SEVERANCE AGREEMENT

 

This SEVERANCE AGREEMENT (the “Agreement”) is made this 20th day of August,
2018, by and between I.D. Systems, Inc., a Delaware corporation (the “Company”)
and Chris Wolfe (“Executive”).

 

BACKGROUND:

 

WHEREAS, Executive is currently employed as Chief Executive Officer (“CEO”) of
the Company;

 

WHEREAS, Executive was provided an offer letter dated December 6, 2016 (the
“Offer Letter”), regarding certain terms and conditions of employment, which
remain in effect unless otherwise modified by this Agreement; and

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined it
is in the best interests of the Company to enter into this Agreement to, among
other things, help retain and motivate Executive in his position with the
Company.

 

NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

 

1. Certain Definitions: As used in the Agreement, the following terms shall have
the respective meanings set forth below:

 

(a) “Affiliate” of the Company means any Person that controls, is controlled by,
or is under common control with, the Company. A Person shall be deemed to be in
control of another Person if, and for so long as, it owns or controls more than
50% of the voting power in the election of directors (or, in the case of an
entity that is not a corporation, for the election of the corresponding managing
authority) of such other Person.

 

(b) “Cause” means Executive’s (i) conviction of, or plea of nolo contendere to,
a felony or crime involving moral turpitude; (ii) fraud on or misappropriation
of any funds or property of the Company; (iii) willful violation of any law,
rule or regulation (other than minor traffic violations or similar offenses or
solely as a result of vicarious liability) or breach of fiduciary duty which
results in personal profit to Executive; (iv) material dishonesty in connection
with Employee’s duties or responsibilities, disloyalty, material
insubordination, unsatisfactory performance or attendance, or failure to follow
the Company’s policies, rules, codes of conduct, or procedures; (v)
nonperformance or breach by Employee of any of the material provisions of this
Agreement (including inaccuracy of representations) or Company Policies
(including expense reimbursement policies). Executive shall be given notice of
the termination of Executive’s employment for Cause and shall have an
opportunity to be heard by the Board with respect thereto and, to the extent
that the Board deems the matter curable, shall have a reasonable period of time
to cure the matter to the Board’s reasonable satisfaction.

 

(c) “Change in Control Event” means the occurrence of any of the following
events with respect to the Company:

 

(i) the consummation of any consolidation or merger of the Company in which the
holders of the Company’s common stock, par value $0.01 per share (“Common
Stock”) immediately prior to such consolidation or merger own less than fifty
percent (50%) of the outstanding common stock of the surviving corporation
immediately after the merger; or

 

(ii) the consummation of any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Company, other than to a subsidiary or Affiliate; or

 

(iii) any action pursuant to which any person or group (as such terms are
defined in Section 13(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), shall become the “beneficial owner” (as such term is defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of shares of capital
stock entitled to vote generally for the election of directors of the Company
(“Voting Securities”) representing more than thirty (30%) percent of the
combined voting power of the Company’s then outstanding Voting Securities
(calculated as provided in Rule 13d-3(d) in the case of rights to acquire any
such securities); or

 

 

 

 

(iv) the individuals (x) who, as of the effective date of this Agreement,
constitute the Board (the “Original Directors”) and (y) who thereafter are
elected to the Board and whose election, or nomination for election, to the
Board was approved by a vote of a majority of the Original Directors then still
in office (such Directors being called “Additional Original Directors”) and (z)
who thereafter are elected to the Board and whose election or nomination for
election to the Board was approved by a vote of a majority of the Original
Directors and Additional Original Directors then still in office, cease for any
reason to constitute a majority of the members of the Board.

 

(d) “Disability” means that Executive is incapable of performing his principal
duties due to physical or mental incapacity or impairment for 120 consecutive
days, or for 180 non-consecutive days, during any 12 month period.

 

(e) “Good Reason” means (i) a material reduction in Executive’s base salary as
in effect from time to time; (ii) a material reduction in Executive’s authority,
duties or responsibilities; (iii) Executive’s principal office location being
moved to a location which is more than 25 miles from the principal office
location at which Executive performs services on the date this Agreement is
executed or (iv) a material breach by the Company of the agreement under which
Executive provides services to the Company; provided, however, that Executive
must notify the Company, within 90 days of the occurrence of any of the
foregoing conditions, that he considers it to be a “Good Reason” condition, and
provide the Company with at least 30 days in which to cure the condition. In
addition, the resignation may not occur later than 6 months after the occurrence
of the condition giving rise to the resignation. If Executive fails to provide
such notice and cure period prior to his resignation, or his resignation occurs
later than 6 months after the initial occurrence of the condition, his
resignation shall not be deemed to be for “Good Reason” and Executive shall be
deemed to have waived any right to receive any of the payments or benefits set
forth in Section 2 hereof.

 

(f) “Person” means an individual, a partnership, a limited liability company, a
corporation, an association, a joint stock corporation, a trust, a joint
venture, an unincorporated organization, or any court, administrative agency or
commission or other federal, state, county, local or foreign governmental
authority, instrumentality, agency or commission.

 

(g) “Release” means a general release agreement in the form annexed hereto as
Exhibit A and made a part hereof.

 

(h) “Trigger Event” means the termination of Executive’s employment by the
Company other than a termination for Cause. For purposes of clarity, a
termination of Executive’s employment due to his death or Disability shall not
be considered a termination of Executive’s employment by the Company other than
for Cause, and shall not constitute a Trigger Event.

 

(i) “Change in Control Trigger Event” means the occurrence of: (i) the
termination of Executive’s employment by the Company other than a termination
for Cause within 6 months following a Change in Control Event; or (ii)
Executive’s resignation for Good Reason within 6 months following a Change in
Control Event. For purposes of clarity, a termination of Executive’s employment
due to his death or Disability shall not be considered a termination of
Executive’s employment by the Company other than for Cause, and shall not
constitute a Change in Control Trigger Event.

 

2. Trigger Event Payments and Benefits.

 

Within 45 days after the occurrence of a Trigger Event or Change in Control
Trigger Event (the “Operative Trigger Event”) (or such shorter period as may be
required by the Release), Executive shall execute and deliver to the Company the
Release. Upon the sooner of the expiration of any applicable revocation period
required for the Release to be effective with respect to age discrimination
claims and the date on which it is otherwise permitted to be effective and
irrevocable under applicable law (such sooner date the “Release Effective
Date”), Executive shall be entitled to:

 

 

 

 

(a) cash payments (collectively the “Severance Payment”) at the rate of
Executive’s annual base salary as in effect immediately prior to the Operative
Trigger Event for a period of 12 months (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 Operative Trigger Event;

 

(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. Notwithstanding the foregoing, in the event that Executive becomes
eligible to obtain alternate healthcare coverage from a new employer before the
end of the Severance Period, the Company’s obligation to waive the remaining
portion of Executive’s healthcare continuation coverage under COBRA 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 before the end of the Severance Period;

 

(c) any Company stock options and restricted stock (“Awards”) granted to
Executive shall (to the extent not already then “vested”), partially “vest” and
a portion of the stock options shall be exercisable, in each case on a pro-rated
basis, taking into account the number of months elapsed since the date of grant
as compared to the scheduled vesting date. For example, if the total number of
months from the grant date until the vesting date is 36 months, and the
Operative Trigger Event occurs at the end of the 12th month after the grant
date, then effective on the Release Effective Date, the total number of vested
options and vested Awards should be equal to 1/3 (i.e., 12/36) of the total
number of each granted. Notwithstanding anything to the contrary contained
herein, the terms of the equity compensation plan under which any such Award was
granted shall govern acceleration of vesting of such Award in the event of a
“Change of Control” as defined in such plan.

 

If the Operative Trigger Event is a Change in Control Trigger Event, then the
Severance Payment in (a) above shall be at double the rate of Executive’s annual
base salary during the Severance Period and, subject to the same execution and
delivery of a Release, Executive shall also be entitled to:

 

(d) a pro-rata portion of any bonus that would have been payable with respect to
the year of termination based on the achievement of the predetermined company
objectives used to determine the Company’s performance, but pro-rated based on
Executive’s period of employment during such year (such amount to be paid at
such time as Executive’s annual bonus would otherwise have been payable).

 

This Paragraph 2 supersedes any previous understandings or agreements regarding
severance or severance payments, including those stated in the Offer Letter.

 

3. Covenants Agreement. As a condition to the Company’s obligations hereunder,
Executive shall execute and deliver to the Company an agreement in the form of
Exhibit B annexed hereto and made a part hereof relating to confidentiality,
assignment of inventions, non-competition and non-solicitation. The
non-competition and non-solicitation covenants shall apply for a period equal to
the Severance Period.

 

4. At Will Employment. Nothing in this Agreement shall alter Executive’s status
as an “at-will” employee.

 

5. Headings. Headings used in this Agreement are for convenience of reference
only and do not affect the meaning of any provision.

 

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

 

 

 

 

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

 

8. Governing Law; Jurisdiction. This Agreement 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 Agreement 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.

 

9. Amendments. This Agreement may only be amended or otherwise modified, and the
provisions hereof may only be waived, by a writing executed by the parties
hereto.

 

10. Entire Agreement. This Agreement shall constitute the entire agreement of
the parties with respect to the matters covered hereby and shall supersede all
previous written, oral or implied understandings between them with respect to
such matters.

 

11. Opportunity to Consult Counsel. Executive hereby acknowledges that he has
read and fully understands this Agreement, that he has been advised that Olshan
Frome Wolosky LLP is counsel to the Company and not to Executive, and that
Executive has been advised to, and has had the opportunity to, consult with
counsel and Executive’s personal financial or tax advisor with respect to this
Agreement.

 

12. No Effect on Other Benefits. Notwithstanding anything contained herein to
the contrary, nothing contained herein shall adversely affect the rights of
Executive and his dependents and beneficiaries to any and all benefits to which
any of them may be entitled under the benefit plans and arrangements of the
Company in accordance with the terms of such benefit plans and arrangements.

 

13. Section 409A.

 

(a) This Agreement is intended to comply with the requirements of Section 409A
of the Code and regulations promulgated thereunder (“Section 409A”). To the
extent that any provision in this Agreement is ambiguous as to its compliance
with Section 409A, the provision shall be read in such a manner so that no
payments due under this Agreement shall be subject to an “additional tax” as
defined in Section 409A(a)(1)(B) of the Code. For purposes of Section 409A, each
payment made under this Agreement shall be treated as a separate payment. In no
event may Executive, directly or indirectly, designate the calendar year of
payment.

 

(b) Notwithstanding anything to the contrary contained herein, if necessary to
comply with the restriction in Section 409A(a)(2)(B) of the Code concerning
payments to “specified employees,” any payment on account of Executive’s
separation from service that would otherwise be due hereunder within six months
after such separation shall nonetheless be delayed until the first business day
of the seventh month following Executive’s date of termination and the first
such payment shall include the cumulative amount of any payments that would have
been paid prior to such date if not for such restriction, together with interest
on such cumulative amount during the period of such restriction at a rate, per
annum, equal to the applicable federal short-term rate (compounded monthly) in
effect under Section 1274(d) of the Code on the date of termination. For
purposes of Section 2 hereof, Executive shall be a “specified employee” for the
12-month period beginning on the first day of the fourth month following each
“Identification Date” if he is a “key employee” (as defined in Section 416(i) of
the Code without regard to Section 416(i)(5) thereof) of the Company at any time
during the 12-month period ending on the “Identification Date.” For purposes of
the foregoing, the Identification Date shall be December 31. Notwithstanding
anything contained herein to the contrary, Executive shall not be considered to
have terminated employment with the Company for purposes of Section 2 hereof
unless he would be considered to have incurred a “termination of employment”
from the Company within the meaning of Treasury Regulation §1.409A-1(h)(1)(ii).

 

(c) Executive acknowledges that any tax liability incurred by Executive under
Section 409A of the Code is solely the responsibility of Executive.

 

14. No Mitigation. Executive shall be under no obligation to seek other
employment after Executive’s termination of employment with the Company, and the
obligations of the Company to Executive which arise pursuant to Section 2 of
this Agreement shall not be subject to mitigation or offset.

 

 

 

 

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

 

      I.D. SYSTEMS, INC.                 By: /s/ Ned Mavrommatis       Name: Ned
Mavrommatis       Title: Chief Financial Officer       Date: 8/20/2018  
                 WITNESS: EXECUTIVE:           /s/ Bonnie Mavrommatis   /s/
Chris Wolfe Name: Bonnie Mavrommatis   Name: Chris Wolfe Date: 8/20/2018   Date:
8/20/2018

 

 

 

 

EXHIBIT A

FORM OF RELEASE

 

SEPARATION AND GENERAL RELEASE AGREEMENT

 

This Separation and General Release Agreement (the “Agreement”) is entered into
between _______________ with an address at _____________________________ (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, New Jersey 07677 (the “Released Parties”).

 

1. Separation of Employment. Employee acknowledges and understands that
Employee’s last day of employment with ID Systems was _______________ (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. 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 herself 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 August 20, 2018, 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: _________) 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 __________________) 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. Employee agrees not to 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 ____ day of ________, 20__.

 

Witness:   EMPLOYEE:                     Name:                   Agreed to and
accepted on this ____ day of _______, 20__.               ID SYSTEMS, INC.      
              Name:       Title:  

 

 

 

 

EXHIBIT B

FORM OF COVENANTS AGREEMENT

 

I.D. SYSTEMS, INC.

 

Confidentiality, Assignment of Contributions and

Inventions, Non-Competition, and Non-Solicitation Agreement

 

Background. I am a paid employee of I.D. Systems, Inc., a Delaware corporation
(the “Company”). I am executing this Agreement in consideration of my continued
employment with the Company and the severance agreement effective as of August
20, 2018.

 

1. Confidentiality. While working for the Company, I may have previously
developed or acquired, or may in the future develop or acquire, knowledge in my
work or from my colleagues or otherwise of Confidential Information relating to
the Company, its business, potential business or that of its customers or its or
their respective affiliates. “Confidential Information” includes information
concerning the identity of customers or their requirements or key contacts
within the customer’s organization, suppliers, distributors, software programs,
demonstration programs, routines, algorithms, computer systems, plans,
strategies, research, formulations, processes, production methods and sources,
products and specifications, equipment manufacturing and other techniques,
designs, know-how, show how, trade secrets, inventions, improvements,
discoveries, concepts, methodology, formulas, drawings, maps, manuals, models,
specifications, records, files, memoranda, notes, reports, files,
correspondence, financial and sales data, pricing lists or terms, trading terms,
training materials and methods, marketing, distribution, and merchandising
techniques and strategies, evaluations, opinions and interpretations, together
with all other writings or materials of any type embodying any of the foregoing
and any and all other technical, operating, financial, and business information
or materials relating to the Company, its customers or its or their respective
affiliates, whether or not reduced to writing or other medium and whether or not
marked or labeled confidential, proprietary, or the like, regardless of whether
created by me, others or both. Confidential Information does not include
information that is or becomes public domain without fault on my part. I will
have the burden of proof with respect to the exclusion of any information from
the definition of “Confidential Information.”

 

With respect to Confidential Information of the Company, its customers and its
or their respective affiliates, I agree that:

 

(a) The Confidential Information is and will continue to be the sole and
exclusive property of the Company;

 

(b) Except as required under applicable law or pursuant to any judicial process
or administrative proceeding with subpoena powers, I will use the Confidential
Information only in the performance of my duties for the Company. I will not use
the Confidential Information at any time (during or after my employment with the
Company or any of its affiliates) for my personal benefit, for the benefit of
any other Person or in any manner adverse to the interests of the Company, its
customers or its or their respective affiliates;

 

(c) Except as required under applicable law or pursuant to any judicial process
or administrative proceeding with subpoena powers, I will not disclose the
Confidential Information at any time (during or after my employment with the
Company or any of its affiliates) except to authorized Company personnel, unless
the Company consents in advance in writing or unless the Confidential
Information indisputably becomes of public knowledge or enters the public domain
(without fault on my part);

 

(d) I will safeguard the Confidential Information by all reasonable steps and
abide by all policies and procedures of the Company and its customers in effect
from time to time regarding storage, copying, destroying, publication or
posting, or handling of such Confidential Information, in whatever medium or
format that Confidential Information takes;

 

 

 

 

(e) Except as required under applicable law or pursuant to any judicial process
or administrative proceeding with subpoena powers, I will execute and abide by
all confidentiality agreements that the Company reasonably requests me to sign
or abide by, whether those agreements are for the benefit of the Company, an
affiliate or an actual or a potential customer or supplier thereof;

 

(f) I will return all materials containing or relating to Confidential
Information, together with all other Company or customer property, to the
Company when my employment with the Company or any of its affiliates terminates
(either voluntary or involuntary) or upon the Company’s earlier request. I shall
not retain any copies or reproductions of correspondence, memoranda, reports,
notebooks, drawings, photographs, or other documents relating in any way to the
business or affairs of the Company, its customers or its or their respective
affiliates; and

 

(g) Upon any termination of my employment with the Company, I will acknowledge
to the Company, in writing and under oath, in the form attached hereto as
Exhibit A that I have complied with this Agreement.

 

As used herein, the term “Person” means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization or a governmental
entity or department, agency or subdivision of the government entity.

 

For purposes of clauses (b), (c) and (e), in the event of any required
disclosure, I will promptly notify the Company and reasonably cooperate and
assist the Company in resisting such disclosure in the event it chooses to do
so.

 

2. Contributions and Inventions. While employed by the Company, I may make
Contributions and Inventions deemed by the Company to have value to it. The
terms “Contributions” and “Inventions” are understood to include all
information, ideas, concepts, technology, improvements, discoveries, formulae,
inventions, creations, discoveries, techniques, designs, methods, trade secrets,
technical specifications and data, works, modifications, processes, know-how,
show-how, concepts, expressions, improvements, works of authorship (including
computer programs), ideas and other developments, whether or not they are
patentable or copyrightable or subject to analogous protection and regardless of
their form or state of development and whether or not I have made them alone or
with others, together with any and all rights to U.S. or foreign applications
for patents, inventor’s certifications or other industrial rights that may be
filed thereon, including divisions, continuations-in-part, reissues and/or
extensions thereof.

 

This Agreement covers Contributions and Inventions of any kind that are
conceived or made by me, alone or with others, while I am employed by the
Company, regardless of whether they are conceived or made during regular working
hours or at my place of work (whether located at the Company, customer
facilities, at home or elsewhere) and that (i) relate to the Company’s business
or potential business or that of its affiliates, (ii) result from tasks assigned
to me by the Company, or (iii) are conceived or made with the use of the
Company’s time, facilities, resources, or materials. With respect to
Contributions or Inventions covered by this Agreement, I agree that:

 

(a) I will disclose them promptly to the Company. I will not disclose them to
anyone other than authorized Company personnel;

 

(b) They will belong solely to the Company from conception as “works made for
hire” (as that term is used under U.S. copyright law) or otherwise. To the
extent that title to any such Contributions and Inventions do not, by operation
of law, vest in the Company, I hereby irrevocably assign to the Company all
right, title and interest, including, without limitation, tangible and
intangible rights such as patent rights, trademarks, and copyrights, that I may
have or may acquire in and to all such Contributions and Inventions, benefits
and/or rights resulting therefrom, and agree to promptly execute any further
specific assignments related to such Contributions or Inventions, benefits
and/or rights at the request of the Company. If the Company wants more specific
or formal evidence of this, I will sign written documents of assignment at the
Company’s request. I also hereby assign to the Company, or waive if not
assignable, all “moral rights” in and to any Contributions and Inventions and
agree promptly to execute any further specific assignments or waivers related to
moral rights at the request of the Company; and

 

 

 

 

(c) I will, at any time, either during the time I am employed by the Company or
thereafter, assist the Company in obtaining and maintaining patent, copyright,
trademark, mask works and other protection for them, in all countries and
territories, at the Company’s expense. In the event that the Company is unable
to secure my signature after reasonable effort in connection with any patent,
trademark, copyright, mask work or other similar protection relating to a
Contribution or an Invention, I hereby irrevocably designate and appoint the
Company and its duly authorized officers and agents as my agent and
attorney-in-fact, to act for and on my behalf and stead to execute and file any
such application and to do all other lawfully permitted acts to further the
prosecution and issuance of patents, trademarks, copyrights, mask works or other
similar protection thereon with the same legal force and effect as if executed
by me.

 

(d) Any Contributions or Inventions relating to the business of the Company and
disclosed to the Company within 6 months following the termination of my
employment shall be deemed to fall within the provisions of this Section 2. The
“business of the Company’ as used in this Section 2 includes the actual business
conducted by the Company or any of its affiliates at any time during my
employment with the Company, as well as any business in which the Company or any
of its affiliates, at any time during my employment with the Company, proposes
or proposes to engage.

 

3. Obligations to Prior Employers or Others. I do not have any non-disclosure,
non-compete, non-solicitation or other obligations to any previous employer or
other Person that would prohibit, limit, conflict or interfere with my
obligations under this Agreement or the performance of my duties for the
Company. I will not disclose to the Company or its customers or induce the
Company or its customers to use any secret or confidential information or
material belonging to others, including my former employers, if any.

 

4. Excluded Information. A complete list, by non-confidential descriptive title
of all Contributions, Inventions, ideas, reports or other creative works, if
any, made or conceived by me prior to my employment by the Company and intended
to be excluded from this Agreement, is attached as Exhibit B. I shall not assert
any rights under any Contributions, Inventions, ideas, reports or other creative
works as having been made or acquired by me prior to my being employed by the
Company, unless such Contributions, Inventions, ideas, reports or other creative
works are identified on Exhibit B. If, after the date of this Agreement, I
believe that any Contribution or Invention is excluded from this Agreement, I
agree to obtain written authorization from the Company, prior to applying for
any patent on the Contribution or Invention, and prior to taking any steps to
commercially exploit the Contribution or Invention.

 

5. Covenant Against Competition and Solicitation.

 

(a) I acknowledge and understand that, in view of my position as an employee of
the Company, I may have previously been afforded, or in the future may be
afforded, access to the Company’s Confidential Information and that of its
affiliates. I therefore agree that during the course of my employment with the
Company or any of its affiliates and for a period of 12 months after termination
of my employment with the Company and all of its affiliates (for any reason or
no reason) (the “Restricted Period”), I will not, anywhere within the United
States of America or any other country or territory in which the Company or its
affiliates conducts business, either directly or indirectly, whether alone or as
an employee, employer, consultant, independent contractor, agent, principal,
partner, joint venturer, stockholder, member, officer, director or otherwise of
any company or other business enterprise, or in any other individual or
representative capacity, engage in, assist in, participate in, or otherwise be
connected to or benefit from any Competitive Business. As used in this
Agreement, “Competitive Business” shall mean any individual, entity, or business
enterprise that is engaged in or is seeking to engage in: (i) the development,
design, manufacture, marketing, sale and/or distribution of tracking and
monitoring products; or (ii) the development, design, manufacture, marketing,
sale and/or distribution of any products that are directly competitive with
products that (a) represent at least 10% of the Company’s consolidated product
revenues, (b) were first sold or distributed by the Company or any of its
affiliates during the preceding 12-month period, or (c) are being developed,
produced, marketed and/or distributed by the Company or any of its affiliates
and are scheduled to be first sold or distributed by the Company within a
12-month period; provided, however, that for purposes of this definition, a
business shall be a “Competitive Business,” as it applies during the 12 month
period after termination of my employment only if the Company is engaged or is
actively seeking to engage in that business on the date of my termination of
employment with the Company or was engaged or actively seeking to engage in that
business at any time during the preceding 12 months.

 

 

 

 

(b) During the Restricted Period, I will not, without the express prior written
consent of the Company, directly or indirectly: (i) solicit, induce, or assist
any third person in soliciting or inducing any Person that is (or was at any
time within the 12 months prior to the solicitation or inducement) an employee,
consultant, independent contractor or agent of the Company or any of its
affiliates to leave the employment of the Company or any of its affiliates or
cease performing services as an independent contractor, consultant or agent of
the Company or any of its affiliates; (ii) hire, engage, or assist any third
party in hiring or engaging, any individual that is or was (at any time within
the 12 months prior to the attempted hiring) an employee of the Company or any
of its affiliates; or (iii) contact, communicate, solicit, or transact any
business with or assist any third party in contacting, communicating,
soliciting, or transacting any business with any Person that is or was (at any
time within 12 months prior to the contact, communication, solicitation, or
transaction) a customer, distributor or supplier of the Company or its
affiliates (or Person who, at any time during the 12 months prior to the
contact, communication, solicitation, or transaction, the Company or its
affiliates contacted, communicated with or solicited for the purposes of
becoming a customer, distributor, or supplier of the Company or its affiliates
and I was in any way involved or otherwise had knowledge of or reasonably should
have had knowledge of such contact, communication, or solicitation) for the
purposes of inducing such customer, distributor, or supplier or potential
customer, distributor, or supplier to be connected to or benefit from any
business competitive with that of the Company or its affiliates or terminate its
or their business relationship with the Company or its affiliates.

 

6. Defend Trade Secrets. Pursuant to the Defend Trade Secrets Act of 2016, I
understand that:

 

An individual may not be held criminally or civilly liable under any federal or
state trade secret law for the disclosure of a trade secret that: (a) is made
(i) in confidence to a federal, state, or local government official, either
directly or indirectly, or to an attorney; and (ii) solely for the purpose of
reporting or investigating a suspected violation of law; or (b) is made in a
complaint or other document that is filed under seal in a lawsuit or other
proceeding.

 

Further, an individual who files a lawsuit for retaliation by an employer for
reporting a suspected violation of law may disclose the employer’s trade secrets
to the attorney and use the trade secret information in the court proceeding if
the individual: (a) files any document containing the trade secret under seal;
and (b) does not disclose the trade secret, except pursuant to court order.

 

7. Non-Disparagement. I will not at any time (during or after my employment with
the Company) disparage the reputation of the Company, its affiliates, or any of
its or their respective officers and directors.

 

8. Interpretation and Scope of this Agreement.

 

(a) In the event that any court of competent jurisdiction shall determine that
any one or more of the provisions contained in this Agreement shall be
unenforceable in any respect, then such provision shall be deemed limited and
restricted to the extent that the court shall deem the provision to be
enforceable. It is the intention of the parties to this Agreement that the
covenants and restrictions in this Agreement be given the broadest
interpretation permitted by law. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision hereof. The covenants and restrictions contained in this
Agreement shall be deemed a series of separate covenants and restrictions. If,
in any judicial proceeding, a court of competent jurisdiction should refuse to
enforce all of the separate covenants and restrictions in this Agreement, then
such unenforceable covenants and restrictions shall be deemed eliminated from
the provisions of this Agreement for the purpose of such proceeding to the
extent necessary to permit the remaining separate covenants and restrictions to
be enforced in such proceeding.

 

 

 

 

(b) I acknowledge that the restrictions on the activities in which I may engage
that are set forth in this Agreement and the location and period of time for
which such restrictions apply are reasonable and necessary to protect the
legitimate business interests of the Company and shall survive the termination
of my employment. I understand that the Company’s business is global and,
accordingly, the restrictions cannot be limited to any particular geographic
area. I further acknowledge that the restrictions contained in this Agreement
will not prevent me from earning a livelihood during the applicable period of
restriction.

 

(c) I understand and agree that if I breach or threaten to breach any of the
provisions of this Agreement, including, without limitation, the provisions of
Sections 1, 2, 5 or 6 hereof, the Company would suffer irreparable harm and
damages would be an inadequate remedy. Accordingly, I acknowledge that, in the
event of any breach or threatened breach by me of any of the provisions of this
Agreement, the Company shall be entitled to temporary, preliminary and permanent
injunctive or other equitable relief in any court of competent jurisdiction
(without being required to post a bond or other collateral) and to an equitable
accounting of all earnings, profits and other benefits arising, directly or
indirectly, from such violation, which rights shall be cumulative and in
addition to (rather than instead of) any other rights or remedies to which the
Company may be entitled at law or in equity. In addition (and not instead of
those rights), I further covenant that I shall be responsible for payment of the
reasonable fees and expenses of the Company’s attorneys and experts, as well as
the Company’s court costs, pertaining to any suit, arbitration, mediation,
action or other proceeding (including the costs of any investigation related
thereto) in which the Company prevails, arising directly or indirectly out of my
violation or threatened violation of any of the provisions of this Agreement. If
the Company does not prevail in any suit, arbitration, mediation, action or
other proceeding arising directly or indirectly out of my purported violation of
any of the provisions of this Agreement, the Company shall be responsible for
payment of the reasonable fees and expenses of attorneys and experts that I
incur, as well as my court costs, pertaining to any such suit, arbitration,
mediation, action or other proceeding (including the costs of any investigation
related thereto).

 

(d) This Agreement shall be binding upon me, my heirs, assigns and personal
representatives and shall inure to the benefit of the Company, its affiliates
and their respective successors and assigns (including, without limitation, the
purchaser of all or substantially all of its assets).

 

(e) This Agreement shall constitute the entire agreement between Company and
myself with respect to the matters covered hereby and shall supersede all
previous written, oral or implied understandings between us with respect to such
matters.

 

(f) I acknowledge that my employment with the Company is “at-will.” I understand
that nothing contained in this Agreement shall give me a right to continue in
the employ of the Company, and the right to terminate my employment with the
Company, at any time, with or without cause, is specifically reserved to the
Company. I also understand that I may resign from employment with the Company at
any time in my discretion.

 

(g) Any and all actions or controversies arising out of this Agreement,
Employee’s employment by the Company or termination therefrom, including,
without limitation, tort claims, shall be construed and enforced in accordance
with the internal laws of the State of New Jersey, without regard to the choice
of law principles thereof.

 

 

 

 

I represent and warrant that: (a) I have read this Agreement; (b) I understand
all the terms and conditions hereof; (c) I have entered into this Agreement of
my own free will and volition; (d) I have been advised by the Company to seek
and have, to the extent I have deemed necessary, received the advice of counsel
of any own selection; and (e) the terms of this Agreement are fair, reasonable
and are being agreed to voluntarily in exchange for my continued employment with
the Company and the severance agreement effective as of August 20, 2018.

 

Date: 8/20/2018   /s/ Chris Wolfe       Name: Chris Wolfe

 

Accepted:

 

I.D. SYSTEMS, INC.         By: /s/ Ned Mavrommatis   Name: Ned Mavrommatis  
Title: Chief Financial Officer  

 

 

 

 

EXHIBIT A

 

STATE OF NEW JERSEY

COUNTY OF _________________

 

The undersigned, being duly sworn, does hereby certify that he/she has complied
with, and will continue to comply with, for the applicable period set forth
therein, all of the terms of the Confidentiality, Assignment of Contributions
and Inventions, Non-Competition and Non-Solicitation Agreement dated August 20,
2018 by the Undersigned in favor of I.D. Systems, Inc. (the “Company”). I have
returned all Company property and all materials relating to or containing
Confidential Information to the Company and I have not retained any copies or
reproductions of any correspondence, memoranda, reports, notebooks, drawings,
photographs or other documents or materials relating to the affairs of the
Company, its customers and its or their affiliates.

 

      Name: Chris Wolfe

 

Sworn and Subscribed to

before me this ____ day of

______________, 2018

______________________________________

 

 

 

 

EXHIBIT B

 

Excluded Information

(See Section 4. If None, type “NONE”)

 

NONE