EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement"), dated as of the
1st day of January, 1999, is made by and among Xxxxxx Xxxxxx ("Xxxxxx" or
"Employee") and Electric City Corp., a Delaware corporation (the "Company").
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Marino do hereby
agree as follows:
Section 1. Employment and Duties. On the terms and subject to
the conditions set forth in this Agreement, and subject to the approval of the
board of directors of the Company, the Company agrees to employ Marino as its
President and Chief Executive Officer to render such services as would be
customary for a president and chief executive officer including hiring senior
management and to render such other services and discharge such other
responsibilities as the board of directors of the Company may, from time to
time, stipulate and which shall not be inconsistent with the position of
President and Chief Executive Officer.
Section 2. Performance. Marino accepts the employment
described in Section 1 of this Agreement and agrees to concentrate all of his
time and efforts to the performance of the services described therein, including
the performance of such other services and responsibilities as the board of
directors of the Company, may from time to time stipulate and which shall not be
inconsistent with the position of President and Chief Executive Officer.
Without limiting the generality of the foregoing Marino
ordinarily shall devote not less than five days per week (except for vacations
and regular business holidays observed by the Company) on a full time basis,
during normal business hours Monday through Friday. Marino further agrees that
when the performance of his duties reasonably requires, he shall be present on
the Company's premises (if necessary) or engaged in service to or on behalf of
the Company at such times except during vacations, regular business holidays or
weekends.
Section 3. Term. The term of employment under this Agreement
(the "Employment Period") shall commence as of the date hereof and shall remain
in effect for a period of four (4) years thereafter endings, on the 31st day of
December, 2003, unless earlier terminated pursuant to the termination provisions
set forth herein. Notwithstanding anything to the contrary herein, the parties
acknowledge and agree that Marino's employment may be terminated only for Due
Cause as more fully set forth herein.
Section 4. Compensation.
4.1. Salary. For all the services to be rendered by Marino
hereunder, the Company agrees to pay, during the Employment Period, a salary at
the annual rate of Two Hundred Twenty-Five Thousand ($225,000) payable in equal
monthly installments at the end of each month during the term of this Agreement,
beginning on the 1st day of June, 1999, or at such other intervals, not less
frequently than once per month, as may be consistent with the Company's normal
compensation schedule. Thereafter, Marino's salary will be subject to annual
review by the board of directors.
1
4.2. [Intentionally Deleted].
4.3. Stock Options. The Company hereby agrees to grant to
Marino 450,000 stock options of the Company at an exercise price of
$3.50 per share, subject to and in accordance with the following:
(a) On the one year anniversary of the date of this Agreement,
provided neither party has terminated this Agreement, Marino shall
become immediately vested in options to purchase 112,500 of the issued
and outstanding shares of common stock of the Company for three dollars
and fifty cents ($3.50) per share.
(b) On the two year anniversary of the date of this Agreement,
provided neither party has terminated this Agreement, Marino shall
become immediately vested in options to purchase 112,500 of the issued
and outstanding shares of common stock of the Company for three dollars
and fifty cents ($3.50) per same.
(c) On the three year anniversary of the date of this
Agreement, provided neither party has terminated this Agreement, Marino
shall become immediately vested in options to purchase 112,500 of the
issued and outstanding shares of common stock of the Company for three
dollars and fifty cents ($3.50) per share.
(d) On the four year anniversary of the date of this
Agreement, provided neither party has terminated this Agreement, Marino
shall become immediately vested in options to purchase 112,500 of the
issued and outstanding shares of common stock of the Company for three
dollars and fifty cents ($3.50) per share.
(e) Registration Rights. Marino shall have piggy-back
registration rights for all shares of stock obtained through the
exercise of any options described in Sections 4.3(a) (b) (c) and (d)
above for any registration the Company files with the Securities and
Exchange Commission registering shares of the Company's common stock
that are similar to the shares to be issued hereunder. The Company will
use its best efforts to file an S-8 registration when Company becomes a
fully reporting company.
(f) Sale of Assets: Change in Control. Upon the sale of more
than forty percent (40%) of the net assets or shares of stock of the
Company to a person or entity not affiliated with the Company or its
parent company or subsidiaries, all of the options described in
Sections 4.3(a) (b) (c) and (d) above shall be automatically granted to
Marino and shall immediately vest and be exercisable by Marino subject
to the terms of this Agreement.
(g) Termination Options. The term of the Options hereunder
shall be until December 31, 2008.
2
4.4. Insurance. During the Employment Period, the Company
shall apply for and procure in Marino's name and for Marino's benefit, if Marino
is eligible, (a) short-term and permanent disability insurance providing for
disability benefits substantially equivalent to the benefit of other salaried
employees of the Company, (b) medical and dental insurance for Marino and
Marino's family substantially equivalent to the benefits of other salaried
employees of the Company and (c) officer and director liability insurance, in
such amount as may be determined by the board of directors of the Company or as
may be required by law, and Marino shall submit to any medical or other
examination and execute and deliver any application or other instrument in
writing, reasonably necessary to effectuate such insurance.
4.5. Automobile. The Company agrees to provide Marino with the
use of a new automobile satisfactory to Marino for the term of this Agreement.
4.6. Cellular Phone. The Company agrees to reimburse Marino
for all business-related cellular phone calls, subject to the provisions of
Section 5.2.
4.7. Other Benefits. Except as otherwise specifically provided
herein, during the Employment Period, Marino shall be eligible for all vacation
and non-wage benefits the Company provides generally for its other salaried
employees.
Section 5. Business Expenses.
5.1. Reimbursement. The Company shall reimburse Marino for the
reasonable, ordinary, and necessary expenses incurred by him in connection with
the performance of his duties hereunder, including but not limited to, ordinary
and necessary travel expense and entertainment expenses.
5.2. Accounting. Marino shall provide the Company with an
accounting of his expenses, which accounting shall clearly reflect which
expenses are reimbursable by the Company, Marino will provide the Company with
such other supporting documentation and other substantiation of reimbursable
expenses as will conform to Internal Revenue Service or other requirements.
Section 6. Covenants of Marino.
6.1. Confidentiality. During the Employment Period and
following the termination thereof for any reason, Marino shall not disclose or
make any use of, for his own benefit or for the benefit of a business or entity
other than the Company or any corporation partnership, limited liability company
or other entity, more than 50% of the equity securities or partnership or
membership interests of which are owned directly or indirectly by the Company,
("Subsidiaries") (except Globel Energy Ventures and Reverberi Corporation) any
secret or confidential information, customer lists, and lists of prospective
customers, or any other information of or pertaining to the Company, its
Subsidiaries or their businesses, products, financial affairs, customers or
prospective customers, or services not generally known within the trade of the
Company or its Subsidiaries and which was acquired by him during his affiliation
with the Company or its Subsidiaries.
3
6.2. Inventions and Secrecy. Except as otherwise provided in
this Section 6.2, Marino: (a) shall hold in a fiduciary capacity for the benefit
of the Company and its Subsidiaries, all secret or confidential information,
knowledge, or data of the Company, its Subsidiaries or their businesses or
production operations obtained by Marino during his employment by the Company,
which shall not be generally known to the public or recognized as standard
practice (whether or not developed by Marino) and shall not, during his
employment by the Company and after the termination of such employment for any
reason, communicate or divulge, any such information, knowledge or data to any
person, firm, or corporation other than the Company or its Subsidiaries, or
persons, firms or corporations designated by the Company; (b) shall promptly
disclose to the Company all inventions ideas, devices, and processes made or
conceived by him alone or jointly with others, from the time of entering the
Company's employ until such employment is terminated and within the one (1) year
period immediately following such termination, relevant or pertinent in any way,
whether directly or indirectly, to the businesses or production operations of
the Company or its Subsidiaries or resulting from or suggested by any work which
he may have done for or at the request of the Company or its Subsidiaries, (c)
shall, at all times during his employment with the Company, assist the Company
and its Subsidiaries in every proper way (entirely at the expense of the
Company) to obtain and develop for the benefit of the Company patents on such
inventions, ideas, devices, and processes, whether or not patented; and (d)
shall do all such acts and execute, acknowledge and deliver all such instruments
as may be necessary or desirable in the opinion of the Company to vest in the
Company, the entire interest in such inventions, ideas, devices, and processes
referred to above. The covenants contained in this section 6.2 are not
applicable to Marino's involvement with Globel Energy Ventures or Reverberi
Corporation.
6.3. Competition Following Termination. Within the two (2)
year period immediately following termination of Marino's employment with the
Company for any reason, Marino shall not, without the prior written consent of
the Company, which consent may be withheld at the sole discretion of the
Company: (a) engage directly or indirectly, whether as an officer, director,
stockholder (of 10% or more of such entity), partner, majority owner, managerial
employee, creditor, or otherwise with the operation, management, or conduct of
any business which competes directly or indirectly with the businesses of the
Company or its Subsidiaries being conducted at the time of such termination
within the United States; (b) solicit, contact, interfere with, or divert any
customer served by the Company or its Subsidiaries, or any prospective customer
identified by or on behalf of the Company or its Subsidiaries, during Marino's
employment with the Company; or (c) solicit any person then or previously
employed by the Company or its Subsidiaries to join Marino, whether as a
partner, agent, employee, or otherwise, in any enterprise engaged in a business
similar to the businesses of the Company or its Subsidiaries being conducted at
the time of such termination. The covenants contained in this section 6.3 are
not applicable to Marino's involvement with Globel Energy Ventures or Reverberi
Corporation.
4
6.4. Acknowledgement. Marino acknowledges that the
restrictions set forth in this Section 6 are reasonable in scope and essential
to the preservation of the businesses and proprietary properties of the Company
and its Subsidiaries and that the enforcement thereof will not in any manner
preclude Marino, in the event of Marino's termination of employment with the
Company, from becoming gainfully employed in such manner and to such extent as
to provide a standard of living for himself, the members of his family, and
those dependent upon him of at least the sort and fashion to which he and they
have become accustomed and may expect.
6.5. Severability. The covenants of Marino contained in this
Section 6 shall each be construed as an agreement independent of any other
provision in this Agreement and the existence of any claim or cause of action of
Marino against the Company or its Subsidiaries, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company or its Subsidiaries of such covenants. The parties hereto expressly
agree and contract that it is not the intention of any party to violate any
public policy, statutory or common law, and that if any sentence, paragraph,
clause, or combination of the same of this Agreement is in violation of the law
of any state where applicable, such sentence, paragraph, clause or combination
of the same shall be void in the jurisdictions where it is unlawful, and the
remainder of such paragraph and this Agreement shall remain binding on the
parties to make the covenants of this Agreement binding only to the extent that
it may be lawfully done under existing applicable laws. In the event that any
part of any covenant of this Agreement is determined by a court of law to be
overly broad thereby making the covenant unenforceable, the parties hereto
agree, and it is their desire, that such court shall substitute a judicially
enforceable limitation in its place, and that as so modified the covenant shall
be binding upon the parties as if originally set forth herein.
Section 7. Termination.
7.1 Termination for Due Cause. The Employment Period may be
terminated only for the following reasons and upon the terms and conditions set
forth below ("Due Cause"). Company, by a vote of 3/4 of the board of directors
("Termination Vote") may terminate the Employment Period, effective upon written
notice of such termination to Marino, in the event of: (a) Marino's death or
permanent total disability of Marino (b) breach by Marino of his covenants under
this Agreement; (c) commission by Marino of theft or embezzlement of property of
the Company or other acts of dishonesty; (d) commission by Marino of a crime
resulting in injury to the businesses, properties or reputations of the Company
or its Subsidiaries or commission of other significant activities harmful to the
businesses, properties or reputations of the Company or its Subsidiaries; (e)
commission of an act by Marino in the performance of his duties hereunder
reasonably determined by a majority of the board of directors of the Company to
amount to gross, willful, or wanton negligence; (f) willful refusal to perform
or substantial neglect of the duties assigned to Marino pursuant to Section 1
hereof; (g) any significant violation of any statutory or common law duty of
loyalty to the Company or its Subsidiaries; (i) other legally sufficient cause.
In the event Marino is on the board of directors he shall not participate in a
Termination Vote. The 3/4 vote necessary shall be calculated as if Marino was
not a member of the board of directors. Notwithstanding the above, termination
pursuant to the terms of this Agreement shall not affect Marino's status as a
member of Company's Board of Directors.
5
7.2. Surrender of Properties. Upon termination of Marino's
employment with the Company, regardless of the cause therefor, Marino shall
promptly surrender to the Company or its Subsidiaries all property provided him
by the Company or its Subsidiaries, as applicable, for use in relation to his
employment and in addition, Marino shall surrender to the Company or its
Subsidiaries, as applicable, any and all sales materials, lists of customers and
prospective customers, price lists, files, patent applications, records, models,
or other materials and information of or pertaining to the Company or its
Subsidiaries or their customers or prospective customers or the products,
businesses, and operations of the Company or its Subsidiaries.
7.3. Survival of Covenants. The covenants of Marino set forth
in Section 6 of this Agreement shall survive the termination of the Employment
Period or termination of this Agreement for Due Cause.
Section 8. General Provisions.
8.1. Notice. Any notice required or permitted hereunder shall
be made in writing (a) either by actual delivery of the notice into the hands of
the party thereunder entitled, or (b) by the mailing of the notice in the United
States mail, certified or registered mail, return receipt requested, all postage
prepaid and addressed to the party to whom the notice is to be given at the
party's respective address set forth below, or such other address as the parties
may from time to time designate by written notice as herein provided.
If to the Company:
Electric City Corp.
0000 Xxxxxxxx Xxxx
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
With a copy (which shall not constitute notice) to:
Xxxxxx & Xxxxx, Ltd.
000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxx X. Xxxxx
If to President/CEO:
Xxxxxx Xxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
6
The notice shall be deemed to be received in case (a) on the date of its actual
receipt by the party entitled thereto and in case (b) on the date of its
mailing.
8.2. Amendment and Waiver. No amendment or modification of
this Agreement shall be valid or binding upon: a) the Company unless made in
writing and signed by an officer of the Company, duly authorized by the board of
directors of the Company or; b) Marino unless made in writing and signed by him.
The waiver by the Company or Marino of the breach of any Provision of this
Agreement by the other party shall not operate or be construed as a waiver of
any subsequent breach by such party.
8.3. Governing Law. The validity and effect of this Agreement
and the rights and obligations of the parties hereto shall be construed and
determined in accordance with the internal law, and not the conflicts law, of
the State of Illinois.
8.4. Entire Agreement. This Agreement contains all of the
terms agreed upon by the parties with respect to the subject matter hereof and
supersedes all prior agreements, arrangements and communications between the
parties dealing with such subject matter, whether oral or written.
8.5. Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the transferees, successors and assigns of the
Company, including any company or corporation with which the Company may merge
or consolidate.
8.6. Remedies for Breach. Marino specifically acknowledges
that his services under this Agreement are unique and extraordinary and that
irreparable injury will result to the Company and its businesses and properties
in the event of a breach of the terms and conditions of this Agreement to be
performed by him (including, but not limited to, leaving the employment provided
for hereunder). Marino, therefore, agrees that in the event of his breach of any
of the terms and conditions of this Agreement to be performed by him (including,
but not limited to leaving the employment provided for hereunder), the Company
shall be entitled, if it so elects, to institute and prosecute proceedings in
any court of competent jurisdiction, either at law or in equity, to enjoin him
from performing services for any other person, firm or corporation in violation
of any of the terms of this Agreement, and to obtain damages for any breach of
this Agreement. In the event of the breach by the Company of any of the terms
and conditions of this Agreement to be performed by it, Marino shall have all
remedies available to him under the laws of the State of Illinois. The remedies
provided herein shall be cumulative and in addition to any and all other
remedies which either party may have at law or in equity.
8.7. Costs of Enforcement. In the event of any suit or
proceeding seeking to enforce the terms, covenants, or conditions of this
Agreement, the prevailing party shall, in addition to all other remedies and
relief that may be available under this Agreement or applicable law, recover his
or its reasonable attorneys' fees and costs as shall be determined and awarded
by the court.
7
8.8. Headings. Numbers and titles to paragraphs hereof are for
information purposes only and, where inconsistent with the text, are to be
disregarded.
8.9. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
when taken together, shall be and constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the date first set forth above.
ELECTRIC CITY CORP.
By:/s/Xxxxxx Xxxxxx
-------------------
Its: President
-------------------
XXXXXX XXXXXX
/s/Xxxxxx Xxxxxx
-------------------
8
