EXHIBIT 10.32
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated March 1, 1996,
is entered into by and between Global Energy Metering Service, Inc., a
Delaware corporation (the "Company") and Xxxxxxx X. Xxxxx ("Employee"), in
consideration of the mutual promises and conditions made herein.
ARTICLE I
EMPLOYMENT AND TERM OF EMPLOYMENT
1.1. EMPLOYMENT AND TERM. The Company hereby employs Employee to
render full-time services to the Company on an exclusive basis, upon the
terms and conditions set forth below, from the date of this Agreement until
the employment relationship is terminated in accordance with the provisions
of this Agreement. This Agreement is for a term of five years (the "Stated
Term") effective January 1, 1996, unless terminated earlier as provided for
herein (the "Employment Term").
1.2. ACCEPTANCE. Employee hereby accepts employment with the Company
and agrees to devote his full-time attention and best efforts exclusively
to rendering the services described below. The Employee shall accept and
follow the direction and authority of the President of the Company in the
performance of his duties, and shall comply with all existing and future
regulations applicable to employees of the Company and to the Company's
business.
ARTICLE II
DUTIES OF EMPLOYEE
2.1. GENERAL DUTIES. Employee shall serve as the Executive Vice
President and Chief Engineer of the Company. In his capacity as Executive
Vice President and Chief Engineer, Employee shall do and perform all
services, acts, or other things necessary or advisable to manage and
conduct the business of the Company, including, but not limited to, the
supervision, direction and control of the business and other employees of
the Company, subject to the policies and direction of the Board of
Directors (the "Board") and President. Employee shall have all powers,
duties and responsibilities necessary to carry out his duties, and such
other powers and duties as the Board and President may prescribe.
2.2. EXCLUSIVE SERVICES. It is understood and agreed that Employee
may not engage in any other business activity during the term of his
employment hereunder, whether or not for profit or other remuneration,
without the prior written consent of the Company. Further, Employee shall
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not directly or indirectly acquire any stock or interest in any
corporation, partnership, or other business entity that competes, directly
or indirectly, with the business of the Company.
2.3. REPORTING OBLIGATIONS. In connection with the performance of his
duties hereunder, unless otherwise instructed by the Company's Board, the
Employee shall report directly to the President of the Company.
ARTICLE III
COMPENSATION AND BENEFITS OF EMPLOYEE
3.1. ANNUAL BASE SALARY. The Company shall pay Employee salary for
the services to be rendered by him during the term of this Agreement at the
rate of one hundred twenty-five thousand dollars ($125,000) annually
(prorated for any portion of a year), subject to increases, if any, as the
Compensation Committee of the Board may determine in its sole discretion
after annual review of the Employee's performance of his duties hereunder.
Such base salary shall be payable in periodic installments in accordance
with the terms of the Company's regular payroll practices in effect from
time to time during the term of this Agreement, but in no event less
frequently than once each month.
3.2. BONUSES. In addition to the base salary and other benefits
provided to Employee hereunder, Employee is eligible to receive bonuses
based on Company performance and Employee's attainment of objectives
established by the Compensation Committee of the Board annually. The
Employee's total annual compensation (exclusive of any stock options issued
pursuant to Section 3.3) shall not exceed three hundred percent (300%) of
his annual base salary in any given fiscal year.
3.3. STOCK OPTIONS. Employee shall be granted stock options to
purchase 125,000 shares of DBSI's common stock at an exercise price of
$5.20 per share. The options are subject to vesting, 50,000 of which shall
be immediately exercisable, and the remaining shall vest in 25,000
increments on the first of each following year. In addition, the stock
options are subject to (a) further terms and conditions set forth herein
and in the Stock Option Agreement attached as Exhibit A to this Agreement,
and (b) the Employee's execution of the Stock Option Agreement and all
documents customarily required by the Company to effect the grant of the
options.
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In connection with a registration statement filed by the Company to
register shares of its common stock for an employee benefit plan on Form S-
8, the Company shall also register the common stock underlying the stock
options granted to Employee.
3.4. EXPENSES. The Company shall pay or reimburse Employee for all
reasonable, ordinary and necessary business expenses actually incurred or
paid by the Employee in the performance of Employee's services under this
Agreement in accordance with the expense reimbursement policies of the
Company in effect from time to time during the Employment Term, upon
presentation of proper expense statements or vouchers or such other written
supporting documents as the Company may reasonably require.
3.5. VACATION. Employee shall be entitled to six (6) weeks paid
vacation for each calendar year (prorated for any portion of a year, as
applicable), such vacation to accrue at the rate of twenty (20) hours per
month. Notwithstanding anything to the contrary in this Agreement,
vacation time shall cease to accrue beyond eight weeks at any given time
during the Employment Term.
3.6. GENERAL EMPLOYMENT BENEFITS. Except where expressly provided for
herein, Employee shall be entitled to participate in, and to receive the
benefits under, any pension, health, life, accident and disability
insurance plans or programs and any other employee benefit or fringe
benefit plans that the Company makes available generally to its employees,
as the same may be in effect from time to time during the Employment Term.
3.7. INDEMNIFICATION. The Company shall indemnify and hold Employee
harmless for any actions taken or decisions made by him in good faith while
performing services in his capacity as Vice President of the Company during
the Employment Term. The Company agrees to indemnify and hold Employee
harmless to the extent provided in an indemnification agreement in the form
attached hereto as Exhibit B and incorporated herein by reference.
3.8. ANNUAL PHYSICAL. Employee shall have the right to an annual
physical at the cost of the Company.
ARTICLE IV
TERMINATION OF EMPLOYMENT
4.1. TERMINATION. This Agreement may be terminated earlier as
provided for in this Article IV, or extended by further written agreement
of the parties.
4.2. TERMINATION FOR CAUSE. The Company reserves the right to
terminate this Agreement for cause upon: (a) Employee's willful and
continued failure to substantially perform his duties with the Company
(other than such failure resulting from his incapacity due to physical or
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mental illness) after there is delivered to Employee by the Board, acting
reasonably and in good faith, a written demand for substantial performance
which sets forth in detail the specific respects in which the Board
believes Employee has not performed his duties, and giving Employee not
less than thirty (30) days to correct the deficiencies specified in the
written notice; or (b) Employee's willful engagement in gross misconduct as
determined by the Board which is materially and demonstrably injurious to
the Company. Notwithstanding the foregoing, Employee shall not be deemed
to have been terminated for cause unless and until there shall have been
delivered to Employee a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire Board members at
a meeting called and held for that purpose.
Upon termination for cause, Employee shall not be entitled to any
severance benefits and all options which have not vested shall be
cancelled.
4.3. TERMINATION WITHOUT CAUSE. Notwithstanding anything to the
contrary in this Agreement, the Company reserves the right to terminate
this Agreement at any time without cause subject to the express terms and
provisions below.
If Employee is terminated without cause, each month for a period of 12
months following termination the Employee shall be paid an amount equal to
his then monthly base salary so long as Employee does not compete with the
Company (in the manner described below) and complies with the provisions of
Article V. Payments shall be made in accordance with Section 3.1. This
arrangement shall continue for a period of 12 months beginning the month
following the month in which termination occurred.
If Employee is terminated without cause, Employee shall be entitled to
full vesting of all options granted pursuant to this Agreement. The
options must be exercised within ten years after the date of such
termination or such lesser period specified in the option agreement (but in
no event after the expiration date of option).
It is expressly intended by the parties that if the "does not compete"
provision of this Section 4.3 of the Agreement is found to be
unenforceable, the Company's obligation to pay Employee's remaining salary
is conditioned upon compliance with the provisions of Article V.
For the purposes of this Agreement, the phrase "compete with the
Company," or the substantial equivalent thereof, means that Employee,
either alone or as a partner, member, director, employee, shareholder or
agent of any other business, or in any other individual or representative
capacity, directly or indirectly owns, manages, operates, controls, or
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participates in the ownership, management, operation or control of, or
works for or provides consulting services to, or permits the use of his
name by, or lends money to, any business or activity which is or which
becomes, at the time of the acts or conduct in question, directly or
indirectly competitive with the business of the Company.
4.4. VOLUNTARY TERMINATION BY EMPLOYEE. Notwithstanding anything to
the contrary in this Agreement, Employee may terminate this Agreement at
any time upon sixty (60) days written notice to the Company.
If Employee voluntarily terminates employment, Employee shall not be
entitled to any severance benefits and all options which have not vested
shall be cancelled.
4.5. DISABILITY. If Employee becomes permanently and totally
disabled, this Agreement shall be terminated. Employee shall be deemed
permanently and totally disabled if he is unable to engage in the
activities required by this Agreement by reason of any medically
determinable physical or mental impairment which can be expected to result
in death or which has lasted or can be expected to last for a continuous
period of not less than 3 months. Upon termination due to disability, any
further compensation and effect on any unvested options will be treated as
terminated without cause pursuant to Section 4.3.
4.6. DEATH. If Employee dies during the term of this Agreement, this
Agreement shall be terminated on the last day of the calendar month of his
death subject to the express terms and provisions below.
Upon death all unvested options shall be vested as of the date of
death and may be exercised by the designated beneficiary, as provided in
Section 6.8 below, the estate or Employee's personal representative in
whole or in part at any time within ten (10) years after the date of death
or such lesser period specified in the option agreement (in no event after
the expiration date of option).
Company shall provide Employee with life insurance, at Company's
expense, in an amount equal to two times the Employee's annual salary.
4.7. EFFECT OF TERMINATION. Except as expressly provided for in this
Agreement, the termination of employment shall not excuse any obligation
that accrued prior to termination, nor shall termination excuse the
performance of any obligation which is required or to be performed after
termination. Any such obligation shall survive the termination of
employment and this Agreement.
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ARTICLE V
COVENANTS AND REPRESENTATIONS OF EMPLOYEE
5.1. UNFAIR COMPETITION. Employee acknowledges that he will have
access at the highest level to, and the opportunity to acquire knowledge
of, the Company's customer lists, customer needs, business plans, trade
secrets and other confidential and proprietary information from which the
Company may derive economic or competitive advantage, and that he is
entering into the covenants and representations in this Article V in order
to preserve the goodwill and going concern value of the Company, and to
induce the Company to enter into this Agreement. Employee agrees not to
engage in any unfair competition with Employer.
5.2. CONFIDENTIAL INFORMATION. During the Employment Term and at all
times thereafter, the Employee agrees to keep secret and to retain in the
strictest confidence all confidential matters which relate to the Company
or its "affiliate" (as that term is defined in the Exchange Act),
including, without limitation, customer lists, client lists, trade secrets,
pricing lists, business plans, financial projections and reports, business
strategies, internal operating procedures, and other confidential business
information from which the Company derives an economic or competitive
advantage, or from which the Company might derive such advantage in its
business, whether or not labeled "secret" or "confidential," and not to
disclose any such information to anyone outside of the Company, whether
during or after the Employment Term, except as required in connection with
performing the services to the Company.
5.3. RETURN OF PROPERTY. Upon termination of employment, and at the
request of the Company otherwise, the Employee agrees to promptly deliver
to the Company all Company or affiliate memoranda, notes, records, reports,
manuals, drawings, designs, computer files in any media, and other
documents (including extracts and copies thereof) relating to the Company
or its affiliate, and all other property of the Company.
5.4. INVENTIONS. All processes, inventions, patents, copyrights,
trademarks, and other intangible rights that may be conceived or developed
by the Employee, either alone or with others, during the Employment Term,
whether or not conceived or developed during Employee's working hours, and
with respect to which the equipment, supplies, facilities or trade secret
information of the Company was used, or that relate at the time of
conception or reduction to practice of the invention to the business of the
Company or to the Company's actual or demonstrably anticipated research or
development, or that result from any work performed by Employee for the
Company, shall be the sole property of the Employer. Employee shall
disclose to the Company all inventions or ideas conceived during the
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Employment Term, whether or not the property of Employer under the terms of
this provision, provided that such disclosure shall be received by the
Company in confidence. Employee shall execute all documents, including
patent applications and assignments, required by the Company to establish
the Company's rights under this provision.
5.5. REPRESENTATIONS. The Employee represents and warrants to the
Company that he has full power to enter into this Agreement and perform his
duties hereunder, and that his execution and delivery of this Agreement and
the performance of his duties shall not result in a breach of, or
constitute a default under, any agreement or understanding, whether oral or
written, including, without limitation, any restrictive covenant or
confidentiality agreement, to which he is a party or by which he may be
bound.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1. NOTICES. All notices to be given by either party to the other
shall be in writing and may be transmitted by personal delivery, facsimile
transmission, overnight courier or mail, registered or certified, postage
prepaid with return receipt requested; PROVIDED, HOWEVER, that notices of
change of address or telex or facsimile number shall be effective only upon
actual receipt by the other party. Notices shall be delivered at the
following addresses, unless changed as provided for herein.
To the Employee:
Xxxxxxx X. Xxxxx
00 Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
To the Company:
Global Energy Metering Service, Inc.
000 Xxxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
6.2. NO ASSIGNMENT. This Agreement, and the rights and obligations
of the parties, may not be assigned by either party without the prior
written consent of the other party.
6.3. APPLICABLE LAW. This Agreement and the relationships of the
parties in connection with the subject matter of this Agreement shall be
governed by, and construed under, the laws of the State of California.
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6.4. ENTIRE AGREEMENT. This Agreement and the Exhibits to this
Agreement supersede any and all other agreements or understandings of the
parties, either oral or written, with respect to this employment of
Employee by the Company, and contains the complete and final agreement and
understanding of the parties with respect thereto. Employee acknowledges
that no representation, inducements, promises, or agreements, oral or
otherwise, have been made by the Company or any of its officers, directors,
employees or agents, which are not expressed herein, and that no other
agreement shall be valid or binding on the Company.
6.5. WITHHOLDING TAXES. All amounts payable under this Agreement,
whether such payment is to be made in cash or other property, including
without limitation stock of the Company, shall be subject to withholding
for Federal, state and local income taxes, employment and payroll taxes,
and other legally required withholding taxes and contributions to the
extent appropriate in the determination of the Company, and the Employee
agrees to report all such amounts as ordinary income on his personal income
tax returns and for all other purposes, as called for.
At the election of Employee, Employee shall have the right to sell to
the Company any vested stock options (at the then fair market value of the
common stock less the exercise price) in order to meet any withholding
requirements.
6.6. SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable by any judgment of a tribunal of competent
jurisdiction, the remaining provisions and terms of this Agreement shall
not be affected by such judgment, and this Agreement shall be carried out
as nearly as possible according to its original terms and intent and, to
the full extent permitted by law, any provision or restrictions found to be
invalid shall be amended with such modifications as may be necessary to
cure such invalidity, and such restrictions shall apply as so modified, or
if such provisions cannot be amended, they shall be deemed severable from
the remaining provisions and the remaining provisions shall be fully
enforceable in accordance with law.
6.7. EFFECT OF WAIVER. The failure of either party to insist on
strict compliance with any provision of this Agreement by the other party
shall not be deemed a waiver of such of such provision, or a relinquishment
of any right thereunder, or to affect either the validity of this
Agreement, and shall not prevent enforcement of such provision, or any
similar provision, at any time.
6.8. DESIGNATION OF BENEFICIARY. If the Employee shall die before
receipt of all payments and benefits to which he is entitled under this
Agreement, payment of such amounts or benefits in the manner provided
herein shall be made to such beneficiary as he shall have designated in
writing filed with the Secretary of the Company or, in the absence of such
designation, to his estate or personal representative.
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6.9. ARBITRATION. Any controversy between Employer and Employee
involving the construction or application of any of the terms, provisions,
or conditions of this Agreement shall be submitted to arbitration.
Arbitration shall comply with and be governed by the provisions of the
American Arbitration Association.
6.10. ATTORNEYS FEES. In the event of any litigation arising out
of this Agreement, or the parties' performance as outlined herein, the
prevailing party shall be entitled to an award of costs, including an award
of reasonable attorney's fees.
6.11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which when taken together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
EMPLOYER: GLOBAL ENERGY METERING SERVICE, INC.
By: E.A. XXXXX XXXXXXX
E. A. Xxxxx Xxxxxxx, President
EMPLOYEE: XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx
