ThermoEnergy Corporation Executive Employment Agreement
ThermoEnergy
Corporation
AGREEMENT,
effective March 1, 2010 (the “Effective Date”), by and between ThermoEnergy
Corporation, a Delaware corporation (together with all of its subsidiaries, the
“Company”) and Xxxxxx X. Xxxxxx (the “Executive”).
WHEREAS, the
Executive has served the Company as President, Chief Executive Officer and
Chairman of the Board of Directors; and
WHEREAS,
the Company desires to continue to retain the services of the Executive as
Chairman of the Board of Directors on the terms herein set forth and the
Executive is willing to be employed by the Company in such capacity on such
terms;
NOW,
THEREFORE, in consideration of the mutual covenants contained herein, the
parties agree as follows:
ARTICLE
I
EMPLOYMENT
DUTIES AND BENEFITS
Section
1.1
Employment. The Company
hereby employs the Executive as Chairman of the Board of
Directors. The Executive accepts such employment and agrees to
perform the duties and responsibilities assigned to him pursuant to this
Agreement.
Section
1.2
Title,
Duties and Responsibilities. The Executive’s
title shall be “Executive Chairman.” The Executive shall perform such
lawful duties and have such responsibilities as are reasonably assigned to him
by the Board of Directors of the Company or by the Company’s Chief Executive
Officer. The Executive shall devote his full professional time and
attention to the business of the Company and shall not be engaged in any other
business activity; provided, however, that the Executive may, with the prior
consent of the Board of Directors of the Company (which consent shall not be
unreasonably withheld), engage in uncompensated charitable, religious, political
or civic activities, so long as such activities do not materially interfere with
the Executive’s performance of his responsibilities hereunder. The
Executive will serve as a member of the Board of Directors of the
Company.
Section
1.3
Office
Facilities. The Company will
provide to the Executive an appropriate office, which shall initially be located
in or near Little Rock, Arkansas.
ARTICLE
II
COMPENSATION
AND BENEFITS
Section
2.1
Base
Salary. From and after
the Effective Date, the Company shall pay to the Executive a salary at the rate
of $150,000 per annum (the “Base Salary”) payable during the term of the
Executive’s employment in accordance with the Company’s payroll and withholding
policies.
Section
2.2
Performance
Bonus. In addition to
the Base Salary, the Executive shall be eligible to receive performance bonuses,
from time to time, in accordance with incentive compensation arrangements to be
established by the Compensation Committee of the Company’s Board of Directors
(the “Compensation Committee”) in consultation with the Executive and the
Company’s Chief Executive Officer. Such performance bonuses shall be
payable in cash, in shares of the Company’s Common Stock, in options to purchase
shares of the Company’s Common Stock, or in a combination thereof, at the
discretion of the Compensation Committee of the Company’s Board of
Directors.
Section
2.3
Expense
Reimbursement. The Company will,
in accordance with the Company’s general policies with respect to business
expenses, reimburse the Executive for all expenses (including travel and
lodging) reasonably incurred by the Executive in the performance of his duties
under this Agreement.
Section
2.4
Benefit
Plans. From and after
the Effective Date, the Executive shall be entitled to receive, during the term
of the Executive’s employment and at the expense of the Company, health
insurance for himself and his family and to participate in any and all benefit
plans (including life and disability insurance plans) provided generally to
executive employees of the Company.
ARTICLE
III
TERM
OF EMPLOYMENT AND TERMINATION
Section
3.1
Term. The term of the
Executive’s employment hereunder shall commence on the date of this Agreement
and shall continue indefinitely.
Section
3.2 Termination
of Employment. The Executive’s
employment hereunder may be terminated, at any time, by either party upon thirty
days’ written notice; provided, however, that the Company may terminate the
Executive’s employment immediately for Cause and the Executive may terminate his
employment (i) immediately with Good Reason or (ii) upon 60 days written notice
upon Retirement. As used herein, the term “Cause” for termination of the
Executive’s employment by the Company shall mean any of the following: (a)
willful disloyalty to the Company; (b) substantial inattention to or neglect of
duties and responsibilities consistent with the terms of this Agreement that
have been reasonably assigned to the Executive by the Company's Board of
Directors or Chief Executive Officer, which inattention or neglect continues for
a period of at least ten days after the Executive receives written notice
thereof from the Company’s Board of Directors; (c) failure to comply with lawful
directives of the Company's Board of Directors or Chief Executive Officer not
inconsistent with the terms of this Agreement; or (d) commission by the Executive of a crime
involving deceit, dishonesty or fraud; provided, however, that any action taken
by the Executive in his capacity as an officer or director of the Company will
not be deemed to constitute Cause even if subsequently determined to be criminal
if, prior to taking such action, the Executive consulted with the Company’s
Board of Directors or the Company’s legal counsel and was advised that such
action was permissable. As used herein, the term “Good Reason” for the
Executive’s voluntary termination of his employment shall mean either of the
following: (a) the Company’s failure to perform the terms of this
Agreement, other than an isolated, insubstantial and inadvertent failure not
occurring in bad faith and remedied by the Company promptly (but not later than
ten days) after receiving written notice thereof from the Executive; (b) the
assignment to the Executive of any duty or to any position inconsistent with the
Executive’s training and experience; or (c) a material reduction of the Base
Salary. As used herein, the term “Retirement” shall mean the
Executive’s voluntary withdrawal, at any time on or after the Executive’s
66th
birthday, from the work force (provided, however, that the Executive shall
continue to be deemed to be in Retirement notwithstanding (i) his provision of
consulting or other services for compensation on less than 40% of a full time
basis or (ii) his service for compensation as a member of the Board of Directors
of any business).
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In the
event the Executive’s employment is terminated for any reason other than (i) by
the Company for Cause or (ii) voluntarily by the Executive without Good Reason,
the Executive shall be entitled to receive, in addition to any unpaid salary and
accrued and unused vacation pay through the last day of the month in which such
termination occurs, as the Executive’s sole and exclusive entitlement upon
termination of his employment under such circumstances, (i) severance payments
in the amount of $12,500 per month for a period of twelve months commencing on
the first day of the month immediately following the date of termination,
payable in accordance with the Company’s standard payroll and withholding
policies, (ii) any and all compensation relating to bonus payments earned on or
before the date of termination, and (iii) continuation of health insurance
benefits as set forth in the last sentence of this paragraph. Upon
Retirement, the Executive shall be entitled to receive, in addition to any
unpaid salary and accrued and unused vacation pay through the last day of the
month in which such Retirement occurs, as the Executive’s sole and exclusive
entitlement upon termination of his employment under such circumstances, (i) any
and all compensation relating to bonus payments earned on or before the date of
termination, and (ii) continuation of health insurance benefits as set forth in
the last sentence of this paragraph. For a period of one year
commencing on the first day of the month immediately following the date of
termination of the Executive’s employment (other than termination (i) by the
Company for Cause or (ii) voluntarily by the Executive prior to Retirement and
without Good Reason) the Company shall keep in full force and effect all health
insurance benefits afforded to the Executive and his family at the time of the
termination of his employment, which benefits shall be provided on terms
identical to those provided to full time employees of the Company who are in
good standing; provided, however, that the Company’s obligation to provide
continuing health insurance benefits to the Executive and his family shall
terminate at such time as the Executive becomes eligible to receive from another
source, at a cost to the Executive no greater than the cost that would have been
borne by the Executive had he remained a full time employee of the Company,
health insurance benefits with equivalent or better coverage.
All stock
options held by the Executive that are subject to vesting based on the
Executive’s continuing service as an employee or director of the Company shall
immediately vest in full and become fully exercisable upon (i) Retirement, (ii)
the Executive’s death or (iii) the Executive’s permanent
disability.
ARTICLE
IV
COVENANTS
Section
4.1 Confidentiality
and Non-Use of Proprietary Information. To protect the
Company’s proprietary interest in the Company’s intellectual property and
proprietary information and to protect the goodwill and value of the Company,
the Executive hereby agrees that the Executive will preserve
as confidential all Confidential Information pertaining to the
Company’s business that has been or may be obtained or learned by him by reason
of his employment or otherwise. The Executive will not, without the
written consent of the Company either use for his own benefit or for the benefit
of any third parties, either during the term of his employment hereunder or
thereafter (except as required in fulfilling the duties of his employment), any
Confidential Information pertaining to the business of the
Company. As used herein, the term “Confidential Information
shall include without limitation any and all financial, cost and pricing
information and any and all information contained in any drawing, designs, plan,
proposals, customer lists, records of any kind, data, formulas, specifications,
concepts or ideas, related to the business of the
Company. Confidential Information shall not include information which
(a) is disclosed in a publication available to the public, is otherwise in the
public domain at the time of disclosure, or becomes publicly known through no
wrongful act on the part of the Executive, (b) is obtained by the Executive
lawfully from a third party who is not under an obligation of secrecy to the
Company and is not under any similar restrictions as to use or (c) is generally
disclosed to third parties by the Company without similar restrictions on such
third parties. The Executive acknowledges that all documents,
reports, files, analyses, drawings, designs tools, equipment, plans (including,
without limitation, marketing and sales plans), proposals, customer lists,
computer software or hardware, patents, license agreements, and similar
materials that are made by him or come into his possession by reason of his
employment by the Company are the property of the Company and shall not be used
by him in any way adverse to the Company’s interests. The Executive
will not allow any such documents or other things, or any copies, reproductions
or summaries thereof to by delivered to or used by any third party without the
specific consent of the Company. The Executive will deliver to the
Chief Executive Officer of the Company, or his designee, upon demand, and in any
event upon the termination of the Executive’s employment, all of such documents
and other things which are in the Executive’s possession or under his
control.
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Section
4.2 Non-Competition
and Non-Solicitation. To protect the Company’s proprietary
interest in the Company’s intellectual property and proprietary information and
to protect the goodwill and value of the Company, the Executive hereby agrees
that during his employment by the Company and for a period of one year following
the date on which his employment is terminated (whether voluntarily or
involuntarily, with or without Cause or Good Reason) (the “Non-Compete Term”),
the Executive will not, individually, or in association or in combination with
any other person or entity, directly or indirectly, as proprietor or owner, or
officer, director or shareholder of any corporation, or as an employee, agent,
independent contractor, consultant, advisor, joint venturer, partner or
otherwise, whether or not for monetary benefit, except on behalf of the Company,
solicit, sell to, provide services to, or assist the solicitation of, sale to,
or providing to, or encourage, induce or entice any other person or entity to
solicit, sell to or provide services to, any person or entity who is a customer
of the Company or who, at any time within 18 months prior to the date of
termination of the Executive’s employment, or whom the Company has, within six
months prior to the date of such termination, solicited to become a customer of
Company, for the purpose of (a) providing such customer with any product or
service which directly competes with the products or services provided by the
Company to such customer or is in substitution for or in replacement of such
products or services; (b) altering, modifying or precluding the development
of such customer’s business relationship with the Company; or (c) reducing
the volume of business which such customer transacts with the
Company. To further protect the Company’s proprietary interest in the
Company’s intellectual property and proprietary information and to protect the
goodwill of the Company (including the Company’s beneficial business
relationships with the Company’s employees), the Executive hereby agrees that,
during the Non-Compete Term, the Executive will not, individually or in
association or in combination with any other person or entity, directly or
indirectly, encourage, induce or entice any employee or independent contractor
of the Company to terminate or modify such person’s or entity’s employment,
engagement or business relationship with the Company or, without the prior
written consent of the Company, hire or retain any employee or independent
contractor then performing services for the Company to perform the same or
substantially similar services.
Section
4.3 Scope of
Covenants. The Executive agrees that the products and services
of the Company can be, and are being designed and developed to be, manufactured,
distributed and/or sold throughout the world. Consequently, the
Executive and the Company agree that it is not possible to limit the geographic
scope of the non-competition covenant contained in this Article IV to particular
countries, states, cities or other geographic subdivisions. Further,
the Executive agrees that the length of the Non-Compete Term is reasonable, in
light of the position in which the Executive has been employed by the Company
and the amount and duration of severance payments payable to him under this
Agreement.
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ARTICLE
V
GENERAL
MATTERS
Section
5.1
Governing
Law. This Agreement
shall be governed by the laws of the Commonwealth of Massachusetts and shall be
construed in accordance therewith.
Section
5.2
No
Waiver. No provision of
this Agreement may be waived except by an agreement in writing signed by the
waiving party. A waiver of any term or provision shall not be
construed as a waiver of any other term or provision.
Section
5.3
Amendment. This Agreement
may be amended, altered or revoked at any time, in whole or in part, only by a
written instrument setting forth such changes, signed by each of the
parties.
Section
5.4
Benefit. This Agreement
shall be binding upon the Executive and the Company, and shall not be assignable
by either party without the other party’s written consent.
Section
5.5
Text to
Control. The headings of
articles and sections are included solely for convenience in
reference. If any conflict between any heading and the text of this
Agreement exists, the text shall control.
Section
5.6
Severability. If any provision
of this Agreement is declared by any court of competent jurisdiction to be
invalid for any reason, such invalidity shall not affect the remaining
provisions. On the contrary, such remaining provisions shall be fully
severable, and this Agreement shall be construed and enforced as if such invalid
provisions had not been included in the Agreement.
Section
5.6
Entire
Agreement. This Agreement
constitutes the entire agreement between the Company and the Executive with
respect to the Executive’s employment by the Company and supersedes any and all
prior agreements and understandings (whether written or oral) between the
parties with respect to such employment including, without limitation, the
Employment Agreement dated as of September 14, 2005 between the Company and the
Executive.
In
Witness Whereof, the Company and the Executive have executed this Agreement as
of the date first above written.
ThermoEnergy
Corporation
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/s/ Xxxxxx X.
Xxxxxx
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By:
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/s/ Xxxx X.
Xxxxxxx
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Xxxxxx
X. Xxxxxx
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Xxxx
X. Xxxxxxx
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President
and Chief Executive
Officer
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