Document:

EXHIBIT 10.24

EMPLOYMENT AGREEMENT

 

This
Employment Agreement (the “Agreement”) is entered into on February 13,
2008 (the “Effective Date”), by and between Jeffrey A. Mayer, an
individual (“Executive”) and MxEnergy Holdings Inc., a Delaware
corporation (the “Company”). 
Terms within this Agreement that begin with initial capital letters
shall have the meaning specially set forth herein, unless the context clearly
demonstrates a different meaning (see Section 7 of this Agreement for the
definition of several terms).  The
Executive recognizes and agrees that the Company’s commitments set forth herein
provide full and adequate consideration for any modifications of the Executive’s
rights existing prior to the Effective Date of this Agreement, including, but
not limited to, the modifications set forth in Sections 5 and 6 of this
Agreement.

 

1.     Employment.

 

(a)   Officer.  Executive will serve as President and Chief Executive
Officer of the Company for the Employment Term specified in Section 2
below.  Executive will report to the Board
of Directors (the “Board”), and will render such services consistent
with the foregoing role.  The parties
anticipate that such services will include (but not be limited to)
participating in the Company’s efforts to consummate an initial public offering
of its Common Stock.  Executive’s office
shall be located at the Company’s headquarters in Stamford, Connecticut.

 

(b)   Director.  During the Employment Term (as defined
below), the Company shall use its best efforts to ensure that Executive
continues to serve as a member of the Board.

 

2.     Term.  Company’s employment of Executive pursuant to
this Agreement shall be for an initial term of four (4) years (the “Employment
Term”), beginning on Effective Date and ending on the fourth annual anniversary
of the Effective Date or such earlier date on which Executive’s employment
terminates in accordance with Section 6 of this Agreement.  Upon the fourth annual anniversary of the
Effective Date and each anniversary thereof (collectively, the “Expiration
Date”), this Agreement shall automatically renew for a one-year term unless
(a) the Agreement has been earlier terminated under Section 6 or (b) either
party gives written notice not less than 180 days prior to the expiration of
any such term that the Agreement will not be extended.  Upon termination of the then applicable Employment
Term for any reason, Executive shall promptly resign from all positions held
with the Company.

 

3.     Salary.  The Company shall pay Executive base salary
at an annual rate of $566,500, which base salary may be increased from time to
time by the Company, in its discretion (“Base Salary”).  Executive’s Base Salary shall be paid in
conformity with the Company’s salary payment practices generally applicable to
similarly situated Company executives.

 

4.     Bonus.  Executive shall be entitled to participate in
the Company’s executive bonus program. 
Executive’s annual target bonus (the “Target Bonus”) shall be
100% of Base Salary, of which (a) 75% shall be payable based on
achievement of Company and/or individual objectives specified by the Compensation
Committee (the “Compensation Committee”) of the Board, and (b) 

 

 

25% may be awarded solely at the discretion of the Compensation
Committee.  In addition, the Compensation
Committee may, in its sole discretion, award the Executive an additional bonus
of up to 20% of Base Salary for extraordinary performance by the Executive in
connection with a significant business event affecting the Company, such as an
initial public offering or a Change in Control; provided, however, that absent
special circumstances the maximum actual bonus will not exceed 120% of Base
Salary.

 

5.     Executive Benefits.

 

(a)   Repurchase
of Common Stock.  In the event that
Executive’s employment terminates for any reason, the Company shall have the
right (or obligation) to purchase all of the shares of Common Stock that the
Executive owns, whether acquired before or after the Effective Date of this
Agreement, subject to the terms and conditions set forth herein.

 

(i)   If Executive’s employment is
terminated for any reason during the Employment Term, the Company shall have
the initial right to purchase all (but not less than all) of the Common Stock
owned by the Executive (“Call Option”). 
The Company shall have the right to exercise the Call Option by giving
written notice to Executive within sixty (60) days after the date of
termination, which shall set forth the fair market value of the shares being
purchased as determined in the good faith of the Board (“Call Notice”).  In the event that the Company fails to
exercise the Call Option on a timely basis, its rights under this Section 5(a)(i) shall
automatically terminate.  If the Call
Notice is delivered on a timely basis and the Executive agrees with the
valuation set forth in the Call Notice, he shall provide a written acceptance
to the Company within fifteen (15) days from the date of the Call Notice, and
the repurchase of the shares shall occur within fifteen (15) days from the date
of acceptance.  If, however, the Call Notice
is delivered on a timely basis and the Executive disagrees with the valuation
set forth therein, the repurchase price for the shares shall be determined in
accordance with Section 5(a)(iii) below.

 

(ii)   If Executive’s employment is involuntarily
terminated for any reason (including a Constructive Termination) during the
Employment Term, but the Company does not exercise the Call Option on a timely
basis, the Executive shall have the right to cause the Company to repurchase
all (but not less than all) of the Common Stock owned by the Executive (“Put
Option”).  Notwithstanding the
foregoing, the Executive shall not have the right to exercise the Put Option in
the event of a Termination for Business Reasons.  The Put Option shall become exercisable upon
the expiration of the Call Option.  The
Executive shall have the right to exercise the Put Option by giving written
notice to the Company within sixty (60) days after the expiration of the Call
Option, which shall set forth the fair market value of the shares being sold to
the Company as determined in good faith by the Executive (“Put Notice”).  If the Executive fails to exercise the Put
Option on a timely basis, his rights under this Section 5(a)(ii) shall
automatically terminate.  If the Put
Notice is delivered on a timely basis and the Company agrees with the valuation
set forth in the Put Notice, it shall provide a written acceptance to the
Executive within fifteen (15) days from the date of the Put Notice, and the
repurchase of the shares shall occur within fifteen (15) days from the date of
acceptance.  If, however, the Put Notice
is delivered on a timely basis and the Company disagrees with the valuation set
forth therein, the repurchase price for the shares shall be determined in
accordance with Section 5(a)(iii) below.

 

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(iii)   In the event that Executive’s
employment terminates for any reason, the Company shall have the right to
repurchase, or, in the case of an involuntary termination, the Executive shall
have the right to cause the Company to repurchase, all or part of the shares of
Common Stock that the Executive owns. The repurchase price shall equal the fair
market value of the shares, as established by the Board in its discretion,
being repurchased.  If the Executive does
not agree with the Board’s determination of the fair market value of those
shares, then the Executive and the Company shall mutually select a neutral
independent valuation firm that will establish the fair market value of the
shares being repurchased, and that firm’s determination of fair market value
will be binding on all parties.  If the
Executive and the Company do not agree on a neutral independent valuation firm,
each of the Executive and the Company shall appoint their own independent
representative; and such independent representatives shall select the neutral
independent valuation firm.  The Company
shall pay all fees related to the expense associated with such valuation.

 

(iv)   If (A) the Company
repurchases the Common Stock held by the Executive pursuant to Section 5(a)(i) or
5(a)(ii) above, (B) the Company enters into an agreement to effect a
Change in Control within six (6) months following the date of such
repurchase, and (C) the per share consideration to be received by the
holders of Common Stock in connection with the Change of Control is greater
than the per share consideration received by the Executive for his Common Stock
hereunder, then the Company shall be obligated to pay additional consideration
to Executive in an amount equal to the difference (“Additional Consideration”).  Any Additional Consideration payable
hereunder shall be paid by the Company in cash within five (5) business
days following the consummation of the Change of Control transaction.  To the extent the consideration received by
holders of Common Stock in connection with the Change of Control is in the form
of securities, the value of such consideration will be based on the market
value upon the closing of the Change of Control, or if no market exists, it
will be based on the good faith determination of the Board.

 

(v)   Notwithstanding the foregoing,
the rights under this Section 5(a) shall automatically terminate upon
an initial public offering of the Common Stock of the Company.

 

(b)   Other
Employee and Executive Benefits. 
Executive shall be entitled to receive all benefits provided to senior
executives, executives and employees of the Company generally from time to
time, including health, life insurance and disability, and all other benefits
provided to the Company’s senior executives generally, in each case so long as
and to the extent the same exist; provided, that in respect to each such plan
Executive is otherwise eligible and insurable in accordance with the terms of
such plans.  Notwithstanding the
preceding sentence, Executive’s right to receive severance payments and
benefits shall be only as provided in Section 6 hereof.

 

(c)   Vacation,
Sick Leave, Holidays and Sabbatical. 
Executive shall be entitled to paid time off (“PTO”), sick leave,
and holidays in accordance with the policies of the Company, as they exist from
time to time, for senior executives.  PTO
not used during any calendar year will not roll over to the following year.

 

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6.     Severance Benefits.

 

(a)   At Will
Employment.  Executive’s employment
shall be “at will.”  Either the Company
or Executive may terminate this agreement and Executive’s employment at any
time, with or without Business Reasons, in its or his sole discretion, upon at
least sixty (60) days’ prior written notice of termination.

 

(b)   Involuntary
Termination Without Business Reasons or Constructive Termination.  If at any time during the then applicable Employment
Term (other than following a Change in Control to which Section 6(c) applies)
the Company terminates the employment of Executive involuntarily and without
Business Reasons or a Constructive Termination occurs, then subject to Section 6(h) below
and Executive signing a general release of claims against the Company and its
successors and such release becoming irrevocable within sixty (60) days of the
Executive’s Termination Date, Executive shall be entitled to receive the
following:

 

(i)    Base
Salary, PTO, and any earned and unpaid Target Bonus accrued through the
Termination Date, and any expense reimbursements and other benefits due to the
Executive under any Company-provided plans, policies and arrangements, which
shall not be paid or payable later than March 15 of the calendar year after
the calendar year in which the Termination Date occurs;

 

(ii)   a lump sum
payment, which shall not be paid or payable later than March 15 of the
calendar year after the calendar year in which the Termination Date occurs, equal
to the greater of (A) Base Salary for a period of twelve months following
the Termination Date, or (B) Base Salary for the remainder of the
then-current Employment Term;

 

(iii)  a lump sum
payment, calculated using the Base Salary and Target Bonus percentage effective
on the Termination Date, which shall not be paid or payable later than March 15
of the calendar year after the calendar year in which the Termination Date
occurs, equal to (A) one hundred percent (100%) of the Target Bonus for
the fiscal year in which the Termination Date occurs, (B) one hundred percent
(100%) of the Target Bonus for any full fiscal year remaining during the then
applicable Employment Term, and (C) a pro rata portion of one hundred percent
(100%) of the Target Bonus being paid for the final fiscal year that begins during
the then applicable Employment Term (such pro rata amount will be based on the
ratio of the number of full months of the then applicable Employment Term that
fall within such final fiscal year, to 12); and

 

(iv)  subject to Section 5(a) which
shall be applicable to any shares purchased through Executive’s exercise of
stock options, one hundred percent (100%) of the Executive’s unvested stock
options, restricted stock, and other equity awards shall become fully vested, whether
such stock options, restricted stock, and other equity awards were acquired
before or after the Effective Date of this Agreement, all of the Executive’s
unvested stock options and other equity awards shall become fully vested, and all
stock options that are vested and outstanding (but unexercised) on the
Termination Date shall be cancelled in consideration of the Company’s payment
to the Executive, as soon as practicable after the Termination Date, of an
amount equal to the product of the following:

 

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(A)                           the excess, if any, of (1) the per share fair
market value, as determined pursuant to Section 5(a) above, of the
shares underlying the cancelled stock options, over (2) the exercise price
per share of the Company Common Stock subject to such option, multiplied by

 

(B)                             the number of shares of Company Common Stock that are
subject to the stock options being cancelled); and

 

(v)           all
of the Executive’s benefits under Section 5(b) above will continue
for the duration of the Restricted Term, as that term is defined in Section 11(a) below.

 

Notwithstanding
the foregoing, if the Executive’s Termination Date occurs after October 31st of any calendar
year, then no payment conditioned on such release shall be made until January 2nd  of the
calendar year following the calendar year of termination, even if the release
is signed and any applicable revocation period concludes earlier.

Notwithstanding
anything to the contrary in this Section 6(b), if Executive violates the
provisions set forth in Section 11, Executive no longer shall be entitled
to receive any consideration otherwise paid pursuant to this section, and any
unexercised stock options, whether vested or unvested, will be cancelled.

 

(c)   Change in Control.  If there is a Change in Control during the then
applicable Employment Term, and either a Constructive Termination occurs or the
Company terminates the Executive’s employment without Business Reasons prior to
the then applicable Expiration Date (or if later, within a one-year period
following the Change in Control) then subject to Section 6(h) below
and Executive signing a general release of claims against the Company and its
successors and such release becoming irrevocable within sixty (60) days of the
Executive’s Termination Date, Executive shall be entitled to receive the
following:

 

(i)    Base
Salary, PTO, and any earned and unpaid Target Bonus accrued through the
Termination Date, and any expense reimbursements and other benefits due to the
Executive under any Company-provided plans, policies, and arrangements, which
shall not be paid or payable later than March 15 of the calendar year after
the calendar year in which the Termination Date occurs;

 

(ii)   a lump sum
payment, which shall not be paid or payable later than March 15 of the
calendar year after the calendar year in which the Termination Date occurs,
equal to the greater of (A) two (2) times Base Salary or (B) the
Base Salary for the remainder of the then-current applicable Employment Term; provided,
however, in no event shall such lump sum amount payable pursuant to this Section 6(c)(ii) be
less than the amount to which Executive would otherwise be entitled to pursuant
to Section 6(b)(ii);

 

(iii)  a lump sum
payment, calculated using the Base Salary and Target Bonus percentage effective
on the Termination Date, which shall not be paid or payable later than March 15
of the calendar year after the calendar year in which the Termination Date
occurs, equal to the greater of (A) two hundred percent (200%) of the
Target Bonus for the fiscal year in which the 

 

5

 

termination occurs, or (B) one hundred percent (100%) of the
Target Bonus for the fiscal year in which the termination occurs times the
number of years for the remainder of the then-current applicable Employment
Term (rounded to the nearest tenth); provided, however, in no event
shall such lump sum amount payable pursuant to this Section 6(c)(iii) shall
be less than the amount to which Executive would otherwise be entitled to
pursuant to Section 6(b)(iii); and

 

(iv)  subject to Section 5(a) which
shall be applicable to any shares purchased through Executive’s exercise of
stock options, all of the Executive’s unvested stock options, restricted stock,
and other equity awards shall become fully vested, whether such stock options,
restricted stock, or other equity were acquired before or after the Effective
Date of this Agreement.

Notwithstanding
the foregoing, if the Executive’s Termination Date occurs after October 31st of any calendar
year, then no payment conditioned on such release shall be made until January 2nd  of the
calendar year following the calendar year of termination, even if the release
is signed and any applicable revocation period concludes earlier.

 

(d)   Termination
for Disability.  If at any time
during the applicable Employment Term Executive becomes unable to perform his
duties as an employee as a result a Disability, which gives rise to termination
of employment for Disability, then (i) Executive shall be entitled to
receive payments and benefits in accordance with the Disability policies of the
Company, as they exist from time to time, for senior executives and (ii) Executive’s
outstanding stock options, restricted stock, and other equity arrangements
shall expire in accordance with the terms of the applicable award agreement(s);
provided, however, that Executive will be entitled to the “in the money” value
of all vested options as calculated under Section 6(b)(iv) above.  The payments and benefits contemplated under
clause (i) above shall not be paid or payable later than March 15 of
the calendar year after the calendar year in which the Termination Date occurs
and shall include, without limitation, the following:  (v) any accrued and unpaid salary, (w) any
accrued and unpaid Target Bonus for a prior fiscal year, (x) a pro-rata
portion of any Target Bonus that Executive would have otherwise earned during
the fiscal year in which his Disability occurs, (y) any accrued and unpaid
PTO, and (z) any expense reimbursements.

 

(e)   Voluntary
Termination or Involuntary Termination for Business Reasons.  If (i) Executive voluntarily terminates
his employment (other than in the case of a Constructive Termination), or (ii) Executive
is terminated involuntarily for Business Reasons, then in any such event (A) all
further vesting of Executive’s stock options, restricted stock, and other
equity arrangements will cease immediately and such awards will expire in
accordance with the terms of the applicable award agreement(s), (B) all
payments of compensation by the Company to Executive hereunder will terminate
immediately, (C) Executive will be paid all accrued but unpaid PTO,
expense reimbursements and other benefits due to Executive through his
termination date under any Company-provided or paid plans, policies, and
arrangements, and (D) Executive will be paid all accrued and unpaid
salary, all accrued and unpaid Target Bonus for a prior fiscal year, and a
pro-rata portion of any Target Bonus that Executive would have otherwise earned
during the fiscal year in which his termination occurs hereunder.

 

6

 

(f)    Termination
Upon Death.  If Executive’s
employment is terminated because of death, then (i) Executive’s
representatives shall be entitled to receive payments and benefits in
accordance with the Company’s then applicable plans, policies, and arrangements
and (ii) Executive’s outstanding stock options, restricted stock, and
other equity arrangements shall expire in accordance with the terms of the
applicable award agreement(s); provided, however, that Executive will be
entitled to the “in the money” value of all vested options as calculated under Section 6(b)(iv) above.  The payments and benefits contemplated under
clause (i) above shall not be paid or payable later than March 15 of
the calendar year after the calendar year in which the Termination Date occurs
and shall include, without limitation, the following:  (v) any accrued and unpaid salary, (w) any
accrued and unpaid Target Bonus for a prior fiscal year, (x) a pro-rata
portion of any Target Bonus that Executive would have otherwise earned during
the fiscal year in which his death occurs, (y) any accrued and unpaid PTO,
and (z) any expense reimbursements.

 

(g)   Exclusivity.  The provisions of this Section 6 are
intended to be and are exclusive and in lieu of any other rights or remedies to
which Executive or the Company may otherwise be entitled, either at law, tort
or contract, in equity, or under this Agreement, in the event of any
termination of Executive’s employment. 
Executive shall be entitled to no benefits, compensation or other
payments or rights upon termination of employment other than those benefits
expressly set forth in paragraph (b), (c), (d), (e) or (f) of this Section 6,
whichever shall be applicable and those benefits required to be provided by
law.

 

(h)   409A
Compliance.  Notwithstanding anything
in this Section 6 to the contrary, if the Company determines in good faith
that any payment or benefit to the Executive under this Section 6 constitutes
“nonqualified deferred compensation” under Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) payment of such amounts
shall not commence until the Executive incurs a “separation from service”
within the meaning of Treas. Reg. § 1.409A-1(h).  If, at the time of the Executive’s separation
from service, the Executive is a “specified employee” within the meaning of Section 409A
of the Code , any benefit as to which Section 409A penalties could be
assessed that becomes payable to Executive on account of Executive’s “separation
from service” (including any amounts payable pursuant to the preceding
sentence) will not be paid until after the end of the sixth calendar month
after the Executive’s “separation from service”(the “409A Suspension Period”).  Within fourteen calendar days after the end
of the 409A Suspension Period, the Company shall pay to the Executive a lump
sum payment in cash equal to any payments delayed because of the preceding
sentence, (including interest on any such payments, at an interest rate of not
less than the average prime interest rate published in the Wall Street Journal
on any day chosen by the Company during that period).  Thereafter, the Executive shall receive any
remaining payments and benefits due under this Section 6 in accordance
with the terms of this Section (as if there had not been any delay).

 

(i)    Code Section 280G.

 

(i)    Notwithstanding
any provision of this Agreement to the contrary, if Executive becomes entitled
to payment and/or benefits provided by this Agreement or any other amounts in
the nature of compensation, whether alone or together with other payments or
benefits that the Executive receives or realizes or is then entitled to receive
or realize from the Company or any of its affiliates or any other person whose
actions result in a change of ownership or effective 

 

7

 

control of the Company, and such payments and/or benefits would
constitute an “excess parachute payment” within the meaning of Section 280G
of the Code and/or any corresponding and applicable state law provision, the
payments and/or benefits provided to the Executive under this Agreement will be
reduced by reducing the amount of payments or benefits payable to Executive (the
“280G Reduction”) to the extent necessary so that no portion of
Executive’s payments or benefits will be subject to the excise tax imposed by Section 4999
of the Code or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the “Excise Tax”).  Notwithstanding the foregoing, the 280G
Reduction will be made only if, by reason of that reduction, the Executive’s “net
after tax benefit” (as defined below) exceeds the net after tax benefit he
would realize if the 280G Reduction were not made.  To the extent that the 280G Reduction is not
applicable because Executive’s net after tax benefit is greater than the net
after tax benefit that he would receive if the 280G Reduction were made, then
the Company will pay to the Executive the “Gross-Up Payment” as set forth below
in Section 6(i)(iii).

 

(ii)   For
purposes of this Section 6(i), “net after tax benefit” means the sum of (a) the
total amount received or realized by Executive pursuant to this Agreement that
would constitute a “parachute payment” within the meaning of Section 280G
of the Code and any corresponding and applicable state law provision, plus (b) all
other payments or benefits that Executive receives or realizes or is then
entitled to receive or realize from the Company and any of its affiliates or
that are otherwise within the scope of payments and/or benefits provided for in
sub-clause (i) above that would constitute a “parachute payment” within
the meaning of Section 280G of the Code and any corresponding and
applicable state law provision, less (c) the amount of federal, state,
local and social security taxes payable with respect to the payments or
benefits described in (a) and (b) above calculated at the maximum
marginal individual income tax rate for each year in which payments or benefits
are realized by Executive (based upon the rate in effect for that year as set
forth in the Code at the time of the first receipt or realization of the
foregoing), less (d) the amount of excise taxes imposed with respect to
the payments or benefits described in (a) and (b) above by Section 4999
of the Code and any corresponding and applicable state law provision.

 

(iii)  As
provided above, in the event that (a) Executive’s net after tax benefit without
the 280G Reduction is greater than the net after tax benefit that he would
receive if the 280G Reduction were made, and (b) it shall be determined
that any payment or distribution by the Company to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section (a “Payment”) would
be subject to the Excise Tax, then the Company will pay to the Executive an
additional payment (a “Gross-Up Payment”) in an amount such that after
payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, both any
income taxes (and any interest and penalties imposed with respect thereto), and
the Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to seventy-five percent (75%) of the
Excise Tax imposed upon the Payments.

 

A.    Subject to
the provisions of this Section 6(i), all determinations required to be
made under this Section, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such 

 

8

 

determination, shall be made by an outside nationally recognized accounting
firm selected by the Company or the Board, in its sole and absolute discretion (the
“Accounting Firm”), which shall provide detailed supporting calculations
both to the Company and the Executive within 15 business days of the receipt of
notice from the Executive that there has been a Payment, or such earlier time
as is requested by the Company.  In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Company shall appoint
another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder).  All fees and
expenses of the Accounting Firm shall be borne solely by the Company.  Any Gross-Up Payment, if applicable, as determined
pursuant to this Section 6(i), shall be paid by the Company to the
Executive within thirty (30) days of the receipt of the Accounting Firm’s
determination.  All determinations made
by the Accounting Firm shall be based on detailed supporting calculations
provided both to the Company and Executive at such time as is requested by
either party.  Any determination by the
Accounting Firm shall be binding upon the Company and the Executive.  In the event that the Company exhausts its
remedies pursuant to Section 6(i)(iii)(B) and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment (as defined below) that has
occurred and the Company’s pro rata portion of any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Executive.   In no event shall the Gross-Up Payment be
made later than the end of the service provider’s taxable year next following
the service provider’s taxable year in which the related taxes are remitted to
the taxing authority.

 

B.    The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require an additional Payment or
Payments, as the case may be, which have not been made by the Company, but
could have been made pursuant to this Section 6(i) (the “Underpayment”).  Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid.  The Executive shall not pay such claim prior
to the expiration of the 30-day period following the date on which it gives
such notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due).  If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claims, the Executive shall:

 

(i)    give the
Company any information reasonably requested by the Company relating to such
claim,

 

(ii)   take such
action in connection with contesting such claim as the Company shall reasonably
request from time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney reasonably selected by
the Company,

 

(iii)  cooperate
with the Company in good faith in order effectively to contest such claim, and

 

9

 

(iv)  permit the
Company to participate in any proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly all reasonable costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for seventy-five percent (75%) of any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expenses.  In no event shall the payment of any Excise
Tax or income tax (including interest and penalties with respect thereto) be
made later than the end of the service provider’s taxable year next following
the service provider’s taxable year in which the related taxes are remitted to
the taxing authority.  Without limitation
on the foregoing provisions of this Section 6(i)(iii)(B), the Company
shall control all proceedings taken in connection with such contest and, at its
sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine and subject to the
Company covering all out of pocket expenses incurred in such contest; provided,
however, that if the Company directs the Executive to pay such claim and sue
for a refund, the Company shall advance the amount of such payment to the
Executive that represents the Company’s pro rata share of any payment, on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from the Company’s pro rata share of any Excise Tax or income
tax (including interest or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is limited solely to such
contested amount.  Furthermore, the
Company’s control of the contest shall be limited to issues and/or claims that
are materially related to the imposition of any Excise Tax or with respect to
which a Gross-Up Payment would be otherwise payable hereunder and the Executive
shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.  The Company and the Executive shall promptly
deliver to each other copies of any written communications and summaries of any
verbal communications with any taxing authority regarding the matters addressed
herein.

 

C.    If, after
the receipt by the Executive of an amount advanced by the Company pursuant to Section 6(i)(iii)(B),
the Executive becomes entitled to receive any refund with respect to such
claim, the Executive shall (subject to the Company’s complying with the
requirements of Section 6(i)(iii)(B) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto).  If,
after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 6(i)(iii)(B), a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

 

10

 

7.     Definition of Terms. 
The following terms referred to in this Agreement shall have the
following meanings:

 

(a)   Business
Reasons.  “Business Reasons”
means (i) gross negligence, willful misconduct or other willful
malfeasance by Executive in the performance of his duties, (ii) Executive’s
conviction of, plea of nolo contendere
to, or written admission of the commission of, a felony, (iii) any act by
the Executive involving fraud or misrepresentation with respect to his duties
for the Company or its affiliates, which has resulted or likely will result in
material damage to the Company or its affiliates, (iv) any act by the
Executive constituting a failure to follow the directions of the either the CEO
or the Board, provided that, the Board provides written notice of such failure
to the Executive and the failure continues for fifteen (15) days after the
Executive’s receipt of such notice, or (v) Executive’s material breach of
this Agreement, including without limitation any breach of Sections 8 through
11 hereof, provided that, in the case of any such breach or such behavior
covered by subclause (i), and the affirmative vote of not less than two-thirds
of the entire membership of the Board to take such action following a meeting
in which the Executive and his counsel are provided an opportunity to be heard
by the Board on this issue, the Board provides written notice of such breach or
action to the Executive, specifically identifying the manner in which the Board
believes that Executive has breached this Agreement or acted in accordance with
subclause (i), and Executive shall have the opportunity to cure such breach or
action to the reasonable satisfaction of the Board within thirty (30) days
following the delivery of such notice, unless such breach or action is
incapable of cure.  For purpose of this
paragraph, no act or failure to act by Executive shall be considered “willful” if
such act or failure to act was in good faith and with the reasonable belief
that the act or omission was in the best interests of the Company, or occurred
at the direction of the Board.

 

(b)   Disability.  “Disability” shall mean that Executive
has been unable to perform his duties as an employee as the result of his
incapacity due to physical or mental illness for a continuous period of not
less than one month or a cumulative period of not less than eight weeks within
any 12-month period, and such inability, at least 26 weeks after its
commencement, is determined to be total and permanent by a physician selected
by the Company’s insurers.  Termination
resulting from Disability may only be effected after at least sixty (60) days
written notice by the Company informing Executive of its intention to terminate
Executive’s employment and the date upon which such termination shall occur.  In the event that Executive resumes the
performance of substantially all of his duties hereunder before the termination
of his employment becomes effective, the notice of intent to terminate
automatically shall be deemed to have been revoked.

 

(c)   Termination
Date.  “Termination Date”
shall mean (i) if this Agreement is terminated on account of death, the
date of death; (ii) if this Agreement is terminated for Disability, the
date specified in Section 7(b); (iii) if this Agreement is terminated
by the Company, the date on which such termination occurs as set forth in a
notice of termination given to Executive by the Company in accordance with
Sections 6(a) and 12(a); (iv) if the Agreement is terminated by
Executive, the date indicated in a notice of termination given to the Company
by Executive in accordance with Sections 6(a) and 12(a); or (v) if
this Agreement expires by its terms, then the last day of the term of this
Agreement.

 

11

 

(d)   Constructive
Termination.  A “Constructive
Termination” shall be deemed to occur if (1) Executive gives the
Company written notice of the existence of one of the events arising without
Executive’s consent listed in clauses (i) through (v), below within thirty
(30) days of the initial existence of such event; (2) the Company has
failed to cure such event within thirty (30) days following the date such
notice is given; and (3) Executive elects to voluntarily terminate
employment within the ninety (90) day period immediately following such event. The
events include: (i) a material reduction in Executive’s authority, duties,
and responsibilities , (ii) Executive is required to relocate his place of
employment, other than a relocation within fifty (50) miles of the Company’s Stamford
offices, (iii) there is a material reduction in Executive’s Base Salary
other than any such reduction consistent with a general reduction of pay across
the executive staff as a group, as an economic or strategic measure due to poor
financial performance by the Company, (iv) any material breach by the Company
of Section 12(c)(i) of this Agreement, provided, that a Constructive
Termination will not be deemed to have occurred if, within sixty (60) days of a
Change of Control, the Executive is offered an employment contract by the new
owner of the Company which is at least as economically favorable to the
Executive as this Agreement, or (v) there occurs any other material breach
of this Agreement by the Company, and, in addition to notifying the Company of
the existence of such breach as described above in this paragraph, a written
demand for substantial performance is delivered to the Company by Executive
which specifically identifies the manner in which Executive believes that the
Company has materially breached this Agreement.

 

(e)   Change
in Control.  “Change in Control”
shall have the same meaning as in Treas. Reg. §§ 1.409A-3(i)(5)(vi) and
1.409A-3(i)(5)(vii), except that for purposes of Treas. Reg. §
1.409A-3(i)(5)(vi)(1), the phrase “30 percent” shall be replaced with “50
percent”.

 

8.     Confidential
Information.

 

(a)   Executive
acknowledges that the Confidential Information relating to the business of the
Company and its subsidiaries which Executive has obtained or will obtain during
the course of his association with the Company and subsidiaries and his
performance under this Agreement are the property of the Company and its
subsidiaries.  Executive agrees that
Executive will not disclose or use at any time, either during or after the
Employment period, any Confidential Information without the written consent of
the Board of Directors of the Company, other than proper disclosure or use in
the performance of his duties hereunder. 
Executive agrees to deliver to the Company at the end of the then
applicable Employment Term, or at any other time that the Company may request,
all memoranda, notes, plans, records, documentation and other materials (and
copies thereof) containing Confidential Information relating to the business of
the Company and its subsidiaries, no matter where such material is located and
no matter what form the material may be in, which Executive may then possess or
have under his control.  If requested by
the Company, Executive shall provide to the Company written confirmation that
all such materials have been delivered to the Company or have been
destroyed.  Executive shall take all
appropriate steps to safeguard Confidential Information and to protect it
against disclosure, misuse, espionage, loss and theft.

 

(b)   “Confidential
Information” shall mean information which is not generally known to the
public and which is used, developed, or obtained by the Company or its
subsidiaries relating to the businesses of any of the Company and its
subsidiaries or the business of any customer thereof including, but not limited
to:  pricing models; products or
services; fees, costs and pricing structure; 

 

12

 

designs; analyses; formulae; drawings; photographs; reports; computer
software, including operating systems, applications, program listings, flow
charts, manuals and documentation; databases; accounting and business methods;
inventions and new developments and methods, whether patentable or unpatentable
and whether or not reduced to practice; all copyrightable works; the customers
of any of the Company and its subsidiaries and the Confidential Information of
any customer thereof; and all similar and related information in whatever
form.  Confidential Information shall not
include any information which (i) was rightfully known by Executive prior
to the Employment Term; (ii) is publicly disclosed by law or in response
to an order of a court or governmental agency; (iii) becomes publicly
available through no fault of Executive or (iv) has been published in a
form generally available to the public prior to the date upon which Executive
proposes to disclose such information. 
Information shall not be deemed to have been published merely because
individual portions of the information have been separately published, but only
if all the material features comprising such information have been published in
combination.

 

9.     Intellectual
Property.  In the event that
Executive, as a part of Executive’s activities on behalf of the Company,
generates, authors or contributes to any invention, new development or method,
whether or not patentable and whether or not reduced to practice, any
copyrightable work, any trade secret, any other Confidential Information, or
any information that gives any of the Company and its subsidiaries an advantage
over any competitor, or similar or related developments or information related
to the present or future business of any of the Company and its subsidiaries
(collectively “Developments and Information”), Executive acknowledges
that all Developments and Information are “work for hire” and the exclusive
property of the Company.  Executive
hereby assigns to the Company, its nominees, successors or assigns, all rights,
title and interest to Developments and Information.  Executive shall cooperate with the Company’s
Board of Directors to protect the interests of the Company and its subsidiaries
in Developments and Information. 
Executive shall execute and file any document related to any
Developments and Information requested by the Company’s Board of Directors
including applications, powers of attorney, assignments or other instruments
which the Company’s Board of Directors deems necessary to apply for any patent,
copyright or other proprietary right in any and all countries or to convey any
right, title or interest therein to any of the Company’s nominees, successors
or assigns.

 

10.   No Conflicts.

 

(a)   Executive
agrees that in his individual capacity he will not enter into any agreement,
arrangement or understanding, whether written or oral, with any supplier,
contractor, distributor, wholesaler, sales representative, representative group
or customer, relating to the business of the Company or any of its
subsidiaries, without the express written consent of the Board.

 

(b)   As long as
Executive is employed by the Company or any of its subsidiaries, Executive
agrees that Executive will not, except with the express written consent of the
Board, become engaged in, render services for, or permit his name to be used in
connection with, any for-profit business other than the business of the
Company, any of its subsidiaries or any corporation or partnership in which the
Company or any of its subsidiaries have an equity interest.

 

13

 

11.   Non-Competition Agreement.

 

(a)   Executive
acknowledges that Executive services are of a special, unique and extraordinary
value to the Company and that Executive has access to the Company’s trade
secrets, Confidential Information and strategic plans of the most valuable
nature and develops goodwill on behalf of the Company.  Accordingly, Executive agrees that during the
Restricted Term (as defined below), Executive shall not directly or indirectly
own, manage, control, participate in, consult with, render strategic, executive
managerial sales, marketing, investment, financial, or other non-administrative
services for, or in any manner engage in any business Competing (as defined
below) with the businesses of the Company or any of its subsidiaries as such
businesses exist or are in process of development on the Termination Date (as
evidenced by written proposals, market research or similar materials).  A business is a Competing business if it
engages in the deregulated retail marketing of natural gas or electricity in
markets in which the Company has operated at any time during the two-year
period ending on the Termination Date, and shall not include any regulated
businesses.  Nothing herein shall
prohibit Executive from being a passive owner of not more than 3% of the
outstanding stock of any class of a corporation that is publicly traded, so
long as Executive has no active participation in the business of such
corporation.  For purposes of this
Agreement, the “Restricted Term” shall be the remainder of the then current
Employment Term.

 

(b)   In
addition, during the Restricted Term, Executive shall not (i) directly or
indirectly induce or attempt to induce any employee of the Company or any
subsidiary (other than his own assistant) to leave the employ of the Company or
such subsidiary, or in any way interfere with the relationship between the
Company or any subsidiary and any employee thereof, (ii) hire directly or
through another entity any person who was an employee of the Company or any
subsidiary at any time during the then preceding 12 months (unless such
employee contacts the Executive on an unsolicited basis), (iii) directly
or indirectly induce or attempt to induce any customer, supplier, licensee or
other business relation of the Company or any subsidiary to cease doing
business with the Company or such subsidiary, or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any subsidiary, or (iv) disparage the Company, its
executive officers, or its directors.

 

(c)   If any
court or tribunal of competent jurisdiction shall determine any of the
foregoing covenants to be unenforceable with respect to the term thereof or the
scope of the subject matter or geography covered thereby, such remaining
covenants shall nonetheless be enforceable by such court or tribunal against
such other party or parties or upon such shorter term or within such lesser
scope as may be determined by the court or tribunal to be enforceable.

 

(d)   Because
Executive’s services are unique and because Executive has access to
Confidential Information and strategic plans of the Company of the most
valuable nature and will help the Company develop goodwill, the parties agree
that the covenants contained in this Section 11 are necessary to protect
the value of the business of the Company and that a breach of any such covenant
would result in irreparable and continuing damage for which there would be no
adequate remedy at law.  The parties
agree therefore that in the event of a breach or threatened breach of this
Agreement, the Company or its successors or assigns may, in addition to other
rights and remedies existing in their favor, apply to any court of competent
jurisdiction for specific performance and/or injunctive or other relief in
order to enforce, or prevent any violations of, the provisions hereof.  The 

 

14

 

parties further agree that in the event the Company is granted any such
injunctive or other relief, the Company shall not be required to post any bond
or security that may otherwise normally be associated with such relief.

 

12.   Miscellaneous Provisions.

 

(a)   Notice.  Notices and all other communications
contemplated by this Agreement shall be in writing, shall be effective when
given, and in any event shall be deemed to have been duly given (i) when
delivered, if personally delivered, (ii) three (3) business days
after deposit in the U.S. mail, if mailed by U.S. registered or certified mail,
return receipt requested, or (iii) one (1) business day after the
business day of deposit with Federal Express or similar overnight courier, if
so delivered, freight prepaid.  In the
case of Executive, notices shall be addressed to him at the home address which
he most recently communicated to the Company in writing.  In the case of the Company, notices shall be
addressed to its corporate headquarters, and all notices shall be directed to
the attention of its Corporate Secretary.

 

(b)   Notice
of Termination.  Any termination by
the Company or Executive shall be communicated by a notice of termination to
the other party hereto given in accordance with paragraph (a) hereof.  Such notice shall indicate the specific
termination provision in this Agreement relied upon.

 

(c)   Successors.

 

(i)    Company’s
Successors.  Any successor to the
Company (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company’s business and/or assets shall be entitled to assume the rights and
shall be obligated to assume the obligations of the Company under this
Agreement and shall agree to perform the Company’s 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 the assumption agreement described in this
subsection (i) 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, distributees, devisees and legatees.

 

(iii)  No
Other Assignment of Benefits.  Except
as provided in this Section 12(c), 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 (iii) shall
be void.

 

(d)   Waiver.  No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by Executive and by 

 

15

 

an authorized officer of the Company (other than Executive).  No waiver by either party of any breach of,
or of compliance with, any condition or provision of this Agreement by the
other party shall be considered a waiver of any other condition or provision or
of the same condition or provision at another time.

 

(e)   Entire
Agreement.  This Agreement shall
supersede any and all prior agreements, representations or understandings
(whether oral or written and whether express or implied) between the parties
with respect to the subject matter hereof.

 

(f)    Severability.  The invalidity or unenforceability of any
provision 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.

 

(g)   Arbitration.  Except for injunctive or other equitable
relief in aid of arbitration, any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in Stamford,
Connecticut, 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.  All attorneys fees and costs shall be
allocated or apportioned as agreed by the parties or, in the absence of an
agreement, in such manner as the arbitrator or court shall determine to be
appropriate to reflect the final decision of the deciding body as compared to
the initial positions in arbitration of each party.  THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
AS THEY APPLY TO CONTRACTS ENTERED INTO AND WHOLLY TO BE PERFORMED WITHIN SUCH
STATE BY RESIDENTS THEREOF.

 

(h)   Withholding
of Taxes.  All payments made pursuant
to this Agreement will be subject to withholding of applicable taxes.

 

(i)    Indemnification.  Executive will be covered under the Company’s
insurance policies and, subject to applicable law, will be provided
indemnification to the maximum extent permitted by the Company’s bylaws and
Certificate of Incorporation, with such insurance coverage and indemnification
to be in accordance with the Company’s standard practices for senior executive
officers but on terms no less favorable than provided to any other Company
senior executive officer or director. 
Indemnification shall not be awarded for any conduct that is found to be
breach by a Court or tribunal of competent jurisdiction to violate this
agreement.

 

(j)    Compliance
with Company Policies.  During the
Employment Term, Executive will comply with all Company policies generally
applicable to the Company’s employees and senior executives.

 

(k)   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.

 

(l)    Non-Disclosure.  Unless required by law or to enforce this
Agreement, the parties hereto shall not disclose the existence of this
Agreement or the underlying terms to any third party, other than their
representatives who have a need to know such matters.

 

16

 

(m)   Legal
Fees.  The Company shall pay the
reasonable legal fees incurred by the Executive in connection with the
negotiation of this Agreement in an amount not to exceed $30,000.

 

17

 

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 day and year first
above written.

 

 

	
   

  	
  MXenergy Holdings Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel Bergstein

  	
   

  
	
   

  	
  Name: Daniel Bergstein

  
	
   

  	
  Title: Chairman,
  Compensation Committee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Jeffrey A. Mayer

  	
   

  
	
   

  	
  Jeffrey A. Mayer

  
	
   

  	
  President and Chief
  Executive OfficerEXHIBIT 10.28

EMPLOYMENT AGREEMENT

 

This
Employment Agreement (the “Agreement”) is entered into on February 13,
2008 (the “Effective Date”), by and between Chaitu Parikh, an individual
(“Executive”) and MxEnergy Holdings Inc., a Delaware corporation (the “Company”).  Terms within this Agreement that begin with
initial capital letters shall have the meaning specially set forth herein,
unless the context clearly demonstrates a different meaning (see Section 7
of this Agreement for the definition of several terms).  The Executive recognizes and agrees that the
Company’s commitments set forth herein provide full and adequate consideration
for any modifications of the Executive’s rights existing prior to the Effective
Date of this Agreement, including, but not limited to, the modifications set
forth in Sections  5 and 6 of this
Agreement.

 

1.     Employment.  Executive will serve as Chief Financial
Officer (“CFO”) and Senior Vice President of the Company for the
Employment Term specified in Section 2 below.  Executive will report to the Chief Executive
Officer (the “CEO”), and will render such services consistent with the
foregoing role.  The parties anticipate
that such services will include (but not be limited to) participating in the
Company’s efforts to consummate an initial public offering of its Common Stock
or a recapitalization of the Company’s financial structure, securing liquidity
to support the working capital  needs of
the Company, developing relationships with private equity investors and
potential financial sponsors, investigating potential acquisition
opportunities, and supporting the development of new products and businesses
for the Company.  Executive’s office
shall be located at the Company’s headquarters in Stamford, Connecticut.

 

2.     Term.  Company’s employment of Executive pursuant to
this Agreement shall be for an initial term of three (3) years (the “Employment
Term”), beginning on Effective Date and ending on the third annual
anniversary of the Effective Date or such earlier date on which Executive’s
employment terminates in accordance with Section 6 of this Agreement.  Upon the third annual anniversary of the
Effective Date and each anniversary thereof (the “Expiration Date”),
this Agreement shall automatically renew for a one-year term unless (a) the
Agreement has been earlier terminated under Section 6 or (b) either
party gives written notice not less than 180 days prior to the expiration of
any such term that the Agreement will not be extended.  Upon termination of the then applicable
Employment Term for any reason, Executive shall promptly resign from all
positions held with the Company.

 

3.     Salary.  The Company shall pay Executive base salary
at an annual rate of $401,700, which base salary may be increased from time to
time by the Company, in its discretion (“Base Salary”).  Executive’s Base Salary shall be paid in
conformity with the Company’s salary payment practices generally applicable to
similarly situated Company executives.

 

4.     Bonus.  Executive shall be entitled to participate in
the Company’s executive bonus program. 
Executive’s annual target bonus (the “Target Bonus”) shall be
100% of Base Salary, of which (a) 75% shall be payable based on
achievement of Company and/or individual objectives specified by the
Compensation Committee (the “Compensation Committee”) of the Board of
Directors of the Company (the “Board”), and (b) 25% may be awarded
solely at the discretion of the 

 

 

Compensation Committee.  In
addition, the Compensation Committee may, in its sole discretion, award the
Executive an additional bonus of up to 20% of Base Salary for extraordinary
performance by the Executive in connection with a significant business event
affecting the Company, such as an initial public offering or a Change in
Control; provided, however, that absent special circumstances the maximum
actual bonus will not exceed 120% of Base Salary.

 

5.     Executive Benefits.

 

(a)   Repurchase
of Common Stock.  In the event that
Executive’s employment terminates for any reason, the Company shall have the
right (or obligation) to purchase all of the shares of Common Stock that the
Executive owns, whether acquired before or after the Effective Date of this
Agreement, subject to the terms and conditions set forth herein.

 

(i)    If
Executive’s employment is terminated for any reason during the Employment Term,
the Company shall have the initial right to purchase all (but not less than
all) of the Common Stock owned by the Executive (“Call Option”).  The Company shall have the right to exercise
the Call Option by giving written notice to Executive within sixty (60) days
after the date of termination, which shall set forth the fair market value of
the shares being purchased as determined in the good faith of the Board (“Call
Notice”).  In the event that the
Company fails to exercise the Call Option on a timely basis, its rights under
this Section 5(a)(i) shall automatically terminate.  If the Call Notice is delivered on a timely
basis and the Executive agrees with the valuation set forth in the Call Notice,
he shall provide a written acceptance to the Company within fifteen (15) days
from the date of the Call Notice, and the repurchase of the shares shall occur
within fifteen (15) days from the date of acceptance.  If, however, the Call Notice is delivered on
a timely basis and the Executive disagrees with the valuation set forth
therein, the repurchase price for the shares shall be determined in accordance
with Section 5(a)(iii) below.

 

(ii)   If
Executive’s employment is involuntarily terminated for any reason (including a
Constructive Termination) during the Employment Term, but the Company does not
exercise the Call Option on a timely basis, the Executive shall have the right
to cause the Company to repurchase all (but not less than all) of the Common
Stock owned by the Executive (“Put Option”).  Notwithstanding the foregoing, the Executive
shall not have the right to exercise the Put Option in the event of a
Termination for Business Reasons.  The
Put Option shall become exercisable upon the expiration of the Call
Option.  The Executive shall have the
right to exercise the Put Option by giving written notice to the Company within
sixty (60) days after the expiration of the Call Option, which shall set forth
the fair market value of the shares being sold to the Company as determined in
good faith by the Executive (“Put Notice”).  If the Executive fails to exercise the Put
Option on a timely basis, his rights under this Section 5(a)(ii) shall
automatically terminate.  If the Put
Notice is delivered on a timely basis and the Company agrees with the valuation
set forth in the Put Notice, it shall provide a written acceptance to the
Executive within fifteen (15) days from the date of the Put Notice, and the
repurchase of the shares shall occur within fifteen (15) days from the date of
acceptance.  If, however, the Put Notice
is delivered on a timely basis and the Company disagrees with the valuation set
forth therein, the repurchase price for the shares shall be determined in
accordance with Section 5(a)(iii) below.

 

2

 

(iii)  In the
event that Executive’s employment terminates for any reason, the Company shall
have the right to repurchase, or, in the case of an involuntary termination,
the Executive shall have the right to cause the Company to repurchase, all or
part of the shares of Common Stock that the Executive owns. The repurchase
price shall equal the fair market value of the shares, as established by the
Board in its discretion, being repurchased. 
If the Executive does not agree with the Board’s determination of the
fair market value of those shares, then the Executive and the Company shall
mutually select a neutral independent valuation firm that will establish the
fair market value of the shares being repurchased, and that firm’s determination
of fair market value will be binding on all parties.  If the Executive and the Company do not agree
on a neutral independent valuation firm, each of the Executive and the Company
shall appoint their own independent representative; and such independent
representatives shall select the neutral independent valuation firm.  The Company shall pay all fees related to the
expense associated with such valuation.

 

(iv)  If (A) the
Company repurchases the Common Stock held by the Executive pursuant to Section 5(a)(i) or
5(a)(ii) above, (B) the Company enters into an agreement to effect a
Change in Control within six (6) months following the date of such
repurchase, and (C) the per share consideration to be received by the
holders of Common Stock in connection with the Change of Control is greater
than the per share consideration received by the Executive for his Common Stock
hereunder, then the Company shall be obligated to pay additional consideration
to Executive in an amount equal to the difference (“Additional Consideration”).  Any Additional Consideration payable
hereunder shall be paid by the Company in cash within five (5) business
days following the consummation of the Change of Control transaction.  To the extent the consideration received by
holders of Common Stock in connection with the Change of Control is in the form
of securities, the value of such consideration will be based on the market
value upon the closing of the Change of Control, or if no market exists, it
will be based on the good faith determination of the Board.

 

(v)   Notwithstanding
the foregoing, the rights under this Section 5(a) shall automatically
terminate upon an initial public offering of the Common Stock of the Company.

 

(b)   Other
Employee and Executive Benefits. 
Executive shall be entitled to receive all benefits provided to senior
executives, executives and employees of the Company generally from time to
time, including health, life insurance and disability, and all other benefits
provided to the Company’s senior executives generally, in each case so long as
and to the extent the same exist; provided, that in respect to each such plan
Executive is otherwise eligible and insurable in accordance with the terms of
such plans.  Notwithstanding the
preceding sentence, Executive’s right to receive severance payments and
benefits shall be only as provided in Section 6 hereof.

 

(c)   Vacation,
Sick Leave, Holidays and Sabbatical. 
Executive shall be entitled to paid time off (“PTO”), sick leave,
and holidays in accordance with the policies of the Company, as they exist from
time to time, for senior executives.  PTO
not used during any calendar year will not roll over to the following year.

 

3

 

6.     Severance Benefits.

 

(a)   At Will
Employment.  Executive’s employment
shall be “at will.”  Either the Company
or Executive may terminate this agreement and Executive’s employment at any
time, with or without Business Reasons, in its or his sole discretion, upon at
least sixty (60) days’ prior written notice of termination.

 

(b)   Involuntary
Termination Without Business Reasons or Constructive Termination.  If at any time during the then applicable
Employment Term (other than following a Change in Control to which Section 6(c) applies)
the Company terminates the employment of Executive involuntarily and without
Business Reasons or a Constructive Termination occurs, then subject to Section 6(h) below
and Executive signing a general release of claims against the Company and its
successors and such release becoming irrevocable within sixty (60) days of the
Executive’s Termination Date, Executive shall be entitled to receive the
following:

 

(i)    Base
Salary, PTO, and any earned and unpaid Target Bonus accrued through the
Termination Date, and any expense reimbursements and other benefits due to the
Executive under any Company-provided plans, policies and arrangements, which
shall not be paid or payable later than March 15 of the calendar year
after the calendar year in which the Termination Date occurs;

 

(ii)   a lump sum
payment, which shall not be paid or payable later than March 15 of the
calendar year after the calendar year in which the Termination Date occurs,
equal to the greater of (A) Base Salary for a period of twelve months
following the Termination Date, or (B) Base Salary for the remainder of
the then-current Employment Term;

 

(iii)  a lump sum
payment, calculated using the Base Salary and Target Bonus percentage effective
on the Termination Date, which shall not be paid or payable later than March 15
of the calendar year after the calendar year in which the Termination Date
occurs, equal to (A) one hundred percent (100%) of the Target Bonus for
the fiscal year in which the Termination Date occurs, (B) one hundred
percent (100%) of the Target Bonus for any full fiscal year remaining during
the  then applicable Employment Term, and
(C) a pro rata portion of one hundred percent (100%) of the Target Bonus
being paid for the final fiscal year that begins during the then applicable
Employment Term (such pro rata amount will be based on the ratio of the number
of full months of the then applicable Employment Term that fall within such
final fiscal year, to 12); and

 

(iv)  subject to Section 5(a) which
shall be applicable to any shares purchased through Executive’s exercise of
stock options, one hundred percent (100%) of the Executive’s unvested stock
options, restricted stock, and other equity awards shall become fully vested,
whether such stock options, restricted stock, and other equity awards were
acquired before or after the Effective Date of this Agreement, all of the
Executive’s unvested stock options and other equity awards shall become fully
vested, and all stock options that are vested and outstanding (but unexercised)
on the Termination Date shall be cancelled in consideration of the Company’s
payment to the Executive, as soon as practicable after the Termination Date, of
an amount equal to the product of the following:

 

4

 

(A)                            the excess, if any, of (1) the per
share fair market value, as determined pursuant to Section 5(a) above,
of the shares underlying the cancelled stock options, over (2) the
exercise price per share of the Company Common Stock subject to such option,
multiplied by

 

(B)                              the number of shares of Company Common
Stock that are subject to the stock options being cancelled); and

 

(v)           all
of the Executive’s benefits under Section 5(b) above will continue
for the duration of the Restricted Term, as that term is defined in Section 11(a) below.

 

Notwithstanding
the foregoing, if the Executive’s Termination Date occurs after October 31st
of any calendar year, then no payment conditioned on such release shall be made
until January 2nd of the calendar year following the calendar year of
termination, even if the release is signed and any applicable revocation period
concludes earlier.

 

Notwithstanding
anything to the contrary in this Section 6(b), if Executive violates the
provisions set forth in Section 11, Executive no longer shall be entitled
to receive any consideration otherwise paid pursuant to this section, and any
unexercised stock options, whether vested or unvested, will be cancelled.

 

(c)   Change in Control.  If there is a Change in Control during the
then applicable Employment Term, and either a Constructive Termination occurs
or the Company terminates the Executive’s employment without Business Reasons
prior to the then applicable Expiration Date (or if later, within a one-year
period following the Change in Control) then subject to Section 6(h) below
and Executive signing a general release of claims against the Company and its
successors and such release becoming irrevocable within sixty (60) days of the
Executive’s Termination Date, Executive shall be entitled to receive the
following:

 

(i)    Base Salary,
PTO, and any earned and unpaid Target Bonus accrued through the Termination
Date, and any expense reimbursements and other benefits due to the Executive
under any Company-provided plans, policies, and arrangements, which shall not
be paid or payable later than March 15 of the calendar year after the
calendar year in which the Termination Date occurs;

 

(ii)   a lump sum
payment, which shall not be paid or payable later than March 15 of the
calendar year after the calendar year in which the Termination Date occurs,
equal to the greater of (A) two (2) times Base Salary or (B) the
Base Salary for the remainder of the then-current applicable Employment Term;
provided, however, in no event shall such lump sum amount payable pursuant to
this Section 6(c)(ii) be less than the amount to which Executive
would otherwise be entitled to pursuant to Section 6(b)(ii);

 

(iii)  a lump sum
payment, calculated using the Base Salary and Target Bonus percentage effective
on the Termination Date, which shall not be paid or payable later than March 15
of the calendar year after the calendar year in which the Termination Date
occurs, equal to the greater of (A) two hundred percent (200%) of the
Target Bonus for the fiscal year in which the 

 

5

 

termination occurs, or (B) one hundred percent (100%) of the
Target Bonus for the fiscal year in which the termination occurs times the
number of years for the remainder of the then-current applicable Employment
Term (rounded to the nearest tenth); provided, however, in no event shall such
lump sum amount payable pursuant to this Section 6(c)(iii) shall be
less than the amount to which Executive would otherwise be entitled to pursuant
to Section 6(b)(iii); and

 

(iv)  subject to Section 5(a) which
shall be applicable to any shares purchased through Executive’s exercise of
stock options, all of the Executive’s unvested stock options, restricted stock,
and other equity awards shall become fully vested, whether such stock options,
restricted stock, or other equity were acquired before or after the Effective
Date of this Agreement.

 

Notwithstanding
the foregoing, if the Executive’s Termination Date occurs after October 31st
of any calendar year, then no payment conditioned on such release shall be made
until January 2nd of the calendar year following the calendar year of
termination, even if the release is signed and any applicable revocation period
concludes earlier.

 

(d)   Termination
for Disability.  If at any time
during the applicable Employment Term Executive becomes unable to perform his
duties as an employee as a result a Disability, which gives rise to termination
of employment for Disability, then (i) Executive shall be entitled to
receive payments and benefits in accordance with the Disability policies of the
Company, as they exist from time to time, for senior executives and (ii) Executive’s
outstanding stock options, restricted stock, and other equity arrangements
shall expire in accordance with the terms of the applicable award agreement(s);
provided, however, that Executive will be entitled to the “in the money” value
of all vested options as calculated under Section 6(b)(iv) above.  The payments and benefits contemplated under
clause (i) above shall not be paid or payable later than March 15 of
the calendar year after the calendar year in which the Termination Date occurs
and shall include, without limitation, the following:  (v) any accrued and unpaid salary, (w) any
accrued and unpaid Target Bonus for a prior fiscal year, (x) a pro-rata
portion of any Target Bonus that Executive would have otherwise earned during
the fiscal year in which his Disability occurs, (y) any accrued and unpaid
PTO, and (z) any expense reimbursements.

 

(e)   Voluntary
Termination or Involuntary Termination for Business Reasons.  If (i) Executive voluntarily terminates
his employment (other than in the case of a Constructive Termination), or (ii) Executive
is terminated involuntarily for Business Reasons, then in any such event (A) all
further vesting of Executive’s stock options, restricted stock, and other
equity arrangements will cease immediately and such awards will expire in
accordance with the terms of the applicable award agreement(s), (B) all
payments of compensation by the Company to Executive hereunder will terminate
immediately, (C) Executive will be paid all accrued but unpaid PTO,
expense reimbursements and other benefits due to Executive through his
termination date under any Company-provided or paid plans, policies, and
arrangements, and (D) Executive will be paid all accrued and unpaid
salary, all accrued and unpaid Target Bonus for a prior fiscal year, and a
pro-rata portion of any Target Bonus that Executive would have otherwise earned
during the fiscal year in which his termination occurs hereunder.

 

6

 

(f)    Termination
Upon Death.  If Executive’s
employment is terminated because of death, then (i) Executive’s
representatives shall be entitled to receive payments and benefits in
accordance with the Company’s then applicable plans, policies, and arrangements
and (ii) Executive’s outstanding stock options, restricted stock, and
other equity arrangements shall expire in accordance with the terms of the
applicable award agreement(s); provided, however, that Executive will be
entitled to the “in the money” value of all vested options as calculated under Section 6(b)(iv) above.  The payments and benefits contemplated under
clause (i) above shall not be paid or payable later than March 15 of
the calendar year after the calendar year in which the Termination Date occurs
and shall include, without limitation, the following:  (v) any accrued and unpaid salary, (w) any
accrued and unpaid Target Bonus for a prior fiscal year, (x) a pro-rata
portion of any Target Bonus that Executive would have otherwise earned during
the fiscal year in which his death occurs, (y) any accrued and unpaid PTO,
and (z) any expense reimbursements.

 

(g)   Exclusivity.  The provisions of this Section 6 are
intended to be and are exclusive and in lieu of any other rights or remedies to
which Executive or the Company may otherwise be entitled, either at law, tort
or contract, in equity, or under this Agreement, in the event of any
termination of Executive’s employment. 
Executive shall be entitled to no benefits, compensation or other
payments or rights upon termination of employment other than those benefits
expressly set forth in paragraph (b), (c), (d), (e) or (f) of this Section 6,
whichever shall be applicable and those benefits required to be provided by
law.

 

(h)   409A
Compliance.  Notwithstanding anything
in this Section 6 to the contrary, if the Company determines in good faith
that any payment or benefit to the Executive under this Section 6
constitutes “nonqualified deferred compensation” under Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) payment of such
amounts shall not commence until the Executive incurs a “separation from
service” within the meaning of Treas. Reg. § 1.409A-1(h).  If, at the time of the Executive’s separation
from service, the Executive is a “specified employee” within the meaning of Section 409A
of the Code, any benefit as to which Section 409A penalties could be
assessed that becomes payable to Executive on account of Executive’s “separation
from service” (including any amounts payable pursuant to the preceding
sentence) will not be paid until after the end of the sixth calendar month
after the Executive’s “separation from service”(the “409A Suspension Period”).  Within fourteen calendar days after the end
of the 409A Suspension Period, the Company shall pay to the Executive a lump
sum payment in cash equal to any payments delayed because of the preceding
sentence, (including interest on any such payments, at an interest rate of not
less than the average prime interest rate published in the Wall Street Journal
on any day chosen by the Company during that period).  Thereafter, the Executive shall receive any
remaining payments and benefits due under this Section 6 in accordance
with the terms of this Section (as if there had not been any delay).

 

(i)    Code Section 280G.

 

(i)    Notwithstanding
any provision of this Agreement to the contrary, if Executive becomes entitled
to payment and/or benefits provided by this Agreement or any other amounts in
the nature of compensation, whether alone or together with other payments or
benefits that the Executive receives or realizes or is then entitled to receive
or realize from the Company or any of its affiliates or any other person whose
actions result in a change of ownership or effective 

 

7

 

control of the Company, and such payments and/or benefits would
constitute an “excess parachute payment” within the meaning of Section 280G
of the Code and/or any corresponding and applicable state law provision, the
payments and/or benefits provided to the Executive under this Agreement will be
reduced by reducing the amount of payments or benefits payable to Executive
(the “280G Reduction”) to the extent necessary so that no portion of
Executive’s payments or benefits will be subject to the excise tax imposed by Section 4999
of the Code or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the “Excise Tax”).  Notwithstanding the foregoing, the 280G
Reduction will be made only if, by reason of that reduction, the Executive’s “net
after tax benefit” (as defined below) exceeds the net after tax benefit he
would realize if the 280G Reduction were not made.  To the extent that the 280G Reduction is not
applicable because Executive’s net after tax benefit is greater than the net
after tax benefit that he would receive if the 280G Reduction were made, then
the Company will pay to the Executive the “Gross-Up Payment” as set forth below
in Section 6(i)(iii).

 

(ii)   For
purposes of this Section 6(i), “net after tax benefit” means the sum of (a) the
total amount received or realized by Executive pursuant to this Agreement that
would constitute a “parachute payment” within the  meaning of Section 280G of the Code and
any corresponding and applicable state law provision, plus (b) all other
payments or benefits that Executive receives or realizes or is then entitled to
receive or realize from the Company and any of its affiliates or that are
otherwise within the scope of payments and/or benefits provided for in
sub-clause (i) above that would constitute a “parachute payment” within
the meaning of Section 280G of the Code and any corresponding and
applicable state law provision, less (c) the amount of federal, state,
local and social security taxes payable with respect to the payments or
benefits described in (a) and (b) above calculated at the maximum marginal
individual income tax rate for each year in which payments or benefits are
realized by Executive (based upon the rate in effect for that year as set forth
in the Code at the time of the first receipt or realization of the foregoing),
less (d) the amount of excise taxes imposed with respect to the payments
or benefits described in (a) and (b) above by  Section 4999 of the Code and any
corresponding and applicable state law provision.

 

(iii)  As
provided above, in the event that (a) Executive’s net after tax benefit
without the 280G Reduction is greater than the net after tax benefit that he
would receive if the 280G Reduction were made, and (b) it shall be
determined that any payment or distribution by the Company to or for the
benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section (a
“Payment”) would be subject to the Excise Tax, then the Company will pay
to the Executive an additional payment (a “Gross-Up Payment”) in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, both any income taxes (and any interest and penalties imposed with
respect thereto), and the Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to seventy-five
percent (75%) of the Excise Tax imposed upon the Payments.

 

A.    Subject to
the provisions of this Section 6(i), all determinations required to be
made under this Section, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such 

 

8

 

determination, shall be made by an outside nationally recognized
accounting firm selected by the Company or the Board, in its sole and absolute
discretion (the “Accounting Firm”), which shall provide detailed
supporting calculations both to the Company and the Executive within 15
business days of the receipt of notice from the Executive that there has been a
Payment, or such earlier time as is requested by the Company.  In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group effecting
the Change of Control, the Company shall appoint another nationally recognized
accounting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firm
shall be borne solely by the Company. 
Any Gross-Up Payment, if applicable, as determined pursuant to this Section 6(i),
shall be paid by the Company to the Executive within thirty (30) days of the
receipt of the Accounting Firm’s determination. 
All determinations made by the Accounting Firm shall be based on
detailed supporting calculations provided both to the Company and Executive at such
time as is requested by either party. 
Any determination by the Accounting Firm shall be binding upon the
Company and the Executive.  In the event
that the Company exhausts its remedies pursuant to Section 6(i)(iii)(B) and
the Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment (as defined
below) that has occurred and the Company’s pro rata portion of any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.  In no event shall the
Gross-Up Payment be made later than the end of the service provider’s taxable
year next following the service provider’s taxable year in which the related
taxes are remitted to the taxing authority.

 

B.    The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require an additional Payment or
Payments, as the case may be, which have not been made by the Company, but
could have been made pursuant to this Section 6(i) (the “Underpayment”).  Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid.  The Executive shall not pay such claim prior
to the expiration of the 30-day period following the date on which it gives
such notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due).  If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claims, the Executive shall:

 

(i)    give the
Company any information reasonably requested by the Company relating to such
claim,

 

(ii)   take such
action in connection with contesting such claim as the Company shall reasonably
request from time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney reasonably selected by
the Company,

 

(iii)  cooperate
with the Company in good faith in order effectively to contest such claim, and

 

9

 

(iv)      permit
the Company to participate in any proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly all reasonable costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for seventy-five percent (75%) of any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expenses.  In no event shall the payment of any Excise
Tax or income tax (including interest and penalties with respect thereto) be
made later than the end of the service provider’s taxable year next following
the service provider’s taxable year in which the related taxes are remitted to
the taxing authority.  Without limitation
on the foregoing provisions of this Section 6(i)(iii)(B), the Company
shall control all proceedings taken in connection with such contest and, at its
sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine and subject to the
Company covering all out of pocket expenses incurred in such contest; provided,
however, that if the Company directs the Executive to pay such claim and sue
for a refund, the Company shall advance the amount of such payment to the
Executive that represents the Company’s pro rata share of any payment, on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from the Company’s pro rata share of any Excise Tax or income
tax (including interest or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is limited solely to such
contested amount.  Furthermore, the
Company’s control of the contest shall be limited to issues and/or claims that
are materially related to the imposition of any Excise Tax or with respect to
which a Gross-Up Payment would be otherwise payable hereunder and the Executive
shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.  The Company and the Executive shall promptly
deliver to each other copies of any written communications and summaries of any
verbal communications with any taxing authority regarding the matters addressed
herein.

 

C.      If, after
the receipt by the Executive of an amount advanced by the Company pursuant to Section 6(i)(iii)(B),
the Executive becomes entitled to receive any refund with respect to such
claim, the Executive shall (subject to the Company’s complying with the
requirements of Section 6(i)(iii)(B) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto).  If,
after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 6(i)(iii)(B), a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

 

10

 

7.     Definition of Terms. 
The following terms referred to in this Agreement shall have the
following meanings:

 

(a)   Business
Reasons.  “Business Reasons”
means (i) gross negligence, willful misconduct or other willful
malfeasance by Executive in the performance of his duties, (ii) Executive’s
conviction of, plea of nolo contendere
to, or written admission of the commission of, a felony, (iii) any act by
the Executive involving fraud or misrepresentation with respect to his duties
for the Company or its affiliates, which has resulted or likely will result in
material damage to the Company or its affiliates, (iv) any act by the
Executive constituting a failure to follow the directions of the either the CEO
or the Board, provided that, the Board provides written notice of such failure
to the Executive and the failure continues for fifteen (15) days after the
Executive’s receipt of such notice, or (v) Executive’s material breach of
this Agreement, including without limitation any breach of Sections 8 through
11 hereof, provided that, in the case of any such breach or such behavior
covered by subclause (i), and the affirmative vote of not less than two-thirds
of the entire membership of the Board to take such action following a meeting
in which the Executive and his counsel are provided an opportunity to be heard
by the Board on this issue, the Board provides written notice of such breach or
action to the Executive, specifically identifying the manner in which the Board
believes that Executive has breached this Agreement or acted in accordance with
subclause (i), and Executive shall have the opportunity to cure such breach or
action to the reasonable satisfaction of the Board within thirty (30) days
following the delivery of such notice, unless such breach or action is
incapable of cure.  For purpose of this
paragraph, no act or failure to act by Executive shall be considered “willful” if
such act or failure to act was in good faith and with the reasonable belief
that the act or omission was in the best interests of the Company, or occurred
at the direction of the Board.

 

(b)   Disability.  “Disability” shall mean that Executive
has been unable to perform his duties as an employee as the result of his
incapacity due to physical or mental illness for a continuous period of not
less than one month or a cumulative period of not less than eight weeks within
any 12-month period, and such inability, at least 26 weeks after its
commencement, is determined to be total and permanent by a physician selected
by the Company’s insurers.  Termination
resulting from Disability may only be effected after at least sixty (60) days
written notice by the Company informing Executive of its intention to terminate
Executive’s employment and the date upon which such termination shall occur.  In the event that Executive resumes the
performance of substantially all of his duties hereunder before the termination
of his employment becomes effective, the notice of intent to terminate
automatically shall be deemed to have been revoked.

 

(c)   Termination
Date.  “Termination Date”
shall mean (i) if this Agreement is terminated on account of death, the
date of death; (ii) if this Agreement is terminated for Disability, the
date specified in Section 7(b); (iii) if this Agreement is terminated
by the Company, the date on which such termination occurs as set forth in a
notice of termination given to Executive by the Company in accordance with
Sections 6(a) and 12(a); (iv) if the Agreement is terminated by
Executive, the date indicated in a notice of termination given to the Company
by Executive in accordance with Sections 6(a) and 12(a); or (v) if
this Agreement expires by its terms, then the last day of the term of this
Agreement.

 

11

 

(d)   Constructive
Termination.  A “Constructive
Termination” shall be deemed to occur if (1) Executive gives the
Company written notice of the existence of one of the events arising without
Executive’s consent listed in clauses (i) through (v), below, within
thirty (30) days of the initial existence of such event; (2) the Company
has failed to cure such event within thirty (30) days following the date such
notice is given; and (3) Executive elects to voluntarily terminate
employment within the ninety (90) day period immediately following such event.  The events include: (i) a material
reduction in Executive’s authority, duties, and responsibilities; or a material
reduction in the authority, duties and responsibilities of the supervisor (Chief
Executive Officer) to whom Executive is required to report directly; (ii) Executive
is required to relocate his place of employment, other than a relocation within
fifty (50) miles of the Company’s Stamford offices, (iii) there is a material
reduction in  Executive’s Base Salary
other than any such reduction consistent with a general reduction of pay across
the executive staff as a group, as an economic or strategic measure due to poor
financial performance by the Company, (iv) any material breach by the
Company of Section 12(c)(i) of this Agreement, provided that a
Constructive Termination will not be deemed to have occurred if, within sixty
(60) days of a Change in Control, the Executive is offered an employment
contract by the new owner of the Company which is at least as economically favorable
to the Executive as this Agreement, or (v) there occurs any other material
breach of this Agreement by the Company, and, in addition to notifying the
Company of the existence of such breach as described above in this paragraph, a
written demand for substantial performance is delivered to the Company by
Executive which specifically identifies the manner in which Executive believes
that the Company has materially breached this Agreement.

 

(e)   Change
in Control.  “Change in Control”
shall have the same meaning as in Treas. Reg. §§ 1.409A-3(i)(5)(vi) and
1.409A-3(i)(5)(vii), except that for purposes of Treas. Reg. §
1.409A-3(i)(5)(vi)(1), the phrase “30 percent” shall be replaced with “50
percent”.

 

8.     Confidential
Information.

 

(a)   Executive
acknowledges that the Confidential Information relating to the business of the
Company and its subsidiaries which Executive has obtained or will obtain during
the course of his association with the Company and subsidiaries and his
performance under this Agreement is the property of the Company and its
subsidiaries.  Executive agrees that
Executive will not disclose or use at any time, either during or after the
Employment period, any Confidential Information without the written consent of
the Board of Directors of the Company, other than proper disclosure or use in
the performance of his duties hereunder. 
Executive agrees to deliver to the Company at the end of the then
applicable Employment Term, or at any other time that the Company may request,
all memoranda, notes, plans, records, documentation and other materials (and
copies thereof) containing Confidential Information relating to the business of
the Company and its subsidiaries, no matter where such material is located and
no matter what form the material may be in, which Executive may then possess or
have under his control.  If requested by
the Company, Executive shall provide to the Company written confirmation that
all such materials have been delivered to the Company or have been
destroyed.  Executive shall take all
appropriate steps to safeguard Confidential Information and to protect it
against disclosure, misuse, espionage, loss and theft.

 

(b)   “Confidential
Information” shall mean information which is not generally known to the
public and which is used, developed, or obtained by the Company or its
subsidiaries relating to 

 

12

 

the businesses of any of the Company and its subsidiaries or the
business of any customer thereof including, but not limited to:  pricing models; products or services; fees,
costs and pricing structure; designs; analyses; formulae; drawings;
photographs; reports; computer software, including operating systems,
applications, program listings, flow charts, manuals and documentation; databases;
accounting and business methods; inventions and new developments and methods,
whether patentable or unpatentable and whether or not reduced to practice; all
copyrightable works; the customers of any of the Company and its subsidiaries
and the Confidential Information of any customer thereof; and all similar and
related information in whatever form. 
Confidential Information shall not include any information which (i) was
rightfully known by Executive prior to the Employment Term; (ii) is
publicly disclosed by law or in response to an order of a court or governmental
agency; (iii) becomes publicly available through no fault of Executive, or
(iv) has been published in a form generally available to the public prior
to the date upon which Executive proposes to disclose such information.  Information shall not be deemed to have been
published merely because individual portions of the information have been
separately published, but only if all the material features comprising such
information have been published in combination.

 

9.     Intellectual
Property.  In the event that
Executive, as a part of Executive’s activities on behalf of the Company,
generates, authors or contributes to any invention, new development or method,
whether or not patentable and whether or not reduced to practice, any
copyrightable work, any trade secret, any other Confidential Information, or
any information that gives any of the Company and its subsidiaries an advantage
over any competitor, or similar or related developments or information related
to the present or future business of any of the Company and its subsidiaries
(collectively “Developments and Information”), Executive acknowledges
that all Developments and Information are “work for hire” and the exclusive
property of the Company.  Executive
hereby assigns to the Company, its nominees, successors or assigns, all rights,
title and interest to Developments and Information.  Executive shall cooperate with the Company’s
Board of Directors to protect the interests of the Company and its subsidiaries
in Developments and Information. 
Executive shall execute and file any document related to any
Developments and Information requested by the Company’s Board of Directors
including applications, powers of attorney, assignments or other instruments
which the Company’s Board of Directors deems necessary to apply for any patent,
copyright or other proprietary right in any and all countries or to convey any
right, title or interest therein to any of the Company’s nominees, successors
or assigns.

 

10.   No Conflicts.

 

(a)   Executive
agrees that in his individual capacity he will not enter into any agreement,
arrangement or understanding, whether written or oral, with any supplier,
contractor, distributor, wholesaler, sales representative, representative group
or customer, relating to the business of the Company or any of its
subsidiaries, without the express written consent of the Board.

 

(b)   As long as
Executive is employed by the Company or any of its subsidiaries, Executive
agrees that Executive will not, except with the express written consent of the
Board, become engaged in, render services for, or permit his name to be used in
connection with, any for-profit business other than the business of the
Company, any of its subsidiaries or any corporation or partnership in which the
Company or any of its subsidiaries have an equity interest.

 

13

 

11.   Non-Competition Agreement.

 

(a)   Executive
acknowledges that Executive services are of a special, unique and extraordinary
value to the Company and that Executive has access to the Company’s trade
secrets, Confidential Information and strategic plans of the most valuable
nature and develops goodwill on behalf of the Company.  Accordingly, Executive agrees that during the
Restricted Term (as defined below), Executive shall not directly or indirectly
own, manage, control, participate in, consult with, render strategic, executive
managerial sales, marketing, investment, financial, or other non-administrative
services for, or in any manner engage in any business Competing (as defined
below) with the businesses of the Company or any of its subsidiaries as such
businesses exist or are in process of development on the Termination Date (as
evidenced by written proposals, market research or similar materials).  A business is a Competing business if it
engages in the deregulated retail marketing of natural gas or electricity in
markets in which the Company has operated at any time during the two-year
period ending on the Termination Date, and shall not include any regulated
businesses.  Nothing herein shall
prohibit Executive from being a passive owner of not more than 3% of the
outstanding stock of any class of a corporation that is publicly traded, so
long as Executive has no active participation in the business of such
corporation.  For purposes of this
Agreement, the “Restricted Term” shall be the remainder of the then current
Employment Term.

 

(b)   In
addition, during the Restricted Term, Executive shall not (i) directly or
indirectly induce or attempt to induce any employee of the Company or any
subsidiary (other than his own assistant) to leave the employ of the Company or
such subsidiary, or in any way interfere with the relationship between the
Company or any subsidiary and any employee thereof, (ii) hire directly or
through another entity any person who was an employee of the Company or any
subsidiary at any time during the then preceding 12 months (unless such
employee contacts the Executive on an unsolicited basis), (iii) directly
or indirectly induce or attempt to induce any customer, supplier, licensee or
other business relation of the Company or any subsidiary to cease doing
business with the Company or such subsidiary, or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any subsidiary, or (iv) disparage the Company, its
executive officers, or its directors.

 

(c)   If any
court or tribunal of competent jurisdiction shall determine any of the foregoing
covenants to be unenforceable with respect to the term thereof or the scope of
the subject matter or geography covered thereby, such remaining covenants shall
nonetheless be enforceable by such court or tribunal against such other party
or parties or upon such shorter term or within such lesser scope as may be
determined by the court or tribunal to be enforceable.

 

(d)   Because
Executive’s services are unique and because Executive has access to
Confidential Information and strategic plans of the Company of the most
valuable nature and will help the Company develop goodwill, the parties agree
that the covenants contained in this Section 11 are necessary to protect
the value of the business of the Company and that a breach of any such covenant
would result in irreparable and continuing damage for which there would be no
adequate remedy at law.  The parties
agree therefore that in the event of a breach or threatened breach of this
Agreement, the Company or its successors or assigns may, in addition to other
rights and remedies existing in their favor, apply to any court of competent
jurisdiction for specific performance and/or injunctive or other relief in
order to enforce, or prevent any violations of, the provisions hereof.  The 

 

14

 

parties further agree that in the event the Company is granted any such
injunctive or other relief, the Company shall not be required to post any bond
or security that may otherwise normally be associated with such relief.

 

12.   Miscellaneous Provisions.

 

(a)   Notice.  Notices and all other communications
contemplated by this Agreement shall be in writing, shall be effective when
given, and in any event shall be deemed to have been duly given (i) when
delivered, if personally delivered, (ii) three (3) business days
after deposit in the U.S. mail, if mailed by U.S. registered or certified mail,
return receipt requested, or (iii) one (1) business day after the
business day of deposit with Federal Express or similar overnight courier, if
so delivered, freight prepaid.  In the
case of Executive, notices shall be addressed to him at the home address which
he most recently communicated to the Company in writing.  In the case of the Company, notices shall be
addressed to its corporate headquarters, and all notices shall be directed to
the attention of its Corporate Secretary.

 

(b)   Notice
of Termination.  Any termination by
the Company or Executive shall be communicated by a notice of termination to
the other party hereto given in accordance with paragraph (a) hereof.  Such notice shall indicate the specific
termination provision in this Agreement relied upon.

 

(c)   Successors.

 

(i)    Company’s
Successors.  Any successor to the
Company (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company’s business and/or assets shall be entitled to assume the rights and
shall be obligated to assume the obligations of the Company under this
Agreement and shall agree to perform the Company’s 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 the assumption agreement described in this
subsection (i) 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, distributees, devisees and
legatees.

 

(iii)  No
Other Assignment of Benefits.  Except
as provided in this Section 12(c), 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 (iii) shall
be void.

 

(d)   Waiver.  No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by Executive and by 

 

15

 

an authorized officer of the Company (other than Executive).  No waiver by either party of any breach of,
or of compliance with, any condition or provision of this Agreement by the
other party shall be considered a waiver of any other condition or provision or
of the same condition or provision at another time.

 

(e)   Entire
Agreement.  This Agreement shall
supersede any and all prior agreements, representations or understandings
(whether oral or written and whether express or implied) between the parties
with respect to the subject matter hereof.

 

(f)    Severability.  The invalidity or unenforceability of any
provision 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.

 

(g)   Arbitration.  Except for injunctive or other equitable
relief in aid of arbitration, any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in Stamford,
Connecticut, 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.  All attorneys fees and costs shall be
allocated or apportioned as agreed by the parties or, in the absence of an
agreement, in such manner as the arbitrator or court shall determine to be
appropriate to reflect the final decision of the deciding body as compared to
the initial positions in arbitration of each party.  THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
AS THEY APPLY TO CONTRACTS ENTERED INTO AND WHOLLY TO BE PERFORMED WITHIN SUCH
STATE BY RESIDENTS THEREOF.

 

(h)   Withholding
of  Taxes.  All payments made pursuant to this Agreement
will be subject to withholding of applicable taxes.

 

(i)    Indemnification.  Executive will be covered under the Company’s
insurance policies and, subject to applicable law, will be provided
indemnification to the maximum extent permitted by the Company’s bylaws and
Certificate of Incorporation, with such insurance coverage and indemnification
to be in accordance with the Company’s standard practices for senior executive
officers but on terms no less favorable than provided to any other Company
senior executive officer or director. 
Indemnification shall not be awarded for any conduct that is found to be
breach by a Court or tribunal of competent jurisdiction to violate this
agreement.

 

(j)    Compliance
with Company Policies.  During the
Employment Term, Executive will comply with all Company policies generally
applicable to the Company’s employees and senior executives.

 

(k)   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.

 

(l)    Non-Disclosure.  Unless required by law or to enforce this
Agreement, the parties hereto shall not disclose the existence of this
Agreement or the underlying terms to any third party, other than their
representatives who have a need to know such matters.

 

16

 

(m)   Legal
Fees.  The Company shall pay the
reasonable legal fees incurred by the Executive in connection with the
negotiation of this Agreement in an amount not to exceed $12,500.

 

17

 

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 day and year first
above written.

 

 

	
   

  	
  MxENERGY INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Jeffrey A. Mayer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Chaitu Parikh

  	
   

  
	
   

  	
   

  	
   

  	
  Chaitu Parikh

  	
   

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

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