Document:

EXHIBIT 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of September 28, 2016 by and between Znergy, Inc., a Nevada Corporation, (the “Company”), and Dave Baker, an individual residing in the state of Indiana (the “Executive”) and effective on the Effective Date (as hereinafter defined). The term “Company” as used herein with respect to all obligations of the Executive hereunder shall be deemed to include the Company and all of its direct or indirect parent companies, subsidiaries, affiliates, or subsidiaries or affiliates of its parent companies (collectively, the “Company”).

RECITALS

	
A.

	
The Company desires to employ the Executive and to assure itself of the services of the Executive during the term of Employment (as defined below).

	
B.

	
The Executive desires to be employed by the Company during the term of Employment and under the terms and conditions of this Agreement.

AGREEMENT

The parties hereto agree as follows:

	1.	POSITION

The Executive hereby accepts a position of Senior Vice President (the “Employment”) of the Company.

	2.	TERM

Subject to the terms and conditions of this Agreement, the initial term of the Employment shall be three years, commencing on October 3, 2016 (the “Effective Date”), until October 2, 2019, unless terminated earlier pursuant to the terms of this Agreement. Upon expiration of the initial three-year term, the Employment shall be automatically extended for successive one-year terms unless either party gives the other party hereto written notice to terminate the Employment no less than 60 days, and no more than 90 days, prior to the expiration of such one-year term or unless terminated earlier pursuant to the terms of this Agreement.

	3.	DUTIES AND RESPONSIBILITIES

The Executive’s duties at the Company will include all jobs assigned by the Chief Executive Officer (“CEO”) of the Company and the Executive will report directly to the CEO.

	A.	Positions and Duties. The Company hereby employs Executive in the capacity of Senior Vice President of the Company.  The Senior Vice President position combines the head of sales and marketing with the head of operations for the company.  Executive will hire a Director of Operations as soon as reasonably possible.  Sales and Marketing duties include (i) maximizing profitable revenue in assigned territory (Region 9 shown in Schedule A attached hereto) (ii) creating marketing campaigns in territory and for rollout to other territories (iii) developing and implementing sales policies and procedures (iv) developing and implementing sales training tools, including videos, for company’s sales teams (v) assisting with the implementation of sales tools in the company’s website.  Operational duties include (vi) developing installation teams in assigned territory to successfully complete contracted jobs (vii) developing and implementing installation policies and procedures for company wide use (viii) modifying and approving system generated proposals and (ix) overseeing all product purchasing and inventory management.  Executive is in charge of properly staffing the Sales and Operational functions of the Company.

	B.	During the Term and any extension thereof, Executive shall devote his full time and efforts to the performance, to the best of his abilities, of such duties and responsibilities, as described above, and as the CEO shall determine, consistent therewith. The Executive shall use his best efforts to perform his duties hereunder. The Executive shall not, without the prior written consent of the Company, become an employee or consultant of any entity other than the Company and/or any member of the Company, and shall not carry on or be interested in the business or entity that competes with that carried on by the Company any such business or entity, (a “Competitor”), provided that nothing in this clause shall preclude the Executive from holding any shares or other securities of any Competitor that is listed on any securities exchange or recognized securities market anywhere.

	4.	NO BREACH OF CONTRACT

The Executive hereby represents to the Company that: (i) the execution and delivery of this Agreement by the Executive and the performance by the Executive of the Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any other agreement or policy to which the Executive is a party or otherwise bound, except for agreements that are required to be entered into by and between the Executive and any member of the Company pursuant to applicable law of the jurisdiction where the Executive is based, if any; (ii) that the Executive has no information (including, without limitation, confidential information and trade secrets) relating to any other person or entity which would prevent, or be violated by, the Executive entering into this Agreement or carrying out his duties hereunder; (iii) that the Executive is not bound by any confidentiality, trade secret or similar agreement (other than this) with any other person or entity except for other member(s) of the Company , as the case may be.

	5.	LOCATION

Executive will be based in Region 9. Executive may be required to work in other regions on temporary basis.

	6.	COMPENSATION AND BENEFITS

		(a)	Cash Compensation. The Executive’s cash compensation shall be provided by the Company pursuant to Schedule B hereto, subject to annual review and adjustment by the Board.

		(b)	Equity Incentives. The Executive will be eligible to participate in any of the Company’s equity incentive plans as determined by the Board. Subject to approval by the Company’s Board of Directors and the execution of an equity award agreement which will govern the terms and conditions contained in a stock option agreement to be entered into by you and the Company prior to the grant, you will receive the equity award listed on Schedule C (the “Initial Grant”).  Following a Company Change of Control Transaction (as hereinafter defined), all unvested options under the Initial Grant shall vest upon the closing of the Change of Control Transaction.

		(c)	Benefits. The Executive is eligible for participation in any standard employee benefit plan of the Company, including any health insurance plan and annual holiday plan.

		(d)	Certain Definitions. For purposes of this Agreement, a Change of Control Transaction shall mean (a) any sale, lease, exchange or other transfer (in one transaction or a series of transactions) of all or substantially all of the assets of the Company other than to a Company Affiliate; (b) any consolidation or merger or other business combination of the Company with any other entity, other than a Company Affiliate, where the shareholders of the Company, immediately prior to the consolidation or merger or other business combination would not, immediately after the consolidation or merger or other business combination, beneficially own, directly or indirectly, shares representing fifty percent (50%) of the combined voting power of all of the outstanding securities of the entity issuing cash or securities in the consolidation or merger or other business combination (or its ultimate parent corporation, if any); or (c) the Board of the Company adopts a resolution to the effect that a “Change In Control” has occurred for purposes of this Agreement.

		(e)	Vacation . At full pay and without any adverse effect to his compensation, provided that all other terms and conditions of this Agreement are satisfied, Executive shall be entitled to fifteen (15) days of vacation for each full calendar year during the term of this Agreement. Executive agrees to schedule his vacation leave in advance upon written notice to the Board of Directors or other designated individuals. Carryover of vacation days shall be consistent with Company policy.

	7.	TERMINATION OF THE AGREEMENT

		(a)	By the Company with cause. The Company may terminate the Executive’s Employment for cause, at any time, without advance notice or remuneration, if (1) the Executive is convicted or pleads guilty to a felony or to an act of fraud, misappropriation or embezzlement, (2) the Executive has been grossly negligent or acted dishonestly to the detriment of the Company, (3) the Executive has engaged in actions amounting to gross misconduct or failed to perform his duties hereunder and such failure continues after the Executive is afforded a reasonable opportunity to cure such failure, (4) the Executive has died, or (5) the Executive has a disability which shall mean a physical or mental impairment which, as reasonably determined by the Board, renders the Executive unable to perform the essential functions of his employment with the Company, even with reasonable accommodation that does not impose an undue hardship on the Company, for more than 90 days in any 12-month period, unless a longer period is required by applicable law, in which case that longer period would apply.

		(b)	By the Executive for Good Reason. If there is a material and substantial reduction in the Executive’s existing authority and responsibilities and such resignation is approved by the Board, the Executive may resign upon 30-day prior written notice to the Company during the first year after the Effective Date, or 60-day prior written notice to the Company during any period after the first anniversary of the Effective Date.

		(c)	Notice of Termination. Any termination of the Executive’s employment under this Agreement shall be communicated by written notice of termination from the terminating party to the other party. The notice of termination shall indicate the specific provision(s) of this Agreement relied upon in effecting the termination.

		(d)	Remuneration upon Termination. Upon the Company’s termination of the Employment or the Executive’s resignation upon the Board’s approval pursuant to Section 7(b) above and upon the execution of a general release agreement in a form reasonably acceptable to the Company, the Company will provide remuneration to the Executive as follows: (1) if such termination or resignation becomes effective during the first year after the Effective Date, the Company will provide the Executive with a severance pay equal to one month base salary of the Executive; (2) if such termination or resignation becomes effective during any period after the first anniversary of the Effective Date, the Company will provide the Executive with a severance pay equal to two months base salary of the Executive; and (3) the Company will vest any equity award plan of the Initial Grant that would have vested during the applicable severance period. Any payments made pursuant to Section 7(e)(1) or Section 7(e)(2) shall be paid in accordance with the Company’s normal payroll cycles in effect on the termination or resignation date.

		(e)	Termination by Executive for No Reason. The Executive may terminate his Employment for any reason, at any time, upon 60 days prior written notice to the Company. If this occurs within the first twenty four months then all non-vested stocks/options will no longer be eligible for vesting.

	8.	CONFIDENTIALITY AND NONDISCLOSURE

		(a)	Confidentiality and Non-disclosure. In the course of the Executive’s services, the Executive may have access to the Company and/or the Company’s client’s and/or prospective client’s trade secrets and confidential information, including but not limited to those embodied in memoranda, manuals, letters or other documents, computer disks, tapes or other information storage devices, hardware, or other media or vehicles, pertaining to the Company and/or the Company’s client’s and/or prospective client’s business. All such trade secrets and confidential information are considered confidential. All materials containing any such trade secret and confidential information are the property of the Company and/or the Company’s client and/or prospective client, and shall be returned to the Company and/or the Company’s client and/or prospective client upon expiration or earlier termination of this Agreement. The Executive shall not directly or indirectly disclose or use any such trade secret or confidential information, except as required in the performance of the Executive’s duties in connection with the Employment, or pursuant to applicable law.

		(b)	Trade Secrets. During and after the Employment, the Executive shall hold the Trade Secrets in strict confidence; the Executive shall not disclose these Trade Secrets to anyone except other employees of the Company who have a need to know the Trade Secrets in connection with the Company’s business. The Executive shall not use the Trade Secrets other than for the benefits of the Company.

“Trade Secrets” means information deemed confidential by the Company, treated by the Company or which the Executive know or ought reasonably to have known to be confidential, and trade secrets, including without limitation designs, processes, pricing policies, methods, inventions, conceptions, technology, technical data, financial information, corporate structure and know-how, relating to the business and affairs of the Company and its subsidiaries, affiliates and business associates, whether embodied in memoranda, manuals, letters or other documents, computer disks, tapes or other information storage devices, hardware, or other media or vehicles. Trade Secrets do not include information generally known or released to public domain through no fault of the Executive.

		(c)	Former Employer Information. The Executive agrees that he has not and will not, during the term of his employment improperly use or disclose any proprietary information or trade secrets of any former employer, unless the former employer has been acquired by the Company, or other person or entity with which the Executive has an agreement to keep in confidence information acquired by Executive, if any. The Executive will indemnify the Company and hold it harmless from and against all claims, liabilities, damages and expenses, including reasonable attorneys’ fees and costs of suit, arising out of or in connection with any violation of the foregoing.

		(d)	Third Party Information. The Executive recognizes that the Company may have received, and in the future may receive, from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. The Executive agrees that the Executive owes the Company and such third parties, during the Executive’s employment by the Company and thereafter, a duty to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person or firm and to use it in a manner consistent with, and for the limited purposes permitted by, the Company’s agreement with such third party.

This Section 8 shall survive the termination of this Agreement for any reason. In the event the Executive breaches this Section 8, the Company shall have right to seek any and all remedies at law or in equity.

	9.	NON-COMPETITION AND NON-SOLICITATION

	(a)	In consideration of the base salary provided to the Executive by the Company hereunder, the adequacy of which is hereby acknowledged by the parties hereto, the Executive agrees that during the term of the Employment and for a period of two years following the termination of the Employment for whatever reason:

(i)          The Executive will not approach clients, customers or contacts of the Company or other persons or entities introduced to the Executive in the Executive’s capacity as a representative of the Company for the purposes of doing business with such persons or entities which will harm the business relationship between the Company and such persons and/or entities;

(ii)          unless expressly consented to by the Company, the Executive will not seek directly or indirectly, by the offer of alternative employment or other inducement whatsoever, to solicit the services of any employee of the Company employed as at or after the date of such termination, or in the year preceding such termination.

	(b)	In consideration of the base salary provided to the Executive by the Company hereunder, the adequacy of which is hereby acknowledged by the parties hereto not adequate enough, the Executive agrees that during the term of the Employment and for a period of one year thereafter (except in the event of a Termination by the Company without cause pursuant to Section 7(b) or in the event of a Termination by the Executive for Good Reason pursuant to Section 7(c)), following the termination of the Employment for whatever reason, unless expressly consented to by the Company, the Executive will not assume employment with or provide services for any Competitor, or engage, whether as principal, partner, licensor or otherwise, in any Competitor.

	(c)	In consideration of the base salary provided to the Executive by the Company hereunder, the adequacy of which is hereby acknowledged by the parties hereto, the Executive agrees that in the event of a Termination by the Company or by the Executive for Good Reason pursuant to Section 7(b), then during the term of the Employment and for the period of the duration of the severance pay described in Section 7(d)(1) or Section 7(d)(2), as appropriate, unless expressly consented to by the Company, the Executive will not assume employment with or provide services for any Competitor, or engage, whether as principal, partner, licensor or otherwise, in any Competitor.

The provisions contained in this Section 9 are considered reasonable by the Executive and the Company. In the event that any such provisions should be found to be void under applicable laws but would be valid if some part thereof was deleted or the period or area of application reduced, such provisions shall apply with such modification as may be necessary to make them valid and effective.

This Section 9 shall survive the termination of this Agreement for any reason. In the event the Executive breaches this Section 9, the Executive acknowledges that there will be no adequate remedy at law, and the Company shall be entitled to injunctive relief and/or a decree for specific performance, and such other relief as may be proper (including monetary damages if appropriate). In any event, the Company shall have right to seek any and all remedies permissible at law or in equity.

	10.	ASSIGNMENT

This Agreement is personal in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder; provided, however, that (i) the Company may assign or transfer this Agreement or any rights or obligations hereunder to any member of the Company without such consent, and (ii) in the event of a Change-of-Control Transaction of the Company, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor shall discharge and perform all the promises, covenants, duties, and obligations of the Company hereunder.

	11.	SEVERABILITY

If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of this Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.

	12.	GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the law of Florida.

	13.	AMENDMENT

This Agreement may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this Agreement, which agreement is executed by both of the parties hereto.

	14.	WAIVER

Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

	15.	NOTICES

 

All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and made if (i) delivered by hand, (ii) otherwise delivered against receipt therefor, or (iii) sent by a recognized courier with next-day or second-day delivery to the last known address of the other party.

	16.	COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.

[REMAINDER OF PAGE PURPOSEFULLY LEFT BLANK]

IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.

ZNERGY, INC

By: /s/Christopher J. Floyd                                                          

Christopher J. Floyd

Chief Executive Officer

Znergy, Inc.

6102 South MacDill Ave, Ste. G

Tampa, FL 33611

Agree and Accepted:

EXECUTIVE

By: /s/Dave Baker                                   

Dave Baker

Schedule A

REGIONS

(Image)

 

 

 

Schedule B

 

Cash Compensation

  

		Salary:	$100,000 per year, payable according to the Company’s payroll policy. Salary shall be reviewed on or before March 31, 2017.

 

		Signing Bonus:	Executive shall be paid $10,000 as a signing bonus within 2 business days of executing this agreement.

 

		Q4 2016 Bonus:	Executive shall be paid a bonus equal to 6% of the total revenue generated by Executive in the fiscal quarter from October 1, 2016through December 31, 2016.  Revenue shall be counted as those projects completed in the quarter.  The Q4 2016 Bonus shall be paid on or before January 20th, 2017.

 

		Bonuses:	Executive shall participate in Company’s Executive Bonus Pool as determined by the Board of Directors.

 

		NOTE:	All payments to Executive are subject to withholding.

 

Schedule C

Initial Equity Award

Subject to the approval of the Company’s Board of Directors, the Executive is eligible to receive equity based award in the form of restricted common stock, stock option or other securities by the Company from time to time.

Initial equity grant:

SHARES:          500,000 shares of common stock of the Company vested immediately.

OPTIONS:          5,000,000 options to purchase shares of common stock of the Company:

	
-

	
Strike price of $0.10 per share

	
-

	
Three-year expiration from date of grant

	
-

	
VESTING:  The options shall vest as follows:

	
-

	
TWO Options shall vest for every ONE Dollar of NET INCOME BEFORE TAX, (“NIBT”) recognized by the Company. NIBT shall be calculated per Generally Accepted Accounting Principles (“GAAP”). NIBT shall be calculated quarterly and the subsequent vesting shall be recognized at the time of the Company’s quarterly filing for the period.

 

	Future equity grants:	As determined by the Compensation Committee of the Company’s Board of Directors.Exhibit

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is made as of the 28th day of September, 2016, between Progress Software Corporation, a Delaware corporation (the "Company"), and Kurt Abkemeier, an individual residing at 360 West Hubbard Street, Apt 3512, Chicago, IL 60654 ("Executive").
R E C I T A L S
A.The Board of Directors of the Company (the “Board”) has determined that it is in the best interest of the Company and its stockholders for Executive to become Chief Financial Officer of the Company, and Executive has agreed to do so.
B.The Board has determined that it is in the best interest of the Company and its stockholders to enter into this Agreement setting forth the terms and conditions of Executive’s employment with the Company as Chief Financial Officer.
C.Executive accepts the terms of the Agreement.
D.Certain capitalized terms used in this Agreement are defined in Section 10 below.
In consideration of the mutual covenants herein contained and in consideration of the continuing employment of Executive by the Company, the parties agree as follows:
1.Duties and Scope of Employment.
(a)Position and Duties. Effective September 28, 2016 (the “Commencement Date”), the Company will employ Executive as Chief Financial Officer of the Company, reporting to the Company’s Chief Executive Officer. Executive will render such business and professional services in the performance of his duties commensurate with his title and position, as are reasonably assigned to him by the Chief Executive Officer. The period of Executive’s employment under this Agreement is referred to herein as the “Employment Period.”
(b)Obligations. During the Employment Period, Executive will devote Executive’s full business time and best efforts to the business of the Company. Executive will at all times comply with the Company’s Code of Conduct and Business Ethics. During the Employment Period, Executive will not engage in any employment, occupation, consulting or other similar activity without the Company’s prior written consent; provided, however, that Executive may (i) serve in any capacity (consistent with position and duties) with any professional, community, industry, civic (including governmental boards), educational, charitable, or other non-profit organization, (ii) serve on any for-profit entity board, with the Company’s prior written consent, and (iii) subject to the Company’s Code of Conduct and Business Ethics, make investments in other businesses and manage Executive’s and Executive’s family’s personal investments and legal affairs; provided that any such activities described in clauses (i)-(iii) above do not interfere with the performance of Executive’s duties for the Company and do not otherwise violate this Agreement or any other written agreement between the Company and Executive.
2.At-Will Employment. Executive and the Company agree that Executive’s employment with the Company constitutes “at-will” employment. Executive and the Company acknowledge that this employment relationship may be terminated at any time, upon written notice to the other party, with or without good cause or for any or no cause, at the option either of the Company or Executive. However, as described in this Agreement, Executive shall be entitled to severance benefits in accordance with the terms of this Agreement.
(a)Notice of Termination. In the case of termination of Executive’s employment by the Company for any reason, such termination may be effective immediately or upon such future date as may specified by the Company.  In the case of Executive’s voluntary resignation (which is not an Involuntary Termination), Executive shall provide the Company with not less than 90 days’ prior notice, which may be waived by the Company in its sole discretion (in which case the voluntary resignation shall be effective immediately or upon a date specified by the Company), provided that the Company shall pay and provide Executive his continued salary and employee benefits during any such waived period, but Executive’s unvested equity awards shall not continue to vest, and the exercise periods of those awards shall not be extended, by the continuation of such payments and benefits.   In the case of an Involuntary Termination, Executive’s employment with the Company shall terminate on the 31st day following notice from Executive under Section 10(c)(ii) below (which may be accelerated by the Company in its sole discretion to the date that such notice is given).
(b)Other Offices Held. Executive agrees to resign from all positions that he holds with the Company or any affiliate, including, without limitation, his positions as an officer or director of the Company or of any affiliate of the Company, immediately following the termination of his employment if the Company so requests.  Executive hereby irrevocably appoints the Company to be his attorney-in-fact to execute such documents and to take such actions in his name and on his behalf that may be necessary to effect Executive’s resignation and removal as a director and officer of the Company or any affiliate, should Executive fail to resign following a request from the Company to do so. A written notification signed by a director or duly authorized officer of the Company that any instrument, document or act falls within the appointment of authority conferred by this paragraph (b) will be conclusive evidence that it does so. The Company will prepare any documents, pay any filing fees, and bear any other expenses related to this paragraph.
3.Compensation.
(a)Base Salary. During the Employment Period, Executive will be paid an annual salary of $375,000.00 as compensation for his services (the “Base Salary”), payable on regular pay dates of the Company and subject to applicable employment tax, income tax and other customary withholdings. The Base Salary shall be reviewed for adjustment by the Company no less frequently than annually, and the Company may increase, but shall not decrease, Executive’s Base Salary.  If adjusted, such adjusted amount will become the Base Salary for all purposes under this Agreement.
(b)Annual Bonus. Executive will be entitled to participate in the Company’s Corporate Bonus Plan at an annual (fiscal year) target bonus of 80% of the Base Salary (the “Target Bonus”). For the fiscal year 2016 (ending November 30, 2016), the Target Bonus will be pro-rated from the Commencement Date until November 30, 2016. Future Target Bonuses will be payable upon achievement of performance goals established in good faith by the Compensation Committee of the Board (the “Committee”) similar to the goals applicable to other executive officers of the Company. Executive will have the opportunity to discuss such performance goals with the Committee prior to such goals being established. Bonuses, if any, will accrue and become payable in accordance with the Committee’s standard practices for paying executive incentive compensation.
(c)Signing Bonus. The Company shall pay Executive a signing bonus of $50,000 thirty days after the Commencement Date (the “Signing Bonus”).  If Executive voluntarily resigns his employment (other than an Involuntary Termination) within the first 12 months after the Commencement Date, Executive will pay the Signing Bonus back to the Company.
(d)Equity Compensation. Subject to the terms below, Executive will be granted equity awards consisting of the following—
(i)Annual RSU Award. Subject to the Committee’s approval at the next regularly scheduled Committee meeting (but not later than January 31, 2017), Executive will be awarded restricted stock units (“RSUs”) with a value as of the grant date of $240,000 (the “Annual RSU Award”).  Subject to continued employment, the Annual RSU Award will vest in equal installments semi-annually over three years, with the first such vest occurring on April 1, 2017, and the remaining installments vesting every six months thereafter. The RSU Award will otherwise be subject to the Company’s then standard terms and conditions for executive RSU awards, except as otherwise provided in this Agreement or in the ERMA.
(ii)Annual PSU Award. Subject to the Committee’s approval at the meeting in fiscal year 2017 at which the Committee awards RSUs and performance share units (“PSUs”) to executive officers, Executive will be awarded performance share units with a value as of the grant date of $360,000 (the “Annual PSU Award”).  Subject to continued employment, the Annual PSU Award will be earned and vest in accordance with the following schedule: The PSUs will be earned based upon the achievement of FY17 measurement targets established in good faith by the Committee similar to the goals applicable to other executive officers of the Company. Executive will have the opportunity to discuss such performance goals with the Committee prior to such goals being established. When the PSUs are earned, the PSUs will convert to RSUs, with one-third of the RSUs vesting on April 1, 2018 and the remainder vesting every six months over the next two years. The PSU Award will otherwise be subject to the Company’s then standard terms and conditions for executive RSU awards, except as otherwise provided in this Agreement or in the ERMA.
(iii)Special RSU Award. Subject to the Committee’s approval at the next regularly scheduled Committee meeting (but not later than January 31, 2017), Executive will be awarded RSUs with a value as of the grant date of $1,650,000 (the “Special RSU Award”).  Subject to continued employment, the New Hire Award will vest on the third anniversary of the grant date.
(iv)Long Term Incentive Plan. Subject to the Committee’s approval at the next regularly scheduled Committee meeting (but not later than January 31, 2017), Executive will be added as a participant under the Company’s Long Term Incentive Plan applicable to executive officers of the Company (the “LTIP”) and, in accordance therewith, will be awarded PSUs under the LTIP with respect to fiscal year 2016 with a value as of the grant date of $750,000 (the “LTIP Award”).  The LTIP Award will be subject to the LTIP and will be earned based on the Company’s total shareholder return over a three-year period.
(e)Future Equity Awards. Executive shall be eligible for additional future equity awards as customarily granted to executive officers beginning in fiscal year 2018, determined in the sole discretion of the Committee; provided, however, that Executive shall be eligible for additional awards under the LTIP in fiscal year 2017 if such additional awards are granted to other executive officers of the Company. Such other awards if any will be granted at the same time as annual awards are granted to other executive officers of the Company, but in no event later than the first meeting of the Board of Directors that follows the annual shareholder meeting each year.
4.Employee Benefits; Vacation. During the Employment Period, Executive will be eligible to participate in all Company employee benefit plans, policies, and arrangements that are applicable to other executive officers of the Company, as such plans, policies, and arrangements may be in effect from time to time, and subject to the terms thereof. Executive will be entitled to vacation in accordance with the standard written policies of the Company.
5.Expenses. The Company will reimburse Executive for reasonable travel, entertainment, and other business expenses incurred by Executive in the furtherance of the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time.
6.Relocation Expenses.  Executive agrees to relocate to Bedford, Massachusetts by a mutually agreed to date. The Company will provide Executive with relocation assistance in the amount of $100,000, which will include reimbursement for expenses and a gross-up on such reimbursement.
7.Indemnification. The Company agrees that if Executive is made a party, or is threatened to be made a party or witness, to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that Executive is or was a director, officer or employee of the Company or is or was serving at the request of the Company as a director, officer, member, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to Company benefit plans, whether or not the basis of such Proceeding is Executive’s alleged action in an official capacity while serving as a director, officer, member, employee or agent, Executive will be indemnified and held harmless by the Company to the fullest extent legally permitted or authorized by the Company’s certificate of incorporation or bylaws or resolutions of the Board, or by the laws of the State of Delaware, against all costs, expenses, liabilities and losses (including attorneys’ fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974 or the Internal Revenue Code of 1986, as amended (the “Code”), or penalties and amounts paid or to be paid in settlement) incurred or suffered by Executive in connection therewith, and such indemnification will continue as to Executive even if Executive has ceased to be a director, officer, member, employee or agent of the Company or other entity and will inure to the benefit of Executive’s heirs, successors, personal representatives, assigns, executors and administrators. The Company shall cause Executive to be designated as a “Covered Person” under the Company’s Directors and Officers Liability Insurance Policy for actions taken during the Employment Period.
8.Severance. Simultaneously with the execution of this Agreement, Executive and the Company are also entering into an Employee Retention and Motivation Agreement (the “ERMA”), which provides Executive with certain benefits upon a “Change of Control” (as defined therein). Section 9(b) below shall be applicable in the event an Involuntary Termination (as defined below) occurs under circumstances other than those circumstances under which the ERMA shall be applicable. In the event an Involuntary Termination occurs during the term of this Agreement in circumstances under which the ERMA shall be applicable, any and all severance and other separation benefits to be paid to Executive shall be governed by the terms and conditions of the ERMA and not Section 9(b) below.
9.Termination Benefits; Severance.
(a)If Executive’s employment is terminated by the Company or Executive for any reason or no reason (except as stated in (iii) below), then Executive shall be entitled to the following:
(i)All accrued but unpaid Base Salary through the Termination Date, to be paid in a lump sum cash payment within thirty (30) days following the Termination Date or sooner if required by law;
(ii)Pay for any vacation time earned but not used through the Termination Date, to be paid in a lump sum cash payment within thirty (30) days following the Termination Date or sooner if required by law;
(iii)Except in the event that Executive’s employment is terminated for Cause, any bonus compensation awarded for the fiscal year preceding that in which the termination occurs, but unpaid on the Termination Date, to be paid and provided in accordance with Section 3(b) above;
(iv)Any unpaid or unreimbursed business expenses incurred and documented in accordance with the Company’s expense reimbursement policy then in effect by Executive, to the extent incurred during the Employment Period, to be paid in a lump sum cash payment within thirty (30) days following the Termination Date; and
(v)Any accrued but unpaid benefits provided under the Company’s employee benefit plans, to be paid and provided in accordance with the terms of the applicable plan.
(b)Involuntary Termination. Subject to Section 8 above, if Executive’s employment is terminated as a result of an Involuntary Termination and such termination also constitutes a “separation from service” within the meaning of Section 409A of the Code, then Executive shall be entitled to the following:
(i)For a period of twelve (12) months after the Termination Date, the Company will pay an amount equal to Executive’s total Target Compensation in equal installments over such 12 months in accordance with the Company’s normal payroll practices and procedures and subject to all applicable deductions and withholdings. Such payments shall commence on the first payroll date that occurs thirty (30) days or more after the Termination Date. Solely for purposes of Section 409A of the Code, each installment payment is considered a separate payment.
(ii)For a period of twelve (12) months after the Termination Date, the Company shall be obligated to provide Executive with benefits that are substantially equivalent to Executive’s benefits (medical, dental, vision and life insurance) that were in effect immediately prior to the Involuntary Termination.
(iii)All unvested stock options held by Executive which were granted prior to the Termination Date under the Company’s stock option or equity incentive plans which would otherwise vest and become fully exercisable during the twelve-month period following the Termination Date shall instead accelerate and become fully exercisable as of the Termination Date.
(iv)All shares of restricted equity (e.g., RSUs) held by Executive which were granted prior to the Termination Date under the Company’s stock option plans which would otherwise become fully vested, nonforfeitable and not subject to any restrictions during the twelve-month period following the Termination Date shall instead become fully vested, nonforfeitable and not subject to any restrictions as of the Termination Date.  In addition, without duplication of the foregoing sentence, (A) if the Involuntary Termination occurs during the first year following the Commencement Date, one-third of the Special RSU Award shall become fully vested, nonforfeitable and not subject to any restrictions as of the Termination Date, and (B) if the Involuntary Termination occurs during the second year following the Commencement Date, two-thirds of the Special RSU Award shall become fully vested, nonforfeitable and not subject to any restrictions as of the Termination Date.  No PSUs (including PSUs relating to performance in the fiscal year in which the Termination Date occurs and under the LTIP), and no RSUs (except those that would otherwise vest during the twelve months after the Termination Date), shall vest or be accelerated as a result of this subparagraph.  Unvested RSUs that do not vest as a result of this subparagraph and PSUs, including those PSUs relating to performance in the fiscal year in which the Termination Date occurs and under the LTIP, will be cancelled on the Termination Date.
(v)Anything in this Agreement to the contrary notwithstanding, if, during the Employment Period, the Company shall maintain a severance plan then applicable to members of the Company’s executive officers providing severance benefits greater than those provided in this Section 9(b) with respect to an Involuntary Termination, then Executive shall be entitled to such greater severance benefits; provided, however, that this clause shall not apply to any executive separation agreements between the Company and members of the Company’s executive officers in effect as of the date of this Agreement.
(vi)Anything in this Agreement to the contrary notwithstanding, if at the time of Executive’s separation from service (within the meaning of Section 409A of the Code), Executive is considered a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, and if any payment that Executive becomes entitled to under this Agreement is considered deferred compensation subject to interest and additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, then no such payment shall be payable prior to the date that is the earliest of (A) six months after Executive’s “separation from service” (within the meaning of Section 409A of the Code), (B) Executive’s death, or (C) such other date as will cause such payment not to be subject to such interest and additional tax. If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule. The parties agree that this Agreement may be amended, as reasonably requested by either party and as may be necessary to comply fully with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.
(c)Voluntary Resignation. If Executive’s employment terminates by reason of Executive’s voluntary resignation (which is not an Involuntary Termination), then Executive shall not be entitled to receive any severance payments or other benefits except for such benefits (if any) as specified in Section 9(a) above or as specifically required by applicable law, and the Company shall have no obligation to provide for the continuation of any health and medical benefit or life insurance plans in effect on the date of such termination, other than as specifically required by applicable law.
(d)Disability; Death. If the Company terminates Executive’s employment as a result of Executive’s Disability, or Executive’s employment is terminated due to the death of Executive, then Executive shall not be entitled to receive any severance payments or other benefits except for those (if any) as may then be established under the Company’s severance guidelines and benefit plans in effect at the time of such Disability or death.
(e)Termination for Cause. If the Company terminates Executive’s employment for Cause, then Executive shall not be entitled to receive any severance payments, bonus payments, or other benefits following the date of such termination, other than such payments and benefits as specified in Section 9(a) above or as specifically required by applicable law, and the Company shall have no obligation to provide for the continuation of any health and medical benefit or life insurance plans in effect on the date of such termination, other than as specifically required by applicable law.
10.Definition of Terms. The following terms referred to in this Agreement shall have the following meanings:
(a)    Cause. “Cause” shall mean (i) any act of personal dishonesty taken by Executive in connection with his responsibilities as an employee and intended to result in substantial personal enrichment of Executive; (ii) the conviction of a felony; (iii) a willful act by Executive which constitutes gross misconduct and which is injurious to the Company; (iv) material breach of a material provision of this Agreement or of the Proprietary Information Agreement (which is not cured within 30 days following notice); or (v) continued violations by Executive of his obligations as an employee of the Company which are demonstrably willful and deliberate on Executive’s part after there has been delivered to Executive a written demand for performance from the Company which describes the basis for Company’s belief that Executive has not substantially performed his duties.
(b)    Disability. “Disability” shall mean that Executive has been unable to perform his duties as an employee of the Company as the result of incapacity due to physical or mental illness, and such inability, at least twenty-six (26) weeks after its commencement, is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to Executive or Executive’s legal representative (such agreement as to acceptability not to be unreasonably withheld). Termination resulting from Disability may only be effected after at least thirty (30) days’ written notice by the Company of its intention to terminate Executive’s employment. In the event that Executive resumes the performance of substantially all of his duties as an employee of the Company before termination of his employment becomes effective, the notice of intent to terminate shall automatically be deemed to have been revoked.
(c)    Involuntary Termination “Involuntary Termination” shall mean that either (i) that the Company has terminated Executive’s employment other than for Cause, Disability or Executive’s death, or (ii) that the conditions set forth in of subsections (i), (ii) and (iii) below have all occurred:
(i)    Any of the following “Events” occurs without Executive’s prior written consent during the term of this Agreement:
(A)the (x) assignment to Executive of any duties or the significant reduction of Executive’s duties, either of which is materially inconsistent with Executive’s position with the Company and responsibilities in effect immediately prior to such assignment, or (y) the removal of Executive from such position and responsibilities, which is not effected for Disability or for Cause;
(B)the failure of the Company to award Executive the equity compensation and awards set forth in Section 3(d) or to enter into the ERMA;
(C)a material reduction by the Company in the Base Salary and/or Target Bonus of Executive as in effect immediately prior to such reduction;
(D)the relocation of Executive to a facility or a location more than fifty (50) miles from Executive’s then present location, without Executive’s express written consent;
(E)any purported termination of Executive by the Company which is not effected for death or disability or for Cause, or any purported termination for Cause for which the grounds relied upon are not valid; or
(F)A material breach of this Agreement by the Company.
(ii)    Within sixty (60) days after the first occurrence of an Event described in Sections 9(c)(i)(A)(y), (B), (C), (D), or (E) or within 120 days of an Event described in Sections 9(c)(i)(A)(x) or (F), Executive provides written notice to the Company describing with reasonable specificity the Event and stating his intention to resign from employment due to such Event; and
(iii)    Either the Company does not cure, or cause to be cured, such Event within thirty (30) days after receipt of Executive’s notice or the Company in its sole discretion concedes the occurrence of such Event and gives notice that it does not intend to cure such Event.
(d)    Target Compensation. “Target Compensation” shall mean the sum of Executive’s Base Salary and Target Bonus.  For the avoidance of doubt, Target Bonus shall mean the annual bonus which Executive is eligible to earn in a fiscal year irrespective of whether such annual bonus is actually earned for such fiscal year.
(e)    Termination Date. “Termination Date” shall mean the date Executive’s employment with the Company terminates.
11.Conditions to Receipt of Severance. The Company’s obligation to pay any severance pursuant to Section 9(b) will be subject to the performance by Executive of his obligations as follows:
(a)    Separation Agreement and Release of Claims. Executive shall sign and return to the Company (without revoking) a standard separation agreement and release of claims (in a form substantially identical to the agreement attached hereto as Exhibit A), by the deadline specified therein, which shall in all events be no later than the thirtieth (30th) day following the Termination Date. Such agreement will provide (among other things) that Executive will not disparage the Company, its directors, or its executive officers during the Restricted Period (as defined below). The Company will have no obligation to make any payment under Section 9(b) or otherwise except as specifically required by law until it has received an effective separation and release of claims agreement, and the return of all Company property under Section 11(b).
(b)    Breach of Obligations. Anything to the contrary contained herein notwithstanding, but except solely as specifically required by applicable law, in the event that Executive materially breaches the separation agreement and release of claims or the Proprietary Information Agreement, the Company: (i) shall have no obligations to make any further payments under Section 9(b) above, or to otherwise pay any severance or benefits otherwise owed under this Agreement following the termination of Executive’s employment (and all such obligations shall be terminated), and (ii) shall have the full and unfettered right to recover from Executive all payments that may have been made under Section 9(b) above, and all severance or severance benefits otherwise paid under this Agreement following the termination of Executive’s employment. The termination under this paragraph of the Company’s payment obligations or its recovery of amounts paid shall have no effect on Executive’s continuing obligations under this Agreement, the separation agreement and release of claims or the Proprietary Information Agreement.
12.Successors.
(i)Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) or to all or substantially all of the Company’s business and/or assets shall assume the obligations under (and be entitled to the benefits of and to enforce) this Agreement and shall expressly agree to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets which executes and delivers an assumption agreement described in this subsection (a) or which becomes bound by the terms of this Agreement by operation of law.
(ii)Executive’s Successors. The terms of this Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributes, devisees and legatees.
13.Notice.
(a)    General. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of Executive, mailed notices shall be addressed to him or her at the home address which he or she most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Chief Legal Officer.
(b)    Notice of Termination by the Company. Any termination by the Company of Executive’s employment with the Company shall be communicated by notice given to Executive in accordance with Section 13(a) of this Agreement. Such notice shall specify the termination date and whether the termination is considered by the Company to be for Cause as defined in Section 10(a) in which case the Company shall identify the specific subsection(s) of Section 10(a) asserted by the Company as the basis for the termination and shall set forth in reasonable detail the facts and circumstances relied upon by the Company in categorizing the termination as for Cause.
14.Miscellaneous Provisions.
(a)    No Duty to Mitigate. Executive shall not be required to mitigate the amount of any payment contemplated by this Agreement (whether by seeking new employment or in any other manner), nor shall any such payment be reduced by any earnings that Executive may receive from any other source.
(b)    Waiver. No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed in writing and signed by Executive and by an authorized officer of the Company (other than Executive). No waiver by either party of any breach of, or non-compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision of the same condition or provision at another time.
(c)    Entire Agreement. This Agreement, the ERMA and the Proprietary Information Agreement represent the entire agreement of the Company and Executive and will supersede any and all previous term sheets, negotiations, memoranda, contracts, arrangements, discussions or understandings between the Company and Executive.
(d)    Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts. The parties each hereby (i) agree that all legal proceedings arising out of or in connection with this Agreement shall be brought, and (ii) irrevocably consent and agree to the exercise of personal jurisdiction, exclusively in the appropriate state and federal courts within the Commonwealth of Massachusetts.
(e)    Severability. The invalidity or enforceability of any provisions or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.
(f)    Arbitration. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by final and binding arbitration in Massachusetts, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.
(g)    No Assignment of Benefits. The rights of any person to payments or benefits under this Agreement shall not be made subject to option or assignment, either by voluntary or involuntary assignment or by operation of law, including (without limitation) bankruptcy, garnishment, attachment or other creditor’s process, and any action in violation of this subsection (g) shall be void.
(h)    Employment Taxes. All payments made pursuant to this Agreement will be subject to withholding of applicable income and employment taxes.
(i)    Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.
(j)    Acknowledgment. Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from his private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement.
(k)    No Conflict of Interest. Executive confirms that Executive has fully disclosed to the Company, to the best of his knowledge, all circumstances under which Executive, Executive’s immediate family and other persons who reside in Executive’s household have or may have a conflict of interest with the Company. Executive further agrees to fully disclose to the Company any such circumstances that might arise during Executive’s employment upon Executive’s becoming aware of such circumstances.
(l)    Other Agreements. Executive hereby represents that his performance of all the terms of this Agreement and the performance of Executive’s duties as an employee of the Company does not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by Executive in confidence or in trust prior to employment with the Company. Executive also represents that he is not a party to or subject to any restrictive covenants, legal restrictions, policies, commitments or other agreements in favor of any entity or person that would in any way preclude, inhibit, impair or limit Executive’s ability to perform his obligations under this Agreement, including noncompetition agreements or nonsolicitation agreements, and Executive further represents that his performance of the duties and obligations under this Agreement does not violate the terms of any agreement to which Executive is a party.
(m)    Legal Expenses. In the event of arbitration or litigation between the parties arising under or in connection with this Agreement, the prevailing party shall be entitled to recover its reasonable costs and attorneys' fees.
(n)    No Oral Modification, Waiver, Cancellation or Discharge. This Agreement may only be amended, canceled or discharged or any obligations thereunder waived through a writing signed by Executive and a representative of the Company duly authorized by the Board.

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the date first above written.

PROGRESS SOFTWARE CORPORATION

By: /s/Stephen H. Faberman        
Name: Stephen H. Faberman
Title:     Chief Legal Officer

EXECUTIVE

/s/Kurt Abkemeier________________
Kurt Abkemeier

1

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