EMPLOYMENT AGREEMENT
AGREEMENT,
dated as of September 19, 2007, between ODYNE CORPORATION, a Delaware
corporation (the “Company”),
and
XXXX XXXXXXXXXX (the “Executive”).
WITNESSETH:
WHEREAS,
the Company desires to retain the services of the Executive and to that end
desires to enter into a contract of employment with him, upon the terms and
conditions herein set forth; and
WHEREAS,
the Executive desires to be employed by the Company upon such terms and
conditions;
NOW,
THEREFORE, in consideration of the premises and of the mutual benefits and
covenants contained herein, the parties hereto, intending to be bound, hereby
agree as follows:
1. APPOINTMENT
AND TERM
Subject
to the terms hereof, the Company hereby employs the Executive, and the Executive
hereby accepts employment with the Company, all in accordance with the terms
and
conditions set forth herein, for a period commencing on the date hereof (the
“Commencement
Date”)
and
ending on the first anniversary (the “Expiration
Date”)
of the
initial closing of the Company’s pending private placement of up to $3,500,000
of 10% senior secured convertible debentures and warrants to purchase common
stock (the “Private
Placement”),
unless the parties mutually agree in writing upon a later date. The term of
Executive’s employment hereunder may be extended for additional terms of one
year each provided that the Company gives Executive at least 30 days’ prior
written notice of its election to extend the term of Executive’s employment and
Executive agrees in writing to such extension.
2. DUTIES
(a) During
the term of this Agreement, the Executive shall hold the position of Chief
Executive Officer and shall, unless prevented by incapacity, devote all of
his
business time, attention and ability during normal corporate office business
hours to the discharge of his duties hereunder and to the faithful and diligent
performance of such duties and the exercise of such powers as may be assigned
to
or vested in him by the Board of Directors of the Company (the “Board”),
such
duties to be consistent with his position. The Executive shall obey the lawful
directions of the Board and shall use his diligent efforts to promote the
interests of the Company and to maintain and promote the reputation
thereof.
(b) The
Company shall cause the Executive to be nominated for election to the Board
for
so long as the Executive remains the Company’s Chief Executive
Officer.
(c) The
Executive shall not during his term of employment (except as a representative
of
the Company or with the consent in writing of the Board) be directly or
indirectly engaged or concerned or interested in any other business activity,
except for the Executive’s interest in Ergowerx International, a developer of an
ergonomic keyboard, or through the Executive’s ownership of an interest of not
more than 2% in any entity (or except such as does not (i) require a significant
time commitment by the Executive or (ii) impair the ability of the Executive
to
discharge his duties hereunder).
(d) Notwithstanding
the foregoing provisions, the Executive shall not be prohibited from serving
in
various leadership capacities in civic, charitable and professional
organizations. The Executive recognizes that his primary and paramount
responsibility is to the Company. In addition, with the Board’s approval, the
Executive shall be free to serve as a Director of a non-competing
corporation.
(e) The
Executive shall be based in the Company’s offices located in Suffolk County, New
York, except for required travel on the Company's business.
2
3. REMUNERATION
(a) Salary.
As
compensation for his services pursuant hereto, starting on January 1, 2008,
the
Executive shall be paid a base salary during the first year of his employment
hereunder at the annual rate set forth in Exhibit
A.
Such
salary shall be increased for any renewal term on each anniversary of the
Commencement Date by an amount equal to 5% of such salary for the preceding
one
year period. This amount shall be payable in equal periodic installments in
accordance with the usual payroll practices of the Company.
(b) Participation
in Company Plans.
Executive shall be entitled, during the term of his employment hereunder, to
participate in such of the Company’s incentive compensation plans and programs
as may from time to time be provided by Company for its executive officers
at
such level as shall be determined by Company’s Compensation Committee or Board
of Directors, as appropriate.
(c) Stock
Options.
(i) The
Executive shall be entitled to receive stock options (the “Stock
Options”)
to
purchase (A) 300,000 shares of Common Stock, par value $.001 per share, of
the
Company (the “Common
Stock”)
at an
exercise price equal to the closing price of the Common Stock, as reported
by
the OTC Bulletin Board, on the date of the initial closing of the Private
Placement, which options shall be granted on the Commencement Date and pursuant
to the Company’s 2006 Equity Incentive Plan, (B) 2,400,000 shares of Common
Stock at an exercise price equal to the average closing price of the Common
Stock, as reported by the OTC Bulletin Board, for the 30 trading days on and
prior to the date of the initial closing of the Private Placement, which options
shall be granted on the Commencement Date, but subject to the terms of a
newly-created incentive compensation plan to be adopted by the Company’s
stockholders (as to which the Company’s current executive officers have agreed
to vote their respective shares of Common Stock in favor of), and (C) 300,000
shares of Common Stock at an exercise price equal to the closing price of the
Common Stock, as reported by the OTC Bulletin Board, on January 2, 2008, which
options shall be granted on January 2, 2008, and pursuant to the Company’s 2006
Equity Incentive Plan. Each Stock Option shall vest in three equal installments
on the second, third and fourth annual anniversaries of the grant date, and
shall be issued pursuant to a customary stock option agreement, which the
Executive and the Company shall enter into on or reasonably promptly following
the respective grant date.
3
(ii) In
the
event of termination of employment (A) by the Executive without Good Reason
(as
defined in Section 7(b)(iv)), on or prior to the second anniversary of the
Commencement Date or (B) pursuant to Section 7(a)(i)(A), all Stock Options
not
theretofore exercisable will lapse and be forfeited. In the event the
Executive’s employment is terminated for any other reason on or prior to the
second anniversary of the Commencement Date, all Stock Options not theretofore
exercisable will thereupon become exercisable. Except as otherwise provided
in
the following paragraph, each Stock Option will expire ten years after it is
granted.
(iii) In
the
event of the termination of the employment of the Executive, all unexercised
and
exercisable stock options granted to him hereunder must be exercised by him,
or
his estate (or heir(s)), as the case may be, (A) within 12 months of the date
of
termination, if the termination is due to disability, as defined in Section
7(a)(i)(B), (B) in the event of death of the Executive, within 12 months of
the
date of termination, as defined in Section 7(a)(i)(C), if the termination is
due
to death or
within
three months of the date of termination if the termination is for any other
reason; provided,
however,
that in
the event the Executive’s employment is terminated for Cause, all unvested stock
options granted to him hereunder become null and void immediately upon
termination. Any vested options must be exercised within three months of the
date of termination.
4
(d) Other
Benefits.
Notwithstanding anything to the contrary herein contained, nothing shall prevent
the Board of Directors of the Corporation following the recommendations of
the
Compensation Committee from prospectively increasing the salary or other
remuneration of the Executive during the period of employment
hereunder.
(e) No
Additional Compensation.
Except
as provided above, in Exhibit
A
and in
Sections 4 and 6 hereof, the Executive shall not be entitled to receive any
additional compensation, remuneration or other payments from the
Company.
4. HEALTH
INSURANCE AND OTHER FRINGE BENEFITS
The
Executive shall be entitled to participate in regular employee fringe benefit
programs to the extent such programs are offered by the Company to its executive
employees, including, but not limited to, medical, hospitalization, dental
and
disability insurance, life insurance and 401(k) plan that are substantially
consistent with the programs of the Company in effect prior to the Commencement
Date.
5. VACATION
The
Executive shall be entitled to four weeks of vacation (in addition to the usual
national holidays) during each contract year during which he serves hereunder.
Such vacation shall be taken at such time or times as will be mutually agreed
between the Executive and the Company. Vacation not taken during a calendar
year
may not be carried forward.
5
6. REIMBURSEMENT
FOR EXPENSES
The
Executive shall be reimbursed for reasonable documented business expenses
incurred in connection with the business of the Company in accordance with
practices and policies established by the Company.
7. TERMINATION
(a) For
Cause, Disability or Death.
(i) The
Company may terminate Executive’s employment hereunder:
(A) Upon
written notice to the Executive by the Company at any time terminating the
Executive for Cause (as such term is defined below).
(B) In
the
event the Executive, by reason of physical or mental disability, shall be unable
to perform the services required of him hereunder for a period of more than
60
consecutive days, or for more than a total of 90 non-consecutive days in the
aggregate during any period of twelve (12) consecutive calendar months, on
the
61st consecutive day, or the 91st day, as the case may be. The Executive agrees,
in the event of any dispute under this Section 7(a)(i)(B), and after written
notice by the Board, to submit to a physical examination by a licensed physician
practicing in the New York, New York area selected by the Board, and reasonably
acceptable to the Executive.
(C) In
the
event the Executive dies while employed pursuant hereto.
(ii) In
the
event Executive’s employment hereunder is terminated pursuant to this Section
7(a), the Company shall have no further obligation to make any further payments
hereunder other than amounts that have been fully earned, but not yet paid
to
Executive.
6
(iii) The
term
“Cause”
shall
mean termination as a result of (w) willful and material malfeasance, dishonesty
or habitual drug or alcohol abuse by the Executive related to or affecting
the
performance of his duties, (x) continuing and intentional breach,
non-performance or non-observance of any of the terms or provisions of this
Agreement, but only after notice by the Company of such breach, nonperformance
or nonobservance and the failure of the Executive to cure such default as soon
as practicable (but in any event within ten (10) days following written notice
from the Company), (y) conduct which the Board in good faith determines could
reasonably be expected to have a material adverse effect on the business,
assets, properties, results of operations, financial condition, personnel or
prospects of the Company (within each category, taken as a whole), but only
after notice by the Company of such conduct and the failure of the Executive
to
cease such conduct as soon as practicable (but in any event within ten (10)
days
following written notice from the Company), or (z) the Executive's conviction
of
a felony, any crime involving moral turpitude (including, without limitation,
sexual harassment) related to or affecting the performance of his duties or
any
act of fraud, embezzlement, theft or willful breach of fiduciary duty against
the Company.
(b) Termination
without Cause or for Good Reason.
(i) If
the
Executive's employment is terminated by the Company for any reason other than
Cause or the disability or death of the Executive, or the Executive's employment
is terminated by Executive for Good Reason (as such term is defined
below):
(A) The
Company shall continue to pay Executive all of the compensation provided for
in
Sections 3 and 4 above (including the minimum increases provided therein) during
the remainder of the then-current term of the Executive's employment;
and
7
(B) The
Executive shall be entitled to continue to receive medical benefits coverage
(as
described in Section 4) at the Executive's expense, for the remainder of
Executive's life.
(ii) The
obligations of the Executive pursuant to Section 9 hereof
shall continue for so long as the Executive continues to receive payments due
pursuant to this Section 7(b).
(iii) Except
for the provisions of this Section 7(b), the Company shall have no further
obligation to the Executive hereunder.
(iv) “Good
Reason”
shall
mean the following:
(A) material
breach of the Company's obligations hereunder;
(B) any
decrease in the Executive's salary as increased during the term of the
Executive’s employment (except for decreases that are in conjunction with
decreases in the Executive salaries generally); or
(C) or
any
reduction in the Executive's duties or authority inconsistent with the duties
and authority of an the Executive officer of the Company.
(c) Voluntary
Termination.
In the
event the Executive's employment is voluntarily terminated by the Executive
without Good Reason, the Company shall not be obligated to make any further
payments to the Executive under this Agreement other than amounts fully earned
but not yet paid as of the date of the Executive's termination.
(d) Release.
Notwithstanding the foregoing, Company shall not be obligated to make any
payments under this Section 7 unless the Executive has executed and delivered
to
the Company a further agreement, to be prepared at the time of the Executive’s
termination of employment, that shall provide (i) an unconditional release
of
all claims, charges, complaints and grievances, whether known or unknown to
the
Executive, against Company or any of its affiliates, through date of the
Executive’s termination of employment; (ii) an undertaking to maintain the
confidentiality of such agreement; and (iii) an undertaking to indemnify Company
if the Executive breaches such agreement.
8
(e) Notice
of No Extension.
In the
event the Company chooses not to enter into any agreement or amendment extending
the Executive's employment beyond the Expiration Date, the Company agrees to
provide the Executive at least six (6) months’ prior written notice of such
determination (which notice may be given either before or after such Expiration
Date, but if notice is given any later than six (6) months prior the Expiration
Date, then the term of this Agreement shall be extended until the date which
is
six (6) months after the date such notice is given), during which time the
Executive may seek alternative employment while still being employed by the
Company.
(f) Notwithstanding
anything to the contrary contained herein, the parties shall have the right
to
terminate this Agreement in the event the Company does not raise at least
$500,000 in gross proceeds in the Private Placement by December 31,
2007.
8. CONFIDENTIAL
INFORMATION
(a) The
Executive covenants and agrees that he will not at any time during the
continuance of this Agreement or at any time thereafter (i) print, publish,
divulge or communicate to any person, firm, corporation or other business
organization (except in connection with the Executive's employment hereunder)
or
use for his own account any secret or confidential information relating to
the
business of the Company (including, without limitation, information relating
to
any customers, suppliers, employees, products, services, formulae, technology,
know-how, trade secrets or the like, financial information or plans) or any
secret or confidential information relating to the affairs, dealings, projects
and concerns of the Company, both past and planned (the “Confidential
Information”),
which
the Executive has received or obtained or may receive or obtain during the
course of his employment with the Company (whether or not developed, devised
or
otherwise created in whole or in part by the efforts of the Executive), or
(ii) take with him, upon termination of his employment hereunder, any
information in paper or document form or on any computer-readable media relating
to the foregoing. The term “Confidential Information” does not include
information which is or becomes generally available to the public other than
as
a result of disclosure by the Executive or which is generally known in the
alternative media business. The Executive further covenants and agrees that
he
shall retain the Confidential Information received or obtained during such
service in trust for the sole benefit of the Company or its successors and
assigns.
9
(b) The
term
Confidential Information as defined in Section 8(a) hereof shall include
information obtained by the Company from any third party under an agreement
including restrictions on disclosure known to the Executive.
(c) In
the
event that the Executive is requested pursuant to subpoena or other legal
process to disclose any of the Confidential Information, the Executive will
provide the Company with prompt notice so that the Company may seek a protective
order or other appropriate remedy and/or waive compliance with Section 8 of
this
Agreement. In the event that such protective order or other remedy is not
obtained or that the Company waives compliance with the provisions of Section
8
of this Agreement, the Executive will furnish only that portion of the
Confidential Information which is legally required.
9. RESTRICTIONS
DURING EMPLOYMENT AND FOLLOWING TERMINATION
(a) The
Executive shall not, anywhere within the United States, during his full term
of
employment under Section 1 hereof and, (i) in the event the Executive’s
employment is terminated for Cause or without Good Reason, for a period of
one
year thereafter or (ii) in the event Executive’s employment is terminated
without Cause or for Good Reason, during the period during which Executive
receives payments pursuant to Section 7(b) hereof and for 90 days thereafter,
without the prior written consent of the Company, directly or indirectly, and
whether as principal, agent, officer, director, partner, employee, consultant,
broker, dealer or otherwise, alone or in association with any other person,
firm, corporation or other business organization, carry on, or be engaged,
have
an interest in or take part in, or render services to any person, firm,
corporation or other business organization (other than the Company) engaged
in a
business which is competitive with all or part of the Business of the Company.
The term “Business of the Company” shall mean any business then carried on by
the Corporation or any of its subsidiaries.
10
(b) The
Executive shall not, for a period of one (1) year after termination of his
employment hereunder, either on his own behalf or on behalf of any other person,
firm, corporation or other business organization, endeavor to entice away from
the Company any person who is an employee of the Company.
(c) The
Executive shall not, for a period of one (1) year after termination of his
employment hereunder, either on his own behalf or on behalf of any other person,
firm, corporation or other business organization, solicit or direct others
to
solicit, any of the Company's customers or prospective customers (including,
but
not limited to, those customers or prospective customers with whom the Executive
had a business relationship during his term of employment) for any purpose
or
for any activity that is competitive with all or part of the Business of the
Company.
(d) It
is
understood by and between the parties hereto that the foregoing covenants by
the
Executive set forth in this Section 9 are essential elements of this Agreement
and that, but for the agreement of the Executive to comply with such covenants,
the Company would not have entered into this Agreement. It is recognized by
the
Executive that the Company currently operates in, and may continue to expand
its
operations throughout, the geographical territories referred to in Section
9(a)
above. The Company and the Executive have independently consulted with their
respective counsel and have been advised in all respects concerning the
reasonableness and propriety of such covenants.
11
10. REMEDIES
(a) Without
intending to limit the remedies available to the Company, it is mutually
understood and agreed that the Executive's services are of a special, unique,
unusual, extraordinary and intellectual character giving them a peculiar value,
the loss of which may not be reasonably or adequately compensated in damages
in
an action at law, and, therefore, in the event of any material breach by the
Executive that continues after any applicable cure period, the Company shall
be
entitled to equitable relief by way of injunction or otherwise.
(b) The
covenants of Section 8 shall be construed as independent of any other provisions
contained in this Agreement and shall be enforceable as aforesaid
notwithstanding the existence of any claim or cause of action of the Executive
against the Company, whether based on this Agreement or otherwise. In the event
that any of the provisions of Sections 8 or 9 hereof should ever be adjudicated
to exceed the time, geographic, product/service or other limitations permitted
by applicable law in any jurisdiction, then such provisions shall be deemed
reformed in any such jurisdiction to the maximum time, geographic,
product/service or other limitations permitted by applicable law.
11. COMPLIANCE
WITH OTHER AGREEMENTS
The
Executive represents and warrants to the Company that the execution of this
Agreement by him and his performance of his obligations hereunder will not,
with
or without the giving of notice or the passage of time or both, conflict with,
result in the breach of any provision of or the termination of, or constitute
a
default under, any agreement to which the Executive is a party or by which
the
Executive is or may be bound.
12
12. WAIVERS
The
waiver by the Company or the Executive of a breach of any of the provisions
of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach.
13. BINDING
EFFECT; BENEFITS
This
Agreement shall inure to the benefit of, and shall be binding upon, the parties
hereto and their respective successors, assigns, heirs and legal respectives,
including any corporation or other business organization with which the Company
may merge or consolidate or sell all or substantially all of its assets. Insofar
as the Executive is concerned, this contract, being personal, cannot be
assigned.
14. NOTICES
All
notices and other communications which are required or may be given under this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered to the person to whom such notice is to be given at his or its address
et forth below, or such other address for the party as shall be specified by
notice given pursuant hereto:
| (a) |
If
to the Executive, to him at the address set forth in Exhibit
A.
|
and
| (b) |
If
to the Company, to it at:
|
Odyne
Corporation
00
Xxxxx
Xxxxx, Xxxxx X
Xxxxxxxxx,
XX 00000
Attention:
President
13
with
a
copy to:
Xxxxxxxxx
Xxxxxxx, LLP
MetLife
Building
000
Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxxx, Esq.
15. MISCELLANEOUS
(a) This
Agreement contains the entire agreement between the parties hereto and
supersedes all prior agreements and understandings, oral or written, between
the
parties hereto with respect to the subject matter hereof. This Agreement may
not
be changed or extended except upon written amendment approved by the Board
and
the Executive and executed by a duly authorized officer of the Company and
Executive. Company and Executive acknowledge that each are party to a
Proprietary Information and Inventions Agreement dated as of an even date
herewith and that the rights and obligations of each of Company and Executive
under such agreement are in addition to, and not in substitution of, their
respective rights and obligations hereunder.
(b) The
Executive acknowledges that from time to time, the Company may establish,
maintain and distribute employee manuals, handbooks or personnel policy manuals,
and officers or other representatives of the Company may make written or oral
statements relating to personnel 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 employee manual or handbook
or personnel policy manual), and no acts or practices of any nature, shall
be
construed to modify this Agreement or to create express or implied obligations
of any nature to the Executive.
14
(c) This
Agreement may be executed in counterparts, each of which shall be deemed to
be
an original, but all of which together shall constitute one and the same
instrument.
(d) All
questions pertaining to the validity, construction, execution and performance
of
this Agreement shall be governed by and construed in accordance with the laws
of
the State of New York, without regard to its conflict of law
principles.
(e) Any
controversy or claim arising from, out of or relating to this Agreement, or
the
breach hereof (other than controversies or claims arising from, out of or
relating to the provisions in Xxxxxxxx 0, 0 xxx 00), xxxxx xx determined by
final and binding arbitration in New York, New York, in accordance with the
Employment Dispute Resolution Rules of the American Arbitration Association,
by
a panel of not less than three (3) independent arbitrators appointed by the
American Arbitration Association. The decision of the arbitrators may be entered
and enforced in any court of competent jurisdiction by either the Company or
the
Executive.
The
parties indicate their acceptance of the foregoing arbitration requirement
by
initialing below:
|
D.B.
|
A.T.
|
|
|
For
the Company
|
Executive
|
(f) In
no
event shall Executive be required to seek other employment or take any other
action by way of mitigation of the amounts payable to Executive under this
Agreement, and such amounts shall not be reduced whether or not Executive
obtains other employment after termination of his employment
hereunder.
15
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first above written.
| ODYNE CORPORATION | ||
| |
|
|
| By: | /s/ Xxxxxx Xxxxxxx | |
|
Xxxxxx Xxxxxxx |
||
| Chief Financial Officer | ||
EXECUTIVE
/s/
Xxxx Xxxxxxxxxx
___________________________________
Xxxx
Xxxxxxxxxx
16
