Document:

exhibit10-4.htm

EXHIBIT 10.4

 

 

Restrictive Covenant Agreement

Celanese Corporation, its Subsidiaries and its Affiliates, (“Employer”), and James S. Alder, his/her heirs, executors, administrators, successors, and assigns (“Executive”), agree that:

	
1.  

	
Last Day of Employment (“Departure Date”). Executive is retiring and the last day of employment with Celanese is: October 31, 2011.

	
2.  

	
Non-competition/Non-solicitation.  Executive acknowledges and recognizes the highly competitive nature of the business of the Employer. Without the express written permission of the Employer, for a period of two (2) years, following the Departure Date (the “Restricted Period”), Executive acknowledges and agrees that he/she will not: (i) directly or indirectly solicit sales of like products similar to those produced or sold by the Employer; (ii) directly engage or become employed in a function with like responsibilities as at the Employer with any business that competes
with the business of the Employer, including but not limited to: direct sales, marketing, or manufacturing research and development or product development for a producer of products similar to those produced or licensed by the Employer; or (iii) for a period of two (2) years from the departure date, directly or indirectly solicit or hire employees of the Employer for employment. Provided however, that nothing in this provision shall restrict Executive from owning solely as an investment, publicly traded securities of any company which is engaged in the business of the Employer, if Executive (i) is not a controlling person of, or a member of a group which controls; and (ii) does not, directly or indirectly, own 5% or more of any class of securities of any such company.

	
3.  

	
Confidentiality. Executive and Employer agree not to disclose any information regarding the existence or substance of this Agreement, except to his spouse, tax advisor, and an attorney with whom Executive chooses to consult regarding his consideration of this Agreement.

Executive agrees and recognizes that any knowledge or information of any type whatsoever of a confidential nature relating to the business of the Employer or any of its subsidiaries, divisions or affiliates, including, without limitation, all types of trade secrets, client lists or information, Executive lists or information, information regarding product development, marketing plans, management organization, operating policies or manuals, performance results, business plans, financial records, or other financial, commercial, business or technical information (collectively “Confidential Information”), must be protected as confidential, not copied, disclosed or used other than for the benefit of the
Employer at any time unless and until such knowledge or information is in the public domain through no wrongful act by Executive. Executive further agrees not to divulge to anyone (other than the Employer or any persons employed or designated by the Employer), publish or make use of any such Confidential Information without the prior written consent of the Employer, except by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency.

	
4.  

	
Future Cooperation after Departure Date.  After departure, Executive agrees to make       reasonable efforts to assist the Employer including but not limited to: assisting with transition duties, assisting with issues that arise after departure of employment and assisting with the defense or prosecution of any lawsuit or claim.  This includes but is not limited to responding to telephone calls, providing deposition testimony, attending hearings and testifying on behalf of the Employer.  The Company will reimburse Executive
for reasonable time and expenses in connection with any future cooperation after the Departure Date.  Time and expenses can include loss of pay or using vacation time at a future employer.  The Employer shall reimburse the Executive within 30 days of remittance by Executive to the Employer of such time and expenses incurred, but in no event later than the end of the Executive’s tax year following the tax year in which the Executive incurs such time and expenses and such reimbursement obligation shall remain in effect for five years and the amount of expenses eligible for reimbursement hereunder during Executive’s tax year will not affect the expenses eligible for reimbursement in any other tax year.

	
5.  

	
Consideration. Each separate installment under this Agreement shall be treated as a separate payment for purposes of determining whether such payment is subject to or exempt from compliance with the requirements of Section 409A of the Internal Revenue Service Code. In consideration for signing this Agreement and compliance with the promises made herein, Employer and Executive agree:

	
a.  

	
Long Term Equity Awards. The Employer will fulfill its obligations to Executive pursuant to the terms of the outstanding equity award agreements. The Employer and Executive agree that the specific equity awards for which the Executive is eligible are set forth on Exhibit A. The Employer further agrees that

	
i.  

	
The Executive shall be entitled to receive a pro rata portion of all outstanding time-vesting and performance-vesting Restricted Stock Units (RSUs), determined by the Departure Date, with the remaining portion being forfeited, and with such pro rata portion to vest and settle as of the original vesting dates, subject to any performance adjustments and hold requirements specified in such awards, and

	
ii.  

	
The Executive shall be entitled to continued vesting of the Executives October 2010 stock option award, and shall be entitled to exercise stock options from the applicable vesting date through the stated award expiration date, subject to  hold requirements. The terms of all remaining stock option awards are unaffected by this agreement.

	
b.  

	
Company Benefit Plans. Healthcare & dental coverage and all other normal company programs (e.g. life insurance, LTD, 401K contributions, etc.) will continue until the last day of the month in which Executive departs, according to their current health & dental plan elections.

	
c.  

	
 Pension & Retiree Health Care Plan. If Executive is eligible, the Employer will fulfill its obligations according to the terms of the respective Plans.

	
d.  

	
 Voluntary Resignation. Executive agrees to voluntarily resign from the Employer effective on the Departure Date.  Effective as of the close of business on such Departure Date, Executive will resign from all positions he holds as a corporate officer of the Company and subsidiaries and Affiliates (including without limitation any positions as an officer, executive and/or director), and from all positions held on behalf of the Company (e.g., external board memberships, joint venture boards, internal committee
positions).

	
e.  

	
 Return of Company Property. Executive will surrender to Employer on the Departure Date, all company materials, including, if applicable, but not limited to his/her company car, laptop computer, phone, credit card, calling cards, etc.  Executive will be responsible for resolving any outstanding balances on the company credit card.

	
6.  

	
No Consideration Absent Execution of this Agreement. Executive understands and agrees that he/she would not receive the consideration specified in Paragraph “2” above, except for the execution of this Agreement and General Release and the fulfillment of the promises contained herein.

	
7.  

	
General Release of Claims. Executive knowingly and voluntarily releases and forever discharges, to the full extent permitted by law the Employer of and from any and all claims, known and unknown, asserted and unasserted, Executive has or may have against Employer as of the date of execution of this Agreement and General Release, including, but not limited to, any alleged violation of:

	
·  

	
Title VII of the Civil Rights Act of 1964, as amended;

	
·  

	
The Civil Rights Act of 1991;

	
·  

	
Sections 1981 through 1988 of Title 42 of the United States Code, as amended;

	
·  

	
The Employee Retirement Income Security Act of 1974, as amended;

	
·  

	
The Immigration Reform and Control Act, as amended;

	
·  

	
The Americans with Disabilities Act of 1990, as amended;

	
·  

	
The Age Discrimination in Employment Act of 1967, as amended;

	
·  

	
The Workers Adjustment and Retraining Notification Act, as amended;

	
·  

	
The Occupational Safety and Health Act, as amended;

	
·  

	
The Wall Street Reform Act of 2010 (Dodd-Frank)

	
·  

	
The Family Medical Leave Act of 1993

	
·  

	
The Sarbanes-Oxley Act of 2002;

	
·  

	
The Texas Civil Rights Act, as amended;

	
·  

	
The Texas Minimum Wage Law, as amended;

	
·  

	
Equal Pay Law for Texas, as amended;

	
·  

	
Any other federal, state or local civil or human rights law, including but not limited to any other local, state or federal law, regulation or ordinance in Texas, or any law, regulation or ordinance of a foreign country, including but not limited to the People’s Republic of China, Federal Republic of Germany and the United Kingdom.

	
·  

	
Any public policy, contract, tort, or common law.

	
·  

	
Any claim for costs, fees, or other expenses including attorneys’ fees incurred in these matters.

	
8.  

	
Affirmations. Executive affirms that he/she has not filed, caused to be filed, or presently is a party to any claim, complaint, or action against Employer in any forum or form. Provided, however, that the foregoing does not affect any right to file an administrative charge with the Equal Employment Opportunity Commission (“EEOC”), or a charge or complaint under the Wall Street Reform Act of 2010 subject to the restriction, that if any such charge or complaint is filed, Executive agrees not to violate the confidentiality provisions of this Agreement and Executive further agrees and covenants that should he/she or any other person,
organization, or other entity file, charge, claim, sue or cause or permit to be filed any charge or claim with the EEOC, the Securities and Exchange Commission (“SEC”), any other governmental body, civil action, suit or legal proceeding against the Employer involving any matter occurring at any time in the past, Executive will not seek or accept any personal relief (including, but not limited to, monetary award, recovery, relief or settlement) in such charge, civil action, suit or proceeding.

Executive further affirms that he/she has reported all hours worked as of the date of this         Agreement and has been paid and/or has received all leave (paid or unpaid), compensation, wages, bonuses, commissions, and/or benefits to which he/she may be entitled and that no other leave (paid or unpaid), compensation, wages, bonuses, commissions and/or benefits are due to him/her, except       as provided in this Agreement and General Release. Executive furthermore affirms that he/she has no known workplace injuries or occupational diseases.

	
9.  

	
Governing Law and Interpretation. This Agreement shall be governed and conformed in accordance with the laws of the state in which Executive was employed on the Departure Date without regard to its conflict of laws provision.  In the event the Executive or Employer breaches any provision of this Agreement, Executive and Employer affirm that either may institute an action to specifically enforce any term or terms of this Agreement.  Should any provision of this Agreement be declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, excluding the general release language,
such provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect.

	
10.  

	
Nonadmission of Wrongdoing. The parties agree that neither this Agreement nor the furnishing of the consideration for this Release shall be deemed or construed at anytime for any purpose as an admission by Employer of any liability or unlawful conduct of any kind.

	
11.  

	
Non-Disparagement.  Executive agrees not to disparage, or make disparaging remarks or send any disparaging communications concerning, the Employer, its reputation, its business, and/or its directors, officers, managers. Likewise the Employer’s senior management agrees not to disparage, or make any disparaging remark or send any disparaging communication concerning Executive, his/ her reputation and/or business.

	
12.  

	
Injunctive Relief. Executive agrees and acknowledges that the Employer will be irreparably harmed by any breach, or threatened breach by him of this Agreement and that monetary damages would be grossly inadequate. Accordingly, he agrees that in the event of a breach, or threatened breach by him of this Agreement the Employer shall be entitled to apply for immediate injunctive or other preliminary or equitable relief, as appropriate, in addition to all other remedies at law or equity.

	
13.  

	
Review Period. Executive is hereby advised that he/she has up to forty-five (45) calendar days to review this Agreement and to consult with an attorney prior to execution of this Agreement. Executive agrees that any modifications, material or otherwise, made to this Agreement do not restart or affect in any manner the original forty-five (45) calendar day consideration period.

	
14.  

	
Revocation Period. In the event that Executive elects to sign and return to the Employer a copy of their Agreement, he/she has a period of seven (7) days (the “Revocation Period”) following the date of such return to revoke this Agreement, which revocation must be in writing and delivered to the Employer within the Revocation Period. This Agreement will not be effective or enforceable until the expiration of the Revocation Period.

	
15.  

	
Amendment. This Agreement may not be modified, altered or changed except upon express written consent of both parties wherein specific reference is made to this Agreement.

	
16.  

	
Entire Agreement. This Agreement sets forth the entire agreement between the parties hereto, and fully supersedes any prior obligation of the Employer to the Executive. Executive acknowledges that he/she has not relied on any representations, promises, or agreements of any kind made to him/her in connection with the decision to accept this Agreement, except for those set forth in this Agreement. Notwithstanding the foregoing, it is expressly understood and agreed that the Equity Agreements and the Long Term Incentive Award Claw Back Agreement executed by Executive shall remain in full force and effect, except as such Equity Agreements are modified
by this Agreement.

	
17.  

	
HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FULFILL THE PROMISES AND TO RECEIVE THE SUMS AND BENEFITS IN PARAGRAPH “5” ABOVE, EXECUTIVE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT AND GENERAL RELEASE INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS HE/SHE HAS OR MIGHT HAVE AGAINST EMPLOYER.

IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this Agreement as of the date set forth below:

 

 

	 	 	 Celanese Corporation
	 	  

By:/S/ James S. Alder

	
 

By:  /S/ David N. Weidman

	 	 	 
	 	
Date:  September 7, 2011

	Date:  September 7, 2011
	 	 	 
	 	 	 
	 	 	 

 

 

 

  

 

EXHIBIT A

 

	
 

2009 Restricted Stock Units

	  	  	  
	
Vesting Period

	
Target Award

	
Prorated Amount

	
Timing of Payment

	
2009 Performance RSU Award: (1)

	  	  	  
	
12/2/2009 - 9/30/2012

	
16,000

	
10,824

	
Oct. 2012

	
2009 Time Vested RSUs: (2)

	  	  	  
	
10/1/2009 - 10/1/2012

	
6,400

	
4,445

	
Oct. 2012

	  	  	  	  
	
2010 Restricted Stock Units

	  	  	  
	
Vesting Period

	
Target Award

	
Prorated Amount

	
Timing of Payment

	
2010 Performance RSU Award: (3)

	  	  	  
	
12/1/2010 - 9/30/2013

	
17,890

	
5,788

	
Oct. 2013

	
2010 Time Vested RSUs: (4)

	  	  	  
	
10/1/2010 - 10/1/2012

	
2,684

	
1,454

	
Oct. 2012

	
10/1/2010 - 10/1/2013

	
3,578

	
1,293

	
Oct. 2013

	  	  	  	  
	
2010 Stock Options (5)

	  	  	  
	
Grant Date

	
Options Granted

	
Prorated Amount

	
Exercisable until:

	
10/1/2010 - 10/1/2012

	
4,757

	
4,757

	
10/1/2017

	
10/1/2010 - 10/1/2013

	
4,757

	
4,757

	
10/1/2017

	
10/1/2010 - 10/1/2014

	
4,759

	
4,759

	
10/1/2017

	
 

Treatment of outstanding awards:

(1)  2009 PRSUs – pro rate on termination date and distribute on original vesting date (October 2012) as adjusted for performance

(2)  2009 Time RSUs - pro rate on termination date and distribute on original vesting dates (October 2012)

(3)  2010 PRSUs - pro rate on termination date and distribute on original vesting date (October 2013) subject to holding requirement (7-years from grant date per agreement)

(4)  2010 Time RSUs - pro rate on termination date and distribute on original vesting date (October 2012 and October 2013) subject to holding requirement (7-years from grant date per agreement)

(5) Outstanding stock options will be exercisable to the extent described in the Award Agreement and subject to holding requirement (1-year from the date of exercise)bblu_ex10-1.htm

EXHIBIT 10.01

 

EMPLOYMENT AGREEMENT

 EMPLOYMENT AGREEMENT, effective as of September 1, 2011, by and between Blue Earth, Inc., a Nevada corporation, with offices located at 2298 Horizon Ridge Parkway, Suite 205, Henderson, Nevada, 89502 (the “Parent”), Xnergy, Inc., a California corporation and wholly owned subsidiary of the Parent, with offices at 2721 Loker Avenue West, Carlsbad, California 92010 (the “Company”); and D. Jason Davis, an individual with an address at 11235 Deprise Cove, San Diego, California 92010 (“Executive”).

WITNESSETH:

 

WHEREAS, subject to the terms and considerations hereinafter set forth, the Company wishes to employ Executive in the position set forth herein and Executive wishes to accept such employment.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.           EMPLOYMENT.

 

The Company hereby employs Executive and Executive hereby accepts such employment, as Chief Executive Officer of the Company, subject to the terms and conditions set forth in this Agreement.  Employee shall be based at, and be expected to perform his duties at, the Company’s offices in Carlsbad, California and at other mutually acceptable geographic locations as required, and shall include reasonable travel incidental to the performance of his duties under this Employment Agreement.

 

2.           TERM OF EMPLOYMENT.

 

Subject to earlier termination as hereinafter provided, the Company hereby retains the services of Executive, and Executive agrees to furnish such services, upon the terms and conditions set forth herein.  The term of this Agreement shall commence on the date hereof (hereinafter referred to as the “Effective Date”) and continue for a period up to and including August 31, 2016, unless terminated earlier as provided in this Agreement (the “Initial Term”).  Unless written notice of either party’s desire to terminate this Agreement is given to the other party at least ninety (90) days prior to the expiration of the Initial Term (or any one-year renewal thereof contemplated by this sentence), the term of this Agreement shall be automatically renewed for successive one (1) year periods (as it may be extended or terminated as provided in this Agreement, the “Term of Employment”).

 

  

  

  

3.           DUTIES.

 

Executive shall serve as Chief Executive Officer of the Company and shall properly perform such duties as may be assigned to him from time to time by the Company’s Board of Directors.  The parties acknowledge that their intent is that, in addition to his duties hereunder to the Company which shall continue, Employee shall remain on the Board of Directors of the Company and as its CEO, in which capacity he will assume responsibility for the overall management of Company’s current and future renewable energy, energy business operations, opportunities, divisions and acquisitions.  For as long as Executive shall remain an employee of the Company, Executive shall devote full attention and apply his best-efforts, energies and skills to the business of the Company. Executive shall not engage in other business, ventures which are “competitive” to the business of the Company or require time commitments that interfere with Executive’s performance for the Company.

3.1           Parent hereby acknowledges and agrees that Executive shall be elected to its Board of Directors within six months of the Effective Date. Parent agrees to adopt all necessary resolutions to nominate Executive to Parent’s Board of Directors at the mutually agreeable time selected.

 4.           COMPENSATION OF EXECUTIVE.

 

4.1           BASE SALARY.  For all services rendered by Executive under this Agreement, the Company shall pay Executive and Executive shall accept an initial annual salary of Three Hundred Thousand Dollars ($300,000.00) (“Base Salary ”) to be payable in equal installments in accordance with the Company's normal pay policy. All amounts payable hereunder shall be subject to all applicable withholding taxes. 

 

4.2          BONUS.                                Executive shall be eligible to receive a bonus as set forth on Schedule A entitled "Cash Bonus" for three fiscal years ending December 31, 2013. The Company shall negotiate a new bonus structure for the fiscal years commencing on January 1, 2014. The bonus shall be paid annually when the financial reporting for the performance criteria in schedule A for the relevant period.

4.3          EXPENSES.  For as long as Executive shall remain an employee of the Company, the Company shall reimburse Executive for all reasonable and necessary travel expenses and other disbursements incurred by Executive on behalf of the Company in the performance of Executive’s duties hereunder, consistent with the Company’s and Parent’s practice or written policy in effect with respect to the reimbursement of expenses to senior executives of the Company/Parent.  Such expenses shall be reimbursed upon presentation of paid receipts and/or original invoices and such other information as shall be reasonably be required by the Company. Executive shall adhere to all general Travel and Entertainment policies as may be established by the Company And Parent from time-to-time.

 

 

  

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4.4           BENEFITS.  For as long as Executive shall remain an employee of the Company, Executive shall be entitled to participate in any pension or profit sharing plan, stock purchase plan, stock option plan, group life insurance plan, hospitalization insurance plan, and medical services plan and other similar plans, and all other benefits now or hereafter existing, afforded to other senior executives.

 

4.5           VACATION AND HOLIDAYS.  Employee is eligible for vacation in accordance with existing Company policy, which is that after five (5) years of service an employee receives fifteen (15) days of paid vacation time each calendar year.  Only one week of vacation may be accrued or carried over from one calendar year to another, with a maximum of twenty (20) days of paid vacation that can be accrued at any one time over one calendar year.

4.6        INDEMNIFICATION:

4.6.1          The Company shall indemnify Executive to the full extent provided by law, the Company’s Articles of Incorporation and any directors and officers insurance policy for all actions performed on behalf of the Company and/or Parent, with the exception of gross negligence by the Executive.

4.6.2          If any action, proceeding or investigation is commenced or threatened in writing as to which Executive proposes to demand such indemnification, Executive shall so notify the Company within ten (10) days of the commencement of such action, proceeding or investigation.  Executive shall have the right to retain counsel of Executive’s own choice to represent Executive, and the Company shall pay all reasonable fees and expenses of such counsel; and such counsel shall, to the fullest extent consistent with such counsel’s professional responsibilities, cooperate with the Company and any counsel designated by the Company.  The Company shall be liable for any settlement of any claim against Executive made with the Company’s written consent, which consent shall not be unreasonably withheld or delayed, to the fullest extent permitted by the Nevada Revised Statues and the Articles of Incorporation and Bylaws of the Parent, as may be amended from time to time.  No such settlement of any claim shall by made by Executive without the written consent of the Company, which consent shall not be unreasonably withheld or delayed.

 5.           TERMINATION.

 

5.1       Termination of Employment.

(a)           The Company may terminate Executive’s services hereunder "For Cause" by delivering to Executive not less than ten (10) days prior to the date on which the termination is to be effective, a written notice of termination for cause specifying the act, acts or failure to act that constitute the cause.  For the purposes of this Agreement, “For Cause” shall mean: (i) any act of fraud or embezzlement materially adversely affecting the reputation or financial or other interests of the Company, or any Affiliate thereof; (ii) the conviction of Executive, or Executive pleading nolo contendere, with respect to any violent crime or felony resulting in a prison sentence, or any felony involving moral turpitude; (iii) failure to materially perform any of Executive’s lawful duties as directed by the President, Chief Executive Officer or Board of Directors of the Company or Parent, which results in material harm to the Company, and is not cured within twenty days after written notice thereof; (iv) any refusal to perform, willful misconduct or gross negligence in connection with Executive’s duties hereunder, if any such refusal or willful misconduct or gross negligence is not cured within twenty days after written notice thereof, (v) any material breach by Executive of this Agreement, if such material breach is not cured within thirty (30) days after written notice thereof, or (vi) failure to achieve net incomes for the Company of at least 50% of $5,000,000 net income in fiscal 2012 and at least 50% of $6,000,000 in net income in fiscal 2013.

 

 

  

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(b)           If (i) the Company terminates Executive’s employment hereunder "For Cause" as set forth in Section 5.1(a) hereof or (ii) Executive voluntarily terminates Executive’s employment by the Company without Good Reason, the Company shall pay to Executive any unpaid compensation payable pursuant to Section 4 hereof, which payment (y) shall include all compensation earned up until and including the date on which the termination is effective and (z) shall be made within 72 hours after the termination date, and no other compensation shall be payable to Executive; provided that Executive shall not be entitled to any bonus amounts pursuant to 4.2 hereof.

(c)          If the Executive’s employment is terminated by the Company for any reason other than "For Cause" (as set forth in Section 5.1(a) hereof), or by the Executive for “Good Reason” (as defined below), but in any event not in the case of any non-renewal of this Agreement by the Company or as a result of Executive’s death or Disability, the Company shall pay to Executive compensation payable pursuant to Section 4 hereof, (without regard to any reduction that triggered “Good Reason”), as specified herein, for the remaining Term of Employment as if the Term of Employment has not been terminated, but in no event less than one month, as severance.  Such severance shall be payable in equal installments in accordance with the Company’s prevailing payroll practices, and shall commence on the first payroll date following the Executive’s termination of employment.  In addition, Executive shall be entitled to the bonus under Section 4.2 earned for any year prior to the year of termination and prorated for the then current year to the extent not previously paid; such bonus to be paid to Executive at the same time it would be payable hereunder.

“Good Reason” shall mean Executive’s resignation of employment within ninety (90) days after the occurrence (without Executive’s written consent) of any of the following conditions or events: (v) a reduction in Executive’s base salary, or any reduction in Executive’s base salary that is not proportional to salary reductions to which the other senior executives of the Company are subject unless such salary reduction is due to poor financial performance of the company, specifically performance that is greater than 20% below the $5,000,000 net income level for fiscal 2012 and 20% below the $6,000,000 net income for fiscal 2013; (w) a material reduction by the Company in Executive’s responsibilities or title with the Company; (x) the requirement that Executive relocate his principal place of work to a location more than 50 miles from his then current place of work; and (z) a material breach by the Company of this Agreement; provided that none of the foregoing conditions or events shall constitute Good Reason unless: (y) Executive has provided written notice to the Company within thirty (30 days) after the occurrence of such condition or event describing the condition or event claimed to constitute Good Reason and (z) the Company has failed to remedy the condition or event within thirty (30) days of its receipt of such written notice.  In the event that Executive terminates his employment without Good Reason, Executive shall provide thirty (30) days notice of such termination to the Company and the lock up period for the selling of shares acquired in the acquisition shall be extended for one year.

 

5.2           DISABILITY.  Executive’s employment under this Employment Agreement shall terminate at the Company’s option, immediately upon notice to Executive given after Executive’s “total disability”, but no earlier than the day after six (6) consecutive months during which Employee suffers from a “total disability”.

 

 

  

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6.        CONFIDENTIAL INFORMATION.    Executive recognizes that he has and will continue to have access to secret and confidential information regarding the Company or any of its subsidiaries or affiliated companies, including, but not limited to, information relating   sales, strategies, customers, formulas, processes, methods, or ideas, belonging to or relating to the business of the Company or any of its subsidiaries or affiliated companies (the “Confidential Information”). Executive acknowledges that such Confidential Information is of great value to the Company, is the sole property of the Company, and has been and will be acquired by him in confidence. In consideration of the obligations undertaken by the Company herein, Executive shall not at any time, during or after his employment hereunder, reveal, divulge or make known to others or use to the detriment of the Company, any such Confidential Information except as may be required by law. Information that is generally available to the public shall not be considered “Confidential”.  The provisions of this Section 6 shall survive Executive’s termination of employment hereunder, as the release of such information will devalue the consideration paid to Executive to acquire the Company.

 

7.           COVENANTS AND RESTRICTIONS.

 

7.1         During the course of the employment of the Executive by the Company, the Executive may have access to and possession of certain valuable and important product, financial, marketing, organizational, technical and other information related to the Company, possibly including, without limitation, information with respect to certain trade secrets of the Company, and public knowledge of this information would directly compromise the Company’s business position.  These trade secrets shall include the naming of any brands, manufacturer identity, formulas and trade secret locations (the “Trade Secrets”) (along with such Trade Secrets, such information shall herein collectively be referred to as the “Confidential Information”).  Confidential Information includes, without limitation, information not generally available to the public, such as all database information, customer names, business relationships, telephone numbers or addresses, supplier lists, patented or proprietary information, forms, information regarding products, equipment, procedures, raw materials, operations, systems, methods, financing, services, know-how, computer and any other processed or collated data, computer programs, pricing, marketing, media and advertising data.  The Executive will not at any time divulge or communicate to any person nor shall the Executive direct any employee, representative or agent of the Company or any of its affiliates to divulge or communicate to any person or entity (other than to a person or entity bound by confidentiality obligations at least as stringent as those contained herein and other than as necessary in performing the Executive’s obligations hereunder) or use to the detriment of the Company or any of its affiliates or for the benefit of any other person or entity, including, without limitation, any competitor, supplier, licensor, licensee or customer of the Company or any of its affiliates, any of such Confidential Information or make or remove any copies thereof, whether or not marked or otherwise identified as "confidential" or "secret."  The Executive shall take all reasonable precautions in restricting the Confidential Information to a strict need-to-know basis pursuant to the terms and provisions of this Agreement and shall comply with any and all security systems and measures adopted from time to time by the Company to protect the confidentiality of the Confidential Information.

 

 

  

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7.2         The Executive will at all times promptly disclose to the Company in such form and manner as the Company may reasonably require, any inventions, improvements or procedural or methodological innovations, including, without limitation, relating to programs, methods, forms, systems, services, designs, marketing ideas, products, formulas, equipment, procedures, raw materials or processes (whether or not capable of being trademarked, copyrighted or patented) conceived or developed or created by the Executive during the Executive’s employment by the Company and/or any of its predecessor or affiliated companies, including any and all moral rights, and which relate to the business of the Company and/or any of its affiliates ("Intellectual Property").  The Executive agrees that all such Intellectual Property conceived, developed or created by the Executive prior to the date hereof is, and on and following the date hereof shall be, and all such Intellectual Property conceived, developed or created by the Executive on or after the date hereof shall be, the sole property of the Company, and that the Executive hereby assigns all of his right, title and interest to the Intellectual Property to the Company.  The Executive further agrees that the Executive will execute such instruments and perform such acts as may reasonably be requested by the Company to transfer to and perfect in the Company all legally protectable rights in such Intellectual Property.  To the extent any moral rights or other Intellectual Property rights are not legally transferable to the Company, the Executive hereby waives and agrees to never assert any such rights against the Company or any of its affiliates, even after termination of employment.

7.3           Any and all written materials, books, records and documents made by the Executive or coming into the Executive’s possession during the Executive’s employment by the Company concerning any products, processes or equipment manufactured, used, developed, investigated, purchased, sold or considered by the Company or any of its affiliates or otherwise concerning the business or affairs of the Company or any of its affiliates, including, without limitation, any files, customer records such as names, telephone numbers and addresses, lists, firm records, brochures and literature, shall be the sole property of the Company, shall not be removed from the Company’s premises by the Executive, and upon termination of the Executive’s employment by the Company, or upon request of the Company during the Executive’s employment by the Company, the Executive shall promptly deliver the same to the Company.  In addition, upon termination of the Executive’s employment by the Company, the Executive will deliver to the Company all other Company property in the Executive’s possession or under the Executive’s control, including, but not limited to, financial statements, marketing and sales data, customer and supplier lists, account lists and other account information, database information, plans, designs and other documents.

 7.4           The provisions of this Section 7 shall survive the termination of Executive’s employment hereunder.

 

8.           REASONABLENESS OF COVENANTS.  Executive acknowledges that he has carefully read and considered all the terms and conditions of this Agreement, including the restraints imposed upon him pursuant to Sections 6 and 7 hereof. Executive agrees that said restraints are necessary for the reasonable and proper protection of the Company and its subsidiaries and affiliates, and that each and every one of the restraints is reasonable in respect to subject matter, length of time, geographic area and otherwise. Executive further acknowledges that, in the event any provision of Sections 6 and 7 hereof shall be determined by any court of competent jurisdiction to be unenforceable by reason of its being extended over too great a time, too large a geographic area, too great a range of activities or any other reason, such provision shall be deemed to be modified to permit its enforcement to the maximum extent permitted by law.

 

 

  

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9.           INSURANCE.  The Company may, from time to time, apply for, purchase and maintain, in its own name and at its own expense, life, health, accident, disability or other insurance upon Executive in any sum or sums that it may deem necessary to protect its interests, and Executive agrees to aid and cooperate in all reasonable respects with the Company in procuring any and all such insurance, including, without limitation, submitting to the usual and customary medical examinations, and by filling out, executing and delivering such applications and other instruments in writing as may be reasonably required by an insurance company or companies to which an application or applications for such insurance may be made by or for the Company.  In order to induce the Company to enter into this Agreement, Executive represents and warrants to the Company that to the best of his knowledge Executive is insurable at standard (non-rated) premiums.

10.          Section 409A; Section 280G.

(a)           It is the intention of the parties that this Agreement be exempt from or comply strictly with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and Treasury Regulations and other Internal Revenue Service guidance promulgated thereunder (the “Section 409A Rules”).  Consistent with that intention, all references hereunder to termination of the Executive’s employment with the Company shall mean separation from the service of the service recipient under the 409A Rules.  Further, to the extent the Executive is a specified employee under the 409A Rules, any payments of deferred compensation within the meaning of the 409A Rules will be deferred and accumulated for a period of six (6) months and one (1) day and will be paid in a lump sum on such date, unless the Executive dies within such period, in which event payment will be made upon his death.  Thereafter, the normal schedule for the remaining payments will commence.  In addition, the Executive’s entitlement to the payments of the severance benefits described in Section 9(c) shall be treated as the entitlement to a series of separate payments for purposes of the Section 409A Rules.  Accordingly, this Agreement, including, but not limited to, any provisions relating to severance payments, may be amended from time to time as may be necessary or appropriate to comply with the Section 409A Rules.

(b)           The Company represents that it has obtained the requisite approval of the shareholders of the Company in accordance with Section 280G(b)(5)(A)(ii) of the Code to avoid the payments contemplated herein and in the Bonus Agreement attached hereto as Annex A (the “Bonus Agreement”) from being characterized as “parachute payments” and the imposition of an excise tax or loss of corporate deduction.

11. MISCELLANEOUS.

 

11.1           ENFORCEMENT OF COVENANTS.  The parties hereto agree that Executive is obligated under this Agreement to render personal services during the Term of Employment of a special, unique, unusual, extraordinary and intellectual character, thereby giving this Agreement peculiar value, and in the event of a breach of any provision of this Agreement by Executive, the injury or imminent injury to the value and goodwill of the Company’s business could not be reasonably or adequately compensated in damages in an action at law. Executive therefore agrees that the Company, in addition to any other remedies available to it, shall be entitled to seek specific performance, preliminary and permanent injunctive relief or any other equitable remedy against Executive, without the posting of a bond, in the event of any breach or threatened breach by Executive of any provision of this Agreement, including, but not limited to, the provisions of Sections 6 and 7 hereof. Without limiting the generality of the foregoing, if Executive breaches any provision of Sections 6 and 7 hereof, such breach will entitle the Company to enjoin Executive from disclosing any Confidential Information to any competing business, to enjoin such competing business from receiving or using any Confidential Information, and/or to enjoin Executive from rendering personal services to or in connection with such competing business. The rights and remedies of the parties hereto are cumulative and shall not be exclusive, and each party shall be entitled to pursue all legal and equitable rights and remedies and to secure performance of the obligations and duties of the other under this Agreement, and the enforcement of one or more of such rights and remedies by a party shall in no way preclude such party from pursuing, at the same time or subsequently, any and all other rights and remedies available to it.

 

 

  

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11.2           SEVERABILITY.  The invalidity or partial invalidity of one or more provisions of this Agreement shall not invalidate any other provision of this Agreement. If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

 

11.3           ASSIGNMENTS.  Neither Executive nor the Company may assign or delegate any of their rights or duties under this Agreement without the express written consent of the other, except the Company may transfer its rights and duties in connection with a sale of all or substantially all of its assets or in connection with any merger, consolidation or other similar business combination.

            11.4           ENTIRE AGREEMENT; AMENDMENT.  This Agreement constitutes and embodies the full and complete understanding and agreement of the parties with respect to Executive’s employment by the Company, supersedes all prior understandings and agreements, whether oral or written, between Executive and the Company, and shall not be amended, modified or changed except by an instrument in writing executed by Executive and by an expressly authorized officer of the Company.

 

11.5           WAIVER.  No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of either party to require the performance of any term or obligation of this Agreement, or the waiver by either party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

 

11.6           BINDING EFFECT.  This Agreement shall inure to the benefit of, be binding upon and enforceable against, the parties hereto and their respective successors, heirs, beneficiaries and permitted assigns.

 

11.7           HEADINGS.  The headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

 

11.8           NOTICES.  Any and all notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when personally delivered, sent by registered or certified mail, return receipt requested, postage prepaid, or by private overnight mail service (e.g., Federal Express) to the party at the address set forth above or to such other address as either party may hereafter give notice of in accordance with the provisions hereof. Notices shall be deemed given on the sooner of the date actually received or the third business day after sending.

 

11.9           GOVERNING LAW.  This Agreement shall be governed by and construed in accordance with the law of the State of California, without giving effect to such State’s conflicts of laws principles.

 

 

  

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11.10                     ARBITRATION.  The Parties agree that all questions or matters in dispute with respect to this Agreement shall be submitted to arbitration on the following terms:

(a)                     It shall be a condition precedent to the right of any party to submit any matter to arbitration pursuant to the provisions hereof, that any party intending to refer any matter to arbitration shall have given not less than five business days’ prior written notice of its intention to do so to the other party together with particulars of the matter in dispute.  On the expiration of such five business days the party who gave such notice may proceed to refer the dispute to arbitration as provided for below.

(b)                     The party desiring arbitration shall appoint one arbitrator, and shall notify the other party of such appointment, and the other party shall, within five business days after receiving such notice, appoint an arbitrator, and the two arbitrators so named, before proceeding to act, shall, within five business days of the appointment of the last appointed arbitrator, unanimously agree on the appointment of a third arbitrator, to act with them and be chairman of the arbitration herein provided for (and if both Parties agree in writing to drop their respective arbitrators then the "chairman" shall serve as the sole arbitrator).  If the other party shall fail to appoint an arbitrator within five business days after receiving actual notice of the appointment of the first arbitrator, then the proceeding may continue with only one arbitrator so appointed, and if the two arbitrators appointed by the parties shall be unable to agree on the appointment of the chairman, the chairman shall be appointed in accordance with the rules for commercial arbitration of the American Arbitration Association.  Except as specifically otherwise provided in this section, the arbitration herein provided for shall be conducted in accordance with the rules for commercial arbitration of the American Arbitration Association and shall be conducted in San Diego County in the State of California.  The chairman, or in the case where only one arbitrator is appointed, the single arbitrator, shall fix a time and place for the purpose of hearing the evidence and representations of the parties, and he shall preside over the arbitration and determine all questions of procedure not provided for by the rules for commercial arbitration of the American Arbitration Association, or this section.   After hearing any evidence and representations that the parties may submit, the single arbitrator, or the arbitrators, as the case may be, shall make an award and reduce the same to writing, and deliver one copy thereof to each of the parties.

(c)          The Parties agree that the award of a majority of the arbitrators, or in the case of a single arbitrator, of such arbitrator, shall be final and binding upon each of them, and there shall be no appeal from such award.  Any such award may be filed thereafter in any court of competent jurisdiction in order to enforce the said award, and shall have the same force and effect as a judgment in favor of the party in his favor the award was entered and against the other party to the arbitration.

(d)          Any award in the arbitration shall be limited to actual contractual damages, and there shall be no award of consequential or punitive damages.  Each party expressly waives and disclaims the right to a jury trial relating to or arising out of this Agreement and expressly accepts the arbitration procedure set forth herein as the sole means of resolving any disputes or disagreements.  The parties agree that the Arbitrator shall award the substantially prevailing party his/its reasonable attorney's fees and costs incurred in the subject dispute, together with any costs incurred (including any expert witness fees).

 

 

  

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11.11           COUNTERPARTS.  This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

11.12           CONSTRUCTION.  The language used in this Agreement is the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against either party.

[SIGNATURE PAGE TO FOLLOW]

  

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 IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date set forth above.

	  	
XNERGY, INC.

	  	  
	  	
By: /s/ Joseph Patalano

       Name: Joseph Patalano

       Title: COO

	  	  
	  	
BLUE EARTH, INC.

	  	  
	  	  
	  	
By: /s/ Johnny R. Thomas

       Name: Johnny R. Thomas

       Title: CEO, President

	  	  
	  	  
	  	
EXECUTIVE

	  	  
	  	
/s/ D. Jason Davis

 D. JASON DAVIS

 

 

 

 

  

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