AMENDMENT NO. 2 TO SEVERANCE AGREEMENT

 

THIS AMENDMENT NO. 2 TO SEVERANCE AGREEMENT (“Amendment”) is made as of the 20th
day of December, 2016, by and between I.D. Systems, Inc., a Delaware corporation
(the “Company”), and Kenneth Ehrman (“Executive”).

 

WHEREAS, the Company and Executive have heretofore entered into that certain
Severance Agreement, dated September 22, 2009, as amended by that certain
Amendment to Severance Agreement, dated June 20, 2013 (as amended, the
“Severance Agreement”); and

 

WHEREAS, the Company and Executive desire to amend the Severance Agreement as
set forth herein.

 

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

 

1. Amendments.

 

(a) Section 1 of the Severance Agreement is hereby amended by adding the
following defined term in appropriate alphabetical order:

 

“Severance Period” means the eighteen-month period commencing on the Release
Effective Date.

 

(b) Section 2(a) of the Severance Agreement is hereby amended and restated to
read in its entirety as follows:

 

“(a) cash payments (collectively the “Severance Payment”) at the rate of
Executive’s annual base salary as in effect immediately prior to the Trigger
Event for the first fifteen (15) months of the Severance Period, payable as set
forth below. The Severance Payment shall be made as a series of separate
payments in accordance with the Company’s standard payroll practices (and
subject to all applicable tax withholdings and deductions), commencing with the
first regular payroll date on or immediately following the 60th day after the
date of the Trigger Event.”

 

(c) Section 2(b) of the Severance Agreement is hereby amended and restated to
read in its entirety as follows:

 

“(b) if Executive timely elects “COBRA” coverage and provided Executive
continues to make contributions for such continuation coverage equal to
Executive’s contribution amount in effect immediately preceding the date of
Executive’s termination of employment, the Company shall waive the remaining
portion of Executive’s healthcare continuation payments under COBRA for the
Severance Period. Following the Severance Period, Executive shall continue to be
eligible to participate in the Company’s healthcare plan pursuant to the
Company’s retiree health benefit program so long as Executive pays for any and
all premiums associated with such healthcare coverage. Notwithstanding the
foregoing, in the event that Executive becomes eligible to obtain alternate
healthcare coverage from a new employer, the Company’s obligation to waive the
remaining portion of Executive’s healthcare continuation coverage under COBRA
and to allow Executive to remain on the Company’s healthcare plan shall cease.
Executive understands and affirms that Executive is obligated to inform the
Company if Executive becomes eligible to obtain alternate healthcare coverage
from a new employer.”

 

 

 

 

(d) Section 2 of the Severance Agreement is hereby amended by adding new
Sections 2(e) and 2(f) to the end thereof to read in their entirety as follows:

 

“(e) Following the execution of the Release, Executive shall be hired as a
special advisor to the Board for a period of six (6) months commencing on the
Release Effective Date and shall receive (i) an advisory fee in the amount of
$30,000 per month and (ii) 18,244 shares of Common Stock, issued as of the
Release Effective Date pursuant to the Company’s 2015 Equity Compensation Plan,
which shall vest in equal monthly installments over a six-month period
commencing on the Release Effective Date. As a condition to the Company’s
obligations hereunder, Executive agrees to resign from the Board and shall
execute and deliver to the Board a resignation letter in the form of Exhibit C
annexed hereto and made a part hereof.

 

(f) a car allowance in the amount of $1,500 per month for a period of eighteen
(18) months commencing on the Release Effective Date.”

 

(e) Exhibit A to the Severance Agreement is hereby amended and restated to read
in its entirety as set forth on Annex A hereto.

 

(f) Exhibit C is hereby added to the Severance Agreement to read in its entirety
as set forth on Annex B hereto.

 

2. The parties hereby agree and acknowledge that Executive’s resignation from
the Company, effective December 6, 2016, constitutes a Trigger Event under the
Severance Agreement.

 

3. Effect of Amendment. As amended hereby, the Severance Agreement shall
continue in full force and effect in accordance with its terms.

 

4.  Miscellaneous.

 

(a) Headings. Headings used in this Amendment are for convenience of reference
only and do not affect the meaning of any provision.

 

(b) Counterparts. This Amendment may be executed as of the same effective date
in one or more counterparts, each of which shall be deemed an original.

 

(c)  Binding Agreement; Assignment. This Amendment shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.

 

(d)  Governing Law; Jurisdiction. This Amendment and any and all matters arising
directly or indirectly herefrom shall be governed by, and construed in
accordance with, the internal laws of the State of New Jersey, without reference
to the choice of law principles thereof. Any legal action, suit or other
proceeding arising out of or in any way connected with this Amendment shall be
brought in the courts of the State of New Jersey, or in the United States courts
for the District of New Jersey. With respect to any such proceeding in any such
court: (i) each party generally and unconditionally submits itself and its
property to the exclusive jurisdiction of such court (and corresponding
appellate courts therefrom), and (ii) each party waives, to the fullest extent
permitted by law, any objection it has or hereafter may have the venue of such
proceeding as well as any claim that it has or may have that such proceeding is
in an inconvenient forum.

 

(e) This Amendment may only be amended or otherwise modified, and the provisions
hereof may only be waived, by a writing executed by the parties hereto.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

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

 

  I.D. SYSTEMS, INC.         By: /s/ Ned Mavrommatis   Name: Ned Mavrommatis  
Title: CFO

 

WITNESS:   EXECUTIVE:           By: /s/ Michael Ehrman   By: /s/ Kenneth Ehrman
Name: Michael Ehrman   Name: Kenneth Ehrman Date: December 20, 2016   Date:
December 20, 2016

 

 

 

 

Annex A

 

EXHIBIT A

FORM OF RELEASE

 

SEPARATION AND GENERAL RELEASE AGREEMENT

 

This Separation and General Release Agreement (the “Agreement”) is entered into
between Kenneth Ehrman with an address at 71 Rolling Ridge Road, Upper Saddle
River, New Jersey (the “Employee”) and I.D. Systems, Inc. (“ID Systems”),
together with its parent, divisions, affiliates, and subsidiaries and their
respective officers, directors, employees, shareholders, members, partners, plan
administrators, attorneys, and agents, as well as any predecessors, future
successors or assigns or estates of any of the foregoing with an address at 123
Tice Boulevard, Woodcliff Lake, NJ 07677 (the “Released Parties”).

 

1.       Separation of Employment. Employee acknowledges and understands that
Employee’s last day of employment with ID Systems was December 6, 2016 (the
“Separation Date”). Employee acknowledges and agrees that, except as otherwise
provided in this Agreement, Employee has received all compensation and benefits
to which Employee is entitled as a result of Employee’s employment. Employee
understands that, except as otherwise provided in this Agreement, Employee is
entitled to nothing further from any of the Released Parties, including
reinstatement by ID Systems.

 

2.       Employee General Release of Released Parties. In consideration of the
payments and benefits set forth in Section 4 below, Employee hereby
unconditionally and irrevocably releases, waives, discharges, and gives up, to
the full extent permitted by law, any and all Claims (as defined below) that
Employee may have against any of the Released Parties, arising on or prior to
the date of Employee’s execution and delivery of this Agreement to ID Systems.
“Claims” means any and all actions, charges, controversies, demands, causes of
action, suits, rights, and/or claims whatsoever for debts, sums of money, wages,
salary, severance pay, commissions, bonuses, unvested stock options, vacation
pay, sick pay, fees and costs, attorneys fees, losses, penalties, damages,
including damages for pain and suffering and emotional harm, arising, directly
or indirectly, out of any promise, agreement, offer letter, contract,
understanding, common law, tort, the laws, statutes, and/or regulations of the
State of New Jersey or any other state and the United States, including, but not
limited to, federal and state whistleblower laws, Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Equal Pay Act, the Americans with
Disabilities Act, the Family and Medical Leave Act, the Employment Retirement
Income Security Act (excluding COBRA), the Vietnam Era Veterans Readjustment
Assistance Act, the Fair Credit Reporting Act, the Age Discrimination in
Employment Act (“ADEA”), the Older Workers’ Benefit Protection Act, the
Occupational Safety and Health Act, the Sarbanes-Oxley Act of 2002, the New
Jersey Law Against Discrimination, the New Jersey Family Leave Act, the New
Jersey Civil Rights Act, and the New Jersey Conscientious Employee Protection
Act, as each may be amended from time to time, whether arising directly or
indirectly from any act or omission, whether intentional or unintentional. This
Section 2 releases all Claims including those of which Employee is not aware and
those not mentioned in this Agreement. Employee specifically releases any and
all Claims arising out of Employee’s employment with ID Systems or separation
therefrom and any and all Claims that Employee may have against any of the
Released Parties in his capacity as a stockholder of ID Systems. Employee
expressly acknowledges and agrees that, by entering into this Agreement,
Employee is releasing and waiving any and all Claims, including, without
limitation, Claims that Employee may having arising under ADEA, which have
arisen on or before the date of Employee’s execution and delivery of this
Agreement to ID Systems.

 

 

 

 

3.       Representations; Covenant Not to Sue. Employee hereby represents and
warrants to the Released Parties that Employee has not: (A) filed, caused or
permitted to be filed any pending proceeding (nor has Employee lodged a
complaint with any governmental or quasi-governmental authority) against any of
the Released Parties, nor has Employee agreed to do any of the foregoing; (B)
assigned, transferred, sold, encumbered, pledged, hypothecated, mortgaged,
distributed, or otherwise disposed of or conveyed to any third party any right
or Claim against any of the Released Parties that has been released in this
Agreement; or (C) directly or indirectly assisted any third party in filing,
causing or assisting to be filed, any Claim against any of the Released Parties.
Except as set forth in Section 11 below, Employee covenants and agrees that he
shall not encourage or solicit or voluntarily assist or participate in any way
in the filing, reporting or prosecution by himself or any third party of a
proceeding or Claim against any of the Released Parties.

 

4.       Payment. As good consideration for Employee’s execution, delivery, and
non-revocation of this Agreement, ID Systems shall provide Employee with the
payments and benefits set forth in Section 2 of the Severance Agreement between
Employee and ID Systems dated as of June 29, 2009, as amended, payable as set
forth therein. Employee acknowledges that Employee is not otherwise entitled to
receive the payments and benefits described in this Section 4 and acknowledges
that nothing in this Agreement shall be deemed to be an admission of liability
on the part of any of the Released Parties. Employee agrees that Employee will
not seek anything further from any of the Released Parties.

 

5.       Who is Bound. ID Systems and Employee are bound by this Agreement.
Anyone who succeeds to Employee’s rights and responsibilities, such as the
executors of Employee’s estate, is bound, and anyone who succeeds to ID
Systems’s rights and responsibilities, such as its successors and assigns, is
also bound.

 

6.       Cooperation. Employee agrees that, within five business days of the
Separation Date, he shall provide ID Systems (attention: Chris Wolfe) with a
written comprehensive summary of all outstanding work activities, current and
prospective customer contact information, and otherwise reasonably cooperate as
necessary to effect a transition of his responsibilities. Employee also agrees
that he will cease from communicating with any current ID Systems employees
(with the exception of Chris Wolfe, Ned Mavrommatis, Michael Ehrman and Lindsay
Estelle) regarding ID Systems personnel or other business-related matters.
Employee agrees to reasonably cooperate in any ID Systems investigations and/or
litigation regarding events that occurred during Employee’s tenure with ID
Systems. ID Systems will compensate Employee for reasonable expenses Employee
incurs in extending such cooperation regarding investigations and/or litigation,
so long as Employee provides advance written notice of Employee’s request for
compensation.

 

 

 

 

7.       Non Disparagement and Confidentiality. Each party agrees not to make
any defamatory or derogatory statements concerning the other party (and, in the
case of Employee, Employee also shall not make any defamatory or derogatory
statements concerning any of the Released Parties). Provided inquiries are
directed to ID Systems’ Department of Human Resources, ID Systems shall disclose
to prospective employers information limited to Employee’s dates of employment
and last position held by Employee. Employee confirms and agrees that Employee
shall not, directly or indirectly, disclose to any person or entity or use for
Employee’s own benefit, any confidential information concerning the business,
finances or operations of ID Systems or its customers; provided, however, that
Employee’s obligations under this Section 7 shall not apply to information
generally known in ID Systems’ industry through no fault of Employee or the
disclosure of which is required by law after reasonable notice has been provided
to ID Systems sufficient to enable ID Systems to contest the disclosure.
Confidential information shall include, without limitation, trade secrets,
customer lists, details of contracts, pricing policies, operational materials,
marketing plans or strategies, security and safety plans and strategies, project
development, and any other non-public or confidential information of, or
relating to, ID Systems or its affiliates. Employee also agrees that the amounts
paid to Employee and all of the other terms of this Agreement shall be kept
confidential, unless ID Systems discloses them in a public filing. Employee
acknowledges that he continues to be bound by the Confidentiality, Assignment of
Contributions and Inventions, Non-Competition and Non-Solicitation Agreement
(the “Covenants Agreement”).

 

8.       Remedies. If Employee tells anyone the amount paid to Employee or any
other term of this Agreement (unless ID Systems has publicly disclosed the terms
of this Agreement in a public filing), breaches any other term or condition of
this Agreement or the Covenants Agreement, or any representation made by
Employee in this Agreement was false when made, it shall constitute a material
breach of this Agreement and, in addition to and not instead of the Released
Parties’ other remedies hereunder, under the Covenants Agreement or otherwise at
law or in equity, Employee shall be required to immediately, upon written notice
from ID Systems, return the payments paid by ID Systems hereunder, less $500.
Employee agrees that if Employee is required to return the payments, this
Agreement shall continue to be binding on Employee and the Released Parties
shall be entitled to enforce the provisions of this Agreement as if the payments
had not been repaid to ID Systems and ID Systems shall have no further payment
obligations to Employee hereunder. Further, in the event of a material breach of
this Agreement, Employee agrees to pay all of the Released Parties’ attorneys’
fees and other costs associated with enforcing this Agreement.

 

9.       ID Systems Property. Employee represents that he has returned all ID
Systems property in Employee’s possession, custody or control, including, but
not limited to, all ID Systems equipment, samples, laptop computers, personal
digital assistants, cell phones, pass codes, keys, swipe cards, documents or
other materials that Employee received, prepared, or helped prepare. Employee
represents that Employee has not retained any copies, duplicates, reproductions,
computer disks, or excerpts thereof of ID Systems’ documents.

 

10.       Construction of Agreement. In the event that one or more of the
provisions contained in this Agreement shall for any reason be held
unenforceable in any respect under the law of any state of the United States or
the United States, such unenforceability shall not affect any other provision of
this Agreement, but this Agreement shall then be construed as if such
unenforceable provision or provisions had never been contained herein or
therein. If it is ever held that any restriction hereunder is too broad to
permit enforcement of such restriction to its fullest extent, such restriction
shall be enforced to the maximum extent permitted by applicable law. This
Agreement and any and all matters arising directly or indirectly herefrom or
therefrom shall be governed under the laws of the State of New Jersey, without
reference to choice of law rules. ID Systems and Employee consent to the sole
jurisdiction of the federal and state courts of New Jersey. ID SYSTEMS AND
EMPLOYEE HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY IN ANY ACTION
CONCERNING THIS AGREEMENT OR ANY AND ALL MATTERS ARISING DIRECTLY OR INDIRECTLY
HEREFROM AND REPRESENT THAT THEY HAVE CONSULTED WITH COUNSEL OF THEIR CHOICE OR
HAVE CHOSEN VOLUNTARILY NOT TO DO SO SPECIFICALLY WITH RESPECT TO THIS WAIVER.

 

 

 

 

11.       Acknowledgments. ID Systems and Employee acknowledge and agree that:

 

(A)       By entering into this Agreement, Employee does not waive any rights or
Claims that may arise after the date that Employee executes and delivers this
Agreement to ID Systems;

 

(B)       This Agreement shall not affect the rights and responsibilities of the
Equal Employment Opportunity Commission (the “EEOC”) to enforce the ADEA and
other laws, and further acknowledge and agree that this Agreement shall not be
used to justify interfering with Employee’s protected right to file a charge or
participate in an investigation or proceeding conducted by the EEOC.
Accordingly, nothing in this Agreement shall preclude Employee from filing a
charge with, or participating in any manner in an investigation, hearing or
proceeding conducted by, the EEOC, but Employee hereby waives any and all rights
to recover under, or by virtue of, any such investigation, hearing or
proceeding;

 

(C)       Notwithstanding anything set forth in this Agreement to the contrary,
nothing in this Agreement shall affect or be used to interfere with Employee’s
protected right to test in any court, under the Older Workers’ Benefit
Protection Act, or like statute or regulation, the validity of the waiver of
rights under ADEA set forth in this Agreement; and

 

(D)       Nothing in this Agreement shall preclude Employee from: exercising
Employee’s rights, if any (i) under Section 601-608 of the Employee Retirement
Income Security Act of 1974, as amended, popularly known as COBRA, or (ii) ID
Systems’s pension plan or 401(k) plan, if applicable.

 

12.       Opportunity For Review.

 

(A)       Employee represents and warrants that Employee: (i) has had sufficient
opportunity to consider this Agreement; (ii) has read this Agreement; (iii)
understands all the terms and conditions hereof; (iv) is not incompetent or had
a guardian, conservator or trustee appointed for Employee; (v) has entered into
this Agreement of Employee’s own free will and volition; (vi) has duly executed
and delivered this Agreement; (vii) understands that Employee is responsible for
Employee’s own attorney’s fees and costs; (viii) has had the opportunity to
review this Agreement with counsel of Employee’s choice or has chosen
voluntarily not to do so; (ix) understands the Employee has been given
twenty-one (21) days to review this Agreement before signing this Agreement and
understands that he is free to use as much or as little of the 21-day period as
he wishes or considers necessary before deciding to sign this Agreement; (x)
understands that if Employee does not sign and return this Agreement to ID
Systems within 21 days of his receipt, ID Systems shall have no obligation to
enter into this Agreement, Employee shall not be entitled to the payments and
benefits set forth in Section 4 of this Agreement, and the Separation Date shall
be unaltered; and (xi) this Agreement is valid, binding and enforceable against
the parties to this Agreement in accordance with its terms.

 

   

 

 

(B)       This Agreement shall be effective and enforceable on the eighth (8th)
day after execution and delivery to ID Systems by Employee. The parties to this
Agreement understand and agree that Employee may revoke this Agreement after
having executed and delivered it to ID Systems by so advising ID Systems in
writing no later than 11:59 p.m. on the seventh (7th) day after Employee’s
execution and delivery of this Agreement to ID Systems. If Employee revokes this
Agreement, it shall not be effective or enforceable, Employee shall not be
entitled to the payments and benefits set forth in Section 4 of this Agreement,
and the Separation Date shall be unaltered.

 

Agreed to and accepted on this 20th day of December, 2016.

 

Witness:   EMPLOYEE:         /s/ Michael Ehrman    By: /s/ Kenneth Ehrman    
Name: Kenneth Ehrman

 

Agreed to and accepted on this 20th day of December, 2016.

 

  I.D. SYSTEMS, INC.         By: /s/ Ned Mavrommatis   Name: Ned Mavrommatis  
Title: CFO

 

 

 

 

Annex B

 

EXHIBIT C

FORM OF RESIGNATION LETTER

 

December 20, 2016

 

I.D. Systems, Inc.

123 Tice Boulevard

Woodcliff Lake, NJ 07677

 

Ladies and Gentlemen:

 

I hereby resign from my position as a member of the Board of Directors of I.D.
Systems, Inc. (the “Company”), including any committees thereof, and any other
positions I may hold with the Company, effective December 20, 2016.

 

  Sincerely,           /s/ Kenneth Ehrman   Kenneth Ehrman