EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (this "AGREEMENT") is made and entered into by
and between COMVERGE TECHNOLOGIES, INC., a Delaware corporation (the "COMPANY"),
and XXXXXX X. XXXXXX (the "EXECUTIVE") as of this 1st day of September, 2001.
The Company desires to employ the Employee under the terms and conditions
set forth in this Agreement, and the Employee desires to accept such employment
subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, terms,
covenants, agreements and conditions set forth herein and performance of each,
the parties agree as follows:
1. EMPLOYMENT AND RESPONSIBILITIES.
(a) EMPLOYMENT AND DUTIES. Subject to the terms and conditions of this
Agreement, the Company hereby agrees to employ Executive as Chief Executive
Officer of the Company during the Term (as defined below), and the Executive
hereby accepts such employment. Executive shall perform the duties, and assume
the responsibilities and obligations, consistent with his position, as may be
assigned to Executive from time to time by the Board of Directors of the Company
(the "BOARD"). The Executive shall devote substantially all of his business
time, attention and skill to the business and affairs of the Company and its
affiliates, and shall faithfully and diligently perform Executive's
responsibilities and duties hereunder. The foregoing notwithstanding, the
parties recognize and agree that the Executive may engage in personal
investments and other business, industry, civic and charitable activities that
do not conflict with the business affairs of the Company or interfere with the
Executive's performance of his duties and responsibilities hereunder.
Executive's place of employment shall be at the Company's headquarters in
Florham Park, New Jersey.
(b) TERM. The term ("TERM") of this Agreement shall commence on the
date hereof (the "EFFECTIVE DATE") and shall terminate, unless otherwise
terminated earlier in accordance with paragraph 7 hereof, on December 31, 2002
(the "INITIAL TERM"), provided that the Term of this Agreement shall be
automatically extended, subject to an earlier termination as provided in
paragraph 7 hereof, for successive additional one (1) year periods (the
"ADDITIONAL TERMS"), unless, at least 30 days prior to the end of the Initial
Term or an Additional Term, the Company or Executive has notified the other in
writing that the Term of this Agreement shall terminate at the end of such
Initial Term or Additional Term, as the case may be.
(c) MEMBERSHIP ON THE BOARD. During the Term of this Agreement,
Executive shall be a director of the Company and the Vice Chairman of the Board,
reporting to the
Chairman and subject to the terms and conditions of the Company's by-laws. Upon
the termination of this Agreement, Executive shall be deemed to have
automatically resigned as a director and the Vice Chairman of the Board without
any further action by Executive.
2. COMPENSATION; DSSI STOCK OPTIONS; DSSI RESTRICTED STOCK. For all
services rendered by Executive to the Company, the Company shall compensate the
Executive as follows:
(a) BASE SALARY. The base salary payable to Executive under this
Agreement shall be $250,000 per year, payable bi-weekly in arrears, commencing
on the Effective Date, in accordance with the Company's usual and customary
payroll practices for executive officers.
(b) ADDITIONAL COMPENSATION AND OTHER BENEFITS. Subject to the terms
and conditions set forth in this Agreement, Executive shall be entitled to
receive the following additional compensation from the Company:
(i) In consideration of consulting services rendered to the
Company by the Executive in the capacity of an independent contractor
prior to the date hereof, the Company shall pay to The Executive a single
lump sum payment of $7,500 with respect to which sum (i) the Company
shall not withhold any payroll taxes and shall timely issue a Form 1099
and (ii) the Executive shall be solely responsible for timely withholding
and payment of all self-employment and income taxes required to be
withheld and paid with respect to such consulting fees. Such payment
shall be made on the date on which this Agreement is executed and
delivered to the Company by the Executive.
(ii) As consideration for entering into this Agreement,
Executive shall be entitled to receive a one time bonus of $250,000
("TRANSACTION BONUS") if and upon the earlier of (A) the consummation of
an initial public offering of equity securities of the Company in which
the Company receives gross proceeds of at least $10 million (the "IPO")
or (B) the occurrence of a "Change in Control" (as hereinafter defined).
For purposes of this Agreement, a "CHANGE IN CONTROL" shall mean the
consummation of any of the following transactions in which the gross
proceeds paid to the Company is equal to or greater than $20 million in
cash or $25 million in publicly traded securities: (1) a consolidation or
merger of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which shares of the Company's Common
Stock would be converted in whole or part into cash, securities or other
property, other than a merger of the Company in which the holders of the
Company's Common Stock immediately prior to the merger have substantially
the same proportionate ownership of common stock of the surviving
corporation immediately after the merger, or (2) any sale, lease,
exchange or transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of the Company. The
Board shall have sole and absolute discretion whether or not to enter
into or consummate any
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IPO or Change in Control. In addition, the Executive acknowledges that he
will be an "interested director" with respect to any action or decision
by the Board regarding an IPO or Change In Control and, consequently, the
Executive acknowledge and agrees that he will not be entitled to vote as
a director on any such IPO or Change in Control. The Transaction Bonus
shall be paid to Executive within three business days after the
consummation of the IPO or Change in Control, as the case may be.
(iii) In addition to Executive's base salary and the Transaction
Bonus, Executive shall be entitled to receive a performance bonus not to
exceed seventy-five percent (75%) of the Executive's annual base salary
(the "PERFORMANCE BONUS") for (A) the 16 month period commencing on the
Effective Date and ending December 31, 2002 (which shall be pro rated to
reflect such 16 month period) and (B) each full calendar year during the
Term (each a "BONUS PERIOD"). The amount of the Performance Bonus paid to
Executive for a Bonus Period shall be based on Executive's achieving
reasonable performance objectives established by the Board (in good faith
and in its sole discretion) for such Bonus Period. The Board shall
establish reasonable performance objectives for the first Bonus Period
within 30 days of the Effective Date, and reasonable performance
objectives for each subsequent Bonus Period by January 31 of such Bonus
Period. The Performance Bonus earned by Executive (if any) shall be paid
within 90 days after each Bonus Period.
(iv) As consideration for entering into this Agreement and, in
particular, the non-competition agreement set forth herein, the Company
shall grant to Executive an option to purchase 349,325 shares of the
Company's Common Stock (the "COMVERGE OPTION"). The Comverge Option shall
be in the form attached hereto as EXHIBIT A.
(v) Executive shall be entitled to participate in all of the
benefit plans and programs available to employees of the Company,
including health, life, and disability plans and the Company's 401(k)
Plan, as such plans or programs may be in effect from time to time and
subject to the respective waiting period specified by any such plan or
program for coverage of new employees. The Company may, in its sole and
absolute discretion, determine to amend, revise, replace or terminate any
such plans or programs at any time.
(vi) The Executive shall be entitled to receive three weeks of
vacation time annually, subject to the Company's regular personnel
policies.
(vii) The Company, upon presentation by Executive of appropriate
documentation, shall reimburse Executive (A) for all reasonable and
necessary business expenses incurred by Executive in connection with the
performance of his duties under this Agreement, subject to Company's
written policies with respect thereto as in effect from time to time, and
(B) up to $8,000 in fees and expenses incurred by the Executive in
connection with legal representation in the
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negotiation and documentation of this Agreement and the other agreements
to be entered into by the Executive in connection with this Agreement,
upon presentation to the Company by the Executive of a reasonably
itemized invoice from his attorneys.
(viii) It is contemplated that Executive will continue to maintain
his residence in Texas until the consummation of the IPO and that
Executive will maintain an apartment in the Florham Park vicinity. For a
period of up to 12 months from the Effective Date (the "REIMBURSEMENT
PERIOD"), the Company shall pay to Executive a monthly sum of $2,500,
which shall be applied by Executive for the lease and maintenance of an
automobile and the rental of an apartment in proximity to the Company's
Florham Park, New Jersey office. In addition to this monthly stipend, the
Company shall reimburse Executive up to $1000 per month for the purchase
by Executive or his wife of airline tickets for travel between Texas and
New Jersey/New York City. Executive agrees that he shall be responsible
for any costs and expenses in excess of this stipend. The reimbursement
of airline ticket expenses shall be subject to the requirements of
Section 2(b)(vii) above. If the IPO has not been consummated by the end
of the Reimbursement Period, then the payments and reimbursements under
the provisions of this paragraph 2(b)(viii) shall continue until the
earlier of six months or the consummation of the IPO.
(ix) After the consummation of the IPO, the Company shall pay or
reimburse Executive up to an aggregate of $50,000 of out-of-pocket
relocation expenses (including, but not limited to, closing costs and
broker commissions on Executive's old residence that was sold and on the
Executive's new residence purchased, moving costs and travel expenses
from the Executive's place of residence to his new place of residence)
incurred or paid by Executive in connection with the relocation of
Executive and his spouse to any place within 50 miles of Florham Park,
New Jersey.
(xi) The Company shall pay the cost up to $500 per year for an
annual physical examination to be conducted by a doctor of medicine or
clinic of the Executive's choosing anywhere in the United States of
America.
(xii) The Company shall pay the cost for the preparation of the
Executive's personal federal and state tax returns prepared by the
Company's tax preparation firm, Anchin Block & Anchin LLP.
(c) DSSI STOCK OPTIONS AND DSSI RESTRICTED STOCK. Simultaneous with
the parties' execution of this Agreement, the Company shall cause its parent
company, Data Systems & Software Inc. ("DSSI"), to execute and deliver to
Executive (i) an employee stock option issued under the DSSI 1994 Stock
Incentive Plan (the "DSSI STOCK OPTION") exercisable for the purchase of 75,000
shares of common stock of DSSI ("DSSI STOCK") at an exercise price of $5.95 per
share (which was the closing price of the DSSI Stock on July 31, 2001); and (ii)
a restricted stock purchase agreement pursuant to which
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Executive shall be entitled to purchase 50,000 shares of DSSI Stock at a
purchase price per share of $5.95 per share (which was the closing price of the
DSSI Stock on July 31, 2001) (the "DSSI RESTRICTED STOCK PURCHASE AGREEMENT").
The DSSI Stock Option shall be in the form attached hereto as EXHIBIT B and
shall be subject to the terms and conditions of the DSSI 1994 Incentive Stock
Plan, and the DSSI Restricted Stock Purchase Agreement shall be in the form
attached hereto as EXHIBIT C.
(d) RETIREMENT PAYMENTS. On January 1, 2003, if this Agreement and the
Executive's employment hereunder have not been terminated, the Executive shall
be eligible to receive retirement payments (the "RETIREMENT PAYMENTS") upon
certain terminations of this Agreement and the Executive's employment hereunder
occurring on or after the Executive's 60th birthday (the "ELIGIBILITY Date"). On
and after the Eligibility Date, if this Agreement and the Executive's employment
hereunder are terminated pursuant to paragraphs 7(a)(i), 7(a)(ii)(C) or 7(a)(iv)
(the "EMPLOYMENT TERMINATION DATE"), the Company shall pay the Retirement
Payments to the Executive during each 12 month period after the Employment
Termination Date until the 7th anniversary thereof. The Retirement Payments
shall be in the following amounts: (A) for each 12 month period after the
Employment Termination Date and ending on the 4th anniversary thereof, 50% of
the Executive's base salary in effect immediately prior to the Employment
Termination Date (the "BASE Rate"); and (B) for each 12 month period after the
4th anniversary of the Employment Termination Date and ending on the 7th
anniversary thereof, 25% of the Base Rate. All such Retirement Payments shall be
paid to the Executive in appropriate installments in accordance with the
Company's usual and customary payroll practices for executive officers. The
provisions of this paragraph 2(d) shall survive the termination of this
Agreement pursuant to paragraphs 7(a)(i), 7(a)(ii)(C) or 7(a)(iv) hereof.
3. NONCOMPETITION AGREEMENT. In consideration of the compensation
paid or payable to Executive by the Company pursuant to this Agreement
(including, but not limited to, Paragraph 2(b)(iv) hereof), Executive hereby
agrees as follows:
(a) During the Term of this Agreement and for a period of two (2)
years immediately following the termination of this Agreement, Executive shall
not, directly or indirectly, for himself or on behalf of, or in conjunction with
any other person, persons, company, partnership, limited liability company,
corporation or other business entity or venture of whatever nature: (i) call
upon any customer of the Company, past or present, including but limited to, any
customers obtained for the Company by Executive, for the purpose of (A)
soliciting or selling any products or services in competition with any products
or services offered by the Company or (B) persuading, inducing or soliciting any
such customer to discontinue conducting business with the Company or purchasing
any of its products or services; (ii) call upon any employee or consultant of
the Company for the purpose or with the intent of persuading or enticing any
such employee or consultant away from or out of the employ of the Company; or
(iii) establish, enter into, be employed by or for, advise, consult with or
become an owner in or a part of, any company, partnership, limited liability
company, corporation or other business entity or venture of whatever nature or
in any way engage for himself or for others, in any
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business that sells products or services that compete with or are similar to the
products or services offered by the Company.
(b) The existence of any claim or cause of action of the Executive
against the Company, whether predicated on this Agreement or otherwise, shall
not preclude the Company's enforcement of these covenants.
(c) Executive acknowledges and agrees that the covenants set forth in
this paragraph 3 are necessary and reasonable to protect the Company and the
conduct of its business and are a fair and reasonable restraint on the Executive
in light of the activities and business of the Company on the date of execution
of this Agreement and the future plans of the Company; and that such covenants
also be construed and enforced light of the activities and business of the
Company (including business activities in the planning stage) on the date of
termination of the Executive's employment with the Company.
(d) The provisions of this paragraph 3 shall survive any termination
of this Agreement and are subject to paragraph 8 of this Agreement.
4. RETURN OF COMPANY PROPERTY. All products, records, designs,
patents, trademarks, copyrights, plans, manuals, memoranda, lists and other
documents or other property of the Company or any of its affiliates in the
possession or control of Executive and all records compiled by the Executive
which pertain to the business of the Company or its affiliates, shall be and
remain the property of the Company and shall be subject at all times to its
discretion and control. Likewise, all correspondence with customers or
affiliates of the Company, all reports, records charts, and advertising
materials and any data pertaining to the Company, its affiliates or the business
of the Company or its affiliates by Executive, shall be delivered promptly to
the Company without request on the date Executive's employment with the Company
terminates or at any other time promptly upon request by the Company.
5. INVENTIONS. Executive shall disclose promptly to the Company any
and all conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by Executive
solely or jointly with another during the period of employment and which are
related to the business or activities of the Company or its affiliates or which
Executive conceives as a result of this employment by the Company, and Executive
hereby assigns and agrees to assign all his interests therein to the Company or
its nominee. Whenever requested to do so by the Company, Executive shall execute
any and all applications, assignments or other instruments which the Company
shall deem necessary to apply for and obtain Letters Patent of the United States
or any foreign country or any copyright or trademark registration or to
otherwise protect the Company's interest therein. The provisions of this
paragraph 5 shall survive any termination or expiration of this Agreement. The
obligations of Executive under this paragraph 5 shall continue beyond the
termination of the Executive's employment with the company with respect to
inventions, improvements and valuable discoveries, whether patentable or not,
conceived, made or acquired by
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Executive during the period of employment and shall be binding upon Executive's
assigns, executors administrator and other legal representatives.
6. CONFIDENTIALITY.
(a) Executive acknowledges that the success of the Company is
dependent upon its relationship with its employees and consultants as well as
its business, operational and marketing plans, financial information, ideas,
concepts, processes, business methods, procedures, operations, computer
software, source codes, object codes, user interfaces, specifications,
documentation, trade secrets, technology, cost, pricing and sales information,
lists and files of the Company and its affiliates regarding employees,
consultants, customers, suppliers, vendors and contractors and their
requirements, and any and all other confidential, proprietary, secret or
non-public information of the Company and its affiliates (including, without
limitation, Data Systems & Software Inc.) (collectively, the "CONFIDENTIAL
INFORMATION"), and that it is imperative that the Confidential Information be
maintained in strict confidence.
(b) Executive shall keep and maintain all Confidential Information in
strict confidence, not utilize or copy Confidential Information for any purpose
other than in furtherance of the Company's business, and not transfer, divulge
or disclose Confidential Information to any third party other than in
furtherance of the Company's business. All of the Confidential Information shall
be subject to the restrictions of this Agreement, whether or not otherwise
protectable by patent, copyright or trademarks. In the event that an order or a
subpoena issued by a court of competent jurisdiction requires Executive to
disclose any Confidential Information, Executive shall be permitted to comply
with such order, but shall consult with the Company in advance so as to enable
the Company to attempt to narrow the scope of such disclosure and/or to
challenge the order of disclosure.
(c) Upon request of the Company or upon any termination or expiration
of this Agreement, all copies of Confidential Information, whether in writing,
digital, electronic, magnetic or in any other format, which is in the possession
or control of Executive shall be promptly returned to the Company and Executive
shall not retain any copies thereof.
(d) The provisions of this paragraph 6 shall survive any termination
of this Agreement and are subject to the provisions of paragraph 8 of this
Agreement.
7. TERMINATION.
(a) TERMINATION. This Agreement and Executive's employment by the
Company may be terminated in any one of the following ways:
(i) This Agreement and Executive's employment shall terminate
immediately upon the date of Executive's death.
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(ii) Following an affirmative vote of two-thirds of the members
of the Board, the Company may terminate this Agreement and Executive's
employment for "Cause" at any time during the Term effective upon the
Company's delivery of written notice thereof to Executive which notice
shall specify the nature of the conduct constituting such "Cause"
("COMPANY NOTICE"). If the requisite affirmative vote of not less than
two-thirds (2/3) of the Board is not obtained, any termination of the
Executive's employment by the Company under this paragraph 7(a)(ii) shall
be deemed a termination without Cause. For purposes of this subparagraph
7(a)(ii), the term "Cause" shall include (without limitation): (A)
Executive's breach of any material provision of this Agreement; (B)
Executive's material breach of any written Company policy contained in
the Company's manual of policies and procedures; (C) Executive's
inability to perform his duties under this Agreement because of illness,
physical or mental disability, or other incapacity which continues for an
uninterrupted period in excess of sixty (60) consecutive days or a
cumulative period of one hundred twenty (120) days in any twelve (12)
month period; (D) Executive's fraud with respect to the business or
affairs of the Company; (E) the conviction of Executive of a felony
crime; or (F) alcohol abuse or illegal drug use by Executive; PROVIDED,
HOWEVER, that in the event of Executive's breach of any material
provision this Agreement or material breach any of written Company policy
or alcohol or illegal drug use as provided in subparagraphs 7(a)(ii)(A),
(B) or (E) hereof, no Cause for termination shall be deemed to exist for
any such breach which is curable and which is cured by Executive within
ten (10) business days after the Company Notice has been delivered to
Executive.
(iii) The Company may terminate this Agreement and Executive's
employment without Cause at any time during the Initial Term effective 30
days after written notice thereof is delivered to Executive.
(iv) The Company or Executive may terminate this Agreement and
Executive's employment without Cause upon delivery of written notice to
other party at least 30 days prior to the end of the Initial Term or any
Additional Term, and such termination shall be effective at the end of
such Initial Term or Additional Term, as the case may be.
(b) RIGHTS UPON TERMINATION.
(i) If this Agreement is terminated by the Company without
Cause during the Initial Term pursuant to paragraph 7(a)(iii) hereof,
Executive shall be entitled to receive (A) any earned but unpaid annual
base salary through the effective date of such termination, (B) the
balance of his annual base salary for the Initial Term, (C) one year of
annual base salary (payable in a lump sum or in installments, as
determined by the Company in its sole discretion), (D) reimbursement for
expenses incurred in accordance with paragraph 2(b)(vii) of this
Agreement, (E) any benefits available to Executive under the terms of the
benefit plans and programs in which Executive is a participant on the
effective
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date of such termination and (F) the Company shall pay the full cost of
COBRA coverage under the Company's group health plan for the Executive
and his family members who are entitled to such COBRA coverage until the
Executive and such family members are covered under another health plan;
PROVIDED, HOWEVER, if such termination occurs after an IPO, then the
Executive shall be entitled to the items in paragraph 7(b)(i)(A), (B),
(D), (E) and (F), PLUS 3 years of the Executive's base annual salary
(payable in a lump sum), the reimbursement for any payment by the
Executive of any excise tax under Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code"), on the payments and benefits under
this paragraph 7(b)(i) received or to be received by the Executive which
are deemed the "parachute payment" (as such term is defined in Section
280G(2) of the Code) PROVIDED, HOWEVER, such reimbursement shall not
exceed 15% of the "parachute payment", and full (100%) vesting in any
non-vested portion any options with the Company and the DSSI Stock Option
and full vesting and complete waiver of restrictions on any other equity
or phantom equity incentives held by the Executive under any plan or
contractual arrangement with the Company.
(ii) If this Agreement is terminated by the Company without
Cause at the end of the Initial Term or any Additional Term pursuant to
paragraph 7(a)(iv) hereof, Executive shall be entitled to receive (A) any
earned but unpaid annual base salary through the effective date of such
termination, (B) one year of annual base salary (payable in a lump sum or
in installments as determined by the Company, in its sole discretion),
(C) reimbursement for expenses incurred in accordance with paragraph
2(b)(vii) of this Agreement, (D) any benefits available to Executive
under the terms of the benefit plans and programs in which Executive is a
participant on the effective date of such termination, and (E) the
Company shall pay the full cost of COBRA coverage under the Company's
group health plan for the Executive and his family members who are
entitled to such COBRA coverage until the Executive and such family
members are covered under another health plan; PROVIDED, HOWEVER, if such
termination occurs after an IPO, then the Executive shall be entitled to
the items in paragraph 7(b)(ii)(A), (C), (D), and (E), PLUS 3 years of
the Executive's base annual salary (payable in a lump sum), on the
payments and benefits under this paragraph 7(b)(ii) received or to be
received by the Executive which are deemed the "parachute payment" (as
such term is defined in Section 280G(2) of the Code) PROVIDED, HOWEVER,
such reimbursement shall not exceed 15% of the "parachute payment", and
full (100%) vesting of any non-vested portion of any options with the
Company and the DSSI Stock Option and full vesting and complete waiver of
restrictions on any other equity or phantom equity incentives held by the
Executive under any plan or contractual arrangement with the Company.
(iii) If this Agreement is terminated by the Company with Cause,
by the Executive pursuant to paragraph 7(a)(iv) hereof or otherwise, or
upon the death of Executive, Executive (or his estate or personal
representative as the case may be) shall be entitled to receive (A) any
earned but unpaid annual base salary
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through the effective date of such termination, (B) reimbursement for
expenses incurred in accordance with paragraph 2(b)(vii) of this
Agreement, and (C) any benefits available to Executive (or immediate
family of a deceased employee as the case may be) under the terms of the
benefit plans and programs in which Executive is a participant on the
effective date of such termination.
8. SPECIFIC PERFORMANCE; INJUNCTIVE RELIEF, REFORMATION OF
RESTRICTIONS
(a) The parties recognize, acknowledge and agree that, if Executive
commits a breach or the Company has reasonable evidence that Executive is about
to commit a breach, of any of the provisions of paragraphs 3 or 6 hereof, the
Company will suffer irreparable harm and injury, and money damages will not
provide an adequate remedy to the Company. Accordingly, Executive agrees that,
in any such event, the Company shall be entitled to have the provisions of this
Agreement specifically enforced by any court having jurisdiction, without being
required to post a bond or other security and without having to prove the
inadequacy of the available remedies at law. In addition, the Company shall be
entitled to avail itself of all such other actions and remedies available to it
under law or in equity and shall be entitled to such damages as it sustains by
reason of such breach. The Company agrees to notify Executive within seven (7)
days after the discovery of any breach or anticipated breach of any of the
provisions of paragraphs 3 or 6 hereof.
(b) The parties acknowledge that the type and periods of
restriction imposed on Executive pursuant to the provisions of paragraphs 3 and
6 hereof are fair and reasonable, and are reasonably required for the protection
of the Company and its affiliates and the goodwill associated with the business
of the Company and its affiliates. It is the express desire and intent of the
parties that the provisions of paragraphs 3 and 6 be enforced to the fullest
extent permissible. If any of the covenants in paragraphs 3 and 6, or any part
of such paragraphs, is hereafter construed to be invalid or unenforceable, the
same shall not affect the remainder of the covenant or covenants, which shall be
given full effect, without regard to the invalid portions. If any of the
covenants contained in paragraphs 3 or 6, or any part of such paragraphs, is
held to be unenforceable because of the duration of such provision or the area
covered thereby, the parties hereby expressly agree that the court making such
determination shall have the power to reduce the duration of such provision
and/or areas to which any such provision shall apply, and, in its reduced or
limited form, said provision shall then be enforceable.
9. REPRESENTATIONS OF EXECUTIVE. Executive has represented and hereby
represents and warrants to the Company that the execution of this Agreement by
Executive and his employment by the Company and performance of his duties
hereunder will not violate or be a breach of any agreement with a former
employer or any other person or entity. Further, Executive agrees to indemnify
the Company for any claim, including, but not limited to, attorney fess and
expenses of investigation, by any such third party which such third party may
now have or may hereafter come to have against the Company based upon or arising
out of any noncompetition agreement or invention and secrecy agreement between
Executive and such third party.
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10. COMPLETE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or in writing, between Company and Executive with
respect to the subject matter of this Agreement. This Agreement may not be
modified except in writing signed by the Company and Executive and no term of
this Agreement may be waived except in writing signed by the party waiving such
term.
11. NO WAIVER. No waiver by the parties hereto of any default or
breach of any term, condition or covenant of this Agreement shall be deemed to
be a waiver of any subsequent default or breach of the same or any other term,
condition or covenant contained herein.
12. ASSIGNMENT; BINDING EFFECT. Executive understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Executive, therefore, agrees that he
cannot assign all or any portion of this Agreement. Subject to the preceding two
sentences, this Agreement shall be binding upon and inure to the benefit of the
parties thereto, and their respective heirs, successors and assigns.
13. SEVERABILITY. Except as provided in paragraph 8 hereof, the
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity and
enforceability of the other provisions hereof. If any provision of this
Agreement is unenforceable for any reason whosoever, such provision shall be
appropriately limited and given effect to the extent that it may be enforceable.
14. NOTICE. Whenever any notice is required hereunder, it shall be
given in writing addressed as follows:
To the Company Comverge Technologies, Inc.
00 Xxxxxxxx Xxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Attn: Chairman of the Board
With a copy to
Xxxxxxx Xxxxxx, Esq.
Xxxxxxxxxx, Xxxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
To Executive Xxxxxx X. Xxxxxx
00000 Xxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
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With a copy to
Xxxxxxxx X. Xxxxx, Esq.
Xxxxxxx & Xxxxx L.L.P.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Notice shall be deemed delivered (i) three (3) days after the deposit in the
U.S. mail of a writing addressed as above and sent first class mail, certified,
return receipt requested, (ii) upon hand delivery, (iii) one business day after
deposit with Federal Express or other recognized over-night courier service, or
(iv) when actually received. Either party may change the address for notice by
notifying the other party of such change in accordance with this paragraph 14.
15. HEADINGS. The paragraph headings herein are for reference purposes
only and are not intended in any way to describe, interpret, define or limit the
extent or intent of this Agreement or of any part hereof.
16. GOVERNING LAW; JURISDICTION.
(a) This Agreement shall in all respects be governed, enforced and
construed according to the internal laws of the State of New Jersey without
regard to the principles of the conflict of laws thereof.
(b) All disputes or claims by the Executive in regard to this
Agreement shall be directed to and determined by the Board and shall be in
writing. Any decision by the Board on a claim or dispute by the Executive shall
be delivered to the Executive in writing and shall set forth the specific
reasons for the decision and the specific provisions of this Agreement relied
upon. The Board shall afford a reasonable opportunity to the Executive for a
review of the decision and shall further allow the Executive to appeal to the
Board a decision of the Board within 20 days after notification by the Board of
its decision regarding the Executive's claim or dispute. Upon receipt of such a
request, the Board shall reconsider its decision and notify the Executive of the
Board's decision on reconsideration within 30 days after receipt of the request
for reconsideration.
(c) Except for equitable relief as specified in paragraphs 8 and 16(g)
hereof and except for the Executive's claim under any Company benefit or
compensation plans, programs, arrangements or awards (whether heretofore or
hereafter established) which have a claim or dispute resolution procedure
specifically applicable thereto, any dispute or controversy which is not
resolved by agreement pursuant to paragraph 16(b) hereof, including all claims,
demands, causes of action, disputes, controversies, and other matters in
question arising out of or relating to this Agreement, whether such claims sound
in contract, tort, or otherwise, at law or in equity, under state or federal
law, whether provided by statute or the common law, for damages or any other
relief, shall be resolved by binding arbitration pursuant to the Federal
Arbitration Act in accordance with the Employment Dispute Resolution Rules then
in effect with the American Arbitration
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Association. The arbitration proceeding shall be conducted in Florham Park, New
Jersey. This agreement to arbitrate shall be enforceable in either federal or
state court.
(d) The enforcement of the parties agreement to arbitrate and all
procedural aspects of the provisions regarding such arbitration, including but
not limited to, the construction and interpretation thereof, the issues subject
to arbitration (i.e., arbitrability), the scope of the arbitrable issues,
allegations of waiver, delay or defenses to arbitrability, and the rules
governing the conduct of the arbitration, shall be governed by and construed
pursuant to the Federal Arbitration Act and shall be decided by the arbitrators.
In deciding the substance of any such claims, the arbitrators shall apply the
substantive laws of the State of New Jersey (excluding New Jersey choice-of-law
principles that might call for the application of some other state's law).
(e) The arbitration may be initiated by any party by providing to the
other parties a written notice of arbitration specifying the claims. Within 30
days of the notice of initiation of the arbitration procedure, (1) the Executive
shall nominate one arbitrator and (2) the Company shall nominate one arbitrator.
The two arbitrators shall select a third arbitrator within 60 days of the
original notice to arbitrate. If the two arbitrators fail to select a third
arbitrator within such 60-day period, then either the Executive or the Company
shall apply to the Senior Active United States District Judge for the State of
New Jersey, who shall appoint a third arbitrator. While the third arbitrator
shall be neutral, the two party-appointed arbitrators are not required to be
neutral and it shall not be grounds for removal of either of the two
party-appointed arbitrators or for vacating the arbitrators' award that either
of such arbitrators has past or present minimal relationships with the party
that appointed such arbitrator. Evident partiality on the part of an arbitrator
exists only where the circumstances are such that a reasonable person would have
to conclude there in fact existed actual bias and a mere appearance or
impression of bias will not constitute evident partiality or otherwise
disqualify an arbitrator.
(f) The three arbitrators shall by majority vote resolve all disputes
between the parties. If the parties agree in writing, there shall be no
transcript of the hearing before the arbitrators. The arbitrators' decision
shall be in writing. The arbitrators shall assign the reasons for their
decision. The arbitrators shall certify in their award that they have faithfully
applied the terms and conditions of this paragraph 16. All proceedings conducted
hereunder and the decision of the arbitrators shall be kept confidential by the
parties, e.g., the arbitrators' award shall not be released to the press or
published in any of the various arbitration reporters. Judgment upon any award
rendered in any such arbitration proceeding may be entered by any federal or
state court having jurisdiction.
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(g) Notwithstanding any provision of this Agreement to the contrary,
(i) the provisions of paragraph 8 shall govern any breach or threatened breach
of any provision of paragraphs 3 or 6, and (ii) in the event of a breach or
threatened breach by the Executive of any of the covenants set forth in
paragraphs 4 or 5 hereof, the Company shall be entitled to seek equitable
relief, including an injunction, in any court of proper jurisdiction to maintain
the status quo pending the resolution of the dispute by binding arbitration as
provided above. With respect to any such action, the Executive and the Company
hereby irrevocably submit to the exclusive jurisdiction of any Federal or State
court sitting in the State of New Jersey, and agree that process in any such
action shall be valid and effective for all purposes if served upon the
respective party in accordance with the notice provisions of paragraph 14
hereof.
(h) In any arbitration or equitable proceeding under this Agreement
(including, without limitation, paragraphs 8 and 16 hereof), the losing party
shall pay all legal fees, arbitration fees and expenses incurred by the
prevailing party in such dispute. Such payments shall be made within five (5)
business days after delivery of the prevailing party's written request for
payment accompanied with reasonably detailed evidence of fees and expenses
incurred by the prevailing party.
17. NO MITIGATION; LIMITED OFFSET. The Company agrees that, if the
Executive's employment with the Company is terminated hereunder, the Executive
is not required to seek other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant to Section 7 hereof.
Further, the amount of any payment or benefit provided for in this Agreement
shall not be reduced by any compensation earned by the Executive as the result
of employment by another employer, by retirement benefits, or by offset against
any amount claimed to be owed by the Executive to the Company (unless such
amount is evidenced by a promissory note signed by the Executive), or otherwise.
18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument.
[Signatures appear on next page]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first written above.
THE COMPANY: COMVERGE TECHNOLOGIES, INC.
By: /s/ Xxxxxx Xxxxxxxxxxx
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Name: Xxxxxx Xxxxxxxxxxx
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Title: Chairman
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EXECUTIVE:
/s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxx
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