EMPLOYMENT AGREEMENT
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AGREEMENT, dated as of the _1_ day of JULY , 2004, among Able Energy,
Inc., a Delaware corporation, having a place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, an
individual having a place of business at c/o Able Energy, Inc. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Executive").
WHEREAS, the Company is principally engaged in the business of the
distribution of, and the provision of services related, fuel oil, and natural
gas; and
WHEREAS, the Company desires to employ the Executive as its Chairman of
the Board of Directors, Chief Executive Officer and Secretary; and
WHEREAS, Executive is willing to accept such employment by the Company,
all in accordance with provisions hereinafter set forth; and
NOW, THEREFORE, in consideration of the promises and mutual
representations, covenants, and agreements set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree effective upon the Acquisition as
follows:
1. TERM: The term of this Agreement shall be for a period of three
(3) years commencing on date of this Agreement (the "Effective Date") and
terminating on the third anniversary date of the Effective Date, subject to
earlier termination as provided herein or unless extended by mutual consent of
the parties.
2. EMPLOYMENT: (A) Subject to the terms and conditions and for the
compensation hereinafter set forth, the Company hereby agrees to employ
Executive for and during the term of this Agreement. Executive is hereby
employed by the Company as its Chairman of the Board of Directors, Chief
Executive Officer and Secretary. The Executive's powers and duties shall be
those of an executive nature which are appropriate for a Chairman of the Board
of Directors, Chief Executive Officer and Secretary in accordance with the
Company's By-Laws; and Executive does hereby accept such employment or greater
employment as may be mutually agreed upon by the parties hereto and agrees to
devote only as much time to the affairs of the Company as Executive deems
necessary to discharge his duties to the Company during the term of this
Agreement, to the performance of his duties upon the conditions hereinafter set
forth. Executive shall report to the Board of Directors of the Company. The
Company shall not require Executive to be employed in any location other than
Rockaway, New Jersey unless he consents in writing to such location.
(B) During the term of this Agreement, Executive shall be furnished
with office space and facilities commensurate with his position and adequate for
the performance of his duties; he shall be provided with the perquisites
customarily associated with the position of Chairman of the Board of Directors,
Chief Executive Officer and Secretary of the Company.
3. COMPENSATION:
(A) SALARY: During the term of this Agreement, the Company agrees to
pay Executive, and Executive agrees to accept, an annual salary of not less than
Two Hundred Sixty Thousand Dollars ($260,000) per year, payable bi-weekly in
accordance with the Company's policies, for services rendered by Executive
hereunder.
(B) BONUS: As additional compensation, the Company may pay Executive
a periodic bonus. The Board of Directors will fix the bonus payable to the
Executive at the end of each year; provided such bonuses, plus all other bonuses
payable to the executive management shall not exceed, in the aggregate the
"Bonus Pool." The Bonus Pool shall equal up to 20% of the earnings before taxes
of the Company ("EBT") for the fiscal years ending 2005, 2006 and 2007, provided
the Company achieves at least $1,000,000 of EBT in each of such years. If the
Company meets or exceeds $1,000,000 EBT for the fiscal year ending in 2005 then
the Executive shall be entitled to 40% of the Bonus Pool.
(C) ADDITIONAL COMPENSATION TO EXECUTIVE. In addition to the
compensation stated above, Executive shall receive 30,000 stock options, that
shall vest and be exercisable pursuant to the Notice of Grant dated July 1,
2004. A true and correct copy of the Notice of Grant is attached hereto as
Exhibit "A". Notwithstanding the foregoing, the vesting of the stock options
shall be pursuant to the vesting schedule contained in the Notice of Grant
("Vesting Schedule")
(D) INCREASES: The annual salary is subject to periodic increases at
the discretion of the Board of Directors with such increases to take effect no
later than on each anniversary date of this Agreement.
4. EXPENSES: The Company shall reimburse Executive for all
reasonable and actual business expenses incurred by him in connection with his
service to the Company, upon submission by him of appropriate vouchers and
expense account reports. In addition, the executive is entitled to receive a
company care or a monthly car allowance.
5. BENEFITS:
(A) INSURANCE: In addition to the salary and bonus to be paid to
Executive hereunder, the Company shall maintain family medical and dental
insurance, life insurance in the amount of not less than _two million_ Dollars
($_2,000,000_) on the life of Executive and for which Executive shall designate
the beneficiary(ies), and long term disability insurance providing monthly
disability benefits to Executive of not less than _ten thousand __ Dollars
($_10,000_). Executive and his dependents shall be entitled to participate in
such other benefits as are extended to active executive employees of the Company
and their dependents including but not limited to pension, retirement,
profit-sharing, 401(k), stock option, bonus and incentive plans, group
insurance, hospitalization, medical or other benefits made available by the
Company to its employees generally.
(B) VACATION: Executive shall be entitled to take up to four (4)
weeks of paid vacation annually at a time mutually convenient to the Company and
Executive. Any such vacation time not
used by Executive in any one year shall accumulate to his benefit in the
succeeding years.
6. RESTRICTIVE COVENANTS: (A) Executive recognizes and acknowledges
that the Company, through the expenditure of considerable time and money, has
developed and will continue to develop in the future information concerning
customers, clients, marketing, business and operational methods of the Company
and its customers or clients, contracts, financial or other data, technical data
or any other confidential or proprietary information possessed, owned or used by
the Company, and that the same are confidential and proprietary, and are
"confidential information" of the Company. In consideration of his employment by
the Company hereunder, Executive agrees that he will not, without the consent of
the Board, make any disclosure of confidential information now or hereafter
possessed by the Company to any person, partnership, corporation or entity
either during or after the term hereunder, except to employees of the Company or
its subsidiaries or affiliates and to others within or without the Company, as
the Executive may deem necessary in order to conduct the Company's business and
except as may be required pursuant to any court order, judgment or decision from
any court of competent jurisdiction. The foregoing shall not apply to
information which is in the public domain on the date hereof; which, after it is
disclosed to Executive by the Company, is published or becomes part of the
public domain through no fault of Executive; which is known to Executive prior
to disclosure thereof to him by the Company as evidenced by his written records;
or, after Executive is no longer employed by the Company, which is thereafter
disclosed to Executive in good faith by a third party which is not under any
obligation of confidence or secrecy to the Company with respect to such
information at the time of disclosure to him. The provisions of this Section
shall continue in full force and effect notwithstanding any lawful termination
of Executive's employment under this Agreement for a period of one (1) year
following said termination of employment.
(B) Except in the ordinary course of his duties as Chairman of the
Board of Directors, Chief Executive Officer and Secretary, or in the furtherance
of the business of the Company, during the period from the date of this
Agreement until one (1) year following the date on which his employment with the
Company is lawfully and properly terminated, Executive will not, directly or
indirectly:
(i) persuade or attempt to persuade any person or entity
which is or was a customer, client or supplier of the Company on the
date on which Executive's employment with the Company is terminated to
cease doing business with the Company, or to reduce the amount of
business it does with the Company;
(ii) solicit for himself or any other person or entity other
than the Company the business of any person or entity which is a
customer or client of the Company, or was its customer or client within
six (6) months prior to the termination of his employment by the
Company, with respect to distribution of roofing supplies and related
products; or
(iii) persuade or attempt to persuade any employee of the
Company, or any individual who was an employee of Company during the six
(6) month period prior
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to the lawful and proper termination of this Agreement, to leave
Company's employ, or to become employed by any person or entity other
than the Company.
(C) Executive acknowledges that the restrictive covenants (the
"Restrictive Covenants") contained in this section 6 are a condition of his
employment and are reasonable and valid in geographical and temporal scope and
in all other respects. If any court determines that any of the Restrictive
Covenants, or any part of any of the Restrictive Covenants, is invalid or
unenforceable, the remainder of the Restrictive Covenants and parts thereof
shall not thereby be affected and shall be given full effect, without regard to
the invalid portion. If any court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or enforceable because of the
geographic or temporal scope of such provision, such court shall have the power
to reduce the geographic or temporal scope of such provision, as the case may
be, and, in its reduced form, such provision shall then be enforceable.
(D) If Executive breaches, or threatens to breach, any of the
Restrictive Covenants, the Company, in addition to and not in lieu of any other
rights and remedies it may have at law or in equity, shall have the right to
injunctive relief; it being acknowledged and agreed to by Executive that any
such breach or threatened breach would cause irreparable and continuing injury
to the Company and that money damages would not provide an adequate remedy to
the Company.
7. TERMINATION:
(A) DEATH: In the event of Executive's death ("Death") during the
term of his employment, Executive's designated beneficiary, or in the absence of
such beneficiary designation, his estate shall be entitled to payment of
Executive's salary from date of death to the expiration of one (1) year
thereafter. In addition, Executive's beneficiary and/or dependents shall be
entitled, for the same one year period to continuation, at the Company's
expense, of such benefits as are then being provided to them under Section 5(A)
hereof, and any additional benefits as may be provided to dependents of the
Company's executive officers in accordance with the terms of the Company's
policies and practices. In addition, any options granted to Executive which have
not, by the terms of the options, vested shall be deemed to have vested as of
the date of his death and shall thereafter be exercisable by Executive's
beneficiary or estate for the maximum period of time allowed for exercise
thereof under the terms of the option.
(B) DISABILITY:
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(a) In the event Executive, by reason of physical or mental
incapacity, shall be disabled ("Disability") for a period of at least six (6)
consecutive months, the Company shall have the option at any time thereafter to
terminate Employee's employment hereunder for disability. Such termination will
be effective thirty (30) days after the Board gives written notice of such
termination to Executive, unless Executive shall have returned to the
performance of his duties prior to the effective date of the notice. All
obligations of the Company hereunder shall cease upon the effectiveness of such
termination, provided that such termination shall not affect or impair any
rights Executive may have under any policy of long term disability insurance or
benefits then maintained on his behalf by the Company. In addition, for a period
of one (1) year following termination of Executive's employment for disability,
Executive and his dependents, as the case may be, shall continue to receive the
benefits set forth under subparagraph 5(A) hereof, as well as such benefits as
are extended to the Company's active executive employees and their dependents
during such period. Any options granted to the Executive which have not, by the
terms of the options, vested shall be deemed to have vested at the termination
and shall thereafter be exercisable by the Employee, his beneficiary,
conservator or estate, as applicable, for the maximum period of time allowed for
exercise thereof under the terms of the option.
(b) "Incapacity" as used herein shall mean the inability of the
Executive due to physical or mental illness, injury or disease substantially to
perform his normal duties as Chairman of the Board of Directors, Chief Executive
Officer and Secretary. Executive's salary as provided for hereunder shall
continue to be paid during any period of incapacity prior to and including the
date on which Executive's employment is terminated for disability.
(C) BY THE COMPANY FOR CAUSE:
(a) The Company shall have the right, before the expiration of the
term of this Agreement, to terminate this Agreement and to discharge Executive
for cause (hereinafter "Cause"), and all compensation to Executive shall cease
to accrue upon discharge of Executive for Cause. For the purposes of this
Agreement, the term "Cause" shall mean (i) Executive's conviction of a felony;
(ii) the alcoholism or drug addiction of Executive; (iii) gross negligence or
willful misconduct of Executive in connection with his duties hereunder; (iv)
the determination by any regulatory or judicial authority (including any
securities self-regulatory organization) that Executive directly violated,
before or after the date hereof, any federal or state securities law, any rule
or regulation adopted thereunder; or (v) the continued and willful failure by
Executive to substantially and materially perform his material duties hereunder.
(b) If the Company elects to terminate Executive employment for
Cause under (C)(a) above, such termination shall be effective fifteen (15) days
after the Company gives written notice of such termination to Executive. In the
event of a termination of Executive's employment for Cause in accordance with
the provisions of 7(C)(a), the Company shall have no further obligation to the
Executive, except for the payment of all compensation and other vested benefits
which have accrued through the date of such termination and not paid and any
other benefits to which he or his dependents may be entitled by law.
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(D) BY EXECUTIVE FOR REASON:
Executive shall have the right to terminate his employment at any time
for "good reason" (herein designated and referred to as "Reason"). The term
Reason shall mean (i) the failure to elect or appoint, or re-elect or
re-appoint, Executive to, or removal or improperly attempted removal of
Executive from, his positions as Chairman of the Board of Directors or Chief
Executive Officer or superior positions with the Company, except in connection
with the proper termination of Executive's employment by reason of Cause, Death
or Disability; (ii) a reduction in Executive's overall compensation other than
his discretionary bonus under Section 3(B) above or an adverse change in the
nature or scope of the authorities, powers, functions or duties normally
attached to the Executive's position with the Company; (iii) the Company's
failure or refusal to perform any obligations required to be performed in
accordance with this Agreement after a reasonable notice and an opportunity to
cure same; and (iv) a Change in Control of the Company, as defined herein,
occurs.
(E) SEVERANCE: (a) In the event Executive's employment hereunder
shall be terminated by the Executive for Reason or by the Company for other than
Cause, Death or Disability: (1) the Executive shall thereupon receive as
severance pay in a lump sum the amount of salary and bonuses which the Executive
would have received for the remaining term of this Agreement had there been no
termination, provided however, that in no event shall such lump sum payment be
less than one year's salary and bonus; and (2) the Executive's (and his
dependents') participation in any and all life, disability, medical and dental
insurance plans shall be continued, or equivalent benefits provided to him or
them by the Company, at no cost to him or them, for a period of two years from
the termination; and (3) any options granted to Executive which have not, by the
terms of the options, vested shall be deemed to have vested at the termination,
and shall thereafter be exercisable for the maximum period of time allowed for
exercise thereof under the terms of the option; and new paragraph (b) an
election by Executive to terminate his employment under the provisions of this
paragraph shall not be deemed a voluntary termination of employment of Executive
for the purpose of interrupting the provisions of any of the Company's employee
benefit plans, programs or policies.
(F) RESIGNATION: In the event Executive resigns without Reason prior
to the expiration hereof, he shall receive any unpaid fixed salary through such
resignation date and such benefits to which he is entitled by law.
(G) EXTENSION OF BENEFITS: Any extension of benefits following the
termination of employment provided for herein shall be deemed to be in addition
to, and not in lieu of, any period for the continuation of benefits provided for
by law, either at the Company's, Executive or his dependents' expense.
(H) CHANGE IN CONTROL: For purposes hereof, a Change in Control
shall be deemed to have occurred (i) if there has occurred a "change in control"
as such term is used in Item 1 (a) of Form 8-K promulgated under the Securities
Exchange Act of 1934, as amended, at the date hereof ("Exchange Act") or (ii) if
there has occurred a change in control as the term "control" is defined in Rule
12b-2 promulgated under the Exchange Act.
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8. INDEMNIFICATION: Company hereby indemnifies and holds Executive
harmless to the extent of any and all claims, suits, proceedings, damages,
losses or liabilities incurred by Executive and arising out of any acts or
decisions done or made in the authorized scope of his employment hereunder.
Company hereby agrees to pay all expenses, including reasonable attorney's fees,
actually incurred by Executive in connection with the investigation of any such
matter, the defense of any such action, suit or proceeding and in connection
with any appeal thereon including the cost of settlements. Nothing contained
herein shall entitle Executive to indemnification by Company in excess of that
permitted under applicable law.
9. WAIVER: No delay or omission to exercise any right, power or
remedy accruing to either party hereto shall impair any such right, power or
remedy or shall be construed to be a waiver of or an acquiescence to any breach
hereof. No waiver of any breach hereof shall be deemed to be a waiver of any
other breach hereof theretofore or thereafter occurring. Any waiver of any
provision hereof shall be effective only to the extent specifically set forth in
the applicable writing. All remedies afforded to either party under this
Agreement, by law or otherwise, shall be cumulative and not alternative and
shall not preclude assertion by either party of any other rights or the seeking
of any other rights or remedies against the other party.
10. GOVERNING LAW: The validity of this Agreement or of any of the
provisions hereof shall be determined under and according to the laws of the
State of New York, and this Agreement and its provisions shall be construed
according to the laws of the State of New York, without regard to the principles
of conflicts of law and the actual domiciles of the parties hereto.
11. NOTICES: All notices, demands or other communications required
or permitted to be given in connection with this Agreement shall be given in
writing, shall be transmitted to the appropriate party by hand delivery, by
certified mail, return receipt requested, postage prepaid or by overnight
carrier and shall be addressed to a party at such party's address shown on the
first page hereof. A party may designate by written notice given to the other
parties a new address to which any notice, demand or other communication
hereunder shall thereafter be given. Each notice, demand or other communication
transmitted in the manner described in this Section 11 shall be deemed to have
been given and received for all purposes at the time it shall have been (i)
delivered to the addressee as indicated by the return receipt (if transmitted by
mail), the affidavit of the messenger (if transmitted by hand delivery or
overnight carrier) or (ii) presented for delivery during normal business hours,
if such delivery shall not have been accepted for any reason.
12. ASSIGNMENTS: This Agreement shall be binding upon and inure to
the benefit of the parties and each of their respective successors, assigns,
heirs and legal representatives; provided, however, that Executive may not
assign or delegate his obligations, responsibilities and duties hereunder except
as permitted by the Company's by-laws, custom, practice, policies or the Board
of Directors. Company may not assign this Agreement without the prior written
consent of Executive.
13. MISCELLANEOUS: This Agreement contains the entire understanding
between the parties hereto and supersedes all other oral and written agreements
or understandings between them with respect to the subject matter hereof. No
modification or addition hereto or waiver or
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cancellation of any provision shall be valid except by a writing signed by the
party to be charged therewith.
14. OBLIGATIONS OF A CONTINUING NATURE: It is expressly understood
and agreed that the covenants, agreements and restrictions undertaken by or
imposed on Executive and, the Company hereunder, which are stated to exist or
continue after termination of Executive's employment with the Company, shall
exist and continue irrespective of the method or circumstances of such
termination for the respective periods of time set forth herein.
15. SEVERABILITY: The parties agree that if any of the covenants,
agreements or restrictions contained herein are held to be invalid by any court
of competent jurisdiction, the remainder of the other covenants, agreements
restrictions and parts thereof herein contained shall be severable so not to
invalidate any others and such other covenants, agreements, restrictions and
parts thereof shall be given full effect without regard to the invalid portion.
16. VENUE: JURISDICTION: The Company and the Executive hereby agree
that any action, proceeding or claim against either of them arising out of, or
relating in any way to this Agreement shall be brought and enforced in any of
the courts of the State of New York in New York County, New York, or the United
States District Court for the Southern District of New York, and irrevocably
submit to such jurisdiction. The Company and the Executive hereby waive any
objection to such jurisdiction and that such courts represent an inconvenient
forum. Any process or summons to be served upon the Company or the Executive may
be served by transmitting a copy thereof by registered or certified mail, return
receipt requested, postage prepaid, addressed to their respective addresses set
forth in the initial paragraph of this agreement or such other address as a
party may so notify the other parties hereto in the manner provided by Section
II hereof. Such mailing shall be deemed personal service and shall be legal and
binding upon the Company and the Executive in any action, proceeding or claim.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
ABLE ENERGY, INC.
By: _____________________________
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