EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement "), dated as of August
20, 2001, between US ENERGY SYSTEMS, INC., a Delaware corporation (the
"Company"), and Xxxxx Xxxxxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company's business consists of (a) acquiring and
operating existing independent power plants ("IPPs") and cogeneration facilities
throughout the world, (b) developing, building and operating new IPPs and
cogeneration facilities throughout the world, and (c) developing, building and
selling special energy efficient products using cogeneration technology
throughout the world and (d) developing, building, acquiring and/or operating
"inside the fence" energy facilities and operations for commercial and
industrial users throughout the world, and (e) developing, building, acquiring
and/or operating district heating and cooling systems throughout the world.
WHEREAS, the Company and the Executive now desire to enter
into this Agreement in its entirety.
NOW, THEREFORE, in consideration of the mutual promises,
representations and warranties set forth herein. and for other good and valuable
consideration, it is hereby agreed as follows:
1. Position and Duties.
a) Employment and Position -The Company hereby
agrees to employ the Executive as set forth in the next succeeding sentence, and
the Executive hereby accepts such employment, upon the terms and conditions set
forth herein effective September 4, 2001. The Executive shall serve as Vice
President-General Counsel of the Company and shall have such other duties
consistent with such office, as from time to time may be prescribed by the
Executive Committee and/or the President.
(b) Duties - During the Term (as defined in
Section 5(f) below), the Executive shall perform and discharge the duties that
may be assigned to him by the [Executive Committee and/or the President] from
time to time as provided in this Agreement, and the Executive shall devote his
reasonable best talents, efforts and abilities to the performance of his duties
hereunder. During the Term, the Executive shall perform such duties on a
substantially full-time basis, and the Executive shall have no other employment
whatsoever; provided, however, it is agreed that Executive may serve as "of
counsel" to a law firm and in such capacity interface with and render legal
services for clients of such law firm so long as the performance of such
services does not interfere with the performance of Executive's duties to the
Company. The Executive shall maintain an office at the Company's headquarters in
the New York metropolitan area and may also maintain an office at the law firm
for which he serves as "of counsel".
2. Compensation.. During the Term of this Agreement the
Employee shall receive the following Compensation.
(a) Base Salary - The Company shall pay the
Executive for his services hereunder a salary (as the same may be increased from
time to time, the "Base Salary") at the annual rate of $140,000 which shall be
payable in accordance with the customary payroll practices of the Company but
not less frequently than on a monthly basis. The Base Salary shall be reviewed
periodically by the Board and shall be subject to such increases as the Board,
in its sole discretion, from time to time may determine.
(b) Incentive Bonus - In addition to the Base
Salary, the Executive shall at the end of each fiscal year for the Company be
awarded a bonus determined in accordance with the 2000 Corporate Incentive Plan
and the 2000 Development Incentive Plan (collectively, the "Incentive Plans")
which may established subject to the approval of the Board of Directors of the
Company. In addition, the Executive is eligible for such other bonuses which may
be awarded by the Board in its sole discretion under such other plans that the
Board may establish in its sole discretion from time to time. The Company shall
advance Executive $30,000 in respect of such bonuses on an annual basis during
each year of the Term and a pro-rata portion thereof from any portion of the
Term that is left then in a fiscal year ("Minimum Bonus") such advances shall be
made in equal monthly payments.
(c) Options. -Contemporaneously herewith, the
Company and the Executive are executing a Stock Option Agreement (the "Stock
Option Agreement) regarding options (the "Stock Options") to acquire 92,500
shares of Common Stock annexed hereto as Exhibit B and incorporated herein as if
fully set forth.
(d) Withholding. All payments required to be
made by the Company to the Executive under this Agreement (whether under this
Section 2 or otherwise) shall be subject to withholding of employment and income
taxes and other payroll deductions in accordance with applicable tax
requirements, the Company's policies applicable to employees of the Company at
the Executive's level and the provisions of the Benefit Plans (as defined in
Section 3 below).
3. Benefits. (a) Benefit Plans - During the Term, the Company
shall provide to the Executive benefits provided under the Company's pension and
profit-sharing plans (if any), health benefit plans (such as medical and
hospitalization coverage), and insurance plans such as life and disability
(collectively, the "Benefit Plans"). Such plans shall during the term provide
for at least the same level of benefits as the Benefit Plans provide at the date
of this Agreement and at least as provided for below. Such Benefit Plans shall
generally provide the following benefits:
o Medical and Dental Insurance
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o 401K plan with Company matching or equal to be structured for
Company management
o Life Insurance under its standard benefit plan
o Disability Insurance
The parties agree that the Executive may carry medical and dental
insurance under a substitute plan in lieu of the Company's plan and the Company
shall reimburse Executive for the cost of such plan up to $3,000 per annum.
(b) Automobiles - During the Term, the Company
shall provide the Executive with a car allowance of $600 per month.
(c) Vacations, sick leave and holidays. The
Executive shall be entitled to no less than four (4) weeks of paid vacation
during each year of the Term (and a pro rata portion thereof for any portion of
the Term that is less than a fiscal year). In addition, the Executive shall be
entitled to paid sick leave and holidays in accordance with the Company's usual
policies for its senior executives.
4. Reimbursement of Expenses. During the Term, the Company
shall pay or reimburse the Executive for all reasonable travel, entertainment
and other business expenses actually incurred or paid by the Executive in the
performance of his duties hereunder upon presentation of expense statements or
vouchers or such other supporting information as the Company may reasonably
require of the Executive.
5. Term: Termination. Subject to the provisions of this
Section 5, the term of the Executive's employment under this Agreement shall
commence on the date hereof and shall end on the third anniversary hereof,
provided that the term of this Agreement shall automatically be renewed for
successive additional one-year periods at the end of such [three]-year period
and of each such one-year renewal period, unless either party elects not to
renew by giving written notice to the other at least 90 days before an annual
renewal date. The initial three-year term referred to herein, together with any
renewal thereof, is referred to in this Agreement as the "Term". The employment
of the Executive may be terminated prior to the expiration of the Term in the
manner described in this Section 5 solely on the following grounds.
(a) Termination by the Company for Cause - The
Company shall have the right to terminate the employment of the Executive prior
to expiration of the Term for Cause (as defined in Section 5(i)(iii) below) by
written notice to the Executive specifying the particulars of the conduct of the
Executive forming the basis for such termination, as provided in this Agreement.
(b) Termination by the Executive for Good Reason
- The Executive shall have the right to terminate his employment hereunder prior
to expiration of the Term for Good Reason (as such term is defined in Section
5(i)(iv) below) by written notice to the Company specifying the grounds
constituting such Good Reason, provided such written notice is given within six
months of the date the Executive reasonably became aware of such an event
constituting such Good Reason.
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(c) Termination upon Death - The employment of
the Executive hereunder shall terminate immediately upon his death.
(d) The Company's Option upon Disability. If the
Executive becomes physically or mentally disabled during the Term so that he is
unable to perform the services required of him pursuant to this Agreement for a
period of six successive months, or an aggregate of six months in any
consecutive twelve-month period (the "Disability Period"), the Company shall
have the option, in its discretion, by giving written notice thereof, to
terminate the Executive's employment hereunder prior to expiration of the Term.
Regardless of whether the Company exercises such option, during a period of 18
month's from the date of the commencement of the Disability Period, the
Executive shall continue to receive his full compensation and other benefits
provided herein net of any payments received under any disability policy or
program provided by the Company of which the Executive is a beneficiary or
recipient.
(e) Termination by the Company for other reason
than under 5(a), 5(c), 5(d), 5(g) - The Company shall have the right to
terminate the employment of the Executive prior to expiration of the Term for
other reasons than defined in 5(a), 5(c), 5(d) and 5(g) above ("Without Cause")
by written notice to the Executive as provided in this Agreement.
(f) Termination by the Executive for other
reason than under 5(b) The Executive shall have the right to terminate his
employment hereunder prior to expiration of the Term for other reason than under
5(b) by written notice given at least 90 days prior to the "Termination Date" as
defined in section 5(h) below.
(g) Termination for Non-Performance. The Company
shall have the right to terminate the Executive's employment hereunder prior to
the expiration of the Term for Non-Performance (as such term is defined in
Section 5(i)(v) by written notice to the Executive specifying the grounds
constituting Non-Performance, provided such written notice is given within six
months of the date the Company reasonably became aware of such an event
constituting such Non-Performance.
(h) Termination Date - Any notice of termination
given by the Company or the Executive pursuant to the provisions of this
Agreement shall specify therein the effective date of such termination (the
"Termination Date").
(i) Certain Definitions - For purposes of this
Agreement, the following terms shall have the following meanings:
(i) The "Affiliate" of any Person means any
other Person directly or indirectly through one or more intermediary Persons,
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" shall mean the power to direct the
management and policies of such Person, directly or indirectly, by or through
equity ownership, agency or otherwise, or pursuant to or in connection with an
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agreement, arrangement or understanding (written or oral) with one or more other
Persons by or through equity ownership, agency or otherwise; and the terms
"controlling" and "controlled" shall have meanings correlative to the foregoing.
(ii) "Change of Control" with respect to the
Company, means the occurrence of any of the following:
(A) the acquisition, with or without the
approval of the Board, directly or indirectly (in one or more
related transactions), by any Person (other than (i) the
Executive or an Affiliate of the Executive (ii) Cinergy
Solutions Inc. or any of its Affiliates (iii) the Xxxxxx Group
or any of its Affiliates or (iv) Xxxxx Xxxxxxxxx or an
Affiliate of Xxxxx Xxxxxxxxx (collectively the "Excluded
Group")) or two or more Persons acting as a group, of
beneficial ownership (as that term is defined in Rule 13d-3
under the Securities Exchange Act of 1934) of more than 30% of
the outstanding voting stock of the Company ("Voting Stock");
(B) the merger or consolidation of the
Company with one or more other Persons (other than any one or
more of the Excluded Group) as a result of which the holders
of the outstanding Voting Stock of the Company immediately
before the merger hold less than 30% of the Voting Stock (or
equivalent thereof) of the surviving or resulting Person;
(C) the sale to any Person (other than
any one or more of the Excluded Group) of all or substantially
all of the assets of the Company or its subsidiaries taken as
a whole, and this Agreement is not assumed by the acquiring
Person in connection therewith; or
(D) the Company or any of its members
enters into any agreement providing for any of the foregoing
and the transaction contemplated thereby is ultimately
consummated;
provided, however, that for purposes of this Agreement, the sale of any Voting
Stock (or equivalent thereof) of the Company (or any successor Person thereto)
pursuant to a public offering shall not constitute a Change of Control.
(iii) "Cause" shall mean (A) the Executive
having been convicted of a crime which constitutes a felony under applicable law
or having entered a plea of guilty or nolo contendere with respect thereto, or
(B) the engaging by the Executive in illegal or fraudulent conduct with respect
to the Company.
(iv) "Good Reason" means the occurrence of
any one of the following events:
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(A) the assignment to the Executive
of any duties inconsistent in any
material respect with the
Executive's then position (including
status, offices, titles and
reporting relationships), authority,
duties or responsibilities, or any
other action by the Company which
when taken as a whole results in a
significant diminution in the
Executive's position, authority,
duties or responsibilities,
excluding for this purpose any
isolated, immaterial and inadvertent
action not taken in bad faith and
which is remedied by the Company
within 7 business days after receipt
of notice thereof given by the
Executive; or
(B) a reduction by the Company in
the Executive's Base Salary or
Minimum Bonus without the consent of
such Executive or the failure by the
Company to continue in effect any
material benefit or compensation
plan, life insurance plan, health
and accident plan or disability plan
in existence as of the date of this
Agreement (or a replacement or
substitute plan providing the
Executive with substantially similar
benefits) in which the Executive is
participating or the material
reduction of the Executive's
benefits under any of such plans (or
replacement or substitute plans).
(C) Change in Control
(D) the Company requiring the
Executive to be based at any
location other than the New York
Metropolitan area; or
(v) "Non-Performance" means the continued
failure of the Executive to perform substantially his duties with the Company
(other than any such failure resulting from (1) the Executive's incapacity due
to physical or mental illness or (2) the Executive's delivery to the Company of
a notice of termination for Good Reason or other reason), including Executive's
failure to comply with the provisions of Section 7 and 8 of this Agreement,
which failure continues for a period of more than 7 business days after a
written demand for substantial performance is given to the Executive by the
Board which specifically identifies the manner in which the Board believes that
the Executive has not substantially performed his duties,
(vi) "Person" means any individual, corporation,
partnership, limited liability company, association, joint-stock company, trust,
unincorporated organization, joint venture, court or government (or political
subdivision or agency thereof).
6. Obligations on Termination.
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(a) Payment Obligations of the Company in Case
of Termination for Good Reason Under Section 5(b) and the Company's Termination
Without Cause under Section 5(e).
(i) Upon termination of the Executive's
employment pursuant to Section 5(b) or Section 5(e), then, in lieu of any
further payment under 2(a), the Company shall pay the Executive a lump sum cash
payment equal to the Base Salary and Minimum Bonus then in effect except that if
this Agreement is terminated for Good Reason under Section 5(b) due to a Change
In Control then in lieu of any further payment under 2(a), the Company shall pay
Executive a lump sum cash payment equal to 2.9 times of the Base Salary and
Minimum Bonus then in effect, plus any unreimbursed expenses and unpaid accrued
benefits (collectively, the "Severance Payment). The Severance Payment shall be
payable within 60 days after the Termination Date.
(ii) Notwithstanding anything to the
contrary contained herein or in any other agreement between the Company and the
Executive, in the event that the Executive's employment is terminated pursuant
to Section 5(b) or Section 5(e),
(A) then any stock options (or
equivalent thereof) heretofore or hereafter granted to the Executive pursuant to
this Agreement, which have vested, may be exercised in full (to the extent not
previously exercised and provided that the term of the applicable option has not
otherwise expired) at any time within six months after such cessation of
employment after which time such options shall expire; and
(B) any and all reasonable costs and
expenses, including but not limited to, reasonable legal fees incurred by the
Executive in good faith in enforcing or establishing any of his rights hereunder
shall be immediately paid to the Executive upon presentation of appropriate
documentation to the Company.
(b) Payment Obligations of the Company in case
of Termination for Non-Performance under Section 5 (h)
(i) Upon termination of the Executive's
employment for Non-Performance under Section 5(h), then, in lieu of any further
payment under 2(a) the Company shall pay the Executive a lump sum cash payment
equal to 1 times the annual Base Salary and Minimum Bonus then in effect, plus
any unreimbursed expenses and unpaid accrued benefits (collectively, the
"Severance Payment). The Severance Payment shall be payable within 60 days after
the Termination Date.
(ii) Notwithstanding anything to the
contrary contained herein or in any other agreement between the Company and the
Executive, in the event that the Executive's employment is terminated pursuant
to Section 5(h) for Non-Performance,
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(A) then any stock options (or
equivalent thereof) heretofore or hereafter granted to the Executive pursuant to
this Agreement, which have vested, may be exercised in full (to the extent not
previously exercised and provided that the term of the applicable option has not
otherwise expired) at any time within six months after such cessation of
employment after which time such options shall expire; and
(B) any and all reasonable costs and
expenses, including but not limited to, reasonable legal fees incurred by the
Executive in good faith in enforcing or establishing any of his rights hereunder
shall be immediately paid to the Executive upon presentation of appropriate
documentation to the Company.
(c) Payment Obligations of the Company in case of
Termination for Death.
(i) Upon termination of the Executive's
employment upon death, the Company shall have no payment obligations to the
Executive hereunder, except for the payment of any proceeds received by the
Company from the Life Insurance policy described in Section 3(a) hereof, any
accrued and unpaid compensation (including unpaid accrued benefits), and
reimbursement of any unreimbursed expenses.
(ii) Notwithstanding anything to the contrary
contained herein or in any other agreement between the Company and the Executive
, in the event that the Executive's employment is terminated pursuant to Section
5(c),
(A) then any stock options (or
equivalent thereof) heretofore or hereafter granted to the Executive pursuant to
this Agreement, which have vested, may be exercised in full (to the extent not
previously exercised and provided that the term of the applicable option has not
otherwise expired) by the Executive's estate at any time within six months after
such termination; and
(B) any and all reasonable costs and
expenses, including but not limited to, reasonable legal fees incurred by the
Executive's estate in good faith in enforcing or establishing any of his rights
hereunder shall be immediately paid to the Executive's estate upon presentation
of appropriate documentation to the Company.
(d) Payment Obligations of the Company in case of
Termination for Disability.
(i) Upon termination of the Executive's
employment upon disability, the Company shall have no payment obligations in the
Executive hereunder except for the payment of any proceeds received by the
Company under the disability insurance described in Section 5(a) and any
unreimbursed expenses and unpaid accrued benefits. Upon termination under
Section 5(d), Executive shall have the same rights under the Plans as if his
employment continued for eighteen months after the commencement of the
Disability Period.
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(ii) Notwithstanding anything to the contrary
contained herein or in any other agreement between the Company and the
Executive, in the event that the Executive's employment is terminated pursuant
to Section 5(d),
(A) then any stock options (or
equivalent thereof) heretofore or hereafter granted to the Executive pursuant to
this Agreement, which have vested or which vest in accordance with the terms of
the Stock Option Agreement within the 18 month period after commencement of the
Disability Period, will vest as if the Executive's employment did not terminate
and may be exercised in full (to the extent not previously exercised and
provided that the term of the applicable option has not otherwise expired) at
any time within such eighteen month period after which time such options shall
expire; and
(B) any and all reasonable costs and
expenses, including but not limited to, reasonable legal fees incurred by the
Executive in good faith in enforcing or establishing any of his rights hereunder
shall be immediately paid to the Executive upon presentation of appropriate
documentation to the Company.
(e) Payment Obligations of the Company in case
of Termination for Voluntary Resignation or Cause as defined in Section 5(i)
(iii)(B) and (C).
(i) Upon termination of the Executive's
employment as a result of the voluntary resignation of the Executive under
Section 5(f) or termination of the Executive by the Company for Cause (except
Non-Performance) as defined in Section 5(i)(iii)(B) and (C) under Section 5(a),
the Company shall have no payment obligations to the Executive hereunder, except
for the payment of any accrued and unpaid compensation (including unpaid accrued
benefits), and reimbursement of any unreimbursed expenses.
(ii) Notwithstanding anything to the
contrary contained herein or in any other agreement between the Company and the
Executive, in the event the Executive terminates his employment by voluntary
resignation pursuant to Section 5(f) or the Executive's employment is terminated
pursuant to Section 5(a) for Cause (except Non-Performance),
(A) then any stock options (or
equivalent thereof) heretofore or hereafter granted to the Executive pursuant to
this Agreement, which have vested, may be exercised in full (to the extent not
previously exercised and provided that the term of the applicable option has not
otherwise expired) at any time within six months after such cessation of
employment after which time such options shall expire; and
(B) any and all reasonable costs and
expenses, including, but not limited to, reasonable legal fees incurred by the
Executive in good faith in enforcing or establishing any of his rights hereunder
shall immediately be paid to the Executive upon presentation of appropriate
documentation to the company.
(f) Continued Medical Dental Coverage. Upon the termination of
the Executive's employment with the Company for whatever reason, to the extent
9
permitted by applicable law, the Company shall continue to provide the Executive
(at the Executive's cost) with medical, dental and hospitalization insurance
coverage for the longest of- (i) the period prescribed by applicable law; and
(ii) the period set forth in the applicable Benefit Plans.
(g) [Reserved]
(h) [Reserved]
(i) Liability of the Company for Compensation in the Event of
Termination - Provided the Company fully complies with this Section 6, then the
Company shall have no further liability to the Executive under Section 2 and
Section 3 above in the event of termination as provided for herein.
7. Trade Secrets; Confidentiality. The Executive recognizes
and acknowledges that, in connection with his employment with the Company, he
has had and will continue to have access to valuable trade secrets and
confidential information of the Company and its Affiliates including, but not
limited to, customer lists, business methods and processes, marketing,
promotional, pricing, financial information, technical information and data
relating to clients, employees and consultants (collectively, "Confidential
Information") and that such Confidential Information is being made available to
the Executive only in connection with the furtherance of his employment with the
Company. The Executive agrees that during the Term and for a period of 2 years
thereafter, the Executive shall not disclose any Confidential Information to any
Person, except that disclosure of Confidential Information will be permitted:
(a) to the Company and its respective Affiliates and advisors; (b) if such
Confidential Information has previously become available to the public through
no fault of the Executive; (c) if required by law or any court or governmental
agency or body, provided that in any such case covered by this clause (c) the
Executive shall provide the Company, in advance of any such disclosure, with
prompt notice of such requirement(s) and shall cooperate fully with the Company
to the extent it may seek to limit such disclosure; (d) if necessary to
establish or assert the rights of the Executive hereunder; or (e) if expressly
consented to by the Company.
8. Noncompetition and Nonsolicitation.
(a) The Executive hereby covenants and agrees that during the
Term and for the respective periods set forth below immediately following the
termination by the Company or the Executive, as applicable, of his employment
under the respective circumstances set forth below he shall not, without the
prior written consent of the Board, at any time, directly or indirectly, on his
own behalf or on behalf of any Person:
(i) own, manage, operate, control, be employed by,
participate in, provide consulting services to, or be connected or associated in
any manner with the ownership, management, operation or control of any business
which is in competition with the Company (in the business in which the Company
is substantially engaged during the Term in the case of acts committed during
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the Term or in the business in which the Company is substantially engaged at the
time of termination of Executive's Employment in the case of acts committed
after the Term) or any of its Affiliates in any state of the United States or in
any foreign country in which any of them are engaged in business during the Term
in the case of acts committed during the Term or in any state of the United
States or in any foreign country in which any of them are engaged in business at
the time of termination of Executive's employment in the case of acts committed
after the Term for as long as the Company continues to conduct such business
(the "Non-Compete"); provided, however, that nothing in this Agreement shall
preclude the executive from owning less than five percent of any class of
publicly traded equity of any entity and provided further, however, that the
foregoing Non-Compete shall not apply to Executive's performance of legal
services after the termination of Executive's Employment.
(ii) solicit or take any action to cause the
solicitation of, or recommend that, any supplier, client, customer, contractor,
vendor, agent or consultant of the Company or any of its Affiliates or other
Person having business relations with the Company, discontinue business or cease
such relationship, in whole or in part, with the Company or any of its
Affiliates (the "Customer Non-Solicit"),
(iii) employ any Person employed by the Company or
any of its Affiliates at the time of, or during the 12 months preceding, such
termination of the Executive's employment with the Company (the "Non-Hire") or
(iv) solicit for employment (other than through
unaffiliated employment recruiting or placement firms or services who are not
specifically directed to solicit employees of the Company or provided with the
names of any such employees) any Person employed by the Company or any of its
Affiliates at the time of, or during the 12 months preceding such termination of
the Executive's employment with the Company, or otherwise encourage or entice
any such Person to leave such employment (the "Employee Non-Solicit"),
Customer Employee
Reason for Termination Non-Compete Non-Solicit Non-Hire Non-Solicit
---------------------- ----------- ----------- -------- -----------
Good Reason 1/2 year 1 1/2 years 1 1/2 years 1 1/2 years
For Cause other than 2 years 1 1/2 years 1 1/2 years 1 1/2 years
Non-Performance
For Non-Performance 1/2 year 1 1/2 years 1 1/2 years 1 1/2 years
Company Termination 0 years 1 1/2 years 1 1/2 years 1 1/2 years
for other than Cause and
Disability
Voluntary Resignation not for 1 year 1 1/2 years 1 1/2 years 1 1/2 years
Good Reason
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Company Failure to Renew 0 years 1 1/2 years 1 1/2 years 1 1/2 years
Executive Failure to Renew 0 years 1 1/2 years 1 1/2 years 1 1/2 years
Disability 0 years 1 1/2 years 1 1/2 years 1 1/2 years
(b) The Employee acknowledges and agrees that
(i) the restrictive covenants set forth in this
Section 8 (the "Restrictive Covenants") are reasonable and valid in geographical
and temporal scope and in all other respects, and
(ii) it is the intention of the parties hereto
that the Restrictive Covenants be enforceable to the fullest extent permitted by
applicable law. Therefore, if any court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable, the remainder of
the Restrictive Covenants shall not thereby be affected and shall be given full
force and effect, without regard to the invalid or unenforceable parts.
Specifically, if any court of competent jurisdiction should hold that any
portion of the Restrictive Covenants is overly broad as to one or more states of
the United States or one or more foreign jurisdictions, then that state or
states or foreign jurisdiction or jurisdictions shall be eliminated from the
territory to which the Restrictive Covenants apply and the restrictions shall
remain applicable in all other states of the United States and foreign
jurisdictions.
(c) If any court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable for any reason, such
court shall have the power to modify such Restrictive Covenant, or any part
thereof, and, in its modified form, such restrictive covenant shall then be
valid and enforceable.
9. Equitable Relief. In the event of a breach or threatened
breach by the Executive of any of the covenants contained in this Agreement, the
Company shall be entitled to a temporary restraining order, a preliminary
injunction and/or a permanent injunction restraining the Executive from
breaching or continuing to breach any of said covenants. Nothing herein
contained shall be construed as prohibiting the Company from pursuing any other
remedies that may be available to it under this Agreement for such breach or
threatened breach.
10. Severability. Should any provision of this Agreement be
held, by a court of competent jurisdiction, to be invalid or unenforceable, such
invalidity or unenforceability shall not render the entire Agreement invalid or
unenforceable, and this Agreement and each individual provision hereof shall be
enforceable and valid to the fullest extent permitted by law.
11. Successors and Assigns.
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(a) This Agreement and all rights under this
Agreement are personal to the Executive and shall not be assignable other than
by will or the laws of descent. All of the Executive's rights under the
Agreement shall inure to the benefit of his heirs, personal representatives,
designees or other legal representatives, as the case may be.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. Any Person succeeding
to the business of the Company by merger, purchase, consolidation or otherwise
shall assume by contract or operation of law the obligations of the Company
under this Agreement. Provided that Executive's position in such dispute has a
good faith basis, any and all reasonable out of pocket costs incurred by the
Executive in connection with any dispute arising out of this Agreement shall be
immediately paid to the Executive by the Company upon presentation of
appropriate documentation, up to an aggregate amount equal to $170,000.
12. Governing Law: Jurisdiction. This Agreement shall be
construed in accordance with and governed by the laws of the State of New York.
The parties hereby agree to submit any and all disputes arising out of or in
connection with this Agreement to binding arbitration in accordance with the
rules of the American Arbitration Association. Such arbitration shall be held in
New York City. Each party shall select one arbitrator and the two such selected
arbitrators shall select a third arbitrator. Notwithstanding anything to the
contrary in this Section 12, such parties may seek in any court of competent
jurisdiction any injunctive relief pursuant to Section 9 of this Agreement.
13. Notices. All notices, requests and demands given to or
made upon the respective parties hereto shall be deemed to have been given when
received or refused if mailed by registered or certified mail, postage prepaid,
if delivered by hand, or if delivered by Federal Express or similar overnight
delivery service, addressed to the parties at their addresses set forth below or
to such other addresses furnished by notice given in accordance with this
Section 13:
(a) if to the Company, to
Company Headquarters
Attention: President
(b) if to the Executive, to
Xxxxx Xxxxxxx
000 0xx Xxxxxx
Xxxxxxxx, X.X. 00000
14. Complete Understanding. Together with the Stock Option
Agreement Stock Option Plans and the Bonus Plan, this Agreement supersedes any
prior contracts, understandings, discussions and agreements relating to
employment between the Executive and the Company and constitutes the complete
understanding between the parties with respect to the subject matter hereof. No
statement, representation, warranty or covenant has been made by either party
with respect to the subject matter hereof except as expressly set forth herein
or therein.
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15. Modification:.
(a) This Agreement may be amended or waived if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment,
by the Company and the Executive or in the case of a waiver, by the party
against whom the waiver is to be effective. Any such waiver shall be effective
only to the extent specifically set forth in such writing.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
16. Mutual Representations.
(a) The Executive represents and warrants to the Company
that the execution and delivery of this Agreement and the fulfillment of the
terms hereof
(i) will not constitute a default under or
conflict with any agreement or other instrument to which he is a party or by
which he is bound, and
(ii) do not require the consent of any Person.
(b) The Company represents and warrants to the Executive that
this Agreement has been duly authorized, executed and delivered by the Company
and that the fulfillment of the terms hereof
(i) will not constitute a default under or
conflict with any agreement or other instrument to which it is a party or by
which it is bound and
(ii) do not require the consent of any Person.
(c) Each party hereto warrants and represents to the other
that this Agreement constitutes the valid and binding obligation of such party
enforceable against such party in accordance with its terms.
(d) The parties agree to indemnify, defend and hold the each
other harmless for any claim, loss, damage, cost, expense including without
limitation, reasonable attorney fees arising out of or relating to a breach of
the foregoing representations in Section 16 (a), (b), and (c). The Executive's
obligation under this Section 16 shall be limited to an aggregate amount of
$170,000.
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17. Headings. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of this Agreement.
18. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received counterparts
hereof signed by the other party hereto.
19. Inconsistencies. In the event of any inconsistency between
this Agreement on the one hand and the Incentive Plans on the other hand, this
Agreement shall govern.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed in its corporate name by one of its officers duly authorized to enter
into and execute this Agreement, and the Executive has manually signed his name
hereto, all as of the day and year first above written.
US ENERGY SYSTEMS, INC.
/s/ Xxxxx Xxxxxxx
--------------------
Name: Xxxxx Xxxxxxx
Title: President
/s/ Xxxxx Xxxxxxx
-------------
Xxxxx Xxxxxxx
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