11701 Mt. Holly Rd., Charlotte, NC 28214
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▇. ▇▇▇▇▇▇▇
Chief
Executive Officer
(▇▇▇)
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September
15, 2008
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▇▇▇▇▇▇▇▇▇▇,
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Gentlemen,
Secondment
of ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. to Acorn Energy, Inc.
In
this
letter:
“Acorn”
means
Acorn Energy, Inc.;
“CoaLogix”
means
CoaLogix, Inc.;
“Employment
Agreement”
means
the employment agreement dated September __, 2008 among ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
Acorn and CoaLogix;
“Secondee”
means
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
The
purpose of this letter is to set out the terms which have been agreed between
Acorn and CoaLogix concerning the secondment of the Secondee to Acorn. This
letter is the “Services Agreement” referenced in the Employment
Agreement.
We
are
pleased to confirm our agreement to place the Secondee on secondment at Acorn
providing services as Vice President, General Counsel and Secretary consistent
with those set forth in the Employment Agreement pertaining to work by the
Secondee. The secondment will commence on January 5, 2009 and, unless sooner
terminated, will continue for a period corresponding with the term of the
Employment Agreement.
1. Secondee’s
Status
During
the secondment, the Secondee will remain an employee of CoaLogix under the
terms
and conditions of his employment or engagement with CoaLogix. CoaLogix will
pay
or provide Secondee all compensation, bonus, other amounts and benefit
entitlements to which he is entitled in accordance with its normal policies
and
procedures. Except for the stock options for 120,000 shares of common stock
of
Acorn referenced in the Employment Agreement, the Secondee will not be entitled
to any compensation from Acorn, and he shall not be entitled to participate
in
any Acorn benefits or benefit plans. CoaLogix shall be responsible for all
tax
withholdings and other deductions required by law relating to the Secondee,
and
for all workers’ compensation, unemployment obligations, and other statutory
obligations regarding employment relating to the Secondee.
The
Secondee will during the secondment be bound by CoaLogix’s general requirements
of its own employees, and CoaLogix will immediately inform Secondee that he
will
be subject to compliance with all of CoaLogix’s workplace conduct policies,
standards and procedures.
2. Authority
and Control
The
Secondee will have the authority to act on behalf of Acorn in the day-to-day
operations of Acorn as provided in the Employment Agreement. Secondee shall
be
subject to the direction of Acorn’s Chief Executive Officer with regard to the
services provided to Acorn.
It
is
anticipated that the Secondee will be providing services to both CoaLogix and
Acorn during the term of the Employment Agreement. The Secondee shall, at all
times during the secondment, be under the day-to-day control of Acorn with
respect to his duties for Acorn as set forth in the Employment
Agreement.
3. Compensation
Costs and Expenses
Acorn
will reimburse CoaLogix for Secondee’s salary, benefits, vacation, training,
expenses (not project related), other than bonus amounts as provided below,
based on the allocation of time spent by Secondee in performing services for
Acorn and CoaLogix. The initial allocation of compensation costs and expenses
is
that fifty (50) percent of Secondee’s compensation costs and expenses will be
allocated to Acorn which will reimburse this amount to CoaLogix. This allocation
will be adjusted every six (6) months based on the services provided in the
previous six (6) months as agreed by the CEOs of Acorn and CoaLogix and if
not
agreed, will be determined by the Board of Directors of CoaLogix.
The
CEO
of Acorn and Acorn’s Board of Directors will set the bonus schedule for Secondee
for services performed by Acorn, with the target amount being fixed at 30%
of
the amount of Secondee’s base salary that is allocated to Acorn. The terms will
be set at the beginning of the year with the allocation of the bonus cost to
Acorn to be based on the amount of service to Acorn in the prior 12 months.
For
the first year, the allocation will be set at fifty (50) percent and Acorn
shall
reimburse CoaLogix for the Secondee bonus expense allocable to
Acorn.
Under
the
Employment Agreement, either party has the right to terminate the Secondee
from
employment.
In
the
event of an Involuntary Termination of employment, as defined in the Employment
Agreement, if only one party initiates the Involuntary Termination and the
other
party does not agree to take full responsibility for the Secondee’s compensation
costs and expenses, the party initiating the Involuntary Termination shall
be
solely responsible for all severance due and any other costs under the
Employment Agreement. If that party is Acorn, it shall reimburse CoaLogix for
any severance and other costs incurred by CoaLogix in connection with the
Involuntary Termination.
If
both
parties agree to the Involuntary Termination, the severance and other costs
shall be allocated based upon the services provided by Secondee in the prior
twelve (12) months and Acorn shall reimburse CoaLogix for its allocated shares
of such severance and other costs.
2
Costs
and
expenses for specific projects undertaken by Secondee on behalf of either party
will be paid for by the party receiving the services and Acorn shall reimburse
CoaLogix for any such costs and expenses paid by CoaLogix on specific projects
of Acorn.
4. Termination
of Secondment
Either
CoaLogix or Acorn may terminate the secondment by giving not less than thirty
days advance notice in writing to the other at any time, notwithstanding the
terms of the Employment Agreement.
The
secondment shall terminate automatically, without notice to either party, upon
the termination of the Employment or in the event the Secondee’s employment or
engagement with CoaLogix terminates for any reason. In the event such employment
with CoaLogix is terminated, CoaLogix shall provide prompt notice of same to
Acorn.
Acorn
may
terminate the secondment at any time with immediate effect by notice in writing
to CoaLogix if:
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the
Secondee engages in any misconduct or other conduct which, in the
reasonable judgment of Acorn, affects or is likely to affect prejudicially
the interests of Acorn; or
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·
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the
Secondee is unable properly to perform his duties by reason of ill-health,
accident or otherwise for a period of thirty consecutive working
days.
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Termination
of the secondment shall not by itself terminate the Employment
Agreement.
5. Indemnities
and Waivers
Acorn
will indemnify CoaLogix for and against all costs, claims, liabilities and
expenses which CoaLogix incurs or suffers arising from claims made against
it by
third parties in respect of any act, omission or error of judgment (whether
or
not negligent or otherwise actionable) by the Secondee arising from the
performance of his duties for Acorn during the secondment, but only if and
to
the extent the Secondee has acted in respect of such acts, omissions or errors
in accordance with the directives of Acorn and its workplace standards of
conduct.
CoaLogix
will indemnify Acorn for and against (i) all employment-related liabilities
relating to compensation and benefits due or alleged to be due to the Secondee
(whether arising out of or related to the Secondee’s employment with CoaLogix,
the Secondee’s secondment to Acorn or otherwise), (ii) all damage, injury or
loss caused by or resulting from any breach by CoaLogix of this Agreement or
any
violation by CoaLogix of any laws applicable to the secondment of the Secondee,
and (iii) all costs, claims, liabilities and expenses which Acorn incurs or
suffers arising from claims made against it by third parties in respect of
any
act, omission or error of judgment (whether or not negligent or otherwise
actionable) of the Secondee during the Secondment, except for those acts or
omissions during the course of and in furtherance of Secondee’s duties under the
secondment that are in accordance with the directive of Acorn and its workplace
standards of conduct.
6. General
Nothing
in this letter shall constitute a partnership or joint venture between the
parties nor have the effect of constituting the Secondee as an employee of
Acorn.
3
The
termination of the secondment as permitted in this letter shall not affect
those
provisions that are expressed to have continuing operation or effect after
termination nor shall termination affect the waivers and indemnities contained
in Section 5.
This
letter sets out the entire agreement and understanding of the parties pertaining
to the secondment; however, the terms of the Employment Agreement are, to the
extent consistent with this letter, incorporated herein by reference. In the
event of any conflict between the terms of this letter and the Employment
Agreement, the terms of the Employment Agreement shall control.
The
terms
of this letter are governed by and construed in accordance with the laws of
the
State of North Carolina.
Please
confirm the acceptance of Acorn to the terms of this agreement by signing where
indicated below.
Yours
sincerely,
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/s/
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Date:
September
15, 2008
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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President
& Chief Executive Officer
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For
and on Behalf of Acorn
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/s/
▇▇▇▇ ▇. ▇▇▇▇▇
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Date:
September
15, 2008
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Name:
▇▇▇▇ ▇. ▇▇▇▇▇
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President
& Chief Executive Officer
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Seen
and Acknowledged:
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/s/
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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Date:
September
15, 2008
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Name:
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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Secondee
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