EMPLOYMENT AGREEMENT
XXXXXXXXXXX X. XXXXXX
AGREEMENT, dated as of the __ day of , 1999, among Able Energy, Inc., a
Delaware corporation, having a place of business at 000 Xxxxx 00, Xxxxxxxx, Xxx
Xxxxxx 00000 (the "Company"), and Xxxxxxxxxxx X. Xxxxxx, an individual having a
place of business at c/o Able Energy, Inc. 000 Xxxxx 00, Xxxxxxxx, Xxx Xxxxxx
00000 (the "Executive").
WHEREAS, the Company is a holding company for five operating
subsidiaries which are principally engaged in the business of the distribution
of, and the provision of services related to , fuel oil, propane gas and natural
gas; and
WHEREAS, the Company proposes to conduct a public offering of its
securities (the AOffering@); and
WHEREAS, Xxxxxxx Xxxxxxxx Securities Corp. (the AUnderwriter@) will act
as underwriter of the offering; and
WHEREAS, the Company desires to employ the Executive as its President;
and
WHEREAS, Executive is willing to accept such employment by the Company,
all in accordance with provisions hereinafter set forth; and
NOW, THEREFORE, in consideration of the promises and mutual
representations, covenants, and agreements set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree effective upon the Acquisition as
follows:
1. TERM: The term of this Agreement shall be for a period of five (5)
years commencing on the effective date of the Offering (the AEffective Date@)
and terminating on the fifth anniversary date of the Effective Date, subject to
earlier termination as provided herein or unless extended by mutual consent of
the parties.
2. EMPLOYMENT: (A) Subject to the terms and conditions and for the
compensation hereinafter set forth, the Company hereby agrees to employ
Executive for and during the term of this Agreement. Executive is hereby
employed by the Company as its President. The Executive's powers and duties
shall be those of an executive nature which are appropriate for a President in
accordance with the Company's By-Laws; and Executive does hereby accept such
employment or greater employment as may be mutually agreed upon by the parties
hereto and agrees to devote only as much time to the affairs of the Company as
Executive deems necessary to discharge his duties to the Company during the term
of this Agreement, to the performance of his duties upon the conditions
hereinafter set forth. Executive shall report to the Board of Directors of the
Company. The Company shall not require Executive to be employed in any location
other than Rockaway, New Jersey unless he consents in writing to such location.
(B) During the term of this Agreement, Executive shall be furnished with
office space and facilities commensurate with his position and adequate for the
performance of his duties; he shall be provided with the perquisites customarily
associated with the position of President of the Company.
3. Compensation:
(A) Salary: During the term of this Agreement, the Company agrees to pay
Executive, and Executive agrees to accept, an annual salary of not less than
[One Hundred Thousand Dollars ($100,000)] per year, payable in accordance with
the Company's policies, for services rendered by Executive hereunder.
(B) Bonus: As additional compensation, the Company may pay Executive a
periodic bonus. The Board of Directors will fix the bonus payable to the
Executive at the end of each year; provided such bonuses, plus all other bonuses
payable to the executive management shall not exceed, in the aggregate, a "bonus
pool." [The bonus pool shall equal up to 5% of the earnings before taxes of the
Company ("EBT") for 1999, provided the Company achieves at least $800,000 in
EBT, 10% of EBT for 2000 and 2001, provided the Company achieves at lease
$3,000,000 and $5,000,000, respectively, of EBT in each of such years.] These
agreements will not be subject to amendment during their term without the
consent of the Underwriter.
(C) Increases: The annual salary is subject to periodic increases at the
discretion of the Board of Directors with such increases to take effect no later
than on each anniversary date of this Agreement.
4. Expenses: The Company shall reimburse Executive for all reasonable and
actual business expenses incurred by him in connection with his service to the
Company, upon submission by him of appropriate vouchers and expense account
reports.
5. Benefits:
(A) Insurance: In addition to the salary and bonus to be paid to Executive
hereunder, the Company shall maintain family medical and dental insurance, life
insurance in the amount of not less than ___________ Dollars ($_________) on the
life of Executive and for which Executive shall designate the beneficiary(ies),
and long term disability insurance providing monthly disability benefits to
Executive of not less than _________ Dollars ($______). Executive and his
dependents shall be entitled to participate in such other benefits as are
extended to active executive employees of the Company and their dependents
including but not limited to pension, retirement, profit-sharing, 401(k), stock
option, bonus and incentive plans, group insurance, hospitalization, medical or
other benefits made available by the Company to its employees generally.
(B) Vacation: Executive shall be entitled to take up to four (4) weeks of
paid vacation annually at a time mutually convenient to the Company and
Executive. Any such vacation time not used by Executive in any one year shall
accumulate to his benefit in the succeeding years.
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6. Restrictive Covenants: (A) Executive recognizes and acknowledges that
the Company, through the expenditure of considerable time and money, has
developed and will continue to develop in the future information concerning
customers, clients, marketing, business and operational methods of the Company
and its customers or clients, contracts, financial or other data, technical data
or any other confidential or proprietary information possessed, owned or used by
the Company, and that the same are confidential and proprietary, and are
"confidential information" of the Company. In consideration of his employment by
the Company hereunder, Executive agrees that he will not, without the consent of
the Board, make any disclosure of confidential information now or hereafter
possessed by the Company to any person, partnership, corporation or entity
either during or after the term hereunder, except to employees of the Company or
its subsidiaries or affiliates and to others within or without the Company, as
the Executive may deem necessary in order to conduct the Company's business and
except as may be required pursuant to any court order, judgment or decision from
any court of competent jurisdiction. The foregoing shall not apply to
information which is in the public domain on the date hereof; which, after it is
disclosed to Executive by the Company, is published or becomes part of the
public domain through no fault of Executive; which is known to Executive prior
to disclosure thereof to him by the Company as evidenced by his written records;
or, after Executive is no longer employed by the Company, which is thereafter
disclosed to Executive in good faith by a third party which is not under any
obligation of confidence or secrecy to the Company with respect to such
information at the time of disclosure to him. The provisions of this Section
shall continue in full force and effect notwithstanding any lawful termination
of Executive's employment under this Agreement for a period of one (1) year
following said termination of employment.
(B) Except in the ordinary course of his duties as President, or in the
furtherance of the business of the Company, during the period from the date of
this Agreement until one (1) year following the date on which his employment
with the Company is lawfully and properly terminated, Executive will not,
directly or indirectly:
(i) persuade or attempt to persuade any person or entity which is or
was a customer, client or supplier of the Company on the date on which
Executive's employment with the Company is terminated to cease doing
business with the Company, or to reduce the amount of business it does
with the Company;
(ii) solicit for himself or any other person or entity other than
the Company the business of any person or entity which is a customer or
client of the Company, or was its customer or client within six (6) months
prior to the termination of his employment by the Company, with respect to
distribution of roofing supplies and related products; or
(iii) persuade or attempt to persuade any employee of the Company,
or any individual who was an employee of Company during the six (6) month
period prior to the lawful and proper termination of this Agreement, to
leave Company's employ, or to become employed by any person or entity
other than the Company.
(C) Executive acknowledges that the restrictive covenants (the
"Restrictive Covenants")
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contained in this section 6 are a condition of his employment and are reasonable
and valid in geographical and temporal scope and in all other respects. If any
court determines that any of the Restrictive Covenants, or any part of any of
the Restrictive Covenants, is invalid or unenforceable, the remainder of the
Restrictive Covenants and parts thereof shall not thereby be affected and shall
be given full effect, without regard to the invalid portion. If any court
determines that any of the Restrictive Covenants, or any part thereof, is
invalid or enforceable because of the geographic or temporal scope of such
provision, such court shall have the power to reduce the geographic or temporal
scope of such provision, as the case may be, and, in its reduced form, such
provision shall then be enforceable.
(D) If Executive breaches, or threatens to breach, any of the Restrictive
Covenants, the Company, in addition to and not in lieu of any other rights and
remedies it may have at law or in equity, shall have the right to injunctive
relief; it being acknowledged and agreed to by Executive that any such breach or
threatened breach would cause irreparable and continuing injury to the Company
and that money damages would not provide an adequate remedy to the Company.
7. Termination:
(A) Death: In the event of Executive's death ("Death") during the term of
his employment, Executive's designated beneficiary, or in the absence of such
beneficiary designation, his estate shall be entitled to payment of Executive's
salary from date of death to the expiration of one (1) year thereafter. In
addition, Executive's beneficiary and/or dependents shall be entitled, for the
same one year period to continuation, at the Company's expense, of such benefits
as are then being provided to them under Section 5(A) hereof, and any additional
benefits as may be provided to dependents of the Company's executive officers in
accordance with the terms of the Company's policies and practices. In addition,
any options granted to Executive which have not, by the terms of the options,
vested shall be deemed to have vested as of the date of his death and shall
thereafter be exercisable by Executive's beneficiary or estate for the maximum
period of time allowed for exercise thereof under the terms of the option.
(B) Disability:
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(a) In the event Executive, by reason of physical or mental incapacity,
shall be disabled ("Disability") for a period of at least six (6) consecutive
months, the Company shall have the option at any time thereafter to terminate
Employee's employment hereunder for disability. Such termination will be
effective thirty (30) days after the Board gives written notice of such
termination to Executive, unless Executive shall have returned to the
performance of his duties prior to the effective date of the notice. All
obligations of the Company hereunder shall cease upon the effectiveness of such
termination, provided that such termination shall not affect or impair any
rights Executive may have under any policy of long term disability insurance or
benefits then maintained on his behalf by the Company. In addition, for a period
of one (1) year following termination of Executive's employment for disability,
Executive and his dependents, as the case may be, shall continue to receive the
benefits set forth under subparagraph 5(A) hereof, as well as such benefits as
are extended to the Company's active executive employees and their dependents
during such period. Any options granted to the Executive which have not, by the
terms of the options, vested shall be deemed to have vested at the termination
and shall thereafter be exercisable by the Employee, his beneficiary,
conservator or estate, as applicable, for the maximum period of time allowed for
exercise thereof under the terms of the option.
(b) "Incapacity" as used herein shall mean the inability of the Executive
due to physical or mental illness, injury or disease substantially to perform
his normal duties as President. Executive's salary as provided for hereunder
shall continue to be paid during any period of incapacity prior to and including
the date on which Executive's employment is terminated for disability.
(C) By The Company For Cause:
(a) The Company shall have the right, before the expiration of the term of
this Agreement, to terminate this Agreement and to discharge Executive for cause
(hereinafter "Cause"), and all compensation to Executive shall cease to accrue
upon discharge of Executive for Cause. For the purposes of this Agreement, the
term "Cause" shall mean (i) Executive's conviction of a felony; (ii) the
alcoholism or drug addiction of Executive; (iii) gross negligence or willful
misconduct of Executive in connection with his duties hereunder; (iv) the
determination by any regulatory or judicial authority (including any securities
self-regulatory organization) that Executive directly violated, before or after
the date hereof, any federal or state securities law, any rule or regulation
adopted thereunder; or (v) the continued and willful failure by Executive to
substantially and materially perform his material duties hereunder.
(b) If the Company elects to terminate Executive employment for Cause
under (C)(a) above, such termination shall be effective fifteen (15) days after
the Company gives written notice of such termination to Executive. In the event
of a termination of Executive's employment for Cause in accordance with the
provisions of 7(C)(a), the Company shall have no further obligation to the
Executive, except for the payment of all compensation and other vested benefits
which have accrued through the date of such termination and not paid and any
other benefits to which he or his dependents may be entitled by law.
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(D) By Executive for Reason:
Executive shall have the right to terminate his employment at any time for
"good reason" (herein designated and referred to as "Reason"). The term Reason
shall mean (i) the failure to elect or appoint, or re-elect or re-appoint,
Executive to, or removal or improperly attempted removal of Executive from, his
positions as Chairman of the Board of Directors or Chief Executive Officer or
superior positions with the Company, except in connection with the proper
termination of Executive's employment by reason of Cause, Death or Disability;
(ii) a reduction in Executive's overall compensation other than his
discretionary bonus under Section 3(B) above or an adverse change in the nature
or scope of the authorities, powers, functions or duties normally attached to
the Executive's position with the Company; (iii) the Company's failure or
refusal to perform any obligations required to be performed in accordance with
this Agreement after a reasonable notice and an opportunity to cure same; and
(iv) a Change in Control of the Company, as defined herein, occurs.
(E) Severance: (a) In the event Executive's employment hereunder shall be
terminated by the Executive for Reason or by the Company for other than Cause,
Death or Disability: (1) the Executive shall thereupon receive as severance pay
in a lump sum the amount of salary and bonuses which the Executive would have
received for the remaining term of this Agreement had there been no termination,
provided however, that in no event shall such lump sum payment be less than one
year's salary and bonus; and (2) the Executive's (and his dependents')
participation in any and all life, disability, medical and dental insurance
plans shall be continued, or equivalent benefits provided to him or them by the
Company, at no cost to him or them, for a period of two years from the
termination; and (3) any options granted to Executive which have not, by the
terms of the options, vested shall be deemed to have vested at the termination,
and shall thereafter be exercisable for the maximum period of time allowed for
exercise thereof under the terms of the option; and new paragraph (b) an
election by Executive to terminate his employment under the provisions of this
paragraph shall not be deemed a voluntary termination of employment of Executive
for the purpose of interrupting the provisions of any of the Company's employee
benefit plans, programs or policies.
(F) Resignation: In the event Executive resigns without Reason prior to
the expiration hereof, he shall receive any unpaid fixed salary through such
resignation date and such benefits to which he is entitled by law.
(G) Extension of Benefits: Any extension of benefits following the
termination of employment provided for herein shall be deemed to be in addition
to, and not in lieu of, any period for the continuation of benefits provided for
by law, either at the Company's, Executive or his dependents' expense.
(H) Change in Control: For purposes hereof, a Change in Control shall be
deemed to have occurred (i) if there has occurred a "change in control" as such
term is used in Item 1 (a) of Form 8-K promulgated under the Securities Exchange
Act of 1934, as amended, at the date hereof
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("Exchange Act") or (ii) if there has occurred a change in control as the term
"control" is defined in Rule 12b-2 promulgated under the Exchange Act.
8. Indemnification: Company hereby indemnifies and holds Executive
harmless to the extent of any and all claims, suits, proceedings, damages,
losses or liabilities incurred by Executive and arising out of any acts or
decisions done or made in the authorized scope of his employment hereunder.
Company hereby agrees to pay all expenses, including reasonable attorney's fees,
actually incurred by Executive in connection with the investigation of any such
matter, the defense of any such action, suit or proceeding and in connection
with any appeal thereon including the cost of settlements. Nothing contained
herein shall entitle Executive to indemnification by Company in excess of that
permitted under applicable law.
9. Waiver: No delay or omission to exercise any right, power or remedy
accruing to either party hereto shall impair any such right, power or remedy or
shall be construed to be a waiver of or an acquiescence to any breach hereof. No
waiver of any breach hereof shall be deemed to be a waiver of any other breach
hereof theretofore or thereafter occurring. Any waiver of any provision hereof
shall be effective only to the extent specifically set forth in the applicable
writing. All remedies afforded to either party under this Agreement, by law or
otherwise, shall be cumulative and not alternative and shall not preclude
assertion by either party of any other rights or the seeking of any other rights
or remedies against the other party.
10. Governing Law: The validity of this Agreement or of any of the
provisions hereof shall be determined under and according to the laws of the
State of New York, and this Agreement and its provisions shall be construed
according to the laws of the State of New York, without regard to the principles
of conflicts of law and the actual domiciles of the parties hereto.
11. Notices: All notices, demands or other communications required or
permitted to be given in connection with this Agreement shall be given in
writing, shall be transmitted to the appropriate party by hand delivery, by
certified mail, return receipt requested, postage prepaid or by overnight
carrier and shall be addressed to a party at such party's address shown on the
first page hereof. A party may designate by written notice given to the other
parties a new address to which any notice, demand or other communication
hereunder shall thereafter be given. Each notice, demand or other communication
transmitted in the manner described in this Section 11 shall be deemed to have
been given and received for all purposes at the time it shall have been (i)
delivered to the addressee as indicated by the return receipt (if transmitted by
mail), the affidavit of the messenger (if transmitted by hand delivery or
overnight carrier) or (ii) presented for delivery during normal business hours,
if such delivery shall not have been accepted for any reason.
12. Assignments: This Agreement shall be binding upon and inure to the
benefit of the parties and each of their respective successors, assigns, heirs
and legal representatives; provided, however, that Executive may not assign or
delegate his obligations, responsibilities and duties hereunder except as
permitted by the Company's by-laws, custom, practice, policies or the Board of
Directors. Company may not assign this Agreement without the prior written
consent of Executive.
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13. Miscellaneous: This Agreement contains the entire understanding
between the parties hereto and supersedes all other oral and written agreements
or understandings between them with respect to the subject matter hereof. No
modification or addition hereto or waiver or cancellation of any provision shall
be valid except by a writing signed by the party to be charged therewith.
14. Obligations of a Continuing Nature: It is expressly understood and
agreed that the covenants, agreements and restrictions undertaken by or imposed
on Executive and, the Company hereunder, which are stated to exist or continue
after termination of Executive's employment with the Company, shall exist and
continue irrespective of the method or circumstances of such termination for the
respective periods of time set forth herein.
15. Severability: The parties agree that if any of the covenants,
agreements or restrictions contained herein are held to be invalid by any court
of competent jurisdiction, the remainder of the other covenants, agreements
restrictions and parts thereof herein contained shall be severable so not to
invalidate any others and such other covenants, agreements, restrictions and
parts thereof shall be given full effect without regard to the invalid portion.
16. Venue: Jurisdiction: The Company and the Executive hereby agree that
any action, proceeding or claim against either of them arising out of, or
relating in any way to this Agreement shall be brought and enforced in any of
the courts of the State of New York in New York County, New York, or the United
States District Court for the Southern District of New York, and irrevocably
submit to such jurisdiction. The Company and the Executive hereby waive any
objection to such jurisdiction and that such courts represent an inconvenient
forum. Any process or summons to be served upon the Company or the Executive may
be served by transmitting a copy thereof by registered or certified mail, return
receipt requested, postage prepaid, addressed to their respective addresses set
forth in the initial paragraph of this agreement or such other address as a
party may so notify the other parties hereto in the manner provided by Section
II hereof. Such mailing shall be deemed personal service and shall be legal and
binding upon the Company and the Executive in any action, proceeding or claim.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
ABLE ENERGY, INC.
By: ___________________________________
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________________________________________
Xxxxxxxxxxx X. Xxxxxx, Executive
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