Exhibit 10.24


 


MxEnergy
Inc.

20 Summer St

Stamford, CT 06901

203 356 1318

203 226 2738 (f)


 


December 24, 2004


 


Mr. Thomas W. Hartmann

18 Lorraine Court 

Cary, Illinois 60013


 


Dear Tom:


 


This will confirm that, in consideration of the mutual covenants contained
herein, you and MxEnergy Inc. (the “Company”) agree as follows:


 


1.                          Employment Relationship.
You have agreed to the terms of this agreement (the “Agreement”) under which
the Company will employ you, effective as of January 10, 2005 (the “Employment
Date”), in the position of General Counsel of MxEnergy lnc. In such position,
you will be responsible for managing, directly or indirectly, the legal affairs
of the Company, including supervision of legal and paralegal personnel;
supervision of regulatory and compliance personnel; review of tariffs, rules and
regulations of public utility regulators and regulated utilities; negotiation
and drafting of all agreements and contracts with customer, suppliers,
stockholders, banks and finance institutions, and other counterparties;
advising the Board of Directors and management of the Company on their
respective rights and responsibilities pursuant to applicable securities law;
and related duties as directed by the Company from time to time through its
Chief Executive Officer or Chief Operating Officer.


 


2.                          Compensation.


 


(a)                     Your base salary shall be the higher of (x)
$225,000 per calendar year, or (y) that amount determined by the Company from
time to time. The Company currently has no formal bonus plan; however, annual
bonuses are sometimes awarded by the Company, in its sole discretion, based on
the Company’s performance and the individual’s personal performance.


 


(b)                    While you are an employee of the Company, you
will be entitled to participate, to the extent of your eligibility, in the
employee benefits generally made available to senior employees in the Company,
including, without limitation, the Company’s Incentive Stock Option Plan and
those benefits set forth in the Employee Handbook and the


 

















 


Executive
Addendum to the Standard Employee Handbook, as they may be amended, added
or terminated by the Company in its sole discretion from time to time.


 


(c)                     Notwithstanding
anything herein to the contrary, you acknowledge that the employment
relationship between you and the Company is intended to be, and will be,
strictly “at-will,” meaning that you and the Company are free to terminate the
relationship at any time, with or without Cause, as defined herein.


 


3.                          Reimbursement
of Expenses. While you are an employee of the Company, you will be
reimbursed for the reasonable and necessary out-of-pocket expenses that you
incur in furtherance of the Company’s business, provided, however, that all
expenses must be properly documented and otherwise be in compliance with the
policies established from time to time by the Company. In addition, you shall
be entitled to receive reimbursement (paid upon submission of receipts to the
Company) for moving expenses, including, but not limited to, travel and living
expenses, up to a maximum reimbursement of $10,000.


 


4.                          Eligibility
to Receive Warrants. You are eligible to receive warrants for up to 10,000
shares of the common stock of the Company (“Warrants”) and with a strike price
equal to $22, as follows:


 


(a)                    Your right to
receive Warrants for up to 2,500 shares shall vest three months following the
Employment Date, provided that you are an active employee of the Company on
such vesting date.


 


(b)                   Your right to
receive additional Warrants for 7,500 Shares shall vest in three installments
of Warrants for 2,500 shares respectively on the first, second and third
anniversaries of the Employment Date (each of such dates is referred to herein
as a “Vesting Date”), provided that you are an active employee of the Company
on each such Vesting Date.


 


(c)                    Subject to
subparagraphs (d), (e), and (f) below, if you terminate your employment
relationship with the Company for any reason (other than through a Resignation
for Good Cause as defined below), including, without limitation, resignation or
retirement, or the Company terminates your employment with Cause, you shall
forfeit the right to receive all Warrants that have not vested as of the
effective date of the termination of such employment relationship.


 


(d)                   Notwithstanding
anything in this Agreement to the contrary, all unvested Warrants (and all
subsequently issued warrants) shall immediately vest at such time as


 


i.                            the
Company terminates your employment relationship at any time without Cause;


 


ii.                         the
Company enters into an agreement, except for purposes of


 


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raising new capital, for the sale or other
disposition, in one transaction or a series of transactions, of securities
representing at least 50% of the common stock of the Company on a fully-diluted
basis, and such sale or other disposition is consummated, or


 


iii.                      the Company
enters into a consolidation or merger (other than a merger (x) in which the
Company is the surviving company,
(y) which involves only a change in the Company’s state of incorporation, or
(z) with a wholly-owned subsidiary of the Company) or the sale of all or
substantially all of the Company’s assets; or


 


iv.                     a
registration statement in respect of a public offering by the Company of its
common stock becomes effective.


 


(e)                        For
purposes of this Agreement, Cause shall mean any of:


 


(i)                        A material
breach of Company policy;


 


(ii)                     A conviction
for, or pleading guilty to, a felony-class crime;


 


(iii)                   Any action
taken in bad faith that has, or is likely to have, in the Company’s reasonable
judgment, a material, detrimental effect on the reputation of the Company or
its business;


 


(iv)                  An act of fraud,
dishonesty or gross misconduct by you;


 


(v)                     A material
breach of any provision of an MxEnergy employment contract that has not been
cured within thirty (30) days after written notice of such breach by the
Company;


 


(vi)                  Failure to
secure, in a timely fashion, approval of a requisite immigration status. At no
time shall an Executive fail to meet any legal requirement regarding the Company’s
employment of a non-citizen; and


 


(vii)               Failure to perform your
duties or responsibilities to the Company to the Company’s reasonable
satisfaction, after being given notice and a reasonable opportunity to improve.


 


(f)                      If you
voluntarily resign for any of the reasons set forth below (collectively, “Resignation
for Good Cause”), your Warrants (and any subsequently issued warrants) shall
vest immediately:


 


(i)                       A reduction
in or failure to pay any portion of your annual base salary;


 


(ii)                    The relocation
of your office to a location more than fifty (50) miles from the location at
which you performed your


 


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duties prior to the
relocation, except for required travel on Company business to an extent
substantially consistent with your business travel obligations; or


 


(iii)                 In the event of a
Change of Control of the Company, the failure by the company that survives the
Change of Control (the “Acquiring Company”) to provide you (until the
expiration of one year after the occurrence of such Change of Control) with
compensation and benefits which are, in the aggregate, no less favorable than
those provided by Company to you immediately prior to the occurrence of such
Change of Control.


 


Change of Control, as used in this Agreement, is
defined as the occurrence of the events set forth in Section 4d(ii)-(iv) of
this Agreement.


 


(g)                   In the event of your voluntary resignation or
a termination of your employment by the Company for Cause, the Company may elect,
in its sole discretion, upon written notice to you, to purchase all or any
portion of your vested Warrants or shares of the Company’s stock at a price
equal to one hundred fifty percent (150%) of the strike price of such Warrants
or your purchase price of the shares.


 


5.                          Termination. In the
event the Company terminates your employment without Cause at any time after April 10,
2005 or you  execute a Resignation with
Good Cause, you shall be entitled to a severance payment equal to six (6) months
of your then current annual base salary payable on a monthly basis thereafter,
provided that if your termination without Cause or your Resignation for Good Cause occurs one year or more after
the Employment Date, your severance payment shall equal the greater of six (6) months
of your then current base salary or two (2) months of your then current
base salary for each full year of employment, up to a maximum severance amount
of two (2) years’ base salary.


 


Notwithstanding the foregoing, if the
Acquiring Company following a Change of Control terminates your employment
without Cause or you submit a Resignation for Good Cause within one (1) year
of a Change of Control of the Company, all of your unvested warrants (whether
issued in this Agreement or hereafter) shall immediately vest, and you shall be
entitled to a severance payment equal to the greater of one (1) year of
your then current salary or two (2) months for each full year of
employment at your then current annual salary payable on a monthly basis
thereafter, up to a maximum severance amount of two (2) years’ base
salary. At the time of the Change of Control, the Company shall use
commercially reasonable efforts to cause the Acquiring Company to assume the
Company’s obligations under this Agreement.


 


6.                          Shareholders Agreement.
As a condition precedent to the issuance of Warrants to you, you agree to enter
into and be bound by the terms and conditions of the


 


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Third Amended and
Restated Stockholders Agreement, dated as of June 30, 2004, as amended and
restated from time to time, among the Company and certain other shareholders
who are parties to the Stockholders Agreement from time to time (the “Stockholders
Agreement”), a copy of which will be made available to you prior to the issuance
of the Warrants.


 


7.                          Limitation
on Transfer of Warrants. You are aware that there are substantial
restrictions on the transferability of the Warrants and the underlying shares.
The Warrants will not be, and you have no right to require that they be,
registered under the Act. The Warrants and underlying stock cannot be, and you
agree that they will not be, sold unless an exemption from registration is
available under the Act. You also acknowledge that you will be responsible for
compliance with all conditions of transfer imposed by any applicable “Blue Sky”
or state securities laws. You further acknowledge that the Warrants and the
underlying stock may not be sold, transferred or otherwise disposed of
without compliance with the terms and conditions of the Shareholders Agreement.


 


8.                          Restrictive
Covenants.


 


(a)                      Confidentiality.
You covenant and agree you win maintain in strictest confidence and not
disclose to any person or business entity, except as specifically required in
the performance of your duties hereunder, or use for personal benefit, gain or
otherwise, any confidential or proprietary information of the Company or any
client of the Company.


 


(b)                     Non-Competition.
You also covenant and agree that, from the date of your execution and delivery
of this Agreement until six (6) months following the cessation of your
employment with the Company for any reason, whether with or without Cause, or
whether initiated by you or the Company, you will not directly or indirectly
(whether as owner, officer, director, shareholder or employee of a business or
in any other manner), without the prior written consent of the Company, (i) work
with, or provide services to any person or entity which was a customer or
competitor of the Company at the date of cessation of your employment
relationship or within the twelve-month period preceding such date, or which
was contacted as a client prospect by any representative of the Company within
ninety (90) days prior to such date of employment cessation; or (ii) solicit
or induce any employee of the Company to leave its employ or to hire or attempt
to hire any such employee.


 


(c)                      Injunctive
and Other Relief. You acknowledge that your services and skills are unique
and that any actual or threatened violation of the provisions of this Section will
cause irreparable harm to the Company. Accordingly, you agree that, in addition
to such other rights as the Company may have at law or in equity
(including the right to recover damages) or under this Agreement, the Company
will be entitled to


 


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temporary
and permanent injunctive relief in the event of any actual or threatened
violation by you of the provisions of this Section.


 


9.        Representations
and Warranties.


 


(a)                    You
represent and warrant that you are not a party to any agreement, contract or
understanding, whether of employment or otherwise, which would in any way
restrict or prohibit you from undertaking or performing the services
contemplated by, and in accordance with, the terms and conditions of this
Agreement, and that you are not in possession of any trade secrets or other
confidential information of any other person which might result in such other
person making a claim against the Company or any affiliate.


 


(b)                   You
have the absolute right and power to acquire the Warrants and to perform your
obligations under this Agreement and the Shareholders Agreement (collectively,
the “Agreements”), and you are not subject to any contractual or other
restriction that would prevent you from entering into the Agreements. The
Agreements are valid, binding and enforceable against you in accordance with
their respective terms.


 


(c)                    You
are acquiring the Warrants for your own account, for investment purposes only,
and not with a view to selling or distributing them in a manner that would
require registration under the Securities Act of 1933 (the “Act”) and the
regulations promulgated thereunder. You do not presently have any reason to
anticipate any change in your circumstances that would cause you to need to
sell the Warrants. You have the financial ability to bear the economic risk of
your investment for an indefinite period of time and have no need for liquidity
with respect to your ownership of the Warrants.


 


(d)                   All
documents and information having a bearing on your proposed ownership of the
Warrants have been made available to you for inspection. You have had a
complete opportunity to ask questions of, and receive answers from, the Company
about the terms and conditions of your proposed ownership of the Warrants, and
all such questions have been answered to your satisfaction. You have such
knowledge and experience in financial and business matters that you are capable
of evaluating the merits, risks and suitability of an investment in, or
ownership of, the Warrants.


 


(e)                    You
have made an independent determination and evaluation of the economic and tax
consequences of your investment in, and ownership of, the Warrants. You have
not received, and you are not relying on, any representations, statements or
warranties made by the Company or any director, officer, employee agent or
other person purportedly acting on


 


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behalf
thereof regarding the Company or its capital stock or the economic or tax
consequences of your investment in, or ownership of, the Warrants.


 


(f)                      The
Company represents and warrants that (i) it has the absolute right and
power to grant the Warrants to you and to perform its obligations under
the Agreements; (ii) it is not subject to any contractual or other
restriction that would prevent it from entering into the Agreements; (iii) the
Agreements are valid, binding and enforceable against the Company in accordance
with their respective terms; and (iv) it is not a party to any agreement,
contract or understanding, whether of employment or otherwise, which would in
any way restrict or prohibit it from undertaking or performing the services
contemplated by, and in accordance with, the terms and conditions of this
Agreement; and (v) the shares granted to you under this letter agreement
are fully paid and non-assessable.


 


10.                   Indemnification.


 


(a)             You acknowledge that
you understand the meaning and legal consequences of the representations,
warranties and agreements set forth in this Agreement and in Schedule A
hereto. You agree to indemnify and hold harmless the Company, its shareholders,
directors, officers and employees from and against any and all loss, damage or
liability due to or arising out of a breach by you of any such representation,
warranty or agreement. Notwithstanding the foregoing, no representation,
warranty, acknowledgment or agreement that you make in this Agreement will in
any way be deemed to constitute a waiver of your rights under federal or state
securities laws.


 


(b)            The Company agrees
to indemnify you and hold you harmless from and against any and all loss,
damage or liability due to or arising out of a breach by the Company of any of
its representations, warranties or obligations hereunder. Notwithstanding the
foregoing, no representation, warranty, acknowledgment or agreement made by the
Company in this Agreement will in any way be deemed to constitute a waiver of
the Company’s rights under federal or state securities laws.


 


11.                   Legend.
You acknowledge that any certificate representing shares of the Company will
bear the legends required by the Shareholders Agreement.


 


12.                   Miscellaneous.


 


(a)             Entire Agreement.
This Agreement constitutes the entire agreement between you and the Company
with respect to the subject matter hereof. This Agreement may not be
amended, modified or supplemented except by written agreement executed by the
parties hereto.


 


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(b)            Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective heirs, legal representatives,
successors and assigns.


 


(c)             Waiver. No delay or failure by either party to exercise any right under this
Agreement, and no partial or single exercise of that right, shall constitute a
waiver of that or any other right.


 


(d)            Governing Law. This Agreement shall be governed by the laws
of the State of Connecticut, without giving regard to its conflicts of law
provisions.


 


(e)             Headings. Headings are provided for convenience of reference only, and shall not
constitute a part of this Agreement or affect the interpretation thereof.


 


13.                 Intellectual Property. During your employment with the Company, you
will comply with all of the provisions set forth in the attached Schedule A,
entitled “Intellectual Property,” and you further agree that the provisions of
Sections 8(c) and 9(a) of this Agreement shall apply thereto.


 


Please acknowledge your acceptance of the terms and conditions of this
Agreement by signing, dating and returning to the undersigned the enclosed
counterpart of this Agreement.


 


 


	
   

  	
  Very
  truly yours,

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MxEnergy
  Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jeffrey A. Mayer

  	
   

  
	
   

  	
   

  	
  Jeffrey
  A. Mayer

  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accepted
  and Agreed effective this

  27th day of December 2004:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/
  Thomas W. Hartmann

  	
   

  	
   

  	
   

  	
   

  
	
  Thomas W.
  Hartmann

  	
   

  	
   

  	
   

  	
   

  



 


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SCHEDULE A

Intellectual
Property.


 


(a)             You
shall make full and prompt disclosure to the Company of all trademarks or trade
names, including, without limitation, designs, logos or slogans, which are
created, made, conceived or reduced to practice by you or under your direction
or jointly with others during your affiliation with the Company, whether or not
during normal working hours or on the premises of the Company, and which
relates to the business then engaged in by the Company or in which the Company
then reasonably anticipates being engaged (all of which are collectively
referred to in this Agreement as “Developments”).


 


(b                You
(i) agree to assign and do hereby assign to the Company (or any person or
entity designated by the Company) all of your respective right, title and
interest in and to all Developments and all related applications; and (ii) agree
to assign and do hereby assign to
any third party designated by the Company any Developments which are subject to
the terms and provisions of an intellectual property license or other similar
agreement approved by the Company’s Board of Directors between the Company and
such third party. You also hereby waive all claims to moral rights in any
Developments.


 


(c)             You
agree to cooperate fully with the Company with respect to the procurement,
maintenance and enforcement of intellectual property rights (both in the United
States and foreign countries) relating to Developments, provided that the
Company shall reimburse you for any costs or expenses incurred in connection
with the procurement, maintenance and enforcement of intellectual property. You
shall sign all papers, including, without limitation, trademark applications,
declarations, oaths, formal assignments, assignments of priority rights, and
limited powers of attorney, which the Company reasonably may deem
necessary or desirable in order to protect its rights and interests in any
Development and which shall be prepared by the Company or its counsel. You
further agree that if the Company is unable, after reasonable effort, to secure
your signature on any such papers, any executive officer of the Company shall
be entitled to execute any such papers as your agent and the attorney-in-fact,
and you hereby irrevocably designate and appoint each executive officer of the
Company as your agent and attorney-in-fact to execute any such papers on your
behalf, and to take any and all reasonable actions as the Company may deem
necessary or desirable in order to protect its rights and interests in any
Development, under the conditions described in this sentence.


 


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