obligations hereunder, or any actual or
alleged breach hereof, shall be determined and settled by binding arbitration in
Denver, Colorado in accordance with the rules of the commercial rules and
procedures of the American Arbitration Association, as amended by this
Agreement. Promptly after a Dispute arises, the parties agree to make a good
faith effort to select one mutually agreeable arbitrator. If the parties are
unable to reach agreement on an arbitrator within thirty (30) days after the
Dispute is submitted to arbitration, one arbitrator shall be selected in
accordance with the commercial rules and procedures of the American Arbitration
Association. Any determination, resolution or award made by the arbitrators
shall specify the findings of fact of the arbitrators and the reasons for the
determination, resolution or award, and such determination, resolution or award
shall be final and binding. If the parties hereto mutually agree to a resolution
of any Dispute prior to the arbitrators' decision, the agreement of the parties
shall resolve the Dispute. The party prevailing in any arbitration, as
determined by the arbitrator, shall be entitled to an award of all of its
out-of-pocket costs and expenses incurred in connection with the Dispute,
including but not limited to reasonable attorneys' fees, court costs and expert
fees. An arbitration award or decision may be entered by any court of competent
jurisdiction, or application may be made to such a court for judicial acceptance
of the award or decision and any appropriate order, including enforcement. The
parties hereby consent to the submission of any Dispute for settlement by
binding arbitration in accordance with this Section 12 and agrees to carry out
without delay the provisions of any arbitration award, decision or resolution.
SECTION 13. GENERAL PROVISIONS.
(a) GOVERNING LAW. This Agreement shall in all respects be governed
by, and construed in accordance with, the internal substantive laws of the State
of Colorado, without giving effect to any conflict or choice of law principles
or rules.
(b) AMENDMENT. This Agreement may not be amended or modified in
whole or in part in any manner except in a writing which makes reference to this
Agreement executed by both parties hereto.
(c) ASSIGNMENT. Neither the Agreement, nor any rights, obligations
or duties hereunder, may be assigned or delegated by any party hereto without
the prior written consent of the other party hereto; provided, however, that
this Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the Company upon any sale of all or substantially all of the
Company's stock or assets, or upon any merger, consolidation or reorganization
of the Company with or into any other Person, so long as such successors or
assigns assume all of the Company's obligations hereunder. As used in this
Agreement, the term "Company" shall be deemed to refer to any such successor or
assign of the Company referred to in the preceding sentence.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
(e) ENTIRE AGREEMENT.
(i) This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and supersedes in their entirety all prior and
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contemporaneous written and oral agreements, arrangements, understandings,
negotiations, communications, covenants, representations and warranties among
the parties hereto relating to the subject matter hereof.
(ii) Employee acknowledges that from time to time, the Company
may establish, maintain or distribute the employee manuals or handbooks or
personnel policy manuals, and Employees or other representatives of the Company
may make written or oral statements relating to personal policies and
procedures. Such manuals, handbooks and statements are intended only for general
guidance. No policies, procedures or statements of any nature by or on behalf of
the Company (whether written or oral, and whether or not contained in any the
employee manual or handbook or personnel policy manual), and no acts or
practices of any nature, shall be construed to modify this Agreement.
(f) NOTICES. Any and all notices, demands, requests, elections and
other communications required or permitted to be given hereunder shall be in
writing and shall be deemed to have been duly given (i) upon personal delivery;
(ii) upon confirmation of receipt when sent by facsimile transmission; (iii) one
business day after deposit during normal business hours with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt; (iv) five business days after being sent by first class
(certified or registered) mail, postage prepaid, return receipt requested, in
each case to the following addresses:
If to the Company:
PowerSpring, Inc.
000 00xx Xxxxxx, Xxxxx 000 Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Chairman of the Board
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to:
Metretek Technologies, Inc.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: W. Xxxxxxx Xxxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and:
Xxxx X. Xxxx, Esq.
Kegler, Brown, Hill & Xxxxxx Co., L.P.A.
00 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Employee to:
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Xxxxxx Xxxxxx
000 Xxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Any party hereto may send any notice, demand, request, election or other
communication to the intended recipient at its address set forth above using any
other means (such as expedited courier, messenger service, telecopy, telex,
ordinary mail or electronic mail), but no such notice, demand, request or other
communication shall be deemed to have been given until it is actually received
by the recipient. Any party hereto may change its designated address by giving
written notice to all other parties.
(g) WAIVER. The obligations of any party hereunder may be waived
only with the written consent of the party or parties entitled to the benefits
the obligations so involved. Any waiver of a breach or violation of or default
under any provision of this Agreement shall not be construed or operate as, or
constitute, a waiver of any other or subsequent breach or violation of or
default under that provision or any other provision of this Agreement. The
failure of any party to insist upon strict compliance with any provision of this
Agreement on any one or more occasions shall not be construed or operate as, or
constitute, a continuing waiver of, or an estoppel of that party's right to
insist upon strict compliance with, that provision or any other provision of
this Agreement.
(h) SEVERABILITY. The provisions of this Agreement shall be deemed
severable. If any provision of this Agreement is determined to be illegal,
invalid or unenforceable in any situation: (i) the parties hereto shall agree to
a suitable and equitable provision to be substituted therefor in order to carry
out, so far as may be valid and enforceable, the intent and purpose of such
invalid or unenforceable provision; and (ii) the remainder of this Agreement
shall remain in full force and effect, and the application of such provision in
any other situation shall not be affected.
(i) COUNTERPARTS. This Agreement may be executed in any number of
counterparts (including counterparts executed by less than all parties hereto),
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
(j) HEADINGS. The headings used herein are solely for convenience of
reference and shall not be given any effect in the construction or
interpretation of this Agreement.
(k) NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement, express
or implied, in intended to create or confer and shall not be construed or
operate as creating or conferring, any rights or remedies under or by reason of
this Agreement, upon any Person other than the parties hereto and their
respective successors and permitted assigns.
(l) FURTHER ASSURANCES. The parties hereto agree to take or cause to
be taken all actions, which are necessary, convenient or desirable in order to
effect the transactions contemplated by this Agreement.
(m) BEST EFFORTS. Each of the parties hereto shall act in good faith
and use its best efforts to bring about the transactions contemplated by this
Agreement.
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(n) EXPENSES. Except as otherwise expressly provided herein, each of
the parties to this Agreement shall pay its own costs and expenses incurred in
connection with this Agreement and the consummation of the transactions
contemplated hereby.
(o) CONSTRUCTION. In the event an ambiguity or question or intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party hereto by virtue of the authorship of any of the
provisions of this Agreement.
(p) SPECIFIC PERFORMANCE. Each of the parties hereto acknowledges
and agrees that the other parties hereto would suffer irreparable damage for
which an adequate remedy at law would not be available in the event any of the
provisions of this Agreement is not performed in accordance with its specific
terms or otherwise is breached. Accordingly, each of the parties hereto agrees
that the non-breaching parties shall be entitled to an injunction, restraining
order or other form of equitable relief from any court of competent jurisdiction
to prevent breaches of, and to specifically enforce, the provisions of this
Agreement.
(q) INTERPRETATION OF CERTAIN PROVISIONS. Except as otherwise
expressly provided herein, as used in this Agreement:
(i) Any reference to any federal, state, local or foreign
statute or law shall be deemed also to include a reference to all rules and
regulations promulgated thereunder.
(ii) The term "including" means "including, without
limitation".
(iii) The term "Entity" means and includes a corporation,
partnership, limited liability company, joint venture, trust, association,
unincorporated organization, governmental or regulating body or authority, or
any other form of business or entity.
(iv) The term "Person" means and includes an individual and an
Entity.
(v) The number and gender of each noun and pronoun and the
terms "Person" and "Persons" and the like shall be construed to mean such number
and gender as the context, the circumstances or its antecedent may require.
(vi) The terms "hereof", "herein", "hereunder" and words of
similar import refer to this Agreement as a whole, and not to any Section,
subsection or clause of this Agreement.
(vii) Each reference to a Section means such Section of this
Agreement.
* * * * * * * * *
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IN WITNESS WHEREOF, this Employment and Non-Competition Agreement has been
executed and delivered by or on behalf the parties hereto, effective as of the
date first above written.
THE COMPANY:
POWERSPRING, INC.
By: /s/ W. Xxxxxxx Xxxxxx
-------------------------------
W. Xxxxxxx Xxxxxx, Chairman
of the Board
EMPLOYEE:
/s/ Xxxxxx Xxxxxx
-------------------------------------
Xxxxxx Xxxxxx
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