COMVERGE, INC. EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10.4
THIS
EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into on June 21,
2010 (“Effective Date”), by and between ▇▇▇▇▇▇▇▇▇▇▇ Camino, 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 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 Executive and Company 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:
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SECTION
1.
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EMPLOYMENT
BY THE COMPANY.
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1.1 Employment
Agreement. Upon the Effective
Date of this Agreement (the
“Employment Date”), Executive’s employment
with the Company shall be pursuant to the terms stated
herein.
1.2 Position and
Duties. Executive
shall serve in the position of Executive Vice-President of Sales, Chief
Marketing Officer, with such powers, duties, and/or responsibilities as are
assigned to Executive by the President & Chief Executive Officer, or his/her
respective 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.
1.3 Location. Executive’s
primary office location shall be in Pittsburgh, Pennsylvania. Executive acknowledges that he will be required to spend
time in Atlanta, Georgia and that the Company’s business extends across the
entire North America and elsewhere and that, from time to
time, Executive’s duties will require him to travel and to work at
other locations, including but not limited
to other Company office locations.
1.4 Term. The
term of Executive’s employment hereunder shall commence as of the Employment
Date and shall continue through December 31, 2011, 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.
1.5 No
Restrictions. Executive acknowledges that the Company is entering
into this Agreement based on Executive’s representation that as of the date of
execution of this Agreement, Executive is not subject to any agreement,
including but not limited to a non-compete, restrictive covenant or
non-disclosure agreement, that would prevent or materially restrict Executive
from performing the job responsibilities as set forth herein or those which may,
commensurate with Executives position, be assigned from time to
time. If it is determined by the Company that an agreement exists
that, in the Company’s sole discretion, would prevent or materially restrict
Executive’s ability to perform his duties under this Agreement, the Company
shall have the option to terminate this Agreement immediately and such
termination shall be considered for Good Cause as defined by Section 7(b) of
this Agreement.
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SECTION
2.
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COMPENSATION,
BENEFITS AND OWNERSHIP.
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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. You will have available up to three (3) weeks of annual
vacation, accruing as you employment continues throughout the year.
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.
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SECTION
3.
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ASSIGNMENT
OF INTELLECTUAL PROPERTY.
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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 7.5 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.
3.4 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 Intellectual Property or (b) a license from the Company to
Executive regarding any of the Company’s existing or future ownership
rights.
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SECTION
4.
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CONFIDENTIALITY.
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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 Secrets remain 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 possession and comply
with any restrictions concerning such information that have been imposed upon by
the Company’s customer with respect to the use, disclosure, or return
information.
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, 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. 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 his obligations
under this Section 4 regardless of any alleged or actual breach or failure to
perform by the Company.
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.
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SECTION
5.
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NONCOMPETITION
AGREEMENT.
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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 or geographic area of North America, and that in the
performance of his duties as set forth in this Agreement, Executive shall
perform services on behalf of the Company which require the use of Executive’s
unique and extraordinary skills. 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, 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 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 Executive acknowledges and agrees is
the business in which the Company is engaged. The term “Territory” means North
America which Executive acknowledges is the geographic scope
of the Company’s business and is the territory for or in which Executive
performs services for the Company. Employee acknowledges that in the
performance of his duties hereunder that he will have significant and extensive
knowledge of the Company’s markets and Customers or Prospective Customers (as
defined below) with whom the Company does business, regardless of any specific
geographic location, and will have received specialized training with respect to
the Company’s products and services offered by the Company within those markets
and with those Customers or Prospective Customers.
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.
6.2
(a)
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,
sold, licenses or licensed goods or services at the time Executive’s employment
with the Company terminated and for the preceding twelve (12) months and with
whom Executive had material business contact 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 twelve (12) 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 the
Company 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 twelve (12)
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 Reasonable
Covenants. Executive
acknowledges and agrees that the covenants set forth in this Section 6 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.
(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.
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 1.3 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.
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) 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.
(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.
(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
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 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 10.11) 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 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.
(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.
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.
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SECTION
9. SEVERABILITY AND
REFORMATION.
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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.
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SECTION
10. GENERAL PROVISIONS.
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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 offers, 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.
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
Pennsylvania). 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 Allegheny County, Pennsylvania.
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 7.1(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).
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”
By: /s/ ▇▇▇▇▇
▇▇▇▇▇
Name:
▇▇▇▇▇
▇▇▇▇▇
Title: President &
CEO
“EXECUTIVE”
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇
Camino
Name:
▇▇▇▇▇
Camino
Title: EVP of Sales, Chief
Marketing Officer
Exhibit
A
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Annual
Salary
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Executive
shall be paid at the rate of $300,000 per annum.
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Annual
Cash Incentive1*
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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, where such payment shall be pro-rated from the start date for
2010.
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Annual
Equity Incentive1
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Beginning
in calendar year 2011 and thereafter, 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 shall be eligible for payment of
this Annual Equity Incentive, if earned, no earlier than mid-March 2012
for the 2011 calendar year.
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Initial
Equity/Stock Option Grants
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Upon
approval of the Company’s Compensation Committee, which shall be at or
around the 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 _____ shares of restricted stock and ______ stock
options.
Restricted
stock shall vest ______ shares on _____, 20___, 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
equal to the closing price of the Company’s common stock as of the date
that the Board consents to the appointment of Executive as EVP of Sales,
and shall vest quarterly on a pro rata basis over the
next four years.
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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.
FIRST
AMENDMENT TO
EMPLOYMENTAGREEMENT
THIS FIRST AMENDMENT TO EMPLOYMENT
AGREEMENT ("First Amendment") is entered into by and between COMVERGE
INC. (formerly Comverge Technologies, Inc.), a Delaware corporation ("Company"),
and ▇▇▇▇▇ Camino ("Executive") as of today, May 24, 2010.
WHEREAS, the Company and
Executive have heretofore entered into that certain Employment Agreement (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. The
Effective Date of the Employment Agreement is amended from June 21, 2010 and
shall now commence on June 14, 2010 ("Effective Date"). Executive shall work
from the Atlanta, Georgia office the week of June 14 for transition
purposes.
2. Except
as expressly modified by this First Amendment, the terms 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.
By:
/s/ R. ▇▇▇▇▇
▇▇▇▇▇
Name: R.
▇▇▇▇▇ ▇▇▇▇▇
Title: President
& CEO
By: /s/ ▇▇▇▇▇
Camino
Name: ▇▇▇▇▇
Camino
EVP of
Sales, Chief Marketing Officer
SECOND
AMENDMENT TO
EMPLOYMENT
AGREEMENT
THIS SECOND AMENDMENT TO EMPLOYMENT
AGREEMENT (“Second Amendment”) is entered into by and between COMVERGE
INC., a Delaware corporation (“Company”), and ▇▇▇▇▇ Camino (“Executive”) as of
today, June 10, 2010.
WHEREAS, the Company and
Executive have heretofore entered into that certain Employment Agreement, as
amended to have a start date of June 14, (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. Attachment A of the
Employment Agreement is amended and replaced to set the number of options and
restricted stock to be provided to Executive upon the Compensation Committee’s
consent.
2. Except as
expressly modified by this Second Amendment, the terms 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. ▇▇▇▇▇
▇▇▇▇▇
Name: R.
▇▇▇▇▇ ▇▇▇▇▇
Title: President
& CEO
By: /s/ ▇▇▇▇▇
Camino
Name: ▇▇▇▇▇
Camino
EVP
of Sales, Chief Marketing Officer
Exhibit
A
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Annual
Salary
|
Executive
shall be paid at the rate of $300,000 per annum.
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Annual
Cash Incentive1*
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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, where such payment shall be pro-rated from the start date for
2010.
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Annual
Equity Incentive1
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Beginning
in calendar year 2011 and thereafter, 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 shall be eligible for payment of
this Annual Equity Incentive, if earned, no earlier than mid-March 2012
for the 2011 calendar year.
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Initial
Equity/Stock Option Grants
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Upon
approval of the Company’s Compensation Committee, which shall be at or
around June 14, 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 25,000 shares of
restricted stock and 150,000 stock options.
Restricted
stock shall vest 25,000 shares on June 14, 2013, which is the third year
after the date this Agreement is executed and shall have a price equal to
the closing price of the Company’s common stock as of the date that the
Board consents.
The
stock options granted under this Agreement shall be at a strike price
equal to the closing price of the Company’s common stock as of the date
that the Board consents to the appointment of Executive as EVP of Sales,
and shall vest quarterly on a pro rata basis over the
next four years.
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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.