Former CEO Retirement Agreement

Interim CEO Employment Agreement

Amendment to Interim CEO Employment Agreement

New CEO Employment Agreement

 

 

EX-10.1 2 rrd195917_23414.htm

COMVERGE, INC.

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of February 18, 2008 (the "Agreement Date"), by and between Robert M. Chiste, an individual ("Executive"), and Comverge, Inc., a Delaware corporation (the "Company").

WHEREAS, the Company desires to employ Executive to provide personal services to the Company and wishes to provide Executive with certain compensation and benefits in return for such services; and

WHEREAS, Executive and the Company have entered into an employment agreement dated September 1, 2001 and amended by a First Amendment dated October 11, 2007 (together, the "Prior Agreement") and now wish to amend and restate the Prior Agreement as provided herein;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, Executive and the Company hereby agree as follows:

SECTION 1. EMPLOYMENT BY THE COMPANY.

1.1 Position and Duties. Effective as of the Agreement Date, Executive shall serve in the positions of Chairman of the Board of Directors of the Company ("Board") and as the Chief Executive Officer and President of the Company with such powers, duties, and responsibilities as are assigned to Executive by the Board and which are consistent with Executive's positions. Executive will devote his best efforts, business time, and attention exclusively (except for vacation periods and periods of illness or other incapacities) to the business of the Company, and shall faithfully and efficiently discharge all duties and responsibilities assigned to him hereunder. Effective with Executive's termination of employment with the Company, Executive shall cease to be an officer of the Company. During the term of this Agreement, the Company shall use its best efforts to cause Executive to be the Chairman of the Board. However, notwithstanding the foregoing, if during the term of this Agreement Executive should not be re-elected to the Board or as Chairman, the failure of Executive to continue to be the Chairman of the Board shall not constitute a breach of this Agreement by either party. Upon his termination of employment, Executive may continue as a member of the Board for the remainder of his then Board term, in his discretion.

1.2 Location. Executive's primary office location shall be in Houston, Texas. From time to time, however, Executive's duties may require him to travel and to work at other locations.

1.3 Term. The term of Executive's employment hereunder shall commence as of the Agreement Date and shall continue through December 31, 2012, unless earlier terminated pursuant to the provisions of this Agreement.

SECTION 2.COMPENSATION AND BENEFITS.

2.1 Compensation. During the term of this Agreement, Executive shall be paid an annual base salary, annual retention bonuses and shall be eligible to receive incentive compensation, all as described in Exhibit A attached hereto, which is made a part of this Agreement for all purposes. All incentive compensation payable pursuant to any plan or program described in Exhibit A shall be governed by and subject to the applicable plan or program documents, which may from time to time be amended, modified or terminated on such terms and in such manner as is permitted in respect of the applicable plan or program.

2.2 Company Benefits. Subject to the satisfaction of the general rules for eligibility and participation under the Company's standard employee benefit plans and practices, Executive shall be allowed to participate in the Company's standard employee benefit plans and practices that may be in effect from time to time during the term of Executive's employment and are provided by the Company to its employees generally. Such participation shall be governed by the applicable plan documents, and the Company reserves the right, in its discretion, to amend, modify, or discontinue any benefit plan or practice. In addition, Executive shall receive such perquisites as the Company may, from time to time, provide to other senior executives of the Company.

2.3 Additional Benefits.

a.       The Company shall pay the cost for the preparation of Executive's personal federal and state income tax returns for each calendar year during Executive's employment by the Company. Such returns shall be prepared by the tax preparation firm selected by Executive and accepted by the Company, which will not unreasonably withhold such acceptance.

b.      During Executive's employment by the Company, the Company shall pay the direct cost (but not travel or other ancillary expenses) for an annual physical examination of Executive to be conducted by a doctor of medicine or clinic of Executive's choosing.

c.       The Company shall reimburse Executive up to $1,000 per month (minus applicable taxes and withholdings) for the purchase by Executive or his wife of airline tickets for travel between Texas and New Jersey/New York City during the Executive's employment by the Company.

d.      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 Executive's new residence purchased, moving costs and travel expenses from 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, during Executive's employment by the Company hereunder.

2.4 Reimbursements. Any reimbursements of any costs or expenses by the Company to Executive under this Agreement shall be made as is customary for expense reimbursement by the Company but in no event later than January 31 of the year after the calendar year in which such expenses are incurred. The expenses incurred by Executive in any calendar year shall not affect the expenses incurred by Executive in any other calendar year that are eligible for reimbursement under this Agreement and Executive's right to receive any reimbursement under this Agreement shall not be subject to liquidation or exchange for any other benefit.

SECTION 3. ASSIGNMENT OF INTELLECTUAL PROPERTY.

3.1 Assignment of Intellectual Property. All processes, products, methods, improvements, discoveries, inventions, ideas, creations, trade secrets, know-how, machines, programs, designs, routines, subroutines, techniques, ideas for formulae, writings, books and other works of authorship, business concepts, plans, projections and other similar items, as well as all business opportunities discovered, conceived, designed, devised, developed, perfected or made by Executive, whether alone or in conjunction with others, and related in any manner to the actual or anticipated business of the Company or to actual or anticipated areas of research and development of the Company (all of the foregoing collectively, the "Intellectual Property"), shall be promptly disclosed to and are the property of the Company, and Executive hereby assigns, transfers and conveys all of the Intellectual Property and all of Executive's rights therein to the Company. The term "Intellectual Property" shall be given the broadest interpretation possible and shall include any Intellectual Property conceived, designed, devised, developed, perfected or made by Executive during off-duty hours and away from the Company's premises, as well as those conceived, designed, devised, developed, perfected or made in the regular course of Executive's performance under this Agreement.

3.2 Post-Employment Scope. All Intellectual Property discovered, conceived designed, devised, developed, perfected or made by Executive following the termination of this Agreement shall be Intellectual Property covered by the scope of Section 3.1 if it was conceived, in whole or in part, while this Agreement remains in effect. All Intellectual Property conceived, designed, devised, developed, perfected or made by Executive within twelve (12) months after termination of this Agreement shall be disclosed to the Company, and shall be presumed to have been conceived, designed, devised, developed, perfected or made by Executive during the Term, and Executive shall have the burden of proving otherwise by clear and convincing evidence in order to successfully rebut such presumption.

3.3 Written Assignments. Executive shall execute and deliver, both during the Term and thereafter, to and in favor of the Company such assignments (including patent and copyright assignments), documents, instruments and applications (including patent or copyright applications) as the Company may deem appropriate or necessary to claim, secure, acquire, perfect, defend, enforce and/or assign any and all rights and privileges in and to or arising from the Intellectual Property. Executive shall also, both during the Term and thereafter, cooperate with the Company, and to render such assistance as the Company may reasonably require, in connection with any process (whether administrative, judicial or otherwise) associated with the Company's efforts to claim, secure, protect, perfect, defend, assign and/or enforce such rights and privileges in favor of the Company and its successors, licensees and assigns. Executive shall also, both during the Term and thereafter, promptly disclose to the Company fully and in writing any Intellectual Property that Executive may conceive, make, or develop, in whole or in part, by himself or jointly with others, (a) whether or not it is conceived, made, developed or worked on by Executive during his Term with the Company; (b) whether or not the Intellectual Property was created at the suggestion of the Company; (c) whether or not the Intellectual Property was reduced to drawings, written description, documentation, models or other tangible form; and (d) whether or not the Intellectual Property is related to the business of the Company.

3.4 Work Made for Hire. Executive acknowledges and agrees that any work of authorship comprising Intellectual Property shall be deemed to be a "Work Made for Hire," to the extent permitted by the United States Copyright Act (17 U.S.C. Section 101 (2000)). To the extent that any such work of authorship may not be deemed to be a Work Made for Hire, Executive hereby irrevocably assigns all ownership rights in and to such work to the Company. If any such work of authorship cannot be assigned, Executive hereby grants to the Company an exclusive, assignable, irrevocable, perpetual, worldwide, sub-licensable (through one or multiple tiers), royalty-free, unlimited license to use, copy, reproduce, distribute, modify, adapt, alter, translate, improve, create derivative works of, practice, publicly perform, publicly display and digitally perform and display such work in any media now known or hereafter known. Outside the scope of his employment, Executive agrees not to (a) practice, display, copy, reproduce, distribute, transfer, modify, adapt, alter, translate, improve, or create derivative works from, or otherwise use, any such work of authorship or (b) incorporate any such work of authorship into any product or invention unrelated to the Company's business. To the extent moral rights may not be assignable under applicable law and to the extent the following is allowed by the laws in the various countries where Moral Rights exist, Executive hereby irrevocably waives such moral rights and consents to any action of the Company that would violate such moral rights in the absence of such consent.

3.5 No License Granted. Executive acknowledges and agrees that nothing in this Agreement shall be deemed to grant, by implication, estoppel, certain rules of construction, or otherwise, (a) a license from the Company to Executive to make, develop, use, license, disclose, or transfer in any way a Intellectual Property or (b) a license from the Company to Executive regarding any of the Company's existing or future ownership rights.

SECTION 4. CONFIDENTIALITY.

4.1 Confidentiality Obligation. Executive acknowledges and the Company agrees to provide to Executive access to new Confidential Information (as defined below) as a result of his employment with the Company to which he did not have access prior to signing this Agreement, the sufficiency and receipt of which is hereby acknowledged, and that such information constitutes valuable, special and unique property of the Company. Without limiting the generality of the foregoing, Executive expressly confirms that, in the course of performing his services pursuant to this Agreement, he will obtain confidential and proprietary information regarding the Company including, without limitation information regarding the Company's operations, customers, suppliers and other matters. Accordingly, at all times while employed by the Company, and continuing in perpetuity following the termination of his employment with the Company for whatever reason, Executive shall neither use nor disclose, nor permit any person or entity within his reasonable control to use or disclose, any Confidential Information, and shall maintain and protect the secrecy of the Confidential Information, except to the extent required in the ordinary course of Executive's employment with the Company, and then only subject to the direction and control of the Company. Additionally, Executive shall cause all persons and entities within his reasonable control to use their respective best efforts, to maintain and protect the secrecy of the Confidential Information.

4.2 Definition of Confidential Information. As used in this Agreement the term "Confidential Information" means any knowledge, information or property relating to, or used or possessed by, the Company, and includes, without limitation, the following: trade secrets, patents, copyrights, software (including, without limitation, all programs, specifications, applications, routines, subroutines, techniques, code and ideas for formulae); ideas, information, concepts, data, drawings, designs and documents; names of clients, customers, employees, agents, contractors and suppliers; business plans, marketing plans and marketing information; financial information and other business records; and all copies of any of the foregoing. Executive agrees that all such information possessed by him, or disclosed to him, or to which he obtains access during his employment with the Company is Confidential Information under the terms of this Agreement, and Executive shall have the burden of proving otherwise by clear and convincing evidence.

4.3 Return of Confidential Information. Executive agrees that he shall immediately, upon the request of the Company, return to the Company all Confidential Information and any other tangible material containing, prepared on the basis of, or reflecting any Confidential Information (whether prepared by the Company, Executive or otherwise) and shall not retain any copies, extracts or other reproductions, in whole or in part, of such Confidential Information.

4.4 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 that are held by or on behalf of 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.

4.5 Nature of Obligation. The obligations of Executive set forth in this Section 4 are in addition to, and not in lieu of, any of Executive's duties or the Company's rights and remedies, at law or in equity, with respect to the Company's proprietary information and property. The Company may pursue all such rights and remedies, as well as remedies for the breach of the provisions set forth herein. Also, the Confidential Information and other property referenced in this Section 4 constitute valuable property of the Company, the ownership of which is not dependent upon the performance by the Company of any of its obligations under this Agreement or the performance of any legal, statutory or other duty, if any, to Executive. Accordingly, Executive shall perform its obligations under this Section 4 regardless of any alleged or actual breach or failure to perform by the Company.

SECTION 5. NONCOMPETITION AGREEMENT.

In consideration of the Company's promise to provide to Executive access to new Confidential Information to which he did not have access prior to signing this Agreement and the compensation paid or payable to Executive by the Company pursuant to this Agreement (including, but not limited to, Section 2 hereof), Executive hereby agrees as follows:

5.1 Noncompetition. During the term of this Agreement and for a period of thirty (30) months following the termination of Executive's employment, 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 (within the one year period preceding the termination if this Agreement) or present, including but not limited to, any customers obtained for the Company by Executive, for the purposes 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, consultant or agent of the Company for the purpose or with the intent of persuading or enticing any such employee, consultant or agent away from or out of the employ of or engagement by 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 business that sells products or services that compete with the products or services offered by the Company including but not limited to the business of providing alternative energy, energy load control or demand response products and services, energy capacity, energy efficiency, or advanced metering solutions, which Executive acknowledges and agrees is the business in which the Company is engaged, including but not limited to within the United States of America. The Company may, in its discretion, by advance written consent permit Executive to take specified actions that, absent such consent, would constitute a violation of this Section 5; but the Company is under no obligation to grant any such written consent or permit any such actions. The covenants in this paragraph are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent which the court deems reasonable, and the Agreement shall thereby be reformed.

5.2 Enforcement. Because of the difficulty of measuring economic losses to the Company as a result of a breach of the foregoing covenant, and because of the immediate and irreparable damage that could be caused by the Company for which it would have no other adequate remedy, Executive agrees that foregoing covenant may be enforced by the Company, in the event of breach by him, by injunctions and restraining orders. Executive further agrees to waive any requirement for the Company's securing or posting of any bond in connection with such remedies. The existence of any claim or cause of action of Executive against the Company, whether predicated on this Agreement or otherwise, shall not preclude the Company's enforcement of these covenants.

5.3 Reasonable Covenants. Executive acknowledges and agrees that the covenants set forth in this Section 5 are necessary and reasonable to protect the Company and the conduct of its business and are a fair and reasonable restraint on 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 in light of the activities and business of the Company (including business activities in the planning stage) on the date of termination of Executive's employment with the Company

5.4 Survival. The provisions of this Section 5 shall survive any termination of this Agreement and are subject to Section 7 of this Agreement.

SECTION 6. TERMINATION OF EMPLOYMENT.

6.1 Certain Definitions. As used herein, the following terms shall have the following definitions:

a.       Board Change. "Board Change" means any change in directors after giving effect to any of the transactions described below in the definition of Change of Control as a result of which the individuals serving on the Board prior to such transaction no longer comprise at least a majority of the directors on the Board immediately after giving effect to such transaction.

b.      Cause. "Cause" shall mean a termination of Executive by the Company due to (i) Executive's material breach of any material provision of this Agreement; (ii) Executive's material breach of any material written Company policy contained in the Company's manual of policies and procedures; (iii) Executive's material non-compliance with any lawful direction given by the Board; (iv) Executive's Disability; (v) Executive's fraud with respect of the business or affairs of the Company; (vi) the conviction of Executive, or his entering of a plea of nolo contendere with regard to, a felony or a crime involving moral turpitude; or (vii) alcohol abuse or illegal drug use by Executive, provided, however, that in the event of Executive's breach as set forth in sub-clauses (i), (ii) or (iii) hereof, no Cause for termination shall be deemed to exist for any such breach which is curable and which is in fact cured by Executive within 30 days after written notice of such termination has been delivered to Executive; and in the event of Executive's breach as set forth in clause (vii) above, no Cause for termination shall be deemed to exist if Executive and the Company agree on a remedial program for Executive, and so long as Executive in all respects complies with the requirements of such program. During the time of any such attempted cure, Executive shall, if directed by the Board, be on paid leave of absence away from the Company's premises. No termination by the Board shall be for Cause unless the determination of Cause is made by a resolution duly adopted by an affirmative vote of not less than two-thirds of the entire membership of the Board.

c.       Change of Control. For purposes of this Agreement, "Change of Control" means the occurrence of any of the following events if, following such occurrence, a Board Change occurs:

                                                                                                                                i.            any person becomes the beneficial owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such person any securities acquired directly from the Company or its affiliates) representing fifty percent (50%) or more of the combined voting power of the Company's then outstanding voting securities; or

                                                                                                                              ii.            a merger or consolidation of the Company is consummated with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) more than fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving or parent equity outstanding immediately after such merger or consolidation; or

                                                                                                                            iii.            there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets (or any transaction having a similar effect), other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale, provided that such transferee entity confirms in writing that it is bound by the terms of this Agreement.

In the event that the foregoing definition of Change of Control does not comply with the requirements of Section 409A of the Code, and an amount, benefit or item of compensation hereunder would be subject to Section 409A of the Code, but would not be so subject if the definition of Change of Control above complied with the requirements of Section 409A of the Code, then with respect only to such amount, benefit or item of compensation, the term "Change of Control" shall mean a "change in control event" within the meaning of Treas. Reg. Section1.409A-3(i)(5).

a.       Good Reason. A termination by Executive for "Good Reason" means a termination by Executive on or following (i) a reduction in Executive's base salary or any other material component of compensation without Executive's prior written consent; (ii) a material breach by the Company of a material provision of this Agreement; or (iii) without Executive's written consent requiring Executive to be based at an office outside of Houston, Texas, except for travel reasonably required in the performance of his duties and reasonably consistent with Executive's travel prior to the Agreement Date; provided however, that Good Reason for Executive's termination shall not be deemed to exist as set forth in subclauses (i) and (ii) above unless (i) Executive gives written notice to the Company of the action or condition that would constitute such Good Reason within 60 days of the initial existence of such action or condition, (ii) the action or condition that would constitute Good Reason is not cured by the Company within the 10-day period after the timely provision of the notice required herein, and (iii) Executive terminates for Good Reason within 30 days after the expiration of the 10-day cure period.

6.2 Death of Executive. This Agreement shall terminate upon Executive's death.

6.3 By the Company. The Company shall have the right to terminate Executive's employment with the Company, at any time, with or without Cause; provided, however, that in connection with a termination with Cause, the Company shall give Executive notice thereof, and if applicable, the time to cure such Cause, in accordance with the provisions of Section 6.1(b) above. For avoidance of doubt, the parties agree that Executive has no right to continue at any time in any office of the Company after being removed from such office in the manner provided in the Company's bylaws or other applicable provisions of the Company's governing law and instruments.

6.4 By Executive. Executive may terminate his employment with the Company at any time, upon providing 30 days advance notice, either with or without Good Reason. In the event Executive terminates his employment with the Company with Good Reason, such notice shall specify the grounds for such termination, and the Company shall have the opportunity to cure such grounds for termination in accordance with the provisions of Section 6.1(c).

6.5 Severance Pay, Retirement, Change of Control and Other Payments.

a.       Termination by the Company for Cause, or by Executive without Good Reason. If the Company terminates Executive's employment for Cause, Executive terminates his employment without Good Reason, or the employment relationship terminates by this Agreement coming to the end of its term without renewal or extension, then in any such event, Executive shall not be entitled to any severance pay, and shall only be entitled to (i) any unpaid, but earned or vested, salary, bonus and other incentive compensation, (ii) any unused but accrued vacation in accordance with Exhibit A hereto, and (iii) any unpaid ordinary and necessary business expenses properly incurred prior to Executive's termination and properly documented by Executive in accordance with the Company's then-effective expense reimbursement policy for senior executives (collectively, the "Accrued Obligations").

b.      Termination by the Company Without Cause, or by Executive for Good Reason. If the Company terminates Executive's employment without Cause or Executive terminates his employment with Good Reason, then in such event Executive shall be entitled to all payments pursuant to Section 6.5(a) above plus the following:

                                                                                                                                i.            a lump sum amount equal to the sum of (x) and (y), where "x" is the product of (1) 3.0, if Executive's termination is on or following a Change of Control (but not later than the second anniversary thereof), and 1.5, if Executive's termination is prior to a Change of Control or later than the second anniversary of a Change of Control, and (2) the sum of Executive's annual base salary and his annual cash incentive at target (together, "Total Pay"), and "y" equals the amount of Retention Bonuses that have not been paid to Executive;

                                                                                                                              ii.            all unvested options to purchase Company stock held by Executive shall immediately vest and become exercisable in full and shall remain exercisable for the lesser of their remaining terms or until March 31, 2013, all restricted stock granted to Executive shall immediately vest and the legend providing restrictions on the sale or transfer of such stock related to such vesting shall be removed at the request of the Executive, and all other equity-based awards shall immediately vest and become payable in full; and

                                                                                                                            iii.            the Company shall provide continued coverage to Executive and his family under the Company's group health plan for executives through December 31, 2012, at a cost to Executive not greater than the active employee premium rate for similar coverage.

a.       Requirements Regarding Eligibility to Receive Severance Payments. Notwithstanding any of the other provisions hereof, the Company shall not be obligated to make and shall not make the severance payments provided under Section 6.5(b) above unless Executive executes and delivers to the Company within 30 days from the date on which Executive's employment is terminated, and does not at any time after execution and delivery withdraw or revoke, a general release substantially in the form attached hereto as Exhibit B, whereby Executive releases the Company from all claims or obligations other than the Company's obligations to make payments as provided in this Agreement. If the requirements of the preceding sentence are met in a timely manner, then, subject to Section 6.5(h), severance payments that Executive is otherwise eligible to receive under Section 6.5(b)(i), (ii) and (iii) shall begin (or shall be made) within 60 days from the date on which Executive's employment was terminated.

b.      Death or Disability. If this Agreement is terminated by reason of Executive's death or Disability, Executive's estate shall be paid the Accrued Obligations. In addition, Executive's unvested stock options and other equity-based awards not otherwise vested shall vest in full upon the death or Disability of Executive. Termination of this Agreement due to Executive's death or Disability shall be without prejudice to any benefits payable to Executive or his beneficiaries or estate under applicable Company benefits relating to such termination event. For purposes of this Agreement, the term "Disability" shall mean the Executive's inability to perform his duties, in all material respects, because of illness or physical or mental disability that continues for an uninterrupted period of 180 days.

c.       Retirement Benefit. During each 12-month period beginning with the first of the month following Executive's termination of employment, until the 7th anniversary of such termination date, the Company shall pay Executive (or his surviving spouse or, if none, his estate) the following amounts: (A) for each 12-month period ending on the 4th anniversary of his termination, 50% of Executive's annual base salary in effect immediately prior to his termination (the "Base Rate") and (B) for each 12-month period after the 4th anniversary and ending on the 7th anniversary of his termination, 25% of the Base Rate. The retirement payments for each 12-month period shall be paid in 12 substantially equal payments due on the first business day of each month.

d.      Change of Control. If a Change of Control occurs within six months following Executive's termination of employment for Good Reason or Executive's termination by the Company without Cause, Executive shall be paid, within three business days of such Change of Control, a lump sum amount in cash equal to 150% of Executive's Total Pay as determined as of the time of Executive's termination of employment.

e.       Section 280G. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or benefit by the Company to or for the benefit of Executive, whether pursuant to the terms of this Agreement or otherwise (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended and the regulations and administrative guidance thereunder (the "Code") (the "Excise Tax"), then the Company shall pay Executive an additional amount (a "Gross-Up Payment") equal to 15 percent of the Payment, unless reducing the amount of the Payment to the maximum amount that would not be subject to the Excise Tax would place Executive in a better net after-tax position than his receipt of the full Payment plus the Gross-Up Payment, in which event the Company shall reduce the Payments to such maximum amount with the Company determining which payments to reduce. If, however, a Gross-Up Payment is due Executive, such Gross-Up Payment shall be made not later than the date of the remittance of the Excise Tax to the applicable governmental authorities.

f.       Payments subject to Section 409A. Notwithstanding anything in this Agreement to the contrary, if on his termination date (for purposes of this Agreement, Executive's termination of employment means he has incurred a "separation from service" for purposes of Section 409A of the Code) Executive is a "specified employee," as defined in Section 409A of the Code, all (or the portion) of any payments, benefits or reimbursements that would be subject to the additional tax provided by Section 409(a)(1)(B) of the Code if not delayed as required by Section 409A(a)(2)(B)(i) of the Code, shall be delayed until the first day of the seventh month following his separation from service date (or, if earlier, Executive's date of death) and shall be paid in a lump sum (with interest at the rate of 7% per annum on amounts payable under Section 6.5(e) that are delayed under this Section 6.5(h)) on such date.

g.      Termination of other Compensation and Benefits. Except as otherwise required by applicable law or as provided by the terms of the applicable Company plan, program, policy or award agreement, or as provided above in this Section 6.5, Executive's (or his surviving spouse's or his estate's) eligibility for or entitlement to any other compensation or benefits shall cease immediately upon termination of this Agreement and Executive's employment with the Company.

6.6 Effect of Termination. Termination of Executive's employment with the Company shall not limit, affect, or discharge Executive's obligations under Sections 3, 4 or 5 of this Agreement and shall not release the Company from its obligations to make payments or provide benefits required by Sections 2 and 6 of this Agreement following such termination. All other obligations as to periods after the date of termination shall cease, without prejudice to the rights and remedies for events or breaches prior to the date of termination.

6.7 Waiver. The Company may waive or defer exercising its power to terminate this Agreement, but such waiver or deferral shall not thereby (a) establish a policy, interpretation, or course of performance that may be used to construe, limit or affect the express terms of this Agreement, (b) preclude the Company from exercising its rights or remedies hereunder or otherwise on any other occasion or from using the breach as support for the exercise of its power to terminate on any future occasion or (c) limit the ability of the Company to revoke such waiver or deferral and exercise its power to terminate this Agreement if it determines that the condition giving rise to a power to terminate has continued, or if the Company determines in good faith that it was not fully aware of all facts and circumstances of such condition, or if such waiver or deferral may be retracted at common law.

SECTION 7. CERTAIN REMEDIES.

With respect to each and every breach or violation or threatened breach or violation by Executive of Sections 3, 4 or 5 of this Agreement, the Company, in addition to all other remedies available at law or in equity, including, but not limited to, specific performance of the provisions hereof, shall be entitled to enjoin the commencement or continuance thereof and may, without notice to Executive, apply to any court of competent jurisdiction for entry of an immediate restraining order or injunction, without the necessity of proving either inadequacy of legal remedies or irreparable harm and without the necessity of posting a bond.

SECTION 8. SEVERABILITY AND REFORMATION.

The provisions of this Agreement are severable, and any judicial determination that one or more of such provisions, or any portion thereof, is invalid or unenforceable shall not affect the validity or enforceability of any other provisions, or portions thereof, but rather shall cause this Agreement to first be construed in all respect as if such invalid or unenforceable provisions, or portions thereof, were modified to terms that are valid and enforceable and provide the greatest protection to the Company's business and interests; provided, however, that if necessary to render this Agreement enforceable, it shall be construed as if such invalid or unenforceable provisions, or portions thereof, were omitted.

SECTION 9. GENERAL PROVISIONS.

9.1 Notices. Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of personal delivery (including personal delivery by fax) or the third day after mailing by first class mail, to the Company at its primary office location and to Executive at Executive's address as listed on the Company payroll.

9.2 Waiver. If either party should waive any breach of any provision of this Agreement, he or it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

9.3 Complete Agreement. This Agreement constitutes the complete, final and exclusive embodiment of the agreement of the Company and Executive with regard to the subject matter hereof, and supersedes and replaces in all respects any previous agreements regarding Executive's employment by the Company or the terms thereof, including the Prior Agreement. This Agreement is entered into without reliance on any promise or representation other than those expressly contained herein , and this Agreement cannot be modified or amended except in a writing signed by Executive and an authorized officer of the Company.

9.4 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

9.5 Headings. The headings of the sections hereof are inserted for convenience of reference only and shall not be deemed to constitute a part hereof or affect the meaning or interpretation of any of the provisions hereof.

9.6 Successors and Assigns. This Agreement is intended to bind, inure to the benefit of, and be binding upon, the successors and assigns of the Company, including the surviving entity of any merger, consolidation, share exchange or combination of the Company with any other entity. Notwithstanding the foregoing, Executive may not assign, transfer or delegate any of Executive's duties or obligations hereunder, and Executive may not assign or transfer any of Executive's rights hereunder without the written consent of the Company.

9.7 Attorney's Fees. If either the Company or Executive brings any action to enforce their respective rights hereunder, the prevailing party in any such action shall be entitled to recover his or its reasonable attorney's fees and costs incurred in connection with such action.

9.8 Choice of Law and Venue. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by the law of the State of Texas (without regard to its conflicts of laws principles). Any dispute arising out of, or concerning, this Agreement or the employment relationship between the parties, shall be resolved exclusively in a federal or state court of competent jurisdiction located in Harris County, Texas. To the extent necessary, the parties hereby submit to, and agree not to contest, the jurisdiction of such courts.

9.9 Representations. Each party represents and warrants to the other that he or it has full power and authority to enter into and perform this Agreement and that his or its execution and performance of this Agreement shall not constitute a default under or breach of any of the terms of any agreement to which he or it is a party or under which he or it is bound. Each party represents that no consent or approval of any third party is required for his or its execution, delivery and performance of this Agreement or that all consents or approvals of any third party required for his or its execution, delivery and performance of this Agreement have been obtained.

9.10 No Guarantee of Tax Treatment. The Company makes no representation or warranty, and undertakes no covenant, regarding any federal, state or local tax treatment of amounts or matters subject to this Agreement or any federal, state or local tax treatment applicable to or inapplicable to Executive.

9.11 Tax Withholding. Any and all amounts payable under this Agreement are subject to withholding for such federal, state, and local taxes as the Company, in its reasonable judgment, determines to be required pursuant to any applicable law, rule or regulation.

9.12 Survival. The provisions of Sections 3, 4, 5, 7, 8 and 9 of this Agreement shall survive the termination of this Agreement for whatever reason.

(SIGNATURE PAGE FOLLOWS)

IN WITNESS WHEREOF, the Company and Executive have executed this Agreement to be effective as of the Agreement Date.

THE "COMPANY"

COMVERGE, INC.

 

By: /s/ Blake Young

Name: Blake Young

Title: Chairman of the Compensation Committee

of the Board of Directors of the Company

"EXECUTIVE"

/s/ Robert M. Chiste

Robert M. Chiste

 

Exhibit A

Annual Salary

Executive shall be paid (in accordance with the Company's regular payroll practice for officers) an annual base salary at the rate of $400,000 per annum. Executive's rate of annual base salary may be increased from time to time in the discretion of the Board, but Executive's rate of annual base salary, as in effect at any time, may not be decreased.

Annual Cash Incentive

Executive will have the opportunity to earn an annual cash bonus equal to 37.5% (threshold), 75% (target) or 150% (maximum) of his annual base salary based on the level of achievement of performance criteria established by the Compensation Committee. The Compensation Committee will set the terms and requirements of the annual cash and annual equity incentives, including the target and threshold performance levels. The target performance level is the level of performance at which the Company is expected to perform. The threshold performance level is the minimum level of performance required as a condition of earning any incentive.

Annual Equity Incentive

Executive will have the opportunity to earn an annual equity award comprised of a combination of restricted stock and options valued at 225% (threshold), 300% (target) or 375% (maximum) times his annual base salary based on the level of achievement of performance criteria established by the Compensation Committee.

Retention Bonuses

Executive will receive a $50,000 bonus payment on the first business day of 2008, 2009, 2010, 2011, and 2012.

Vacation

Effective January 1 of each year, beginning January 1, 2008, Executive shall be entitled to six weeks' paid vacation each year. If Executive does not use all of his six weeks' vacation in any year, any unused vacation, not to exceed three weeks, shall be carried over to his termination of employment. On his termination Executive (or, if termination is due to his death, his estate) shall be paid a lump sum amount in cash for all accrued, unused vacation, including all carried over amounts, which shall include four weeks accrued prior to January 1, 2008, determined as follows: 1/365 x Executive's annual base salary on his termination x the number of his accrued, unused vacation days.

Exhibit B

COMVERGE, INC.

GENERAL RELEASE AGREEMENT

THIS GENERAL RELEASE AGREEMENT (this "Release") is entered into by and between Robert M. Chiste, an individual ("Executive"), and Comverge, Inc., a Delaware company (the "Company"), and is presented to you on __________, 200_.

WHEREAS, Executive and the Company entered into an Executive Employment Agreement ("Agreement") effective as of ____________ 2008;

WHEREAS, Executive's employment with the Company pursuant to the Agreement has terminated; and

WHEREAS, the Agreement provides for the payment of certain amounts and the provision of certain benefits to Executive following a termination of employment if certain requirements are met and if, in consideration thereof, Executive executes and delivers in timely manner, and does not withdraw or revoke, a general release releasing the Company from all claims and obligations other than Company's obligations to make payments as provided in the Agreement;

NOW, THEREFORE, in consideration of their mutual promises and covenants, Executive and the Company agree as follows:

    1. Executive and the Company acknowledge and agree that Executive's employment with the Company terminated effective ____________, 20__ (the "Termination Date"), and that such termination constitutes either a termination by the Company without Cause or by Executive for Good Reason. (Capitalized terms not otherwise defined herein shall have the same meanings as provided in the Agreement.) In accordance with Section 6.5(c) of the Agreement, if and only if Executive properly executes and delivers this Release to the Company within 30 days from the Termination Date, and does not withdraw or revoke the Release at any time after such execution and delivery, the Company, solely in discharge of its obligations under Section 6.5(b) of the Agreement, following such time as the Release becomes binding and irrevocable, but not later than 60 days from the Termination Date, shall -

(i) pay you the lump sum amount of $___________;

(ii) cause all unvested options to purchase Company stock that Executive holds to vest immediately and become exercisable in full and remain exercisable by Executive for the lesser of their remaining terms or until March 31, 2013, all restricted stock granted to Executive and not otherwise forfeited to vest immediately and the legend providing restrictions on the sale or transfer of such stock related to such vesting to be removed at Executive's request, and all other equity-based awards that Executive holds to vest immediately and become payable in full; and

(iii) begin continuation coverage for Executive and his family under the Company's group health plan for executives through December 31, 2012, at a cost to Executive not greater than the active employee premium rate for similar coverage.

Except as provided in Section 6.5(a), (e), (f), (g) or (i), of the Agreement and Paragraph 2 below, this sum represents the exclusive amount to be paid to Executive by the Company, in connection with or arising out of his employment with the Company and/or his termination of employment with the Company, and no further amounts shall be required for any items, including, but not limited to, attorneys' fees.

    1. Executive, on behalf of himself, his heirs, beneficiaries and personal representatives, hereby releases, acquits and forever discharges the Company, its owners, officers, predecessors, employees, former employees, shareholders, directors, partners, attorneys, agents and assigns, and all other persons, firms, partnerships, or corporations in control of, under the direction of, or in any way presently or formerly associated with Company (collectively, "Company Affiliates"), of and from all claims, charges, complaints, liabilities, obligations, promises, agreements, contracts, damages, actions, causes of action, suits, accrued benefits or other liabilities of any kind or character, whether known or hereafter discovered, arising from or in any way connected with or related to Executive's employment with the Company and/or Executive's termination of employment with the Company, including, but not limited to, allegations of wrongful termination, discrimination, retaliation, breach of contract, promissory estoppel, retaliatory discharge, constructive discharge, discharge in violation of any law, statute, regulation or ordinance providing whistleblower protection, discharge in violation of public policy, intentional infliction of emotional distress, negligent infliction of emotional distress, defamation, harassment, sexual harassment, invasion of privacy, any action in tort or contract, any violation of any federal, state, or local law, including, but not limited to, any violation of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000e et seq., the Civil Rights Act of 1966, 42 U.S.C. Section 1981, the Equal Pay Act, 29 U.S.C. Section 206, the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. Section 1001 et seq., the Americans with Disabilities Act, 42 U.S.C. Section 12101 et seq., the Age Discrimination in Employment Act of 1967, as amended ("ADEA"), 29 U.S.C. Section 621 et seq., the Family and Medical Leave Act, 29 U.S.C. Section 2601 et seq., the Fair Credit Reporting Act, 15 U.S.C. Section 1681, et seq., the Sarbanes-Oxley Act, 18 U.S.C. Section 1514A et seq., Chapter 21 of the Texas Labor Code, Tex. Lab. Code Section 21.001, et. seq., the Texas Workers' Compensation Act, Tex. Lab. Code Section 451.001 - 451.003, the Texas Payday Act, Tex. Lab. Code Section 61.011, et seq., or any other employment or civil rights act, and any and all claims for severance pay or benefits under any compensation or employee benefit plan, program, policy, contract, agreement or other arrangement of the Company or the Company Affiliates, but excluding any claim for unemployment compensation, any claim for workers' compensation benefits, and any payments or benefits which Executive is entitled to receive under (i) any Company employee benefit plan, within the meaning of Section 3(3) of ERISA, or (ii) under Sections 6.5(a), (e), (f), (g) or (i), of the Agreement.
    2. Executive agrees not to commence any legal proceeding or lawsuit against the Company or any Company Affiliate arising out of or based upon Executive's employment with the Company or the termination of Executive's employment with the Company; provided, however, this Release does not apply to any claims or causes of action accruing after the date hereof, including, without limitation, any claims or causes with respect to Executive's rights to payments or benefits under Section 6.5 of the Agreement.
    3. The consideration cited above and the promises contained herein are made for the purpose of purchasing the peace of the Company and are not to be construed as an admission of liability or as evidence of unlawful conduct by the Company, all liability being expressly denied.
    4. Executive voluntarily accepts the consideration cited herein, as sufficient payment for the full, final and complete release stated herein, and agrees that no other promises or representations have been made to Executive by the Company or any other person purporting to act on behalf of the Company, except as expressly stated herein.
    5. Executive understands that this is a full, complete, and final release of the Company and all the Company Affiliates. As evidenced by the signature below, Executive expressly promises and represents to the Company that he has completely read this Release and understands its terms, contents, conditions, and effects.
    6. Executive is advised to consult with an attorney prior to executing this Release. Executive understands that he has the right to consult an attorney of his choice and has consulted with an attorney or has knowingly and voluntarily decided not to do so.
    7. Executive states that he is not presently affected by any disability which would prevent him from knowingly and voluntarily granting this release, and further states that the promises made herein are not made under duress, coercion or undue influence.
    8. This Agreement will supersede any and all obligations the Company or any Company Affiliate might otherwise owe to Executive for any act or omission whatsoever that took place, or should have taken place, on or before the date this Agreement is signed and executed by Executive. This Agreement constitutes the entire understanding and agreement between the parties and it may only be modified or amended in a signed writing by both parties hereto.
    9. Should any future dispute arise out of or with respect to this Release, both parties agree that it should be resolved solely in accordance with the terms and provisions of this Agreement and the laws of the State of Texas without giving effect to the choice of law provisions thereof. Each party hereto irrevocably submits to the exclusive jurisdiction of the state and federal courts of Harris County, Texas for the purposes of any proceeding arising out of or relating to this Release; provided, however, a party may enforce a judgment of such court in any court having jurisdiction.
    10. Executive hereby waives all rights to recall, reinstatement, employment, reemployment, and past or future wages from the Company or any the Company Affiliate. Executive further agrees not to apply for employment with the Company or any the Company Affiliate.
    11. Executive understands that he has twenty-one (21) days within which to consider this Release and that this Release is revocable by him for a period of seven (7) days following the execution of this Agreement, and if not so revoked, will become effective and enforceable (the "Effective Date"). For the revocation to be effective, written notice of revocation must be delivered to Comverge, Inc., 3950 Shackleford Road, Suite 400, Duluth, Georgia 30096, Attn: __________________________, no later than the close of business on the seventh day after Executive has signed this Release. The consideration cited in Paragraph 1 above to be delivered to Executive as provided therein.
    12. Executive agrees that the terms and conditions of this Agreement, including without limitation the amount of money and other consideration, shall be treated as confidential, and shall not be revealed to any other person or entity whatsoever, except as follows:

a. to the extent as may be compelled by legal process;

b. to the extent necessary to Executive's legal or financial advisors; or

c. to Executive's spouse.

Executive agrees that the confidentiality provisions of this Agreement are a material part of it and are contractual in nature.

AGREED AND SIGNED by EXECUTIVE on __________________, 20__.

In witnesseth whereof, the Executive and the Company have signed as indicated below.

 

"EXECUTIVE"

 

Robert M. Chiste

 

THE "COMPANY"

COMVERGE, INC.

 

By:

Name:

Title:

Date:

 

 

 

STATE OF

COUNTY OF

 

AFFIDAVIT OF VERIFICATION

 

On this ____ day of ____________, 200___, before me, the undersigned Notary Public in and for the State and County aforesaid, personally came and appeared:

Robert M. Chiste

who, in the presence of the undersigned witnesses, acknowledged that he is a person of the full age of majority and is otherwise competent, and that he executed the attached General Release Agreement of his free will and for the purposes expressed therein.

WITNESSES:

 

______________________________ _______________________________

Print name:_____________________ Robert M. Chiste

 

______________________________

Print name:_____________________

 

 

 

_______________________________

NOTARY PUBLIC

Print name:______________________

Print notary no.:__________________

EX-10 2 exhibit10_1.htm RETIREMENT AGREEMENT

EXHIBIT 10.1

RETIREMENT AGREEMENT

THIS RETIREMENT AGREEMENT (this “Agreement”) is entered into by and between Robert M. Chiste (“Executive”), and Comverge, Inc., a Delaware corporation (the “Company”). Executive and the Company are collectively referred to as Parties and individually as a Party.

WHEREAS, Executive and the Company entered into an Executive Employment Agreement (“Employment Agreement”), attached as Exhibit A to this Agreement, effective as of January 1, 2008;

WHEREAS, Executive resigned his employment and all other positions with the Company effective as of June 19, 2009 (“Resignation Date”); and

WHEREAS, the Employment Agreement provides for the payment of certain amounts and the provision of certain benefits to Executive if certain requirements are met, including various requirements by Executive, and if, in consideration thereof, Executive executes and delivers in timely manner, and does not withdraw or revoke, a general release in the form of this Agreement;

NOW, THEREFORE, in consideration of their mutual promises and covenants, Executive and the Company agree as follows:

Severance.

Executive and the Company agree to treat Executive’s resignation as a termination by the Company without Cause for all purposes including for the calculation of the severance owed under the Employment Agreement and to be paid under this Agreement. (Capitalized terms not otherwise defined herein shall have the same meanings as defined in the Employment Agreement.) The Parties acknowledge and agree that Executive’s employment with the Company terminated as of the Resignation Date. In accordance with Section 6.5(c) of the Employment Agreement, the Company shall:

(i) pay Executive (or Executive’s estate in the event of his death) the lump sum amount of $1,200,000, less applicable withholding, on the earlier of: (a) December 21, 2009; or (b) within 5 business days of being notified of Executive’s death;

(ii) cause as of the Resignation Date (x) all unvested options to purchase Company stock that Executive held as of the Resignation Date to vest immediately and become exercisable in full and remain exercisable by Executive for the lesser of their remaining terms or until March 31, 2013, (y) all restricted stock granted to Executive and not otherwise forfeited to vest immediately and the legend providing restrictions on the sale or transfer of such stock related to such

 

 

 

1

 

 


vesting to be removed, and (z) all other equity-based awards that Executive held as of the Resignation Date to vest immediately and become payable in full; and

(iii) provide continued coverage to Executive and his family under the Company’s group health plans, which are fully-insured plans, through December 31, 2012 (or such earlier date as may be requested by Executive) at a cost to Executive not greater than the active employee premium rate for similar coverage (such coverage is referred to as “Company Continued Health Coverage”). (In the event any such group health plan ceases to be a fully-insured plan prior to the end of the Company Continued Health Coverage Period, and by reason thereof would result in adverse tax consequences to Executive, the Company shall (a) provide Executive and his family with an individual health insurance policy that provides comparable benefits to the Company’s group health plan with Executive paying a portion of the premium for such policy not greater than the active employee premium rate that otherwise would be charged to Executive under the Company group health plan and (b) if the Company is unable to provide such an individual health insurance policy, the parties agree to cooperate with each other to either provide Executive and his family with coverage under such self-insured plan on a basis reasonably comparable to his coverage before such change or to make other arrangements reasonably satisfactory to each party to satisfy the intent of this Section 1(iii).). Executive’s portion of the monthly premium for such Company Continued Health Coverage will be deducted from the consulting and/or Retirement Benefit payments made to him by the Company pursuant to this Agreement and/or the Consulting Agreement. Such Company Continued Health Coverage will count toward and be treated in satisfaction of the Company’s obligation to provide Executive and his covered family members with continuation coverage under the Company’s group health plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”). In the event that Executive or his covered family members elect to discontinue receipt of the Company Continued Health Coverage prior to December 31, 2012, the Company will to the extent required by COBRA provide Executive or his covered family members, as applicable, with notice of their right to continue their coverage under the Company’s group health plan for the remainder of the continuation coverage period prescribed by COBRA.

Other Payments.

 

 

a.

Within 20 business days of the Effective Date (as herein later defined) of this Agreement, the Company will pay Executive the amount of: (i) $62,465.75 for unused but accrued vacation and (ii) Executive’s ordinary and necessary business expenses, which must be submitted within 10 days of the Effective Date, incurred during the course of his employment and submitted in accordance with Company policy and which have not yet been reimbursed. In addition, the Company will reimburse Executive for

 

 

 

2

 

 


all expenses paid by him for the maintenance of that certain residence at 9 Anderson Drive, Florham Park, New Jersey through August 31, 2009; provided that: (i) such reimbursement shall apply only to those forms of expenses that the Company reimbursed prior to the Resignation Date; and (ii) in order to receive such reimbursement, Executive must submit evidence of payment no later than October 30, 2009. The Company shall reimburse Executive for all expenses referenced in the previous sentence no later than 20 business days after its receipt of Executive’s evidence of payment. The Parties acknowledge and agree that, provided that the Company makes the payments set forth in this Section 2(a), then it will have paid all salary, bonus and other non-equity based incentive compensation that was earned as of the Resignation Date.

 

b.

The Parties acknowledge and agree that, pursuant to the “Retirement Benefit” referenced in Section 6.5(e) of the Employment Agreement, the Company shall provide Executive (or Executive’s estate in the event of his death) with a total of $1,100,000, plus interest at the rate of 7% per annum on $100,000 (which amount is equal to six monthly payments that have been deferred), which will be paid in accordance with the schedule set forth in Exhibit B (subject to any deductions as contemplated by Section 1(iii) of this Agreement), which is attached and incorporated into this Agreement. This provision and Exhibit B satisfies all other agreements regarding the Retirement Benefit including without limitation Section 6.5(e) in the Employment Agreement.

 

 

c.

If a Change of Control occurs before December 19, 2009, the Company will pay Executive (or Executive’s estate, in the event of his death) $1,050,000 after such Change of Control occurs on the earlier of: i) December 21, 2009; or ii) within 5 business days of being notified of Executive’s death.

 

 

d.

Within 20 business days of the Effective Date of this Agreement, the Company agrees to reimburse Executive $12,000 in order to offset the costs of moving furniture or other personal effects, as identified by Executive, now owned by Executive and located at 9 Anderson Drive, Florham Park, New Jersey.

 

 

e.

The Parties acknowledge and agree that the sums set forth in Sections 1, 2 and 3 of this Agreement represent the exclusive and total amount to be paid to Executive by the Company, in connection with or arising out of his employment with the Company and/or his termination of employment with the Company, and no further amounts shall be required for any items not listed herein, including but not limited to attorneys’ fees.

 

 

 

3

 

 


Section 280G.

The Parties recognize that the Company has continuing obligations to Executive pursuant to Section 6.5(g) of the Employment Agreement. Accordingly, that Section 6.5(g) is hereby repeated and incorporated by reference herein such that, anything in this Agreement or the Employment Agreement notwithstanding, in the event it shall be determined that any payment or benefit by the Company to or for the benefit of Executive, whether pursuant to the terms of this Agreement or otherwise, would be subject to the Excise Tax, then the Company shall provide the Gross-Up Payment to Executive unless the terms of Section 6.5(g) of the Employment Agreement do not require such Gross-Up Payment.

Release.

Executive, on behalf of himself, hisheirs, beneficiaries and personal representatives, hereby releases, acquits and forever discharges the Company, its owners, officers, predecessors, successors, employees, former employees, shareholders, directors, partners, attorneys, agents and assigns, and all other persons, firms, partnerships, or corporations in control of, under the direction of, or in any way presently or formerly associated with the Company (collectively, “Company Affiliates”), of and from all claims, charges, complaints, liabilities, obligations, promises, agreements, contracts, damages, actions, causes of action, suits, accrued benefits or other liabilities of any kind or character, whether known or hereafter discovered, arising from or in any way connected with or related to Executive’s employment with the Company or Company Affiliates and/or Executive’s termination of employment with the Company, including, but not limited to, allegations of wrongful termination, discrimination, retaliation, breach of contract, promissory estoppel, retaliatory discharge, constructive discharge, discharge in violation of any law, statute, regulation or ordinance providing whistleblower protection, discharge in violation of public policy, intentional infliction of emotional distress, negligent infliction of emotional distress, defamation, harassment, sexual harassment, invasion of privacy, any action in tort or contract, any violation of any federal, state, or local law, including, but not limited to, any violation of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000e et seq., the Civil Rights Act of 1966, 42 U.S.C. Section 1981, the Equal Pay Act, 29 U.S.C. Section 206, the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. Section 1001 et seq., the Americans with Disabilities Act, 42 U.S.C. Section 12101 et seq., the Age Discrimination in Employment Act of 1967, as amended (“ADEA”), 29 U.S.C. Section 621 et seq., the Family and Medical Leave Act, 29 U.S.C. Section 2601 et seq., the Fair Credit Reporting Act, 15 U.S.C. Section 1681, et seq., the Sarbanes-Oxley Act, 18 U.S.C. Section 1514A et seq., Chapter 21 of the Texas Labor Code, Tex. Lab. Code Section 21.001, et. seq., the Texas Workers’ Compensation Act, Tex. Lab. Code Section 451.001 - 451.003, the Texas Payday Act, Tex. Lab. Code Section 61.011, et seq., or any other employment or civil rights act, and any and all claims for severance pay or benefits under any compensation or employee benefit plan, program, policy, contract, agreement or other arrangement of the Company or the Company Affiliates, but excluding any claim for unemployment compensation, any claim for workers’ compensation benefits, any claim relating to services provided by Executive to the

 

 

 

4

 

 


Company after the Effective Date, any claim arising and based on conduct occurring after the Effective Date, any claim for payments under this Agreement and any payments or benefits which Executive is entitled to receive under any Company or Company Affiliate employee benefit plan, within the meaning of Section 3(3) of ERISA.

Covenant Not to Sue.

Executive agrees not to commence any legal proceeding or lawsuit against the Company or any Company Affiliate arising out of or based upon Executive’s employment with the Company or the termination of Executive’s employment with the Company; provided, however, this provision does not apply to any claims or causes of action not released pursuant to Section 4 above, including without limitation any claims or causes of action accruing and based upon conduct occurring after the Effective Date of this Agreement, including, without limitation, any claims or causes with respect to Executive’s rights to payments or benefits under this Agreement.

Non-Disparagement.

Each Party agrees that it will not make any statements, written or verbal, or cause, participate with or encourage others to make any statements, written or verbal, that defame, disparage or materially criticize the personal or business reputation, practices or conduct of the other (including, in the case of the Company, its employees, directors and stockholders).

Future Cooperation.

In the event that the Company becomes involved in any civil or criminal litigation, administrative proceeding or governmental investigation, Executive shall, upon request during the twelve-month period following the Resignation Date, provide reasonable cooperation and assistance to the Company, including without limitation, furnishing relevant information that he remembers or is in his possession, attending meetings and providing statements and testimony. The Company will reimburse Executive for all reasonable and necessary costs and expenses Executive incurs in complying with this Section 7. Any reimbursements of any costs and expenses under this Agreement shall be made as is customary for expense reimbursement by the Company but in no event later than January 31 following the calendar year in which such expenses are incurred. The expenses incurred by Executive in any calendar year shall not affect the expenses incurred by Executive in any other calendar year that are eligible for reimbursement under this Agreement and Executive’s right to receive any reimbursement under this Agreement shall not be subject to liquidation or exchange for any other benefit.

Company Property.

Executive represents that, as of the date he signs this Agreement, he has searched for and returned all Company property as required by Section 4.4 of the Employment Agreement, including without limitation all electronic copies of Company information, including any data that resides on a home computer or other personal electronic device, all hard copies of Company

 

 

 

5

 

 


information, all Company laptops or other computers, all Company cell phones, blackberries or other handheld devices, all Company electronic devices, and all Company keys, access cards, or key fobs.

Surviving Obligations.

The Parties acknowledge and agree that certain of the Parties’ rights and obligations as set forth in the Employment Agree survive and remain in full force and effect. Those surviving rights and obligations are set forth in the following sections of the Employment Agreement: (1) Section 3. Assignment of Intellectual Property; (2) Section 4. Confidentiality; (3) Section 5. Noncompetition Agreement; (4) Section 7. Certain Remedies; (5) Section 8. Severability and Reformation; and (6) Section 9. General Provisions.

Executive’s Waiver of ARRA Subsidy.

Executive waives his rights to the COBRA premium reduction otherwise to be provided to Executive under the American Recovery and Reinvestment Act of 2009 with respect to the Choice Plus Plan G5B(the “Plan”). This waiver is intended to comply with the requirements of IRS Notice 2009-27 and the Company acknowledges receipt of this waiver on behalf of the Plan.

Miscellaneous.

 

 

a.

The consideration cited above and the promises contained herein are not to be construed as an admission of liability or as evidence of unlawful conduct by the Company, as all liability is expressly denied.

 

 

b.

Executive voluntarily accepts the consideration cited herein, as sufficient payment for the full, final and complete release stated herein, and agrees that, with the exception of the Consulting Agreement between the Parties to be effective on the Effective Date of this Agreement, no other promises or representations have been made to Executive by the Company or any other person purporting to act on behalf of the Company, except as expressly stated herein.

 

 

c.

Executive understands that this is a full, complete, and final release of the Company and all the Company Affiliates. As evidenced by the signature below, Executive expressly promises and represents to the Company that he has been advised by counsel and has completely read this Agreement and understands its terms, contents, conditions, and effects.

 

 

d.

Executive is advised to consult with an attorney prior to executing this Agreement.

 

 

 

6

 

 


 

e.

Executive states that he is not presently affected by any disability which would prevent him from knowingly and voluntarily granting this release, and further states that the promises made herein are not made under duress, coercion or undue influence.

 

 

f.

This Agreement will supersede any and all obligations, including without limitation the obligation to pay any additional amounts under the Employment Agreement or any other understanding between the Parties, the Company or any Company Affiliate might otherwise owe to Executive for any act or omission whatsoever that took place, or should have taken place, on or before the date this Agreement is signed and executed by Executive. Except for sections 3, 4, 5, 7, 8, and 9 of the Employment Agreement and the Consulting Agreement between the Parties to be effective on the Effective Date of this Agreement, this Agreement constitutes the entire understanding and agreement between the Parties and it may only be modified or amended in a signed writing by both Parties hereto.

 

 

g.

Should any future dispute arise out of or with respect to this Agreement, both Parties agree that it should be resolved solely in accordance with the terms and provisions of this Agreement and the laws of the State of Texas without giving effect to the choice of law provisions thereof. Each Party hereto irrevocably submits to the exclusive jurisdiction of the state and federal courts of Harris County, Texas for the purposes of any proceeding arising out of or relating to this Agreement; provided, however, a Party may enforce a judgment of such court in any court having jurisdiction.

 

 

h.

Executive hereby waives all rights to recall, reinstatement, employment, reemployment, and past or future wages from the Company or any the Company Affiliate. Executive further agrees not to apply for employment with the Company or any the Company Affiliate.

 

 

i.

Executive understands that he has twenty-one (21) days within which to consider this Agreement and that this Agreement is revocable by him for a period of seven (7) days following the execution of this Agreement, and if not so revoked, will become effective and enforceable. For the revocation to be effective, written notice of revocation must be delivered to Comverge, Inc., 3950 Shackleford Road, Suite 400, Duluth, Georgia 30096, Attn: Matthew H. Smith, no later than the close of business on the seventh day after Executive has signed this Agreement. The consideration cited in Section 1 above to be delivered to Executive as provided therein.

 

 

j.

If Executive does not revoke this Agreement, this Agreement shall become effective as of the date of Executive’s signature below (“Effective

 

 

 

7

 

 


Date”). If Executive revokes this Agreement, the Agreement shall not be effective and there shall be no Effective Date. If Executive revokes this Agreement, the Company shall have no obligations under this Agreement or under Section 6.5(b) of the Employment Agreement or any other provision of the Employment Agreement that requires Executive to execute and not revoke a release.

 

k.

Executive agrees he will keep the terms and conditions of this Agreement, including without limitation the amount of money and other consideration, as confidential, and shall not be revealed to any other person or entity whatsoever, except as follows:

 

 

i.

to the extent as may be compelled by legal process;

 

 

ii.

to the extent necessary to Executive’s legal or financial advisors (including without limitation tax advisors);

 

 

iii.

to Executive’s spouse; and

 

 

iv.

to the extent disclosed in public filings.

Executive agrees that the confidentiality provisions of this Agreement are a material part of it and are contractual in nature.

IN WITNESSETH WHEREOF, the Executive and the Company have signed as indicated below.

“EXECUTIVE”

/s/ Robert M. Chiste

Robert M. Chiste

Date: July 17, 2009

 

THE “COMPANY”

COMVERGE, INC.

 

By: /s/ Alec G. Dreyer

Name: Alec G. Dreyer

Title: Chairman

Date: 7/16/2009

 

 

 

8

 

 

 

 

 


EXHIBIT B: Payment of Retirement Benefit

The Retirement Benefit will be paid as follows. All payments are subject to applicable withholding, including deductions as set forth in Section 1(iii) of the Retirement Agreement:

 

Year from Termination

Date

Amount

1

January 15, 2010

$118,992.35

(includes first 6 months payment plus 7% interest plus payment for month 7)

1

January 30, 2010

$16,667.67

1

February 28, 2010

$16,667.67

1

March 30, 2010

$16,667.67

1

April 30, 2010

$16,667.67

1

May 30, 2010

$16,667.67

2

June 30, 2010

$16,667.67

2

July 30, 2010

$16,667.67

2

August 30, 2010

$16,667.67

2

September 30, 2010

$16,667.67

2

October 30, 2010

$16,667.67

2

November 30, 2010

$16,667.67

2

December 30, 2010

$16,667.67

2

January 30, 2011

$16,667.67

2

February 28, 2011

$16,667.67

2

March 30, 2011

$16,667.67

 

 


 

2

April 30, 2011

$16,667.67

2

May 30, 2011

$16,667.67

3

June 30, 2011

$16,667.67

3

July 30, 2011

$16,667.67

3

August 30, 2011

$16,667.67

3

September 30, 2011

$16,667.67

3

October 30, 2011

$16,667.67

3

November 30, 2011

$16,667.67

3

December 30, 2011

$16,667.67

3

January 30, 2012

$16,667.67

3

February 28, 2012

$16,667.67

3

March 30, 2012

$16,667.67

3

April 30, 2012

$16,667.67

3

May 30, 2012

$16,667.67

4

June 30, 2012

$16,667.67

4

July 30, 2012

$16,667.67

4

August 30, 2012

$16,667.67

4

September 30, 2012

$16,667.67

4

October 30, 2012

$16,667.67

4

November 30, 2012

$16,667.67

4

December 30, 2012

$16,667.67

4

January 30, 2013

$16,667.67

 

 


 

4

February 28, 2013

$16,667.67

4

March 30, 2013

$16,667.67

4

April 30, 2013

$16,667.67

4

May 30, 2013

$16,667.6

5

June 30, 2013

$8,333.33

5

July 30, 2013

$8,333.33

5

August 30, 2013

$8,333.33

5

September 30, 2013

$8,333.33

5

October 30, 2013

$8,333.33

5

November 30, 2013

$8,333.33

5

December 30, 2013

$8,333.33

5

January 30, 2014

$8,333.33

5

February 28, 2014

$8,333.33

5

March 30, 2014

$8,333.33

5

April 30, 2014

$8,333.33

5

May 30, 2014

$8,333.33

6

June 30, 2014

$8,333.33

6

July 30, 2014

$8,333.33

6

August 30, 2014

$8,333.33

6

September 30, 2014

$8,333.33

6

October 30, 2014

$8,333.33

6

November 30, 2014

$8,333.33

6

December 30, 2014

$8,333.33

 

 


 

6

January 30, 2015

$8,333.33

6

February 28, 2015

$8,333.33

6

March 30, 2015

$8,333.33

6

April 30, 2015

$8,333.33

6

May 30, 2015

$8,333.33

7

June 30, 2015

$8,333.33

7

July 30, 2015

$8,333.33

7

August 30, 2015

$8,333.33

7

September 30, 2015

$8,333.33

7

October 30, 2015

$8,333.33

7

November 30, 2015

$8,333.33

7

December 30, 2015

$8,333.33

7

January 30, 2016

$8,333.33

7

February 28, 2016

$8,333.33

7

March 30, 2016

$8,333.33

7

April 30, 2016

$8,333.33

7

May 30, 2016

$8,333.33

 

4066636v1

 

 

EX-10.27 2 exhibit10_27.htm MATERIAL AGREEMENT

EXHIBIT 10.27

COMVERGE, INC.

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of this 29th day of September 2009, by and between Michael D. Picchi, an individual (“Executive”), and Comverge, Inc., a Delaware corporation (the “Company”).   The Executive and Company are collectively referred to as “Parties” and individually as “Party”.

 

WHEREAS, the Company has employed and wishes to continue to employ Executive to provide personal services to the Company and wishes to provide Executive with certain compensation and benefits in return for such services;

 

WHEREAS, the Executive and Company desire to mutually terminate the past employment agreement and now wish to enter the current Agreement; and

 

WHEREAS, Executive wishes to be employed by the Company, and to provide personal services to the Company in return for certain compensation and benefits.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the Executive and the Company hereby agree as follows:

 

SECTION 1.  

EMPLOYMENT BY THE COMPANY.

 

 

1.1 Prior Employment Agreement.  Executive’s employment with the Company has been pursuant to an Executive Employment Agreement, as amended, originally dated October 11, 2007 (hereafter “Prior Agreement”).  Upon the date of execution of this Agreement (the “Employment Date”), the Prior Agreement is hereby terminated and Executive’s continued employment with the Company shall be pursuant to the terms stated herein.

1.2 Position and Duties.  Executive shall serve in the position of Interim Chief Executive Officer & President (collectively “Interim CEO”), Executive Vice-President & Chief Financial Officer (“CFO”), with such powers, duties, and/or responsibilities as are assigned to Executive by the Company’s Board of Directors or their delegate, with the understanding that Executive may be transitioned anytime out of the Interim CEO role at the sole discretion of the Board of Directors.  Executive will devote his best efforts, time, and attention exclusively to the business of the Company, and shall faithfully and efficiently discharge all duties and responsibilities assigned to him hereunder.  Executive shall comply with all Company policies, procedures and practices as may now exist or which from time to time be implemented.

1.3 Location.  Executive’s primary office location shall be in Atlanta, Georgia.  Executive acknowledges that the Company’s business extends across the entire United States and elsewhere and that, from time to time, however, Executive’s duties may require him to travel and to work at other locations, including but not limited to other Company office locations.

 

 

1


 

1.4 Term.  The term of Executive’s employment hereunder shall commence as of the Employment Date and shall continue through December 31, 2010, unless earlier terminated pursuant to the provisions of this Agreement.  Unless, within ninety (90) days prior to any then-scheduled expiration of the Term, either party notifies the other in writing of its desire not to renew this Agreement, the Term shall automatically be extended for an additional period of one (1) year from the applicable succeeding anniversary of the Employment Date.

 

SECTION 2.  

COMPENSATION, BENEFITS AND OWNERSHIP.

 

2.1 Compensation.  Executive shall be paid a salary, and shall be eligible to receive incentive compensation, as described in Exhibit A attached hereto.  All compensation payable pursuant to any plan or program described in Exhibit A shall be governed by and subject to the applicable plan or program documents, which may from time to time be amended, modified or terminated on such terms and in such manner as is permitted in respect of the applicable plan or program.

 

2.2 Company Benefits.  Subject to the satisfaction of the general rules for eligibility and participation under the Company’s standard employee benefit plans and practices, Executive shall be allowed to participate in the Company’s standard employee benefit plans and practices which may be in effect from time to time during the term of Executive’s employment and are provided by the Company to its employees generally.  Such participation shall be governed by the applicable plan documents, and the Company reserves the right, in its discretion, to amend, modify, or discontinue any benefit plan or practice.

 

2.3 Section 280G Limitation.  In the event that any payments to which Executive becomes entitled in accordance with the provisions hereof, or in connection with any plans or programs referred to in Exhibit A or Section 2.2 hereof, would otherwise be deemed to constitute “parachute payments” (each one, a “Parachute Payment”) within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended and the regulations and administrative guidance thereunder (the “Code”), then such payments will be subject to reduction to the extent necessary to assure that Executive receives only the greater benefit of receiving (a) the amount of those payments which would constitute such a Parachute Payment or (b) the amount which yields Executive the greatest after-tax amount of benefits after taking into account any excise tax imposed on the payments provided to Executive pursuant to this Agreement (or on any other benefits to which Executive may be entitled in connection with the Change in Control or the subsequent termination of service) under Section 4999 of the Code.

 

SECTION 3.  

ASSIGNMENT OF INTELLECTUAL PROPERTY.

 

3.1 Ownership and Assignment of Intellectual Property.  All processes, products, methods, improvements, discoveries, inventions, ideas, creations, trade secrets, know-how, machines, programs, designs, routines, subroutines, techniques, ideas for formulae, writings, books and other works of authorship, business concepts, plans, projections and other similar items, as well as all business opportunities discovered, conceived, designed, devised, developed, perfected or made by Executive, whether alone or in conjunction with others and within the course of Executive’s job responsibilities to the Company, and related in any manner to the actual or anticipated business of the Company or to actual or anticipated areas of research and development of the Company (all of the foregoing collectively, the “Intellectual Property”), shall be promptly disclosed to and are the property of the Company, and Executive hereby assigns, transfers and conveys all of the Intellectual Property and all of Executive’s rights therein to the Company.  The term “Intellectual Property” shall be given the broadest interpretation possible and shall include any Intellectual Property conceived, designed, devised, developed, perfected or made by Executive during off-duty hours and away from the Company’s premises, as well as those conceived, designed, devised, developed, perfected or made in the regular course of Executive’s performance under this Agreement.

 

 

2


 

3.2 Post-Employment Assignment of Intellectual Property.  In consideration of the benefits provided pursuant to this Agreement, particularly those benefits conferred by Section 6.5 and any stock option or similar rights pursuant to any Company plans in which Executive was a participant, all Intellectual Property discovered, conceived designed, devised, developed, perfected or made by Executive following the termination of this Agreement shall be Intellectual Property covered by the scope of Section 3.1 if it was conceived, in whole or in part, while this Agreement remains in effect.  All Intellectual Property conceived, designed, devised, developed, perfected or made by Executive within twelve (12) months after termination of this Agreement shall be disclosed to the Company, and shall be presumed to have been conceived, designed, devised, developed, perfected or made by Executive during the Term, and Executive shall have the burden of proving otherwise by clear and convincing evidence in order to successfully rebut such presumption.

 

3.3 Written Assignments.  Executive shall execute and deliver, both during the Term and thereafter in connection with a severance agreement required under Section 7.5(g) to and in favor of the Company such assignments (including patent, trademark and copyright assignments), documents, instruments and applications (including patent, trademark or copyright applications) as the Company may deem appropriate or necessary to claim, secure, acquire, perfect, defend, enforce and/or assign any and all rights and privileges in and to or arising from the Intellectual Property.  Executive shall also, both during the Term and thereafter, cooperate with the Company, and to render such assistance as the Company may reasonably require, in connection with any process (whether administrative, judicial or otherwise) associated with the Company’s efforts to claim, secure, protect, perfect, defend, assign and/or enforce such rights and privileges in favor of the Company and its successors, licensees and assigns.  Executive shall also, both during the Term and thereafter, promptly disclose to the Company fully and in writing any Intellectual Property that Executive may conceive, make, or develop, in whole or in part, by himself or jointly with others, (a) whether or not it is conceived, made, developed or worked on by Executive during his Term with the Company; (b) whether or not the Intellectual Property was created at the suggestion of the Company; (c) whether or not the Intellectual Property was reduced to drawings, written description, documentation, models or other tangible form; and (d) whether or not the Intellectual Property is related to the business of the Company.

 

 

3


 

3.4 Work Made for Hire.  Executive acknowledges and agrees that any work of authorship comprising Intellectual Property shall be deemed to be a “Work Made for Hire,” to the extent permitted by the United States Copyright Act (17 U.S.C. § 101 (2000)).  To the extent that any such work of authorship may not be deemed to be a Work Made for Hire, Executive hereby irrevocably assigns all ownership rights in and to such work to the Company.  If any such work of authorship cannot be assigned, Executive hereby grants to the Company an exclusive, assignable, irrevocable, perpetual, worldwide, sub-licensable (through one or multiple tiers), royalty-free, unlimited license to use, copy, reproduce, distribute, modify, adapt, alter, translate, improve, create derivative works of, practice, publicly perform, publicly display and digitally perform and display such work in any media now known or hereafter known.  Outside the scope of his employment, Executive agrees not to (a) practice, display, copy, reproduce, distribute, transfer, modify, adapt, alter, translate, improve, or create derivative works from, or otherwise use, any such work of authorship or (b) incorporate any such work of authorship into any product or invention unrelated to the Company’s business.  To the extent moral rights (as defined by applicable law) may not be assignable under applicable law and to the extent the following is allowed by the laws in the various countries where moral rights exist, Executive hereby irrevocably waives such moral rights and consents to any action of the Company that would violate such moral rights in the absence of such consent.

 

3.5 No License Granted.  Executive acknowledges and agrees that nothing in this Agreement shall be deemed to grant, by implication, estoppel, certain rules of construction, or otherwise, (a) a license from the Company to Executive to make, develop, use, license, disclose, or transfer in any way a Intellectual Property or (b) a license from the Company to Executive regarding any of the Company’s existing or future ownership rights.

 

SECTION 4.  

CONFIDENTIALITY.

 

4.1 Confidentiality Obligation.  Executive acknowledges and agrees that he has and will have access to Proprietary, Trade Secret and Confidential Information (as those terms are defined below in Section 4.2) as a result of his employment with the Company, and that such information constitutes valuable, special and unique property of the Company.  Without limiting the generality of the foregoing, Executive expressly acknowledges that, in the course of performing his services pursuant to this Agreement, he will obtain or learn Confidential and Proprietary Information regarding the Company including, without limitation information regarding the Company’s operations, financial results, pricing, customers, suppliers and other matters.  Accordingly, at all times while employed by the Company, and continuing for a period of three (3) years with respect to Proprietary and Confidential Information, and for whatever time Trade Secret Information remains a Trade Secret under applicable law, following the termination of his employment with the Company for whatever reason, Executive shall neither use nor disclose, nor permit any person or entity within his reasonable control to use or disclose, any Proprietary, Trade Secret, and Confidential Information, and shall maintain and protect the secrecy of the Proprietary, Trade Secret, and Confidential Information, except to the extent required in the ordinary course of Executive’s employment with the Company, and then only subject to the direction and control of the Company.  Additionally, Executive shall cause all persons and entities within his reasonable control to use their respective best effort(s), to maintain and protect the secrecy of the Proprietary, Trade Secret and Confidential Information.  Executive further acknowledges that in the performance of his job duties to this Agreement, he will have access to and be informed of the Proprietary and Confidential Information (as described in Section 4.2) belonging to customers of Company, and that he shall return to the Company any such information within his actual or indirect position and comply with any restrictions concerning such information within his possess and comply with any restrictions concerning such information that have been imposed upon by its customer with respect to the use, disclosure, or return information.

 

 

4


 

4.2 Definition of Proprietary, Trade Secret and Confidential Information.  As used in this Agreement the term “Proprietary, Trade Secret and Confidential Information” means any non-public knowledge, information or property relating to, or used or possessed by, the Company (or its customers, as the case may be), and includes, without limitation, the following:  trade secrets, patents, copyrights, software (including, without limitation, all programs, specifications, applications, routines, subroutines, techniques, code and ideas for formulae); ideas, information, concepts, data, drawings, designs and documents; names of clients, customers, but not limited to employees, agents, contractors and suppliers; business plans, marketing plans and marketing information; financial, pricing, and cost information and other business records; and all copies of any of the foregoing.   Trade Secrets shall be such information defined by applicable law as a Trade Secret.

 

4.3 Return of Confidential Information.  Executive agrees that he shall immediately, upon the request of the Company, return to the Company all Proprietary, Trade Secret, and  Confidential Information and any other tangible material containing, prepared on the basis of, or reflecting any Proprietary, Trade Secret, and  Confidential Information (whether prepared by the Company, Executive or otherwise) and shall not retain any copies, extracts or other reproductions, in whole or in part, of such Proprietary, Trade Secret, and  Confidential Information.

 

4.4 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 that are held by or on behalf of 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.

 

4.5 Nature of Obligation.  The obligations of Executive set forth in this Section 4 are in addition to, and not in lieu of, any of Executive’s duties or the Company’s rights and remedies, at law or in equity, with respect to the Company’s Proprietary, Trade Secret, and Confidential Information and property.  The Company may pursue all such rights and remedies, as well as remedies for the breach of the provisions set forth herein.  Also, the Proprietary, Trade Secret, and  Confidential Information and other property referenced in this Section 4 constitute valuable property of the Company or its customers, the ownership of which is not dependent upon the performance by the Company of any of its obligations under this Agreement or the performance of any legal, statutory or other duty, if any, to Executive.  Accordingly, Executive shall perform its obligations under this Section 4 regardless of any alleged or actual breach or failure to perform by the Company.

 

 

5


 

4.6           Post Termination Activities.  Executive acknowledges and agrees that, during the course of his employment with the Company, he had access to the Company’s Proprietary, Trade Secret and Confidential Information, and that disclosure to or use of such information by a competitor of the Company would cause the Company irreparable harm.  Executive agrees and acknowledges that should he engage in the restricted activities as set forth in Section 5 hereof, he will inevitably disclose the Company’s Proprietary, Trade Secret and Confidential Information.

 

SECTION 5.  

NONCOMPETITION AGREEMENT.

 

In consideration of the compensation paid or payable to Executive by the Company pursuant to this Agreement (including, but not limited to, Section 2 hereof), Executive hereby agrees as follows:

 

5.1 Executive acknowledges that the Company’s business is nationwide in scope, that its customers are not restricted to any single state in the United States, and that in the performance of his duties as set forth in this Agreement, Executive shall perform services on behalf of the Company in all states in which the Company does business.  During the term of this Agreement, Executive will devote all of his working time and energies to the Company, and will not, without the Company’s express written permission, own, work for or provide services to any other entity, whether as an owner, partner, agent, representative, consultant, officer, director, independent contractor or employee.  Notwithstanding the foregoing, Executive is permitted to own up to 1% of any class of securities of any corporation in competition with the Company that is actively traded on a national securities exchange or through NASDAQ.

 

5.2           As consideration granted herein, Executive hereby covenants that he will not, (i) within the Territory and during the Noncompetition Period, without the prior written consent of the Company, engage in any Restricted Activities for or on behalf of any corporation, partnership, venture or other business entity which is engaged in the Restricted Business and/or (ii) during the Noncompetition Period work for the following companies (including their subsidiaries): EnerNoc, Echelon, Cooper Industries, Honeywell, Good Cents, Tendril Networks, Gridpoint, CPower, Energy Connect, Itron, Emerson Electric, Oracle, SAP, or Cisco Systems in the same or similar capacity as Executive performed for the Company. The term “Noncompetition Period” means the period beginning on the date of this Agreement and ending one year after the date Executive’s employment with the Company ends or is terminated for any reason. The term “Restricted Activities” means having ownership of or being employed by as an employee, agent, or representative, or as an independent contractor or otherwise, and providing services similar to the services Executive provides to the Company.  The term “Restricted Business” means the business of providing energy load control or demand response products and services, energy capacity, energy efficiency, advanced metering solutions, or other alternative energy solutions, which Participant acknowledges and agrees is the business in which the Company is engaged. The term “Territory” means the state where the Executive lives which Executive acknowledge is included within the geographic scope of the Company’s business and is the territory for or in which Executive performs services for the Company.

 

SECTION 6.  NONSOLICITATION AGREEMENT

 

6.1           During the term of this Agreement and for a period of one (1) year after Executive’s employment is terminated for any reason, Executive will not, directly or indirectly, individually or on behalf of any other person, firm, partnership, corporation, or business entity of any type, solicit, assist or in any way encourage any current employee or consultant of the Company, whom Executive supervised or had responsibility for during the twelve (12) months prior to the termination of employment, to terminate his or her employment relationship or consulting relationship with or for the Company, nor will Executive solicit the services of any former employee or consultant of the Company whom Executive supervised or had responsibility for during the twelve (12) months prior to the termination of employment, whose service with the Company has been terminated for less than six (6) months.

 

 

6


 

6.2           During the term of this Agreement and for a period of one (1) year after Executive’s employment is terminated for any reason, Executive will not, directly or indirectly, individually or on behalf of any other person, firm, partnership, corporation, or business entity of any type, solicit, divert, or take away, or attempt to solicit, divert, or take away, in whole or in part, any Customer of the Company or otherwise interfere with the Company’s relationship with any Customer, for the purpose of competing with the Company in the Business.  For purposes of this Agreement, “Customer” shall mean any person, company or business entity to which the Company sells or licenses goods or services at the time Executive’s employment with the Company terminated and with whom Executive had material business contact during the twelve months (12) months prior to his termination of employment, and “Business” shall mean providing energy related services, including without limitation energy load control or demand response products and services, energy capacity, energy efficiency, advanced metering solutions, or other alternative energy solutions engaged in by the Company.

 

6.3           Enforcement.  The existence of any claim or cause of action of Executive against the Company, whether predicated on this Agreement or otherwise, shall not preclude the Company’s enforcement of these covenants.

 

6.4           Reasonable Covenants.  Executive acknowledges and agrees that the covenants set forth in this Section 5 are necessary and reasonable to protect the Company and the conduct of its business and are a fair and reasonable restraint on 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 in light of the activities and business of the Company (including business activities in the planning stage) on the date of termination of Executive’s employment with the Company.  Executive acknowledges that he will not suffer any undue hardship as a result of the covenants set forth in Sections 4, 5 and 6 and that he will be able to pursue his occupation nothwithstanding his obligations under Sections 4, 5 and 6.

 

6.5           Survival.  The provisions of this Section 6 shall survive any termination of this Agreement and are subject to paragraph 8 of this Agreement.

 

SECTION 7.  TERMINATION OF EMPLOYMENT.

 

7.1Certain Definitions.  As used herein, the following terms shall have the following definitions:

 

(a) Affiliate.  “Affiliate” shall mean an affiliate of the Company, as defined in Rule 12b-2 promulgated under Section 12 of the Securities Exchange Act of 1934, as amended from time to time.

 

 

7


 

(b) Cause.  A termination by the Company with “Cause” shall include (without limitation) (i) non-performance in the roles and duties, as assigned; (ii) Executive’s breach of any material provision of this Agreement; (ii) Executive’s material breach of any written Company policy contained in the Company’s manual of policies and procedures; or material non-compliance with any lawful direction given by the Company’s Chief Executive Officer or his/her delegate; (iii) Executive’s Disability (subject to Company’s legal obligations); (iv) Executive’s fraud with respect of the business or affairs of the Company; (v) the commission by Executive, or entering of a plea of nolo contendere with regard to, a felony or a crime involving moral turpitude; or (vi) alcohol abuse or illegal drug use by Executive; provided however, that in the event of Executive’s breach as set forth in Sections 7(b)(i) and (ii) above, no Cause for termination shall be deemed to exist for any such breach that is curable and which in fact is cured by Executive within thirty (30) days after notice of such termination has been delivered to Executive, and in the event of Executive’s breach, as set for in Section 7(b)(vi) above, no Cause shall be deemed to exist if the Executive and Company agree on a remedial program for Executive and so long as Executive in all respects complies with the requirements of such program.  During the time of Executive’s participation in any remedial program as set forth above, Executive shall, if directed by the Company, be on a paid leave of absence away from the Company’s premises.

 

(c) Change in Control.  For purposes of this Agreement, “Change in Control” means the occurrence of any of the following events if, following such occurrence, a Board Change (as hereinafter defined) occurs:

 

(i) any person becomes the beneficial owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such person any securities acquired directly from the Company or its affiliates) representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding voting securities; or

 

(ii) a merger or consolidation of the Company is consummated with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) more than fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving or parent equity outstanding immediately after such merger or consolidation; or

 

(iii) there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction having a similar effect), other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale, provided that such transferee entity confirms in writing that it is bound by the terms of this Agreement.

 

 

8


 

In the event that the foregoing definition of Change in Control does not comply with the requirements of Section 409A of the Code, and an amount, benefit or item of compensation hereunder would be subject to Section 409A of the Code, but would not be so subject if the definition of Change in Control above complied with the requirements of Section 409A of the Code, then with respect only to such amount, benefit or item of compensation, the term “Change in Control” shall mean a “change in control event” within the meaning of Treas. Reg. §1.409A-3(i)(5).

 

(d) Board Change.  “Board Change” means any change in directors after giving effect to any of the transactions described above as a result of which the individuals serving on the Board prior to such transaction no longer comprise at least a majority of the directors on the Board immediately after giving effect to such transaction.

 

(e) Good Reason.  A termination by the Executive for “Good Reason” means termination by Executive following (i) a reduction in Executive’s Annual Salary or other material component of compensation (excluding stock options or similar grants) required to be paid pursuant hereto without Executive’s prior written consent; or (ii) the Company’s relocation of the Executive, without the Executive’s consent, to a permanent location more than seventy-five (75) miles from the location specified in Section 1.2 of this Agreement; provided however, that no Good Reason for Executive’s termination shall be deemed to exist unless (i) Executive gives notice to the Company of the action or condition which would constitute Good Reason within sixty (60) days of the initial existence of such action or condition, (ii) the action or condition which would constitute Good Reason is not cured by the Company within the 30-day period after the timely provision of the notice required herein, and (iii) Executive effects the termination for Good Reason within thirty (30) days after the expiration of the 30-day cure period.  After such thirty (30) day period, Executive shall be deemed to have waived any right to terminate this Agreement pursuant to this Section 7.1(e).

       (f) Non-Renewal.  A non-renewal of this Agreement as provided in Section 1.4 shall not be considered a termination under any provision of this Section 7 and, upon such non-renewal by either party and the termination of this Agreement, and Company shall be required to pay to Executive only the amounts specified in Section 7.5 (a

 

7.2         Death by Executive.  This Agreement shall terminate upon Executive’s death.

 

7.3         By the Company.  The Company shall have the right to terminate Executive’s employment with the Company, at any time, with or without Cause.  For avoidance of doubt, the parties agree that Executive has no right to continue at any time in any office of the Company after being removed from such office in the manner provided in the Company’s bylaws or other applicable provisions of the Company’s governing law and instruments.

 

 

9


 

   7.4    By Executive.  Executive may terminate his employment with the Company at any time, upon providing thirty (30) days advance notice, either with or without Good Reason.  In the event Executive terminates his employment with the Company with Good Reason, such notice shall specify the grounds for such termination, and the Company shall have the opportunity to cure such grounds for termination in accordance with the provisions of Section 7.1(e).

 

7.5 Severance Pay, Other Post-Employment Payments and Acceleration of Benefits Upon Certain Terminations.  

 

(a) Termination by the Company for Cause or by Executive without Good Reason.  If the Company terminates Executive’s employment for Cause, or Executive terminates his employment without Good Reason, then in either such event, Executive shall not be entitled to any severance pay, and shall only be entitled to (i) any unpaid, but earned, salary, (ii) any unpaid but earned vacation in accordance with Company policy then in effect and (iii) any incurred but unpaid ordinary and necessary business expenses properly documented by Executive in accordance with the Company’s then effective expense reimbursement policy.

 

(b) Termination by the Company Without Cause, or by Executive for Good Reason.  Subject to subsection 7.5(c) below, if the Company terminates Executive’s employment without Cause, or Executive terminates his employment with Good Reason, then in such event Executive shall be entitled to all payments allowed pursuant to subsection 7.5(a) above and severance pay in the amount of the sum of (i) nine (9) months’ annual base salary as specified in Exhibit A, plus (ii) an amount equal to the amount of Executive’s bonus payment for the last complete year of service prior to termination, times a fraction, the numerator of which is the number of days in the year of Executive’s termination through the date of such termination, and the denominator of which is 365 (or in the case of leap years, 366). The benefits provided pursuant to this Section 7.5(b) shall not include any stock option or similar grants and Executive’s rights concerning any stock option or similar grants shall be exclusively determined by applicable Company policies or plans concerning such grants.

 

(c) Certain Terminations Following a Change in Control.  Notwithstanding the provisions of Section 7.5(b) above, in the event the Company terminates Executive’s employment without Cause, or Executive terminates his employment with Good Reason, concurrently with or within twelve (12) months following a Change in Control, then, in lieu of the payments specified in Section 7.5(b), Executive shall be entitled to all payments allowed pursuant to subsection 7.5(a) above and severance pay in the amount of eighteen (18) months’ annual base salary as specified in Exhibit A, plus one and one- half times (1.5x) the amount of Executive’s bonus payment for the last complete calendar year prior to Executive’s termination of employment.  In such event, all unvested options to purchase Company stock held by Executive shall immediately vest and become exercisable and all restricted stock granted to Executive shall immediately vest and the legend providing restrictions on the sale or transfer of such stock related to such vesting shall be removed at the request of the Executive.

 

 

10


 

(d) Continuation of Benefits.  In the event the Company terminates Executive’s employment without Cause, or Executive terminates his employment with Good Reason, and Executive qualifies for and becomes entitled to the severance pay provided pursuant to Section 7.5(b) or (c) above, as applicable: (1) the Company shall continue to provide benefits referred to in Section 2.2 during the period Executive is entitled to severance payments under this Agreement, subject to and in accordance with Executive’s COBRA rights and the provisions of the applicable plan documents, and the Company reserves the right, in its discretion, to amend, modify, or discontinue any benefit plan or practice; and (2) if Executive elects to participate in COBRA coverage for which he and/or his family is eligible under the Company’s then-effective health plans, the Executive shall pay to the Company on a monthly or quarterly basis, as the case may be, an amount equal to the co-payment amount for which the Executive would have been responsible had he remained an employee during the COBRA coverage period and the Company shall pay to the plan administrator on behalf of Executive the entire cost of the COBRA coverage.  Executive agrees to a netting of payments where applicable.

 

(e) Death or Disability.  Any termination of this Agreement by reason of Executive’s death or disability shall not give rise to any severance payment hereunder, but shall be without prejudice to any benefits payable to Executive or his estate under applicable company benefits relating to such event.  For purposes of this Agreement, the term “Disability” shall mean the Executive’s inability to perform his duties, in all material respects, because of illness, physical or mental disability, or other incapacity that continues for an uninterrupted period of one hundred eighty (180) days.  Executive’s unvested stock options and restricted stock not otherwise vested shall vest upon the death or disability of Executive as provided in, and subject to the provisions of, applicable Company policies or plans concerning the grants to Executive of unvested stock options and restricted stock.

 

(f) Timing of Payments.  All severance payments provided pursuant to Section 6.5(b) above, as applicable, that are measured by Executive’s annual base salary shall begin as provided by Section 7.5(g) (except as otherwise required by Section 10.12) and shall thereafter be paid at such times and in accordance with the Company’s payroll policies and procedures as if Executive were still employed by the Company; and all amounts of severance pay with respect to bonus payments shall be pro rated over the period of such payment, and payments of a proportional amount of such bonus payments shall begin as provided by Section 7.5(g) (except as otherwise required by Section 10.12) and shall thereafter be paid at such times as base salary payments are made.   All severance payments provided pursuant to Section 7.5(c) above, as applicable, that are measured by Executive’s annual base salary shall be paid in one lump sum amount as provided by Section 6.5(g) (except as otherwise required by Section 10.12).

 

(g) Requirements Regarding Eligibility to Receive Severance Payments.  Notwithstanding any of the other provisions hereof, the Company shall not be obligated to make and shall not make the severance payments provided under Section 7.5(b) or (c) above unless Executive executes and delivers to the Company within thirty (30) days from the date on which the Executive’s employment is terminated, and does not at any time after execution and delivery withdraw or revoke, a Severance Agreement containing a general release in a form reasonably acceptable to the Company and the assignment as set forth in Section 3.3. Furthermore, in the event Executive initially qualifies to receive the payments and benefits provided under this Section 7.5, but then fails to comply with his obligations under this Agreement (including without limitation Sections 3, 4,5 and 6 hereof), the Company’s obligations under this Section 7.5 shall terminate.

 

 

11


 

(h) Termination of other Compensation and Benefits.  Except as otherwise required by applicable law or as provided above in this Section 7.5, Executive’s eligibility for or entitlement to any other compensation or benefits shall cease immediately upon termination of this Agreement and Executive’s employment with the Company.

 

(i) Characterization of Payments under Section 409A.  For purposes of Section 409A of the Code (including, but not limited to, to application of the exceptions for short-term deferrals and for “separation pay only upon an involuntary separation from service”): (i) each payment provided for under this Section 7.5 is hereby designated as a separate payment, rather than a part of a larger single payment or one of a series of payments; and (ii) with respect to the severance payments and benefits to which Executive may become entitled under Section 7.5 of this Agreement and which are not in substitution or replacement of “nonqualified deferred compensation” (within the meaning of Section 409A of the Code), a termination of Executive’s employment by the Company without Cause or by Executive for Good Reason is intended to constitute an “involuntary separation from service” and, in turn, a “substantial risk of forfeiture” (within the meanings of Section 409A of the Code).

 

7.6           Effect of Termination.  Termination of Executive’s employment with the Company shall not limit, affect, or discharge Executive’s obligations under Sections 3, 4 5 and 6 of this Agreement and shall not release the Company from its obligations to make payments or provide benefits required by Sections 2.2 and 7.5 of this Agreement following such termination (subject to the limitations provided in Section 7.3).  All other obligations as to periods after the date of termination shall cease, without prejudice to the rights and remedies for events or breaches prior to the date of termination.

 

7.7           Waiver.  The Company may waive or defer exercising its power to terminate this Agreement, but such waiver or deferral shall not thereby (a) establish a policy, interpretation, or course of performance that may be used to construe, limit or affect the express terms of this Agreement, (b) preclude the Company from exercising its rights or remedies hereunder or otherwise on any other occasion or from using the breach as support for the exercise of its power to terminate on any future occasion or (c) limit the ability of the Company to revoke such waiver or deferral and exercise its power to terminate this Agreement if it determines that the condition giving rise to a power to terminate has continued, or if the Company determines in good faith that it was not fully aware of all facts and circumstances of such condition, or if such waiver or deferral may be retracted at common law.

 

 

12


 

SECTION 8.  CERTAIN REMEDIES.

 

With respect to each and every breach or violation or threatened breach or violation by Executive of Sections 3, 4,5 and 6 of this Agreement, the Company, in addition to all other remedies available at law or in equity, including, but not limited to, specific performance of the provisions hereof, shall be entitled to enjoin the commencement or continuance thereof and may, without notice to Executive, apply to any court of competent jurisdiction for entry of an immediate restraining order or injunction, without the necessity of proving either inadequacy of legal remedies or irreparable harm and without the necessity of posting a bond.  The Company shall also be entitled to the recovery of reasonable attorney’s fees and expenses incurred in conjunction with any such proceeding.

 

SECTION 9.  SEVERABILITY AND REFORMATION.

 

The provisions of this Agreement are severable, and any judicial determination that one or more of such provisions, or any portion thereof, is invalid or unenforceable shall not affect the validity or enforceability of any other provisions, or portions thereof, but rather shall cause this Agreement to first be construed in all respect as if such invalid or unenforceable provisions, or portions thereof, were modified to terms that are valid and enforceable and provide the greatest protection to the Company’s business and interests; provided, however, that if necessary to render this Agreement enforceable, it shall be construed as if such invalid or unenforceable provisions, or portions thereof, were omitted.

 

SECTION 10.  GENERAL PROVISIONS.

 

10.1  Notices.  Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of personal delivery (including personal delivery by fax) or the third day after mailing by first class mail, to the Company at its primary office location and to Executive at Executive’s address as listed on the Company payroll.

 

10.2  Waiver.  If either party should waive any breach of any provision of this Agreement, he or it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

 

10.3  Complete Agreement.  This Agreement constitutes the complete, final and exclusive embodiment of the agreement of the Company and Executive with regard to the subject matter hereof, and supersedes and replaces in all respects any previous agreements solely regarding Executive’s employment by the Company or the terms thereof.  This Agreement is entered into without reliance on any promise or representation other than those expressly contained herein, and this Agreement cannot be modified or amended except in a writing signed by Executive and an authorized officer of the Company.

 

10.4  Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

 

 

13


 

10.5  Headings.  The headings of the sections hereof are inserted for convenience of reference only and shall not be deemed to constitute a part hereof or affect the meaning or interpretation of any of the provisions hereof.

 

10.6  Successors and Assigns.  This Agreement is intended to bind, inure to the benefit of, and be binding upon, the successors and assigns of the Company, including the surviving entity of any merger, consolidation, share exchange or combination of the Company with any other entity.  Notwithstanding the foregoing, Executive may not assign, transfer or delegate any of Executive’s duties or obligations hereunder, and Executive may not assign or transfer any of Executive’s rights hereunder without the written consent of the Company.

 

10.7  Choice of Law and Venue.  All questions concerning the construction, validity and interpretation of this Agreement shall be governed by the law of the State of Georgia.  Any dispute arising out of, or concerning, this Agreement or the employment relationship between the parties, shall be resolved exclusively in a federal or state court of competent jurisdiction located in Georgia.  To the extent necessary, the parties hereby submit to, and agree not to contest, the jurisdiction of such courts.

 

10.8  Representations.  Each party represents and warrants to the other that he or it has full power and authority to enter into and perform this Agreement and that his or its execution and performance of this Agreement shall not constitute a default under or breach of any of the terms of any agreement to which he or it is a party or under which he or it is bound.  Each party represents that no consent or approval of any third party is required for his or its execution, delivery and performance of this Agreement or that all consents or approvals of any third party required for his or its execution, delivery and performance of this Agreement have been obtained.

 

10.9  Withholding.  Any and all amounts payable under this Agreement, including without limitation, amounts payable under Section 2.1 or Section 6.1(c) hereof, are subject to withholding for such federal, state, and local taxes as the Company, in its reasonable judgment, determines to be required pursuant to any applicable law, rule or regulation.

 

10.10  Survival.  The provisions of Sections 3, 4, 5, 7, 8, 9 and 10 of this Agreement shall survive the termination of this Agreement for whatever reason.

 

10.11  Section 409A.   If the Executive is a “key employee,” as defined in Section 416(i) of the Code (without regard to paragraph 5 thereof), except to the extent permitted under Section 409A of the Code, no benefit or payment that is subject to Section 409A of the Code (after taking into account all applicable exceptions to Section 409A of the Code, including but not limited to the exceptions for short-term deferrals and for “separation pay only upon an involuntary separation from service”) shall be made under this Agreement on account of the Executive’s “separation from service,” as defined in Section 409A of the Code, with the Company until the later of the date prescribed for payment in this Agreement and the first day of the seventh calendar month that begins after the date of the Executive’s separation from service (or, if earlier, the date of death of the Executive).

 

 

14


 

 

IN WITNESS WHEREOF, the Company and Executive have executed this Agreement to be effective as of the day and year first above written.

 

THE “COMPANY”

 

COMVERGE, INC.

 

By:      /s/ R. Blake Young

Name: R. Blake Young

Title:  Chairman, Compensation Committee of the Board of Directors

 

“EXECUTIVE”

 

By:      /s/ Michael D. Picchi

Name: Michael D. Picchi

Title:   Interim CEO & President, EVP & CFO

 

 

 

15


 

 

 

Exhibit A

 

Annual Salary*

 

Executive shall be paid at the rate of $240,000 per annum.

Annual

Cash

Incentive1

Executive will have the opportunity to earn an annual bonus equal to 25% (threshold), 50% (target) or 100% (maximum) of his annual salary based on the achievement of performance criteria established by the Compensation Committee.

 

Annual

Equity Incentive1

Executive will have the opportunity to earn an annual equity award comprised of a combination of restricted stock and options valued at 1.13 times salary (threshold), 1.50 times salary (target) or 1.88 times salary (maximum) based on the achievement of performance criteria established by the Compensation Committee.

 

 

* Executive and the Company acknowledge that the Company, through the Compensation Committee, shall fairly and reasonably compensate Executive for his Interim CEO work.

 

* The Parties acknowledge that there is an agreement for a retention bonus between Executive and the Company relating to additional compensation for continued employment through June 25, 2010.

 

 

 

 


 

1   The compensation committee will set Target, Threshold, and Maximum performance levels for Annual Cash and Equity incentives.  The Threshold performance level is the minimum level of performance required as a condition of earning any incentive.  The Target performance level is the level of performance at which the executive, operating division or company is expected to perform.  The Maximum performance level is the highest level of payout.  The committee has discretion to grant or not grant such Annual Cash or Annual Equity Incentives, if in its reasonable discretion, is in the best interests of the Company.

 

 

 


Back to Top

EX-10.8 9 exhibit10_8.htm EMPLOYMENT AGREEMENT

Exhibit 10.8

FIRST AMENDMENT TO

EMPLOYMENTAGREEMENT

 

 

THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT ("First Amendment") is entered into by and between COMVERGE INC., a Delaware corporation ("Company"), and MICHAEL D. PICCHI ("Executive") effective September 1, 2010.

 

WHEREAS, the Company and Executive have heretofore entered into that certain Employment Agreement dated September 29, 2009 (the "Employment Agreement"); and

 

WHEREAS, the Company and Executive desire to amend the Employment Agreement;

 

NOW, THEREFORE, in consideration of the premises set forth above and the mutual agreements set forth herein, the Company and Executive hereby agree, effective as of the date set forth above, that the Employment Agreement shall be amended as hereafter provided:

 

1.  

Section 1.4 – Term.  The Term of Executive’s Employment Agreement hereunder shall commence as of the Employment Date and shall continue through June 1, 2013, unless earlier terminated pursuant to the provisions of the Employment Agreement.  Unless, within ninety (90) days prior to any then-scheduled expiration of the Term, either party notifies the other in writing of its desire not to renew this Agreement, the Term shall automatically be extended for an additional period of one (1) year from the applicable succeeding anniversary of the Employment Date.

 

2.  

Section 2.1 – Compensation.  Executive’s base salary as contained in Exhibit A to the Employment Agreement is changed to $300,000.  All other terms and conditions of Exhibit A to the Employment Agreement shall remain the same.

 

3.  

Section 7.5(b) – Termination by the Company Without Cause, or by Executive for Good Reason.  Section 7.5(b) of the Employment Agreement shall be deleted in its entirety and replaced as follows:  Subject to subsection 7.5(c) below, if the Company terminates Executive’s employment without Cause, or Executive terminates his employment with Good Reason, then in such event Executive shall be entitled to all payments allowed pursuant to subsection 7.5(a) above and severance pay in the amount of the sum of (i) twelve (12) months’ annual base salary as specified in Exhibit A, plus (ii) an amount equal to the amount of Executive’s bonus payment for the last complete year of service prior to termination, times a fraction, the numerator of which is the number of days in the year of Executive’s termination through the date of such termination, and the denominator of which is 365 (or in the case of leap years, 366). The benefits provided pursuant to this Section 7.5(b) shall not include any stock option or similar grants and Executive’s rights concerning any stock option or similar grants shall be exclusively determined by applicable Company policies or plans concerning such grants.

 

4.  

Except as expressly modified by this First Amendment, all other terms and conditions of the Employment Agreement shall remain in full force and effect and are hereby confirmed and ratified.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment as of the date first set forth above.

 

COMVERGE, INC.

 

By:             /s/ R. Blake Young                                                 

Name:         R. Blake Young

Title:           President & CEO

 

 

 

By:              /s/ Michael D. Picchi                                                      

Name:         Michael D. Picchi

Title:           EVP & CFO

 

 

 

 

EX-10.31 6 exhibit10_31.htm MATERIAL AGREEMENT

 

 

EXHIBIT 10.31

 

COMVERGE, INC.

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of this 18th day of February, 2010, by and between R. Blake Young, an individual (“Executive”), and Comverge, Inc., a Delaware corporation (the “Company”).   The Executive and Company are collectively referred to as “Parties” and individually as “Party”.

 

WHEREAS, the Company has wishes to employ Executive to provide personal services to the Company and wishes to provide Executive with certain compensation and benefits in return for such services;

 

WHEREAS, the Company has retained Executive in the past to serve as an independent director to the Board, and the Company and Executive desire for the Executive to remain as a “non-independent” director on the board, pursuant to the this Agreement, and to assume the position and duties as provided herein; and

 

WHEREAS, Executive wishes to be employed by the Company, and to provide personal services to the Company in return for certain compensation and benefits.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the Executive and the Company hereby agree as follows:

 

SECTION 1.  

EMPLOYMENT BY THE COMPANY.

 

1.1 Employment Agreement.  Executive’s relationship with the Company has been solely as an independent director of the board.  Upon the date of execution of this Agreement and conditioned upon the written consent of the Board of Directors (the “Employment Date”), Executive’s continued employment with the Company shall be pursuant to the terms stated herein.

1.2 Position and Duties.  Executive shall serve in the position of President and Chief Executive Officer (collectively “President & CEO”), with such powers, duties, and/or responsibilities as are assigned to Executive by the Company’s Board of Directors or their delegate.  Executive will devote his best efforts, time, and attention exclusively to the business of the Company, and shall faithfully and efficiently discharge all duties and responsibilities assigned to him hereunder.  Executive shall comply with all Company policies, procedures and practices as may now exist or which from time to time be implemented. In order to fulfill the duties as described in this Section 1.2, Executive shall cease performing any business activities through or for any business entity other than the Company, including but not limited to any consulting activities in which Executive engaged prior to his execution of this Agreement.

1.3 Location.  Executive’s primary office location shall be Atlanta, Georgia, where for the first nine months the Executive may live in Houston, Texas and commute to Atlanta, Georgia, with the understanding that the Executive shall permanently relocate within next nine months of his start date to Atlanta, Georgia.  Executive acknowledges that the Company’s business extends across the entire United States and elsewhere and that, from time to time, however, Executive’s duties may require him to travel and to work at other locations, including but not limited to other Company office locations.

 

 

1


 

1.4 Term.  The term of Executive’s employment hereunder shall commence as of the Employment Date and shall continue through February 18, 2013 unless earlier terminated pursuant to the provisions of this Agreement.  The Board may elect to extend this Agreement by providing ninety (90) days advanced written notice prior to any then-scheduled expiration.

 

SECTION 2.  

COMPENSATION, BENEFITS AND OWNERSHIP.

 

2.1 Compensation.  Executive shall be paid a salary, and shall be eligible to receive incentive compensation, as described in Exhibit A attached hereto.  All compensation payable pursuant to any plan or program described in Exhibit A shall be governed by and subject to the applicable plan or program documents, which may from time to time be amended, modified or terminated on such terms and in such manner as is permitted in respect of the applicable plan or program.  The Parties understand that, with the exception of the Company’s withholding and payroll tax obligations, the Executive is responsible for all income tax obligations and that there are no additional payments to be made by the Company to the Executive for such obligations.

 

2.2 Company Benefits.  Subject to the satisfaction of the general rules for eligibility and participation under the Company’s standard employee benefit plans and practices, Executive shall be allowed to participate in the Company’s standard employee benefit plans and practices which may be in effect from time to time during the term of Executive’s employment and are provided by the Company to its employees generally.  Such participation shall be governed by the applicable plan documents, and the Company reserves the right, in its discretion, to amend, modify, or discontinue any benefit plan or practice.

 

2.3 Section 280G Limitation.  In the event that any payments to which Executive becomes entitled in accordance with the provisions hereof, or in connection with any plans or programs referred to in Exhibit A or Section 2.2 hereof, would otherwise be deemed to constitute “parachute payments” (each one, a “Parachute Payment”) within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended and the regulations and administrative guidance thereunder (the “Code”), then such Parachute Payments will be subject to reduction to the extent necessary to assure that Executive receives only the greater benefit of receiving (a) the amount of those payments which would constitute such a Parachute Payment or (b) the amount which yields Executive the greatest after-tax amount of benefits after taking into account any excise tax imposed on the payments provided to Executive pursuant to this Agreement (or on any other benefits to which Executive may be entitled in connection with the Change in Control or the subsequent termination of service) under Section 4999 of the Code.

 

 

3


 

SECTION 3.  

ASSIGNMENT OF INTELLECTUAL PROPERTY.

 

3.1 Ownership and Assignment of Intellectual Property.  All processes, products, methods, improvements, discoveries, inventions, ideas, creations, trade secrets, know-how, machines, programs, designs, routines, subroutines, techniques, ideas for formulae, writings, books and other works of authorship, business concepts, plans, projections and other similar items, as well as all business opportunities discovered, conceived, designed, devised, developed, perfected or made by Executive, whether alone or in conjunction with others, and within the course of Executive’s job responsibilities to the Company, and related in any manner to the actual or anticipated business of the Company or to actual or anticipated areas of research and development of the Company (all of the foregoing collectively, the “Intellectual Property”), shall be promptly disclosed to and are the property of the Company, and Executive hereby assigns, transfers and conveys all of the Intellectual Property and all of Executive’s rights therein to the Company.  The term “Intellectual Property” shall be given the broadest interpretation possible and shall include any Intellectual Property conceived, designed, devised, developed, perfected or made by Executive during off-duty hours and away from the Company’s premises, as well as those conceived, designed, devised, developed, perfected or made in the regular course of Executive’s performance under this Agreement.

 

3.2 Post-Employment Assignment of Intellectual Property.  In consideration of the benefits provided pursuant to this Agreement, particularly those benefits conferred by Section 6.5 and any stock option or similar rights pursuant to any Company plans in which Executive was a participant, all Intellectual Property discovered, conceived designed, devised, developed, perfected or made by Executive following the termination of this Agreement shall be Intellectual Property covered by the scope of Section 3.1 if it was conceived, in whole or in part, while this Agreement remains in effect.  All Intellectual Property conceived, designed, devised, developed, perfected or made by Executive within twelve (12) months after termination of this Agreement shall be disclosed to the Company, and shall be presumed to have been conceived, designed, devised, developed, perfected or made by Executive during the Term, and Executive shall have the burden of proving otherwise in order to successfully rebut such presumption.

 

3.3 Written Assignments.  Executive shall execute and deliver, both during the Term and thereafter in connection with a severance agreement required under Section 7.5(g) to and in favor of the Company such assignments (including patent, trademark and copyright assignments), documents, instruments and applications (including patent, trademark or copyright applications) as the Company may deem appropriate or necessary to claim, secure, acquire, perfect, defend, enforce and/or assign any and all rights and privileges in and to or arising from the Intellectual Property.  Executive shall also, both during the Term and thereafter, cooperate with the Company, and to render such assistance as the Company may reasonably require, in connection with any process (whether administrative, judicial or otherwise) associated with the Company’s efforts to claim, secure, protect, perfect, defend, assign and/or enforce such rights and privileges in favor of the Company and its successors, licensees and assigns.  Executive shall also, both during the Term and thereafter, promptly disclose to the Company fully and in writing any Intellectual Property that Executive may conceive, make, or develop, in whole or in part, by himself or jointly with others during his Term with the Company, (a) whether or not the Intellectual Property was created at the suggestion of the Company; and (b) whether or not the Intellectual Property was reduced to drawings, written description, documentation, models or other tangible form.

 

 

2


 

3.4 Work Made for Hire.  Executive acknowledges and agrees that any work of authorship comprising Intellectual Property shall be deemed to be a “Work Made for Hire,” to the extent permitted by the United States Copyright Act (17 U.S.C. § 101 (2000)).  To the extent that any such work of authorship may not be deemed to be a Work Made for Hire, Executive hereby irrevocably assigns all ownership rights in and to such work to the Company.  If any such work of authorship cannot be assigned, Executive hereby grants to the Company an exclusive, assignable, irrevocable, perpetual, worldwide, sub-licensable (through one or multiple tiers), royalty-free, unlimited license to use, copy, reproduce, distribute, modify, adapt, alter, translate, improve, create derivative works of, practice, publicly perform, publicly display and digitally perform and display such work in any media now known or hereafter known.  Outside the scope of his employment, Executive agrees not to (a) practice, display, copy, reproduce, distribute, transfer, modify, adapt, alter, translate, improve, or create derivative works from, or otherwise use, any such work of authorship or (b) incorporate any such work of authorship into any product or invention unrelated to the Company’s business.  To the extent moral rights (as defined by applicable law) may not be assignable under applicable law and to the extent the following is allowed by the laws in the various countries where moral rights exist, Executive hereby irrevocably waives such moral rights and consents to any action of the Company that would violate such moral rights in the absence of such consent.

 

3.5 No License Granted.  Executive acknowledges and agrees that nothing in this Agreement shall be deemed to grant, by implication, estoppel, certain rules of construction, or otherwise, (a) a license from the Company to Executive to make, develop, use, license, disclose, or transfer in any way a Intellectual Property or (b) a license from the Company to Executive regarding any of the Company’s existing or future ownership rights.

 

SECTION 4.  

CONFIDENTIALITY.

 

4.1 Confidentiality Obligation.  Executive acknowledges and agrees that he has and will have access to Proprietary, Trade Secret and Confidential Information (as those terms are defined below in Section 4.2) as a result of his employment with the Company, and that such information constitutes valuable, special and unique property of the Company.  Without limiting the generality of the foregoing, Executive expressly acknowledges that, in the course of performing his services pursuant to this Agreement, he will obtain or learn Confidential and Proprietary Information regarding the Company including, without limitation information regarding the Company’s operations, financial results, pricing, customers, suppliers and other matters.  Accordingly, at all times while employed by the Company, and continuing for a period of three (3) years with respect to Proprietary and Confidential Information, and for whatever time Trade Secret Information remains a Trade Secret under applicable law, following the termination of his employment with the Company for whatever reason, Executive shall neither use nor disclose, nor permit any person or entity within his reasonable control to use or disclose, any Proprietary, Trade Secret, and Confidential Information, and shall maintain and protect the secrecy of the Proprietary, Trade Secret, and Confidential Information, except to the extent required in the ordinary course of Executive’s employment with the Company, and then only subject to the direction and control of the Company.  Additionally, Executive shall cause all persons and entities within his reasonable control to use their respective best effort(s), to maintain and protect the secrecy of the Proprietary, Trade Secret and Confidential Information.  Executive further acknowledges that in the performance of his job duties to this Agreement, he will have access to and be informed of the Proprietary and Confidential Information (as described in Section 4.2) belonging to customers of Company, and that he shall return to the Company any such information within his actual or indirect position and comply with any restrictions concerning such information within his possess and comply with any restrictions concerning such information that have been imposed upon by its customer with respect to the use, disclosure, or return information.

 

 

3


 

4.2 Definition of Proprietary, Trade Secret and Confidential Information.  As used in this Agreement the term “Proprietary, Trade Secret and Confidential Information” means any non-public knowledge, information or property relating to, or used or possessed by, the Company (or its customers, as the case may be), and includes, without limitation, the following:  trade secrets, patents, copyrights, software (including, without limitation, all programs, specifications, applications, routines, subroutines, techniques, code and ideas for formulae); ideas, information, concepts, data, drawings, designs and documents; names of clients, customers, but not limited to employees, agents, contractors and suppliers; business plans, marketing plans and marketing information; financial, pricing, and cost information and other business records; and all copies of any of the foregoing.   Trade Secrets shall be such information defined by applicable law as a Trade Secret.

 

4.3 Return of Confidential Information.  Executive agrees that he shall immediately, upon the request of the Company, return to the Company all Proprietary, Trade Secret, and  Confidential Information and any other tangible material containing, prepared on the basis of, or reflecting any Proprietary, Trade Secret, and  Confidential Information (whether prepared by the Company, Executive or otherwise) and shall not retain any copies, extracts or other reproductions, in whole or in part, of such Proprietary, Trade Secret, and  Confidential Information.

 

4.4 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 that are held by or on behalf of 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.

 

4.5 Nature of Obligation.  The obligations of Executive set forth in this Section 4 are in addition to, and not in lieu of, any of Executive’s duties or the Company’s rights and remedies, at law or in equity, with respect to the Company’s Proprietary, Trade Secret, and Confidential Information and property.  The Company may pursue all such rights and remedies, as well as remedies for the breach of the provisions set forth herein.  Also, the Proprietary, Trade Secret, and  Confidential Information and other property referenced in this Section 4 constitute valuable property of the Company or its customers, the ownership of which is not dependent upon the performance by the Company of any of its obligations under this Agreement or the performance of any legal, statutory or other duty, if any, to Executive.  Accordingly, Executive shall perform its obligations under this Section 4 regardless of any alleged or actual breach or failure to perform by the Company.

 

 

4


 

4.6           Post Termination Activities.  Executive acknowledges and agrees that, during the course of his employment with the Company, he had access to the Company’s Proprietary, Trade Secret and Confidential Information, and that disclosure to or use of such information by a competitor of the Company would cause the Company irreparable harm.  Executive agrees and acknowledges that should he engage in the restricted activities as set forth in Section 5 hereof, he will inevitably disclose the Company’s Proprietary, Trade Secret and Confidential Information.

 

SECTION 5.  

NONCOMPETITION AGREEMENT.

 

In consideration of the compensation paid or payable to Executive by the Company pursuant to this Agreement (including, but not limited to, Section 2 hereof), Executive hereby agrees as follows:

 

5.1 With respect to the provisions contained in Sections 5 and 6 of this Agreement, Executive acknowledges:

 

(a)           That in his position as described herein, he will learn, develop and/or have access to all of the Company’s Proprietary, Trade Secret and Confidential Information as defined by Section 4.2 of this Agreement.  Executive further acknowledges that if he were to engage in the Restricted Activities that violate Sections 5.2 or 5.3 of this Agreement, he would be required to inevitably disclose some or all of the Company’s Proprietary, Trade Secret and Confidential Information in the performance of such Restricted Activities, and such inevitable disclosure would harm the Company if not prevented.  To avoid such inevitable disclosure and the harm to the Company resulting therefrom, which Executive agrees is a legitimate business interest of the Company, Executive agrees that the Restricted Activities and the Territory as defined by Sections 5.2 and 5.3 of this Agreement are reasonable and designed solely to protect the Company’s legitimate business interest.

(b)           That the Company’s business is nationwide in scope, that its customers are not restricted to any single state in the United States, and that in the performance of his duties as set forth in this Agreement, Executive shall perform services on behalf of the Company in all states in which the Company does business.  During the term of this Agreement, Executive will devote all of his working time and energies to the Company, and will not, without the Company’s express written permission, work for or provide services to any other entity, whether as a consultant, independent contractor, owner, partner, agent, representative, officer, director or employee.  This restriction, however, shall not apply to any Executive’s ownership of, or investments in, business entities that do not compete with Company during the term of this Agreement or afterward.  Executive also is permitted to own up to 1% of any class of securities of any corporation in competition with the Company that is actively traded on a national securities exchange or through NASDAQ.

 

(c)           That Executive shall have significant involvement in the development and maintenance of the Company’s relationships with its Customers, as defined by Section 6.2 of this Agreement, on a nationwide basis as well as the implementation, continuance and quality of the services provided by the Company to those Customers and that Executive’s efforts on behalf of the Company will significantly contribute to the Company’s goodwill within the marketplace.

 

 

5


 

(d)           That in his position, Executive shall participate in the direct solicitation of prospective Customers of the Company, and that through such participation, will learn of the Company’s sales strategies for those prospective Customers and that such sales strategies constitute a competitive advantage of the Company.

 

(e)           Reasonable Covenants.  Executive acknowledges and agrees that the covenants set forth in Sections 5 and 6 of this Agreement are necessary and reasonable to protect the Company and the conduct of its business and are a fair and reasonable restraint on 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 in light of the activities and business of the Company (including business activities in the planning stage) on the date of termination of Executive’s employment with the Company.  Executive acknowledges that he will not suffer any undue hardship as a result of the covenants set forth in Sections 4, 5 and 6 and that he will be able to pursue his occupation notwithstanding his obligations under Sections 4, 5 and 6.

 

5.2 In the event Executive’s employment with the Company ends or is terminated pursuant to Sections 7.5(b), or (c) of this Agreement, and as consideration for the payments to Executive as provided in Sections 7.5(b) or (c), Executive hereby covenants that he will not, (i) within the Territory and during the Noncompetition Period, without the prior written consent of the Company, engage in any Restricted Activities for or on behalf of any corporation, partnership, venture or other business entity which is engaged in the Restricted Business in the same or similar capacity as Executive performed for the Company. The term “Noncompetition Period” means the period beginning on the date of this Agreement and ending two (2) years after the date Executive’s employment with the Company ends or is terminated. The term “Restricted Activities” means having ownership of or being employed by as an employee, agent, or representative, or as an independent contractor or otherwise, and providing services similar to the services Executive provides to the Company.  The term “Restricted Business” includes (i) demand response and energy efficiency, and related services, hardware and software applications, and (ii) any other business in which the Company (y) is engaged or (z) can demonstrate, through documentation reviewed by the Executive during his employment and in his capacity as President and CEO, has contemplated being engaged in at the time of termination; and where such Restricted Business shall not include working as an employee at a utility. The term “Territory” means the  United States of America.

 

5.3 In the event Executive’s employment ends or is terminated pursuant to Section 7.5(a) of this Agreement, Executive shall be prohibited from engaging in the Restricted Activities as defined in Section 5.2 of this Agreement for a period of one (1) year after the date the Executive’s employment with the Company ends or is terminated.  The definitions contained in Section 5.2 are incorporated by reference in this Section 5.3.

 

 SECTION 6.  NONSOLICITATION AGREEMENT

 

6.1           During the term of this Agreement and for a period of one (1) year after Executive’s employment is terminated for any reason, Executive will not, directly or indirectly, individually or on behalf of any other person, firm, partnership, corporation, or business entity of any type, solicit, assist or in any way encourage any current employee or consultant of the Company, whom Executive supervised or had responsibility for during the twelve (12) months prior to the termination of employment, to terminate his or her employment relationship or consulting relationship with or for the Company, nor will Executive solicit the services of any former employee or consultant of the Company whom Executive supervised or had responsibility for during the twelve (12) months prior to the termination of employment, whose service with the Company has been terminated for less than six (6) months.

 

 

6


 

6.2 (a)           During the term of this Agreement and for a period of one (1) year after Executive’s employment ends or is terminated for any reason, Executive will not, directly or indirectly, individually or on behalf of any other person, firm, partnership, corporation, or business entity of any type, solicit, divert, or take away, or attempt to solicit, divert, or take away, in whole or in part, any Customer of the Company or otherwise interfere with the Company’s relationship with any Customer, for the purpose of competing with the Company in the Business.  For purposes of this Agreement, “Customer” shall mean any person, company or business entity to which the Company sells or licenses goods or services at the time Executive’s employment with the Company terminated and with whom Executive had material business contact during the twelve months (12) months prior to his termination of employment, and “Business” shall mean providing energy related services, including without limitation energy load control or demand response products and services, energy capacity, energy efficiency, advanced metering solutions, or other alternative energy solutions engaged in by the Company.

 

(b)           During the term of this Agreement, and for a period of six (6) months after Executive’s employment ends or is terminated for any reason, Executive will not, directly or indirectly, individually or on behalf of any person, firm, partnership, corporation, or business entity  of any type, solicit, divert or take away, or attempt to solicit, divert or take away, in whole or in part, any Prospective Customer of the Company or otherwise interfere with the Company’s relationship with any Prospective Customer, for the purpose of competing with the Company in the Business.  For purposes of this Agreement, “Prospective Customer” shall mean those persons, companies or businesses to whom Executive personally made a proposal for the purchase of the Company’s goods or services on behalf of the Company for such Prospective Customer to within the six (6) months  prior to the end or termination of Executive’s employment with the Company.

 

6.3           Enforcement.  The existence of any claim or cause of action of Executive against the Company, whether predicated on this Agreement or otherwise, shall not preclude the Company’s enforcement of these covenants.

 

6.4           Survival.  The provisions of this Section 6 shall survive any termination of this Agreement and are subject to paragraph 8 of this Agreement.

 

 

7


 

SECTION 7.  TERMINATION OF EMPLOYMENT.

 

7.1Certain Definitions.  As used herein, the following terms shall have the following definitions:

 

(a) Affiliate.  “Affiliate” shall mean an affiliate of the Company, as defined in Rule 12b-2 promulgated under Section 12 of the Securities Exchange Act of 1934, as amended from time to time.

 

(b) Cause.  A termination by the Company with “Cause” shall include (without limitation) (i) non-performance in the roles and duties, as assigned; (ii) Executive’s breach of any material provision of this Agreement; (ii) Executive’s material breach of any written Company policy contained in the Company’s manual of policies and procedures; or material non-compliance with any lawful direction given by the Company’s Board of Directors or its delegate; (iii) Executive’s Disability (subject to Company’s legal obligations); (iv) Executive’s fraud with respect of the business or affairs of the Company; (v) the commission by Executive, or entering of a plea of nolo contendere with regard to, a felony or a crime involving moral turpitude; or (vi) alcohol abuse or illegal drug use by Executive; provided however, that in the event of Executive’s breach as set forth in Sections 7(b)(i) and (ii) above, no Cause for termination shall be deemed to exist for any such breach that is curable and which in fact is cured by Executive within thirty (30) days after notice of such termination has been delivered to Executive, and in the event of Executive’s breach, as set forth in Section 7(b)(vi) above, no Cause shall be deemed to exist if the Executive and Company agree on a remedial program for Executive and so long as Executive in all respects complies with the requirements of such program.  During the time of Executive’s participation in any remedial program as set forth above, Executive shall, if directed by the Company, be on a paid leave of absence away from the Company’s premises.

 

(c) Change in Control.  For purposes of this Agreement, “Change in Control” means the occurrence of any of the following events if, following such occurrence, a Board Change (as hereinafter defined) occurs:

 

(i) any person becomes the beneficial owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such person any securities acquired directly from the Company or its affiliates) representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding voting securities; or

 

(ii) any merger, amalgamation, acquisition, or consolidation of the Company is consummated with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) more than fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving or parent equity outstanding immediately after such merger or consolidation; or

 

 

8


 

(iii) there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction having a similar effect), other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale, provided that such transferee entity confirms in writing that it is bound by the terms of this Agreement.

 

In the event that the foregoing definition of Change in Control does not comply with the requirements of Section 409A of the Code, and an amount, benefit or item of compensation hereunder would be subject to Section 409A of the Code, but would not be so subject if the definition of Change in Control above complied with the requirements of Section 409A of the Code, then with respect only to such amount, benefit or item of compensation, the term “Change in Control” shall mean a “change in control event” within the meaning of Treas. Reg. §1.409A-3(i)(5).

 

(d) Board Change.  “Board Change” means any change in directors after giving effect to any of the transactions described above as a result of which the individuals serving on the Board prior to such transaction no longer comprise at least a majority of the directors on the Board immediately after giving effect to such transaction.

 

(e) Good Reason.  A termination by the Executive for “Good Reason” means termination by Executive following (i) a reduction in Executive’s Annual Salary or other material component of compensation (excluding stock options or similar grants) required to be paid pursuant hereto without Executive’s prior written consent; (ii) the Company’s relocation of the Executive, without the Executive’s consent, to a permanent location more than seventy-five (75) miles from the location specified in Section 1.2 of this Agreement, with the understanding that Executive shall have nine months to move to Atlanta, Georgia; or (iii) the appointment of any officer that would displace Executive as the highest-ranking executive officer of the Company; provided however, that no Good Reason for Executive’s termination shall be deemed to exist unless (i) Executive gives notice to the Company of the action or condition which would constitute Good Reason within sixty (60) days of the initial existence of such action or condition, (ii) the action or condition which would constitute Good Reason is not cured by the Company within the 30-day period after the timely provision of the notice required herein, and (iii) Executive effects the termination for Good Reason within thirty (30) days after the expiration of the 30-day cure period.  After such thirty (30) day period, Executive shall be deemed to have waived any right to terminate this Agreement pursuant to this Section 7.1(e).

       (f) Non-Renewal.  A non-renewal of this Agreement as provided in Section 1.4 shall not be considered a termination under any provision of this Section 7 and, upon such non-renewal by either party and the termination of this Agreement, and Company shall be required to pay to Executive only the amounts specified in Section 7.5 (a).

 

 

9


7.2         Death by Executive.  This Agreement shall terminate upon Executive’s death.

 

7.3         By the Company.  The Company shall have the right to terminate Executive’s employment with the Company, at any time, with or without Cause.  For avoidance of doubt, the parties agree that Executive has no right to continue at any time in any office of the Company after being removed from such office in the manner provided in the Company’s bylaws or other applicable provisions of the Company’s governing law and instruments.

 

   7.4    By Executive.  Executive may terminate his employment with the Company at any time, upon providing thirty (30) days advance notice, either with or without Good Reason.  In the event Executive terminates his employment with the Company with Good Reason, such notice shall specify the grounds for such termination, and the Company shall have the opportunity to cure such grounds for termination in accordance with the provisions of Section 7.1(e).

 

7.5 Severance Pay, Other Post-Employment Payments and Acceleration of Benefits Upon Certain Terminations.  

 

(a) Termination by the Company for Cause or by Executive without Good Reason.  If the Company terminates Executive’s employment for Cause, or Executive terminates his employment without Good Reason, then in either such event, Executive shall not be entitled to any severance pay, and shall only be entitled to (i) any unpaid, but earned, salary, medical benefits, vested stock options, and vested restricted stock; (ii) any unpaid but earned vacation in accordance with Company policy then in effect; and (iii) any incurred but unpaid ordinary and necessary business expenses properly documented by Executive in accordance with the Company’s then effective expense reimbursement policy.

 

(b)           Termination by the Company Without Cause, or by Executive for Good Reason.  Subject to subsection 7.5(c) below, if the Company terminates Executive’s employment without Cause, or Executive terminates his employment with Good Reason, then in such event Executive shall be entitled to all compensation, benefits, and amounts allowed pursuant to subsections 7.5(a)(i), (ii), and (iii) above and severance pay in the amount of two times his annual base salary as specified in Exhibit A plus an amount equal to two times the Executive’s target annual cash incentive. The benefits provided pursuant to this Section 7.5(b) shall not include any stock option or similar grants and Executive’s rights concerning any stock option or similar grants shall be exclusively determined by applicable Company policies or plans concerning such grants except as provided in Exhibit A. 

 

(c)           Certain Terminations Following a Change in Control.  Notwithstanding the provisions of Section 7.5(b) above, in the event the Company terminates Executive’s employment without Cause, or Executive terminates his employment with Good Reason, concurrently with or within twenty-four (24) months following a Change in Control, then, in lieu of the payments specified in Section 7.5(b), Executive shall be entitled to all compensation, benefits, and amounts allowed pursuant to subsections 7.5(a)(i), (ii), and (iii) above and severance pay in the amount of three times his annual base salary as specified in Exhibit A plus an amount equal to three times the Executive’s target annual cash incentive.   In such event, all unvested options to purchase Company stock held by Executive shall immediately vest and become exercisable and all unvested restricted stock granted to Executive shall immediately vest and the legend providing restrictions on the sale or transfer of such stock related to such vesting shall be removed at the request of the Executive.

 

 

10


 

(d)           Continuation of Benefits.  In the event the Company terminates Executive’s employment and Executive qualifies for and becomes entitled to the severance pay provided pursuant to Section 7.5(b) or (c) above, as applicable, the Company shall continue to provide medical benefits as noted in Section 2.2 and continue to pay on behalf of Employee the Company’s portion of the premium for such medical benefits for the applicable COBRA period (currently 18 months).  After the applicable COBRA period, the Company shall pay Executive a lump sum equal to six times the Company’s portion of the premium for such medical benefits.  The above payments are subject to and in accordance with Executive’s COBRA rights and the provisions of the applicable plan documents, and the Company reserves the right, in its discretion, to amend, modify, or discontinue any benefit plan or practice.  If the Executive elects to participate in COBRA coverage for which he and/or his family is eligible under the Company’s then-effective health plans, the Executive shall pay to the Company on a monthly or quarterly basis, as the case may be, an amount equal to the co-payment amount for which the Executive would have been responsible had he remained an employee during the COBRA coverage period and the Company shall pay to the plan administrator on behalf of Executive the entire cost of the COBRA coverage.  Executive agrees to a netting of payments where applicable.

 

(e) Death or Disability.  Any termination of this Agreement by reason of Executive’s death or disability shall not give rise to any severance payment hereunder, but shall be without prejudice to any benefits payable to Executive or his estate under applicable company benefits relating to such event.  For purposes of this Agreement, the term “Disability” shall mean the Executive’s inability to perform his duties, in all material respects, because of illness, physical or mental disability, or other incapacity that continues for an uninterrupted period of one hundred eighty (180) days.  Executive’s unvested stock options and restricted stock not otherwise vested shall vest upon the death or disability of Executive as provided in, and subject to the provisions of, applicable Company policies or plans concerning the grants to Executive of unvested stock options and restricted stock.

 

(f)           Timing of Payments.  All severance payments provided above shall be paid in pursuant to Section 7.5(b) above, as applicable, that are measured by Executive’s annual base salary shall begin as provided by Section 7.5(g) (except as otherwise required by Section 10.11) and shall thereafter be paid at such times and in accordance with the Company’s payroll policies and procedures as if Executive were still employed by the Company; and all amounts of severance pay with respect to bonus payments shall be pro rated over the period of one (1) year, and payments of a proportional amount of such bonus payments shall begin as provided by Section 7.5(g) (except as otherwise required by Section 10.11) and shall thereafter be paid at such times as base salary payments are made.   All severance payments provided pursuant to Section 7.5(c) above, as applicable, that are measured by Executive’s annual base salary shall be paid in one lump sum amount as provided by Section 7.5(g) (except as otherwise required by Section 10.11).

 

 (g)           Requirements Regarding Eligibility to Receive Severance Payments.  Notwithstanding any of the other provisions hereof, the Company shall not be obligated to make and shall not make the severance payments provided under Section 7.5(b) or (c) above unless Executive executes and delivers to the Company within thirty (30) days from the date on which the Executive’s employment is terminated, and does not at any time after execution and delivery withdraw or revoke, a Severance Agreement substantially in the form as Exhibit B, which is attached hereto and the assignment as set forth in Section 3.3. Furthermore, in the event Executive initially qualifies to receive the payments and benefits provided under this Section 7.5, but then fails to comply with his obligations under this Agreement (including without limitation Sections 3, 4, 5 and 6 hereof), the Company’s obligations under this Section 7.5 shall terminate.

 

 

11


 

(h)           Termination of other Compensation and Benefits.  Except as otherwise required by applicable law or as provided above in this Section 7.5, Executive’s eligibility for or entitlement to any other compensation or benefits shall cease immediately upon termination of this Agreement and Executive’s employment with the Company.

 

(i)           Characterization of Payments under Section 409A.  For purposes of Section 409A of the Code (including, but not limited to, to application of the exceptions for short-term deferrals and for “separation pay only upon an involuntary separation from service”): (i) each payment provided for under this Section 7.5 is hereby designated as a separate payment, rather than a part of a larger single payment or one of a series of payments; and (ii) with respect to the severance payments and benefits to which Executive may become entitled under Section 7.5 of this Agreement and which are not in substitution or replacement of “nonqualified deferred compensation” (within the meaning of Section 409A of the Code), a termination of Executive’s employment by the Company without Cause or by Executive for Good Reason is intended to constitute an “involuntary separation from service” and, in turn, a “substantial risk of forfeiture” (within the meanings of Section 409A of the Code).

 

7.6           Effect of Termination.  Termination of Executive’s employment with the Company shall not limit, affect, or discharge Executive’s obligations under Sections 3, 4 5 and 6 of this Agreement and shall not release the Company from its obligations to make payments or provide benefits required by Sections 2.2 and 7.5 of this Agreement following such termination (subject to the limitations provided in Section 7.3).  All other obligations as to periods after the date of termination shall cease, without prejudice to the rights and remedies for events or breaches prior to the date of termination.

 

7.7           Waiver.  The Company may waive or defer exercising its power to terminate this Agreement, but such waiver or deferral shall not thereby (a) establish a policy, interpretation, or course of performance that may be used to construe, limit or affect the express terms of this Agreement, (b) preclude the Company from exercising its rights or remedies hereunder or otherwise on any other occasion or from using the breach as support for the exercise of its power to terminate on any future occasion or (c) limit the ability of the Company to revoke such waiver or deferral and exercise its power to terminate this Agreement if it determines that the condition giving rise to a power to terminate has continued, or if the Company determines in good faith that it was not fully aware of all facts and circumstances of such condition, or if such waiver or deferral may be retracted at common law.

 

7.8           Board Resignation.  The parties agree that upon termination of Executive’s employment (whether by the Company, Executive or other operation of this Agreement), the Executive shall provide to the Company Executive’s unconditional resignation from the Company’s Board of Directors within five days of receiving a request to do so from the Company’s Chairman or a majority of the directors then in office excluding Executive.  The parties hereby agree and acknowledge that the foregoing provision does not represent a present decision to resign as a director of the Company.

 

 

12


 

SECTION 8.  CERTAIN REMEDIES.

 

With respect to each and every breach or violation or threatened breach or violation by Executive of Sections 3, 4, 5 and 6 of this Agreement, the Company, in addition to all other remedies available at law or in equity, including, but not limited to, specific performance of the provisions hereof, shall be entitled to enjoin the commencement or continuance thereof and may, without notice to Executive, apply to any court of competent jurisdiction for entry of an immediate restraining order or injunction, without the necessity of proving either inadequacy of legal remedies or irreparable harm and without the necessity of posting a bond.  The Party that obtains a favorable judgment shall be entitled to the recovery of reasonable attorney’s fees and expenses incurred in conjunction with any such proceeding.

 

SECTION 9.  SEVERABILITY AND REFORMATION.

 

The provisions of this Agreement are severable, and any judicial determination that one or more of such provisions, or any portion thereof, is invalid or unenforceable shall not affect the validity or enforceability of any other provisions, or portions thereof, but rather shall cause this Agreement to first be construed in all respect as if such invalid or unenforceable provisions, or portions thereof, were modified to valid and enforceable terms that effectuate the compensation package that this Agreement provides for Executive and that provide the greatest protection to the Company’s business and interests; provided, however, that if necessary to render this Agreement enforceable, it shall be construed as if such invalid or unenforceable provisions, or portions thereof, were omitted.

 

SECTION 10.  GENERAL PROVISIONS.

 

10.1  Notices.  Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of personal delivery (including personal delivery by fax) or the third day after mailing by first class mail, to the Company at its primary office location and to Executive at Executive’s address as listed on the Company payroll.

 

10.2  Waiver.  If either party should waive any breach of any provision of this Agreement, he or it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

 

10.3  Complete Agreement.  This Agreement constitutes the complete, final and exclusive embodiment of the agreement of the Company and Executive with regard to the subject matter hereof, and supersedes and replaces in all respects any previous agreements solely regarding Executive’s employment by the Company or the terms thereof.  This Agreement is entered into without reliance on any promise or representation other than those expressly contained herein, and this Agreement cannot be modified or amended except in a writing signed by Executive and an authorized officer of the Company.

 

10.4  Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

 

 

13


 

10.5  Headings.  The headings of the sections hereof are inserted for convenience of reference only and shall not be deemed to constitute a part hereof or affect the meaning or interpretation of any of the provisions hereof.

 

10.6  Successors and Assigns.  This Agreement is intended to bind, inure to the benefit of, and be binding upon, the successors and assigns of the Company, including the surviving entity of any merger, consolidation, share exchange or combination of the Company with any other entity.  Notwithstanding the foregoing, Executive may not assign, transfer or delegate any of Executive’s duties or obligations hereunder, and Executive may not assign or transfer any of Executive’s rights hereunder without the written consent of the Company.

 

10.7  Choice of Law and Venue.  All questions concerning the construction, validity and interpretation of this Agreement shall be governed by the law of the State of Texas.  Any dispute arising out of, or concerning, this Agreement or the employment relationship between the parties, shall be resolved exclusively in a federal or state court of competent jurisdiction located in Texas.  To the extent necessary, the parties hereby submit to, and agree not to contest, the jurisdiction of such courts.

 

10.8  Representations.  Each party represents and warrants to the other that he or it has full power and authority to enter into and perform this Agreement and that his or its execution and performance of this Agreement shall not constitute a default under or breach of any of the terms of any agreement to which he or it is a party or under which he or it is bound.  Each party represents that no consent or approval of any third party is required for his or its execution, delivery and performance of this Agreement or that all consents or approvals of any third party required for his or its execution, delivery and performance of this Agreement have been obtained.

 

10.9  Withholding.  Any and all amounts payable under this Agreement, including without limitation, amounts payable under Section 2.1 or Section 6.1(c) hereof, are subject to withholding for such federal, state, and local taxes as the Company, in its reasonable judgment, determines to be required pursuant to any applicable law, rule or regulation.

 

10.10  Survival.  The provisions of Sections 3, 4, 5, 7, 8, 9 and 10 of this Agreement shall survive the termination of this Agreement for whatever reason.

 

10.11  Section 409A.   If the Executive is a “key employee,” as defined in Section 416(i) of the Code (without regard to paragraph 5 thereof), except to the extent permitted under Section 409A of the Code, no benefit or payment that is subject to Section 409A of the Code (after taking into account all applicable exceptions to Section 409A of the Code, including but not limited to the exceptions for short-term deferrals and for “separation pay only upon an involuntary separation from service”) shall be made under this Agreement on account of the Executive’s “separation from service,” as defined in Section 409A of the Code, with the Company until the later of the date prescribed for payment in this Agreement and the first day of the seventh calendar month that begins after the date of the Executive’s separation from service (or, if earlier, the date of death of the Executive).

 

 

(Signature Pages Follow)

 

 

14


 

IN WITNESS WHEREOF, the Company and Executive have executed this Agreement to be effective as of the day and year first above written.

 

THE “COMPANY”

 

COMVERGE, INC.

 

 

By:      /s/ Alec Dreyer

Name: Alec Dreyer

Title:   Chairman, Comverge Board of Directors

 

“EXECUTIVE”

 

 

By:      /s/ R. Blake Young

Name: R. Blake Young

Title:   President & Chief Executive Officer

 

 


 

15


 

Exhibit A

 

Annual Salary*

 

Executive shall be paid at the rate of $450,000 per annum.

Annual

Cash Incentive1

Executive will have the opportunity to earn an annual bonus equal to 37.5% (threshold), 75% (target) or 150% (maximum) of his annual salary based on the achievement of performance criteria established by the Compensation Committee.   This cash incentive is available for the Executive’s first year of employment (calendar year 2010) and shall be prorated based on the start date of the Executive’s services.

 

Annual

Equity Incentive1

Executive will have the opportunity to earn an annual equity award comprised of a combination of restricted stock and options valued at 2.25 times salary (threshold), 3.00 times salary (target) or 3.75 times salary (maximum) based on the achievement of performance criteria established by the Compensation Committee.  This annual equity incentive is not available for Executive’s first year of employment (calendar year 2010).  Executive would be eligible for this incentive for calendar year 2011.

 

Initial Equity/Stock Option Grants

Upon execution of the Agreement, and in consideration of Executive’s obligations contained therein, including but not limited to the discontinuance of any business or business activities in which Executive was engaged prior to the execution of this Agreement, Executive shall be granted 92,000 shares of restricted stock and 368,000 stock options.

 

Restricted stock shall vest 46,000 shares on February 18th, 2012, which is the second year after the date this Agreement is executed, with the remaining 46,000 vesting on February 18th, 2013, which is the third year after the date this Agreement is executed.

 

The stock options granted under this Agreement shall be at a strike price of the closing price of the Company’s common stock as of the date that the Board consents to the appointment of Executive as CEO, and shall vest quarterly on a pro rata basis over the next four years.

 

 

Living & Relocation Expenses

Company shall pay to Executive a relocation stipend as follows:

 

Company will pay all reasonable household moving expenses on behalf of Executive and his family for their relocation to Atlanta, Georgia.  These household moving expenses will be direct-billed to the Company.

 

In addition, in consideration of other relocation expenses that Executive and his family will incur, $125,000 will be paid upon execution of the Agreement and $125,000 will be paid upon final relocation to Atlanta, Georgia.  This relocation stipend includes without limitation expenses required for selling Executive’s residence in Houston, Texas, to purchasing his Atlanta, Georgia house, and all living and travel expenses during the process.

Attorney’s fees

Company shall reimburse Executive for all reasonable attorney’s fees associated with the review and negotiation of this Agreement within thirty (30) days of receiving the invoice for such fees and where such fees/invoice shall not exceed $5000.

Vacation

Executive is entitled to four weeks of paid vacation each year.  Vacation shall be prorated during the course of the year.

 


 

1   The compensation committee will set Target, Threshold, and Maximum performance levels for Annual Cash and Equity incentives.  The Threshold performance level is the minimum level of performance required as a condition of earning any incentive.  The Target performance level is the level of performance at which the executive, operating division or company is expected to perform.  The Maximum performance level is the highest level of payout.  The committee has discretion to grant or not grant such Annual Cash or Annual Equity Incentives, if in its reasonable discretion, is in the best interests of the Company.

 

 

 


 

EXHIBIT B

 

SEPARATION AGREEMENT AND GENERAL RELEASE

 

COMPANY CONFIDENTIAL

 

This Separation Agreement and General Release (“Agreement”) is made and entered into on this ___ day of _________, ______ by and between Comverge, Inc., a Delaware corporation (hereinafter referred to as “the Company”), and R. Blake Young (hereinafter referred to as “Employee”).

 

W I T N E S S E T H

WHEREAS, Employee has been employed by the Company in the position of President and Chief Executive Officer pursuant to an Executive Employment Agreement (“Employment Agreement”) dated ________________, 2010; and

 

WHEREAS, the Company has decided not to renew the Employment Agreement and to terminate the Employment Agreement and Employee’s employment with the Company effective_____________________, subject to the terms of this Agreement; and

 

WHEREAS, the parties have decided to settle all rights, claims, and demands which either party has against or may have against the other arising from the non-renewal and termination of the Employment Agreement, Employee’s employment or termination of his employment with the Company; and

 

WHEREAS, the Company and Employee desire to set forth their respective rights, duties and obligations and desire complete accord and satisfaction of all claims arising therefrom;

 

NOW THEREFORE, for and in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Employee hereby agree as follows:

 

1.           Company’s Agreements.

(a) The Employment Agreement will terminate and Employee’s employment with the Company will end on _________________________. Upon Employee’s execution and non-revocation of this Agreement, Employee shall be entitled to the benefits set forth in Section _________ of the Employment Agreement, which is incorporated hereby by reference.  Employee’s entitlement to the benefits or payments from the Company, except as expressly stated herein, is subject to Employee’s acceptance of this Agreement and his compliance with the conditions set forth herein.  At all times preceding and including his termination date, Employee shall be responsible for cooperating with the Company and its directors, officers, employees, agents and representatives.  Employee agrees to exercise his best efforts to perform all job duties and responsibilities, and any task to which he is assigned to perform, in a competent and satisfactory manner, to comply with all policies, procedures and work directives, and to assist and facilitate in the transition of his job responsibilities and functions.  Upon termination of his employment, the Company agrees to pay Employee the severance pay as set forth in Section _____ of the Employment Agreement, less any withholdings that are required under federal and state law.  Except as specifically set forth in this Agreement, Employee shall be entitled to no other payments under this Agreement or the Employment Agreement.

 

(b) Whether or not Employee signs this Agreement, (i) the Company will pay to Employee an amount constituting Employee’s accrued, unused vacation days and reimburse Employee for business expenses in accordance with Company policies, and (ii) Employee’s Group Medical and Dental benefits may be continued for up to eighteen (18) months at Employee’s expense by completion and submittal of the form provided by COBRA Administration Services.  Pursuant to Section _______, the Company will continue to provide certain benefits assuming Employee continues to pay his required payment amounts.

 

 


 

 

2.           Employee’s Agreements.

 

(a)           As a material inducement to the Company to enter into this Agreement, Employee hereby irrevocably and forever releases the Company and its parent and/or related companies, subsidiaries, or affiliates, and their past, present and future officers, directors, employees, agents and attorneys (collectively “Releasees”) from any and all charges, claims, complaints, demands, liabilities, rights, obligations, promises, causes of action, costs, damages at law, expenses (including attorneys’ fees and costs actually incurred), and suits hidden, of any nature whatsoever, known or unknown, which Employee ever had, may have, or now has arising from or related to, directly or indirectly, Employee’s Employment Agreement, his employment by the Company or any other events which have occurred as of the date of this Agreement, including but not limited to any claims arising under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Americans with Disabilities Act, the Family Medical Leave Act, the Age Discrimination in Employment Act and any and all other federal and state laws or statutes.  Notwithstanding the foregoing, Employee does not release (i) any claims under this Agreement or under the Age Discrimination in Employment Act that may arise after the execution of this Agreement, or (ii) any rights that Employee may have to indemnification under applicable law or the Company’s articles of incorporation and by-laws, or benefits under any directors and officers insurance that is or may have been in existence at or prior to the date hereof, or (iii) any vested benefits under any Company benefit plans or programs.

 

(b)           Employee agrees not to commence any legal proceeding or lawsuit against the Company or any Company Affiliate arising out of or based upon Employee’s employment with the Company or the end of Employee’s employment with the Company; provided, however, this provision does not apply to any claims or causes of action not released pursuant to Section 2(a) above, including without limitation any claims or causes of action accruing and based upon conduct occurring after the Effective Date of this Agreement, including, without limitation, any claims or causes with respect to Executive’s rights to payments or benefits under this Agreement.

 

(c)  Employee represents and agrees that he will keep the terms, the amount, and the fact of this Agreement completely confidential and he will not hereafter disclose such information to anyone except members of his family, his professional advisers (who have agreed to confidentiality obligations), or otherwise as he may be required to do so by law.  Employee further agrees that, with the exception of allegations, representations, or statements made in formal legal or arbitration proceedings, he will not engage in any conduct which is designed to disparage or has the effect of disparaging the Company or any of its officers, parent, subsidiary, affiliate, or related companies or their agents, employees or representatives.  Company agrees that it will not engage in any conduct which is designed to disparage or has the effect of disparaging Employee.

 

  (d)           In the event that the Company becomes involved in any civil or criminal litigation, administrative proceeding or governmental investigation, Employee shall, upon request during the twelve-month period following the End Date, provide reasonable cooperation and assistance to the Company, including without limitation, furnishing relevant information that he remembers or is in his possession, attending meetings and providing statements and testimony; provided, however, that such cooperation and assistance does not unreasonably interfere in any subsequent employment of Employee.  The Company will reimburse Employee for all reasonable and necessary costs and expenses Executive incurs in complying with this Section.

 

 


 

(e)  Employee represents and warrants that he has been encouraged to seek advice from anyone of his choosing, including his attorney, accountant or tax advisor prior to his signing it; that this Agreement represents written notice that he do so; that he has been given the opportunity and sufficient time to seek such advice; that he has carefully read and fully understands all of the provisions of this Agreement; and that he is voluntarily entering into this Agreement.  Employee understands that he may take up to twenty-one (21) days to consider whether or not he desires to enter into this Agreement.  Employee further represents and warrants that he was not coerced, threatened or otherwise forced to sign this Agreement, and that his signature appearing hereinafter is genuine.

 

(f)           Employee represents and acknowledges that, in executing this Agreement, he does not rely and has not relied upon any representation or statement made by any of the Releasees or by any of the Releasees’ agents, representatives, or attorneys with regard to the subject matter, basis, or effect of this Agreement.

 

(g)           Employee hereby acknowledges, that during his employment, he agreed to certain post-termination obligations restrictive covenants which are contained in the Employment Agreement at Sections 3, 4, 5, and 6 and which are incorporated herein by reference.  Employee further acknowledges and agrees that Sections 3, 4, 5, and 6 shall remain in full force and effect after the termination of the Employment Agreement and Employee’s employment with the Company and that he will comply with his obligations as set forth in Sections 3, 4, 5, and 6.

 

            (h) For a period of one year from the date hereof, unless specifically invited in writing by the Company, neither you nor any of your representatives acting on your behalf or on behalf of other persons acting in concert with you will in any manner, directly or indirectly effect or seek, offer or propose (whether publicly or otherwise) to effect, or announce any intention to effect or cause or participate in or in any way assist, facilitate or encourage any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in any “proxy” “solicitation” (as such terms are used in the proxy rules of the Securities and Exchange Commission) or consents to vote any voting securities of the Company, or make any communication exempted from the definition of “solicitation” by Rule 14a-1(1)(2)(iv) under the Exchange Act.

 

 


 

3.           Other Agreements.

(a)           Employee understands and acknowledges that he has seven (7) days after his acceptance and execution of this Agreement to revoke this Agreement.  Should Employee choose to revoke his acceptance and execution of this Agreement within that seven (7) day period, he must submit such revocation in writing to the General Counsel of the Company prior to the expiration of the seven (7) day period.  After such seven (7) day period, this Agreement will be irrevocable.

 

(b)           This Agreement supercedes and terminates any prior agreements, whether written or otherwise, between Employee and the Company or any predecessor of the Company.

 

(c)           Employee warrants that he will deliver to the Company all property belonging to the Company no later than his date of termination.  Employee acknowledges and agrees that payment from the Company under this Agreement is contingent upon the return of all Company property.

 

(d)           The Company and Employee agree that the failure of the Company to insist upon any one or more instances relating to the performance of any of the terms, covenants, or conditions of this Agreement shall not be construed as a waiver or relinquishment of any right granted hereunder or of the future performance of any such term, covenant, or condition.

 

(e)           The Company and Employee agree that this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs, executors, administrators, and representatives.  Neither this Agreement nor any right hereunder may be assigned by Employee.

 

(f)           The Company and Employee agree that this Agreement sets forth the full and complete understanding of the parties with respect to the matters addressed herein and that the validity of this Agreement and any of the provision hereof shall be interpreted, construed, and determined under and according to the laws of the State of Texas.

 

4.           Employee Statement.

I have read and understand this entire Agreement.  I understand that I have twenty-one (21) days to consider whether or not I desire to enter into this Agreement.  I understand that I have seven (7) days to revoke this Agreement even after I provide a signed copy to the Company.  After the expiration of such seven (7) day period, this Agreement will be binding upon me and will be irrevocable.

I understand that by signing this Agreement, I am giving up rights I may have.  I understand I do not have to sign this Agreement.

 

 

 

___________________________

R. Blake Young

 

___________________________

Date:                                                                        

 

COMVERGE, INC.

 

 

By: ________________________  

 

                                                                    

Date: ______________________