Exhibit 10.5
EMPLOYMENT AGREEMENT
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AGREEMENT made as of the 1st day of March, 2001 by and between, CLEAN DIESEL
TECHNOLOGIES, INC. a Delaware corporation of 000 Xxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000 (the "Company"), and XXXXX X. XXXXXXXX of 0 Xxxxxxx Xxxx Xxx
Xxxxx, XX 00000 ("Employee").
WHEREAS, the Company desires certain services for itself and its subsidiaries
and affiliates and Employee desires to contract with the Company to perform such
services;
NOW THEREFORE, in consideration of the mutual covenants hereinafter recited, the
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
TERM: THIS AGREEMENT SHALL COMMENCE AS OF THE DATE FIRST WRITTEN ABOVE (THE
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"COMMENCEMENT DATE") AND SHALL CONTINUE THEREAFTER UNTIL TERMINATED BY EITHER
PARTY AS PROVIDED BELOW.
SCOPE OF WORK; TITLE: ON THE COMMENCEMENT DATE EMPLOYEE SHALL BE VICE PRESIDENT
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AND CHIEF FINANCIAL OFFICER OF THE COMPANY. IN SUCH EMPLOYMENT, EMPLOYEE SHALL
ON A FULL-TIME BASIS DIRECT ALL OF HIS EFFORTS TOWARD THE PERFORMANCE OF SUCH
DUTIES AS SHALL BE ASSIGNED TO HIM BY THE PRESIDENT AND CHIEF EXECUTIVE OFFICER
OF THE COMPANY. "FULL TIME" SHALL MEAN NO OTHER SUBSTANTIAL OUTSIDE BUSINESS
ACTIVITIES.
SALARY; BENEFITS: THE COMPANY AGREES TO CAUSE EMPLOYEE TO BE PAID FOR HIS
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SERVICES HEREUNDER AT THE RATE OF ONE HUNDRED SIXTY FIVE THOUSAND ($165,000)
DOLLARS PER YEAR, EMPLOYEE TO BE PAID SUCH AMOUNTS BY THE COMPANY ACCORDING TO
ITS NORMAL AND CUSTOMARY PROCEDURES FROM TIME TO TIME IN EFFECT BUT NOT LESS
OFTEN THAN MONTHLY. EMPLOYEE SHALL BE ENTITLED TO PARTICIPATE FROM TIME TO TIME
IN SUCH BENEFIT PROGRAMS AS THE COMPANY MAY CUSTOMARILY EXTEND TO ITS OFFICERS
AND EMPLOYEES AS A CLASS. THIS AGREEMENT MAY NOT BE CONSTRUED TO PREVENT THE
COMPANY FROM RESCINDING ANY SUCH BENEFIT FOR EMPLOYEE SO LONG AS SUCH RESCISSION
APPLIES TO OFFICERS OR EMPLOYEES AS A CLASS.
EXPENSES: EMPLOYEE SHALL BE REIMBURSED BY THE COMPANY FOR ALL ORDINARY AND
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NECESSARY OUT OF POCKET EXPENSES INCURRED BY EMPLOYEE IN PERFORMING HIS SERVICES
HEREUNDER. SUCH EXPENSES TO BE REPORTED FROM TIME TO TIME BY EMPLOYEE ON THE
COMPANY'S CUSTOMARY FORM OF EXPENSE REPORT AND SUBMITTED FOR APPROVAL TO THE
COMPANY PURSUANT TO ITS POLICIES FROM TIME TO TIME IN EFFECT.
TERMINATION OF EMPLOYMENT: JUST CAUSE. THE COMPANY MAY AT ANY TIME TERMINATE
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THIS AGREEMENT FOR JUST CAUSE. JUST CAUSE SHALL MEAN CONVICTION OF THE EMPLOYEE
UNDER, OR A PLEA OF GUILTY BY THE EMPLOYEE TO, ANY STATE OR FEDERAL FELONY
CHARGE; ANY INSTANCE OF FRAUD, EMBEZZLEMENT, SELF-DEALING, XXXXXXX XXXXXXX OR
SIMILAR MALFEASANCE WITH RESPECT TO THE COMPANY REGARDLESS OF THE AMOUNT OF
MONEY OR VALUE OF PROPERTY INVOLVED; SUBSTANCE ABUSE WHICH SHALL, IN THE SOLE
DISCRETION OF THE BOARD OF DIRECTORS OF THE COMPANY, LIMIT EMPLOYEE'S
PERFORMANCE OF HIS DUTIES; OR ANY TRANSGRESSION FOR WHICH TERMINATION OF
EMPLOYMENT IS IDENTIFIED AS A DISCIPLINARY MEASURE IN ANY COMPANY EMPLOYEE
MANUAL OR WRITTEN POLICY.
Disability. The Company may terminate this agreement upon the
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physical or mental disability of Employee, if the Directors shall determine
that, as a result of such disability Employee has for a continuous period of six
(6) months been substantially absent from his customary place of work and unable
to perform his customary duties.
At Will. Either of Employee or Company may terminate this
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agreement on written notice one to the other. Where Employee shall terminate
this agreement by resigning his employment, he shall provide three month's
written notice thereof to Company. Where Company shall so terminate this
agreement under this clause and not for just cause or disability, Company shall
provide salary and benefit continuation (in the amount and of the nature then
enjoyed by Employee) to the Employee month to month for a period of nine (9)
months or until Employee shall sooner find other employment. The obligation of
Company hereunder to provide salary and benefit continuation shall subsist only
so long as Employee shall diligently continue to seek other employment. "Other
employment" shall mean other substantially comparable employment as Employee
shall have held with the Company or an affiliate thereof. Termination at will
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under this sub-section (c) shall also include constructive discharge within one
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year following a Change in Control of the Company. "Constructive
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discharge" means that the responsibilities of Employee have been materially
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diminished or Employee's position is to be relocated more than one hundred miles
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from the Company's headquarters at the time of Change in Control. "Change in
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Control" has the meaning for such phrase as is set out in the Company's 1994
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Incentive Plan.
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Discoveries and Inventions: (a) All patentable and unpatentable inventions,
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discoveries and ideas which are made or conceived by Employee during the term of
this Agreement, and which are based upon or arise out of Employee's services
hereunder ("Developments") are or shall become the Company's property. Employee
agrees to disclose promptly to the Company each such Development and, upon the
Company's request and at its expense, Employee whether or not still employed by
the Company or during the term of this agreement or not, will assist the
Company, or its designee, in making application for Letters Patent in any
country in the world. Employee further agrees to execute all papers and do all
things which may be necessary or advisable to prosecute such applications, and
to transfer to and vest in the Company, or its designee, all the right, title
and interest in and to such Developments, and all applications for patents and
Letters Patent issued thereon. If for any reason Employee is unable to
effectuate a full assignment of any such Development, Employee agrees to
transfer to the Company, or its designee, Employee's transferable rights,
whether they be exclusive or non-exclusive, or as a joint inventor or partial
owner of the Development. No action or inaction by the Company shall in any
event be construed as a waiver or abandonment of its rights to any such
Development except an instrument in writing signed by an authorized official of
the Company by which it specifically states it intends to be bound in such
respect.
Proprietary Information: Employee will not at any time, either during the term
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of this Agreement or thereafter, disclose to others, or use for his own benefit
or the benefit of others, any of the Developments or any confidential,
proprietary or secret information owned, possessed or used by the Company or any
of its subsidiaries or affiliates (collectively, "Proprietary Information"),
which, by way of illustration, but not limitation, includes devices, structures,
machines, processes, trade secrets, disclosures, data, know-how, business
opportunities, marketing plans, forecasts, unpublished financial statements,
budgets, and information concerning prices, costs, employees, customers and
suppliers. Employee's undertakings and obligations under this Paragraph 7 will
not apply to any Proprietary Information which: (a) is or becomes generally
known to the public through no action on the part of Employee or (b) is
generally disclosed to third parties by the Company or any of its subsidiaries
or affiliates without restriction on such third parties. Upon termination of
this Agreement or at any other time upon request, Employee will promptly deliver
to the Company all notes, memoranda, notebooks, drawings, designs, three
dimensional figures, photographs, layouts, diagrams, records, reports, files and
other documents (and all copies or reproductions of such materials) in his
possession or under his control, whether prepared by him or others, which
contain Proprietary Information. Employee acknowledges that this material is
the sole property of the Company or an affiliate of the Company.
Non-Competition: Following the termination of Employment for any reason,
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Employee agrees that Employee will not recruit, entice, induce or encourage any
of the Company's other employees or consultants to engage in any activity which,
were it done by Employee, would violate any provision of this Agreement.
Employee shall not during a one (1) year period following Employee's termination
of employment with the Company undertake employment with a competitor of the
Company or its affiliates in a line of business substantially similar to that of
the Company or its affiliates and in a position where there is a reasonable
probability that Employee would make use of
the Company's Proprietary Information for such competitor. For such one year
period and before performing any services for others, as employee or consultant
or otherwise, in the actual lines of business in which the Company or its
affiliates were engaged during his term of employment, Employee will notify the
Company of the general nature of the services to be performed and the party for
whom they will be performed and Employee will, also, prior to undertaking such
service or employment inform the other party of the existence of this covenant
in this Agreement. Employee admits that breach of his covenants hereunder
regarding the Company's Proprietary Information is likely to cause serious
economic injury to the Company.
Assignment: This Agreement may not be assigned by either party without the
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prior written consent of the other party.
Continuing Obligations: The Employee's covenants set forth in Sections 6, 7,
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and 8 above shall continue according to their terms following the termination of
this Agreement. The Company may enforce its rights under such covenants by
means of equitable judicial remedies, including temporary restraining orders,
temporary injunctions and injunctions and appeals arising from any applications
for such remedies.
Governing law; Waiver of Jury Trial and Bond. This agreement, the
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interpretation hereof and any and all disputes between the Company and Employee
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shall be governed by and interpreted under the internal substantive laws of the
State of Connecticut applicable to contracts to be performed in that State and
without any reference to any conflicts of laws rules. In any legal proceeding,
including appeals, in any jurisdiction between the Company and Employee,
Employee does hereby irrevocably waive (a) any right to trial by jury with
respect to any claim by or against the Company and (b) any requirement that
Company post any bond for any reason.
Exclusivity. Employee's rights to salary continuation hereunder shall be in
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lieu of severance benefits, if any, separately provided under policies of the
Company from time to time in effect which separately provided severance benefits
Employee hereby waives.
Notices. All notices hereunder shall be in writing and shall be deemed
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effective upon receipt if hand delivered or if sent by facsimile and
acknowledged electronically or by courier and acknowledged. Notices by mail
shall be deemed received four (4) days after delivery if sent priority mail
postage prepaid return receipt requested and the sender shall have the signed
receipt. In each case notices shall be transmitted to the address first given
above or such other address as may be given by notice as provided herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
Employee CLEAN DIESEL TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ X. X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxxxx
Vice President Vice President
Date: 8/6/01 Date: 8/7/01
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