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    EXHIBIT
10.38

     

    Description
of the

    Fiscal
Year 2010 Executive Management Bonus Plan

    of
Notify Technology Corporation (the “Company”)

     

    Participants:  The
participants in the Fiscal Year 2010 Executive Management Bonus Plan (the “Bonus
Plan”) are Paul F. DePond, President and Chief Executive Officer of the Company,
Gerald W. Rice, Chief Financial Officer of the Company, and Rhonda Chicone, Vice
President of Product Development of the Company (collectively, the
“Participants”).

     

    History:  The
Compensation Committee (the “Compensation Committee”) of the Company’s Board of
Directors approved the adoption of the Bonus Plan on October 23,
2009.  The Compensation Committee had previously approved the adoption
of similar executive management bonus plans for fiscal years 2009 and
2008.

     

    Bonus
Pool:  Nine percent of net revenues attributable to sales of
the Company’s products that are negotiated and sold by the Participants, where
no other sales commissions are paid, will go into a pool (the “Pool”) to be
allocated and distributed as set forth below.

     

    Allocation of
Pool:  The Participants will be allocated the following
percentages of the Pool:

    

    
      	
              Name

            	
              Title

            	
              %
      of Pool

            
	
              Paul
      F. DePond

            	
              President
      and Chief Executive Officer

            	
              50%

            
	
              Gerald
      W. Rice

            	
              Chief
      Financial Officer

            	
              25%

            
	
              Rhonda
      Chicone

            	
              Vice
      President of Product Development

            	
              25%

            

    

    

     

    Distribution of
Pool:  The Pool will be distributed to the Participants each
quarter.

     

    Amendment and
Termination: The Compensation Committee may terminate the Bonus Plan, in
whole or in part, suspend the Bonus Plan, in whole or in part from time to time,
and amend the Bonus Plan, from time to time, without the consent of any affected
Participant.Exhibit
10.1

    

    AMERICAN
DG ENERGY INC.

    

    Audit
Committee Charter

    

    (as
amended October 13, 2009)

    Purpose

     

    The
purpose of the Audit Committee is to assist the Board of Directors in overseeing
the Company’s accounting and financial reporting processes and the audits of the
Company’s financial statements.

     

    Structure and
Membership

     

    Number.  Except
as otherwise permitted by the applicable Nasdaq rules, the Audit Committee shall
consist of at least three members of the Board of Directors.

     

    Independence.  Except
as otherwise permitted by the applicable Nasdaq rules, each member of the Audit
Committee shall be independent as defined by Nasdaq rules, meet the criteria for
independence set forth in Rule 10A-3(b)(l) under the Securities Exchange Act
(subject to the exemptions provided in Rule 10A-3(c) under such Act), and not
have participated in the preparation of the financial statements of the Company
or any current subsidiary of the Company at any time during the past three
years.

     

    Financial
Literacy.  Each member of the Audit Committee must be able to
read and understand fundamental financial statements, including the Company’s
balance sheet, income statement, and cash flow statement, at the time of his or
her appointment to the Audit Committee. In addition, at least one member must
have past employment experience in finance or accounting, requisite professional
certification in accounting, or any other comparable experience or background
which results in the individual’s financial sophistication, including being or
having been a chief executive officer, chief financial officer or other senior
officer with financial oversight responsibilities. Unless otherwise determined
by the Board of Directors (in which case disclosure of such determination shall
be made in the Company’s annual report filed with the Securities and Exchange
Commission), at least one member of the Audit Committee shall be an “audit
committee financial expert” (as defined by applicable Securities and Exchange
Commission rules).

     

    Chair.  Unless
the Board of Directors elects a Chair of the Audit Committee, the Audit
Committee shall elect a Chair by majority vote.

     

    Compensation.  The
compensation of Audit Committee members shall be as determined by the Board of
Directors. No member of the Audit Committee may receive, directly or indirectly,
any consulting, advisory or other compensatory fee from the Company or any of
its subsidiaries, other than fees paid in his or her capacity as a member of the
Board of Directors or a committee of the Board.

     

    Selection and
Removal.  Members of the Audit Committee shall be appointed by
the Board of Directors. The Board of Directors may remove members of the Audit
Committee from such committee, with or without cause.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Authority and
Responsibilities

     

    General

     

    The Audit
Committee shall discharge its responsibilities, and shall assess the information
provided by the Company’s management and the independent auditor, in accordance
with its business judgment. Management is responsible for the preparation,
presentation, and integrity of the Company’s financial statements and for the
appropriateness of the accounting principles and reporting policies that are
used by the Company. The independent auditors are responsible for auditing the
Company’s financial statements and for reviewing the Company’s unaudited interim
financial statements. The authority and responsibilities set forth in this
Charter do not reflect or create any duty or obligation of the Audit Committee
to plan or conduct any audit, to determine or certify that the Company’s
financial statements are complete, accurate, fairly presented, or in accordance
with generally accepted accounting principles or applicable law, or to guarantee
the independent auditor’s report.

     

    Oversight
of Independent Auditors

     

    Selection.  The
Audit Committee shall be solely and directly responsible for appointing,
evaluating, retaining and, when necessary, terminating the engagement of the
independent auditor. The Audit Committee may, in its discretion, seek
stockholder ratification of the independent auditor it appoints.

    

    Independence.  The
Audit Committee shall take, or recommend that the full Board of Directors take,
appropriate action to oversee the independence of the independent auditor. In
connection with this responsibility, the Audit Committee shall obtain and review
a formal written statement from the independent auditor describing all
relationships between the auditor and the Company, including the disclosures
required by Independence Standards Board Standard No. 1. The Audit Committee
shall actively engage in dialogue with the auditor concerning any disclosed
relationships or services that might impact the objectivity and independence of
the auditor.

    

    Compensation.  The
Audit Committee shall have sole and direct responsibility for setting the
compensation of the independent auditor. The Audit Committee is empowered,
without further action by the Board of Directors, to cause the Company to pay
the compensation of the independent auditor established by the Audit
Committee.

    

    Preapproval of
Services.  The Audit Committee shall preapprove all audit
services to be provided to the Company, whether provided by the principal
auditor or other firms, and all other services (review, attest and non-audit) to
be provided to the Company by the independent auditor; provided, however, that
de minimis non-audit services may instead be approved in accordance with
applicable Securities and Exchange Commission rules.

    

    Oversight.  The
independent auditor shall report directly to the Audit Committee, and the Audit
Committee shall have sole and direct responsibility for overseeing the work of
the independent auditor, including resolution of disagreements between Company
management and the independent auditor regarding financial reporting. In
connection with its oversight role, the Audit Committee shall, from time to time
as appropriate, receive and consider the reports required to be made by the
independent auditor regarding:

    

    
      	
               
      

            	
              ·

            	
              critical
      accounting policies and practices;

            

    

     

    
      	
               
      

            	
              ·

            	
              alternative
      treatments within generally accepted accounting principles for policies
      and practices related to material items that have been discussed with
      Company management, including ramifications of the use of such alternative
      disclosures and treatments, and the treatment preferred by the independent
      auditor; and

            

    

     

    
      	
               
      

            	
              ·

            	
              other
      material written communications between the independent auditor and
      Company management.

            

    

     

    
       Audited
Financial Statements

    

     

    Review and
Discussion.  The Audit Committee shall review and discuss with
the Company’s management and independent auditor the Company’s audited financial
statements, including the matters about which Statement on Auditing Standards
No. 61 (Codification of Statements on Auditing Standards, AU §380) requires
discussion.

    

    Recommendation to Board
Regarding Financial Statements.  The Audit Committee shall
consider whether it will recommend to the Board of Directors that the Company’s
audited financial statements be included in the Company’s Annual Report on Form
10-K.

    

    Audit Committee
Report.  The Audit Committee shall prepare an annual committee
report for inclusion where necessary in the proxy statement of the Company
relating to its annual meeting of security holders.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Review of
Other Financial Disclosures

     

    Independent Auditor Review
of Interim Financial Statements.  The Audit Committee shall
direct the independent auditor to use its best efforts to perform all reviews of
interim financial information prior to disclosure by the Company of such
information and to discuss promptly with the Audit Committee and the Chief
Financial Officer any matters identified in connection with the auditor’s review
of interim financial information which are required to be discussed by
applicable auditing standards. The Audit Committee shall direct management to
advise the Audit Committee in the event that the Company proposes to disclose
interim financial information prior to completion of the independent auditor’s
review of interim financial information.

    

    Controls
and Procedures

     

    Oversight.  The
Audit Committee shall coordinate the Board of Directors’ oversight of the
Company’s internal control over financial reporting, disclosure controls and
procedures and code of conduct. The Audit Committee shall receive and review the
reports of the CEO and CFO required by Rule 13a-14 of the Securities Exchange
Act.

     

    Procedures for
Complaints.  The Audit Committee shall establish procedures for
(a) the receipt, retention and treatment of complaints received by the Company
regarding accounting, internal accounting controls or auditing matters and (b)
the confidential, anonymous submission by employees of the Company of concerns
regarding questionable accounting or auditing matters.

     

    Related-Party
Transactions.  The Audit Committee shall review all “related
party transactions” (defined as transactions required to be disclosed pursuant
to Item 404 of Regulation S-K promulgated by the Securities and Exchange
Commission) on an ongoing basis, and all such transactions must be approved by
the Audit Committee.

     

    Additional
Powers.  The Audit Committee shall have such other duties as
may be delegated from time to time by the Board of Directors.

     

    Procedures and
Administration

     

    Meetings.  The
Audit Committee shall meet as often as it deems necessary in order to perform
its responsibilities, but at least once each calendar quarter. The Audit
Committee may also act by unanimous written consent in lieu of a meeting. The
Audit Committee shall periodically meet separately with (a) the independent
auditor and (b) Company management. The Audit Committee shall keep such records
of its meetings as it shall deem appropriate.

    

    Subcommittees.  The
Audit Committee may form and delegate authority to one or more subcommittees
(including a subcommittee consisting of a single member), as it deems
appropriate from time to time under the circumstances. Any decision of a
subcommittee to preapprove audit, review, attest or non-audit services shall be
presented to the full Audit Committee at its next scheduled
meeting.

    

    Reports to
Board.  The Audit Committee shall report regularly to the Board
of Directors.

    

    Charter.  At
least annually, the Audit Committee shall review and reassess the adequacy of
this Charter and recommend any proposed changes to the Board of Directors for
approval.

    

    Independent
Advisors.  The Audit Committee is authorized, without further
action by the Board of Directors, to engage such independent legal, accounting
and other advisors as it deems necessary or appropriate to carry out its
responsibilities. Such independent advisors may be the regular advisors to the
Company. The Audit Committee is empowered, without further action by the Board
of Directors, to cause the Company to pay the compensation of such advisors as
established by the Audit Committee.

    

    Investigations.  The
Audit Committee shall have the authority to conduct or authorize investigations
into any matters within the scope of its responsibilities as it shall deem
appropriate, including the authority to request any officer, employee or advisor
of the Company to meet with the Audit Committee or any advisors engaged by the
Audit Committee.

    

    Funding.  The
Audit Committee is empowered, without further action by the Board of Directors,
to cause the Company to pay the ordinary administrative expenses of the Audit
Committee that are necessary or appropriate in carrying out its
duties.

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