Document:

Exhibit 10.18

 

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is dated January 3, 2016 by and between Telkonet,
Inc, a Utah corporation ("Telkonet" or "Company") and Jeffrey Sobieski ("Executive").

 

WHEREAS,
Executive and the Company previously entered into an employment agreement dated as of May 1, 2015 (the ''Prior Employment
Agreement");

 

WHEREAS,
the Company and the Executive desire to amend and restate the Prior Employment Agreement on the terms and conditions
set forth herein;

 

WHEREAS,
Telkonet desires to employ Executive and to secure for itself the experience, abilities and services of Executive in
the capacity of Chief Technology Officer of Telkonet upon the terms and conditions specified herein; and

 

WHEREAS,
Executive will continue to provide services to Telkonet, now pursuant to the terms of this Agreement, which will supersede
and replace the Prior Employment Agreement.

 

NOW,
THEREFORE, in consideration of the mutual covenants contained herein, and for such other good and valuable consideration,
the receipt and sufficiency of which are hereby conclusively acknowledged, the parties, intending to be legally bound, agree as
follows:

 

1.                
Duties and Scope of Employment.

 

		(a)	Positions
                                         and Duties. Telkonet hereby employs Executive in the capacity of Chief Technology
                                         Officer of Telkonet to perform such executive, management and administrative services
                                         and other customary duties consistent with Executive's position as a senior executive
                                         officer within the Company as set forth in the Telkonet by-laws and as Telkonet, by action
                                         of its Chief Executive Officer and Board of Directors ("Board"), may request
                                         from time to time.

 

		(b)	Location. Executive's place of work shall be 20800
Swenson Dr., Suite 175, Waukesha, WI 53186. The Company shall be entitled to require the Executive to travel to work at such other
places as business needs require.

 

2.                
Term. The Initial Term of the Executive's employment hereunder (the "Initial Term") shall commence
on January 3, 2016 (the "Effective Date"), and will continue for one (1) year from the Effective Date. If neither the
Company nor the Executive has provided the other with written notice of an intention to terminate this Agreement at least thirty
(30) days before the end of the Initial Term (or any subsequent renewal period), this Agreement will automatically renew for a
twelve (12) month period. For purposes of this Agreement, the word "Term" means the Initial Term and any renewal period
pursuant to the preceding sentence and any extension pursuant to clause (ii) of the following sentence. Notwithstanding the preceding
sentences (i) this Agreement may be terminated earlier as provided pursuant to
Section 6 and (ii) if a Sale of the Company occurs during the Term, then the Term shall not end before the first anniversary
of the date of the Sale of the Company. For purposes of this Agreement, the term "Sale of the Company" means any transaction
or related series or combination of transactions whereby, directly or indirectly, control of a majority (defined as greater than
50% of the outstanding voting capital stock of Company) of the equity interests of Company (or any direct or indirect parent of
Company), or the majority of Company's business or assets is acquired, leased or licensed by a third party in a sale or exchange
of stock, merger or consolidation, sale, lease or license of assets or joint venture (regardless of whether Company has control
of said joint venture or is a minority owner), including by way of an exchange or tender offer, a leveraged buyout, a recapitalization,
restructuring or reorganization of Company.

 

 

 

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3.                 
Extent of Services. During the Term and any extension thereof, Executive shall devote his full time,
ability, attention and efforts to the performance, to the best of his abilities, of such duties and responsibilities, as described
in Section 1 above, and as the Chief Executive Officer shall determine, consistent therewith.

 

4.                  
Compensation.

 

		(a)	Salary. Executive shall be paid $201,575.00 on an
annualized basis in accordance with Telkonet's normal payroll practices, and be subject to all lawfully required withholdings.
The base salary may be increased, at any time, as determined by the Chief Executive Officer and the Board.

 

		(b)	Annual
                                         Performance Bonus. The Chief Executive Officer, the Board and the Executive will
                                         agree upon terms and conditions. The actual annual performance bonus amount will be based
                                         on metrics provided by the Board of Directors.

 

		(c)	Bonuses Upon Sale of the Subsidiary and/or Sale of the
Company. In the event of the Sale of the Subsidiary and/or the Sale of the Company (as defined in the Exhibit
A attached hereto), Executive shall be entitled to a bonus pursuant to the terms and conditions set forth in Exhibit
A.  ·

 

		(d)	Executive Participation in Telkonet Staff Benefits Plans.
During the Term, Executive shall be entitled to participate in any group health programs and other benefit plans, which may be
instituted from time-to time for Telkonet employees, and for which Executive qualifies under the terms of such plans. All such
benefits shall be provided on the same terms and conditions as generally apply to all other Telkonet employees under these plans
and may be modified by Telkonet from time-to-time.

 

		(e)	Expenses. Executive shall be reimbursed by Telkonet
for all ordinary, reasonable, customary and necessary expenses incurred by him in the performance of his duties and responsibilities.
Executive agrees to prepare documentation for such expenses as may be necessary for Telkonet to comply with the applicable rules
and regulations of the Internal Revenue Service and Telkonet's existing policy. Telkonet will provide a stipend equal to $323
per pay period to Executive for the purpose of obtaining an auto for the Executive's business use.

 

		(f)	Equity. Executive is eligible to participate in
the Company's Employee Stock Option Plan, in accordance with the terms of such plan and awards as granted by the Compensation
Committee of the Board.

 

		(g)	Stock Option. Upon execution of this Agreement (the
"Execution Date"), Executive shall receive a grant of One Million (1,000,000) stock options (the "Stock Options''),
subject to Executive's execution of a Stock Option Agreement, and granted pursuant to the Company's Employee Stock Option Plan.
The Stock Options shall be granted at fair market value as of the date of this Agreement, and shall vest over a three (3) year
period, with 33% of the shares vesting on the twelve (12) month anniversary of the Execution Date, 33% of the shares vesting on
the twenty-four (24) month anniversary of the Execution Date, and the remaining 34% of the shares 011
the thirty-six (36) month anniversary of the Execution Date.. Provided, however, that 100% of the Stock Options shall immediately
vest upon the Sale of the Subsidiary or the Sale of the Company (as those terms are defined in Exhibit
A), regardless of whether Executive remains employed by Telkonet as of the date of such sale. Executive shall have
twelve (12) months from the date of termination of his employment with the Company to exercise any Stock Options.

 

 

 

 

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5.                 
Vacation. At full pay and without any adverse effect to his compensation, provided that all other terms
and conditions of this Agreement are satisfied, Executive shall be entitled to five (5) weeks of vacation for each full calendar
year during the term of this Agreement. Executive agrees to schedule his vacation leave in advance upon written notice to Chief
Executive Officer or other designated individuals. Carryover of vacation days shall be consistent with Company's existing policy.

 

6.                
Termination. This Agreement shall terminate in accordance with Section 2 of this Agreement, or upon the
first to occur of any of the following events:

 

		(a)	The death of Executive.

 

		(b)	The mutual consent of Executive and Telkonet. Executive
shall then receive (i) an amount equal to Executive's base salary for the period starting 011 the
first day after the termination and ending upon the twelve (12) month anniversary date of the termination in accordance with the
Company's payroll schedule applicable to all employees and (ii) if the Executive elects to
participate, in a timely manner, in the Company's group health insurance plan in accordance with the mandates of the Consolidated
Onmibus Reconciliation Act of 1985, as amended ("COBRA"), the Company will, pay for any applicable health insurance
premiums for such COBRA coverage, for a period starting 011 the first day after the termination
and ending upon the twelve (12) month anniversary date of the termination. If the Executive
becomes eligible for similar benefits from another employer, Telkonet will reimburse Executive for the Employee's share of current
employer's health insurance premium ending upon the twelve (12) month anniversary date of the termination; should the Executive
wish to continue COBRA coverage after the period of time during which the Company has agreed to pay the normal employer's share
of COBRA coverage, the Executive agrees and acknowledges that he will
be solely responsible for payment of any amounts required by the Company to continue health insurance coverage in accordance
with COBRA. The Executive agrees to notify the Company in the event he obtains other health insurance coverage within ten (10)
business days of becoming eligible for such coverage.

 

		(c)	"Cause" exists for termination. For purposes
of this Agreement, "cause" shall mean the occurrence of any of the following: (1) theft, fraud, embezzlement, or any
other act of intentional dishonesty by Executive; (2) any material breach by Executive of any provision of this Agreement which
breach is not cured within a reasonable time (but not to exceed fourteen (14) days) after written notification thereof to Executive
by Telkonet; (3) any habitual neglect of duty or misconduct of Executive in discharging any of his duties and responsibilities
under this Agreement after a written demand for performance was delivered to Executive that specifically identified the matter
in which the Board believed the Executive had failed to discharge his duties and responsibilities, and the Executive failed to
resume substantial performance of such duties and responsibilities on a continual basis immediately following such demand; (4)
commission by Executive of a felony or any offense involving moral turpitude; or (5) any default of Executive's obligations hereunder,
or any failure or refusal of Executive to comply with the policies, rules and regulations of Telkonet generally applicable to
Telkonet employees, which default, failure or refusal is not cured within a reasonable time (but not to exceed fourteen (14) days)
after written notification thereof to Executive by Telkonet. If cause exists for termination, Executive shall be entitled to no
further compensation, except for accrued leave and vacation and except as may be required by applicable law.

 

		(d)	"Good reason" exists
for Executive to terminate his employment with Telkonet. For purposes of this Agreement, "good reason" shall mean the
occurrence of any of the following: (1) any material adverse reduction in the scope of Executive's authority or responsibilities;
(2) any reduction in the amount of Executive's compensation or participation in any employee benefits; or (3) Executive's principal
place of employment is actually or constructively moved to any office or other location 75 miles or more outside of Milwaukee,
WI. If Executive terminates his employment with Telkonet for "good reason," then,
upon notice to Telkonet by Executive of such termination, Telkonet shall continue to pay Executive's base salary and provide Executive
with continued participation in each employee benefit plan, in accordance with the mandates of COBRA (see Section 6.(b)(ii)),
in which Executive participated immediately prior to the termination date for the period starting on the first day after the termination
date and ending upon expiration of the Term, or if such period is less than twelve (12) months, for a period of twelve (12) months
from such notice.

 

 

 

 

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		(e)	If
Executive is terminated by Telkonet for any reason other than for "cause", unless such termination occurs in
connection with the Sale of the Company as defined in the attached Exhibit A, Executive shall receive: (i) an amount equal
to Executive's base salary for the period starting on the first day after the termination and ending upon the twelve (12) month
anniversary date of the termination in accordance with the Company's payroll schedule applicable to all employees and (ii)
pay for any applicable health insurance premiums, in accordance with the mandates of COBRA (see
Section 6.(b)(ii)), for a period starting on the first day after the termination and ending upon the twelve (12) month anniversary
date of the termination. If the Executive becomes eligible for
similar benefits from another employer, Telkonet will reimburse Executive for the Employee's share of current employer's health
insurance premium ending upon the twelve (12) month anniversary date of the termination.

 

		(f)	In the event of a termination
under (a), (b), (c) or (d) of this paragraph 6, within thirty (30) days of the separation date, Telkonet shall make a lump sum
payment of any back pay, Executive loans or defendants then due and owing. Notwithstanding anything to the contrary herein, this
Agreement shall not terminate or expire under (e) of this paragraph six unless and until (iii) Executive
is reimbursed for any back pay, Executive loans or deferments then due and owing.

 

		(g)	If Executive's employment
terminates by reason of death or disability, then (i) Executive will be entitled to receive benefits only in accordance with the
Company's then applicable plans, policies, and arrangements.

 

		(h)	Separation Agreement and
Release of Claims. The receipt of any severance pursuant to this Agreement will be subject to Executive signing and not revoking
a separation agreement and release of claims (the "Release") in a form reasonably acceptable to the Company, which becomes
effective within thirty (30) days following Executive's separation from service. The Release will
provide (among other things) that Executive will not disparage the Company, its directors,
or its executive officers for 12 months following the date of termination and the Company will instruct its officers and directors
not to disparage the Executive. No severance pursuant to this Agreement will be paid or provided until the Release becomes effective.

 

		(i)	No Duty to Mitigate. Executive will not be required to
mitigate the amount of any payment contemplated by this Agreement, nor will any earnings that Executive may receive from any other
source reduce any such payment.

 

		(j)	No-Inducement. In the event of a termination of
Executive's employment that otherwise would entitle Executive to the receipt of severance and other benefits pursuant to this
Agreement, Executive agrees that as a condition to receipt of such severance, during the 12 month period following termination
of employment, Executive, directly or indirectly, whether as employee, owner, sole proprietor, partner, director, founder or otherwise,
will not, solicit, induce, or influence any person to modify their employment or consulting relationship With the Company (the
"No Inducement"). If Executive breaches the No-Inducement, all payments and benefits to which Executive otherwise may
be entitled pursuant to this Section 6 will cease immediately.

 

7.                 
Surrender of Books and Papers. Upon termination of this Agreement
(irrespective of the time, manner, or cause of termination, be it for cause or otherwise), Executive shall immediately surrender
to Telkonet all books, records, or other written papers or documents entrusted to him or which he has otherwise acquired pertaining
to Telkonet and all other Telkonet property in Executive's possession, custody or control.

 

 

 

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8.                 
Inventions and Patents. Executive agrees that Executive will promptly, from time-to time, fully inform
and disclose to Telkonet any and all ideas, concepts, copyrights, copyrightable material, developments, inventions, designs, improvements
and discoveries of whatever nature that Executive may have or produced during the term of Executive's employment under this Agreement
that pertain or relate to the then current business of Telkonet (the "Creations"), whether conceived by Executive alone
or with others and whether or not conceived during regular working hours. All Creations shall be the exclusive property of Telkonet
and shall be "works made for hire" as defined in 17 U.S.C. §101, and Telkonet shall own all rights in and to the
Creations throughout the world, without payment of royalty or other consideration to Executive or anyone claiming through Executive.
Executive hereby transfers and assigns to Telkonet (or its designee) all right, title and interest in and to every Creation. Executive
shall assist Telkonet in obtaining patents or copyrights on all such inventions, designs, improvements and discoveries being patentable
or copyrightable by Executive or Telkonet and shall execute all documents and do all things reasonably necessary (at Tekonet's
sole cost and expense) to obtain letters of patent or copyright, vest Telkonet with full and exclusive title thereto, and protect
the same against infringement by third parties, and such assistance shall be given by Executive, if needed, after termination
of this Agreement for whatever cause or reason. Executive hereby represents and warrants that Executive has no current or future
obligation with respect to the assignment or disclosure of any or all developments, inventions, designs, improvements and discoveries
of whatever nature to any previous Employer, entity or other person and that Executive does not claim any rights or interest in
or to any previous unpatented or uncopyrighted developments, inventions, designs, improvements or discoveries.

 

9.
                 Trade Secrets, Non-Competition
and Non-Solicitation.

 

		(a)	Trade Secrets. Contemporaneous
with the execution of this Agreement and during the term of employment under this Agreement, Telkonet shall deliver to Executive
or permit Executive to have access to and become familiar with various confidential information and trade secrets of Telkonet,
including without limitation, data, production methods, customer lists, product format or developments, other information concerning
the business of Telkonet and other unique processes, procedures, services and products of Telkonet, which are regularly used in
the operation of the business of Telkonet (collectively, the "Confidential Information''). For purposes of the preceding
sentence, information is not treated as being Confidential Information if it: (i) is or becomes generally available to the public
other than by Executive in violation of this Agreement; (ii) is obtained by Executive in good faith from a third party who discloses
such information to Executive on a non-confidential basis without violating any obligation of confidentiality or secrecy relating
to the information disclosed; (iii) is independently developed by Executive outside the scope of his employment without use of
Confidential Information; or (iv) is Executive's personnel information. Executive shall not disclose any of the Confidential Information
that he receives from Telkonet or their clients and customers in the course of his employment with Telkonet, directly or indirectly,
nor use it in any way, either during the term of this Agreement or for a period of five (5) years thereafter, except as required
in the course of employment with Telkonet. Executive further acknowledges and agrees that Executive owes Telkonet, a fiduciary
duty to preserve and protect all Confidential Information from unauthorized disclosure or unauthorized use. All files, records,
documents, drawings, graphics, processes, specifications, equipment and similar items relating to the business of Telkonet, whether
prepared by Executive or otherwise coming into Executive's possession in the course of his employment with Telkonet, shall remain
the exclusive property of Telkonet and shall not be removed from the premises of Telkonet without the prior written consent of
Telkonet unless removed in relation to the performance of Executive’s duties under this. Agreement. Any such files, records,
documents, drawings, graphics, specifications, equipment and similar items, and any and all copies of such materials which have
been removed from the premises of Telkonet, shall be returned by Executive to Telkonet. For purposes of this Section 9, "Telkonet"
means Telkonet, Inc., including its subsidiaries and affiliates and all successors and predecessors in interest to Telkonet.

		(b)	Non-Competition. Executive
acknowledges that he will be provided with and have access to the Confidential Information, the unauthorized use or disclosure
of which would cause irreparable injury to Telkonet, that Telkonet's willingness to enter into this Agreement is based
in material part on Executive's agreement to the provisions of this Section 9(b) and that Executive's breach of the provisions
of this Section would materially and irreparably damage Telkonet. In consideration for Telkonet's disclosure of Confidential Information
to Executive, Executive's access to the Confidential Information, and the salary paid to executive hereunder, Executive agrees
that during the term of Executive's employment under this Agreement and for one (1) year after the termination of Executive's
employment and regardless whether such termination is with or without cause, Executive shall not, directly or indirectly, either
as an executive, employee, employer, consultant, agent, principal, partner, stockholder, corporate officer, director, advisor
or in any other individual or representative capacity, engage or participate in any business
that is in competition in any manner whatsoever with the Restricted Business (as defined herein) in North America. "Restricted
Business" means any business conducted by Telkonet at the time of separation of the Executive from Telkonet.

 

 

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		(c)	Reasonableness of Restrictions. Executive acknowledges
that the restrictions set forth in Section 9(b) of this Agreement are reasonable in scope and necessary for the protection
of the business and goodwill of Telkonet. Executive agrees that should any portion of the covenants in Section 9 be unenforceable
because of the scope thereof or the period covered thereby or otherwise, the covenant shall be deemed to be reduced and limited
to enable it to be enforced to the maximum extent permissible under the laws and public policies applied in the jurisdiction in
which enforcement is sought.

 

		(d)	Injunctive Relief; Extension of Restrictive Period.
In the event of a breach of any of the covenants, by Executive or Telkonet contained in this Agreement, it is understood that
damages will be difficult to ascertain, and either party may petition a court of law or equity for injunctive relief in addition
to any other relief which Executive or Telkonet may have under the law, including but not limited to reasonable attorneys' fees.

 

10.             
Indemnification and Insurance. 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, Certificate of Incorporation,
and standard form of Indemnification Agreement, 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.

 

11.              
Miscellaneous.

 

		(a)	This Agreement shall be binding upon the parties and their
respective heirs, executors, administrators, successors and assigns. Executive shall not assign any part of his rights under this
Agreement without the prior written consent of Telkonet.

 

		(b)	This Agreement contains the entire agreement and understanding
between the parties and supersedes any and all prior understandings and agreements between the parties regarding Executive's employment.

 

		(c)	No modification hereof shall be binding unless made in
writing and signed by the party against whom enforcement is sought. No waiver of any provisions of this Agreement shall be valid
unless the same is in writing and signed by the party against whom it is sought to be enforced, unless it can be shown through
custom, usage or course of action.

 

		(d)	This Agreement is executed in, and it is the intention
of the parties hereto that it shall be governed by, the laws of the State of Wisconsin without giving effect to applicable conflict
of laws provisions.

 

		(e)	The provisions of this Agreement shall be deemed to be
severable, and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other
provisions hereof.

 

 

 

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		(f)	Any notice or communication permitted or required by this
Agreement shall be in writing and shall become effective upon personal service, or service by wire transmission, which has been
acknowledged by the other party as being received, or two (2) days after its mailing by certified mail, return receipt requested,
postage prepaid addressed as follows;

 

		(1)	If to Telkonet:

 

Attn; Chief Executive
Officer

20800 Swenson Dr., Suite
175

Waukesha, WI 53186.

 

		(2)	If to Executive:

 

To
the last residential address known

by the Company as provided by

Executive in writing.

 

		(g)	Acknowledgment. Executive acknowledges that he has
had the opportunity to discuss this matter with and obtain advice from his private attorney, has had sufficient time to, and has
carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this
Agreement.

		(h)	Counterparts. This Agreement may be executed in
counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding
agreement on the part of each of the undersigned.

 

 

 

 

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IN WITNESS WHEREOF,
Telkonet and Executive have executed this Agreement as of the date first set forth above.

 

	TELKONET,INC.	 	EXECUTIVE
	 	 	 	 
	By:	/s/ Jason L. Tienor	 	/s/ Jeffrey Sobieski
	 	Jason L. Tienor	 	Jeffrey Sobieski
	 	Chief Executive Officer	 	 
	 	 	 	 
	 	 	 	 
	Date:	January 3, 2017	 	Date: 1-3-17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page- Employment Agreement]

 

 

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EXHIBIT
A

 

1.           
Bonus Upon Sale of the Subsidiary. Contemporaneously with Telkonet's consummation
of any Sale of the Subsidiary (as defined below), and conditioned upon the Sale of the Subsidiary resulting in a purchase price
(before any closing costs or working capital adjustments) equal to or greater than Twelve Million Five Hundred Thousand Dollars
($12,500,000) and Executive remaining employed by Telkonet through at least the date of the Sale of the Subsidiary, Executive shall
be entitled to a base bonus of Twenty-Five Thousand Dollars ($25,000) plus one third of five percent of each dollar in excess of
a purchase price of Twelve Million Five Hundred Thousand Dollars ($12,500,000). For purposes of this Agreement, a "Sale of
the Subsidiary'' means any transaction or related series or combination of transactions whereby, directly or indirectly, control
of a majority (defined as greater than 50%) of the outstanding voting capital stock of EthoStream LLC or the equity interests of
EthoStream LLC, or the majority of EthoStream LLC's business or assets is acquired, leased or licensed to a third party in a sale
or exchange of stock, merger or consolidation, sale, lease or license of assets or joint venture (regardless of whether EthoStream
LLC has control of said join venture or is a minority owner), including by way of an exchange or tender offer, a leveraged buyout,
a recapitalization, restructuring or reorganization of EthoStream LLC. For the avoidance of doubt, an example of the bonus calculation
identified in this paragraph is set forth below:

 

	Examples	 
	(all numbers in $000s)	 
	Sales Price	 	$	12,400	 	 	$	12,500	 	 	$	13,000	 	 	$	13,500	 	 	$	14,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Base Bonus (Total for All Executives)	 	 	 	 	 	$	75.0	 	 	$	75.0	 	 	$	75.0	 	 	$	75.0	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Over-performance Bonus (Total for All Executives)	 	 	 	 	 	 	 	 	 	$	25.0	 	 	$	50.0	 	 	$	75.0	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total Bonus Paid to All Executives by Company	 	 	 	 	 	$	75.0	 	 	$	100.0	 	 	$	125.0	 	 	$	150.0	 
	% Sales Price	 	 	NA	 	 	 	0.6%	 	 	 	~0.8%	 	 	 	~0.9%	 	 	 	~1.0%	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Per Executive	 	 	 	 	 	$	25.0	 	 	$	33.3	 	 	$	41.7	 	 	$	50.0	 

 

 

2.                 
Bonus for Events After Sale of the Subsidiary. After the Sale of the Subsidiary, the Company may pay Executive a
bonus for additional Company related events that Executive may be involved with following the Sale of the Subsidiary.

 

3.                  Bonus
Upon Sale of the Company. Contemporaneously with Telkonet's consummation of any Sale of the Company (as defined below),
and conditioned upon Executive remaining employed by Telkonet through at least the date of the Sale of the Company,
Company shall pay Executive a base bonus equal to six (6) months of Executive's then current base salary, plus two percent
(2%) of each dollar in excess of a purchase price of Twenty Seven Million Dollars ($27,000,000). Such bonus shall be paid in
one lump sum upon the closing of that transaction. For purposes of this Agreement, the term "Sale of the Company"
means any transaction or related series or combination of transactions whereby, directly or indirectly, control of a majority
(defined as greater than 50% of the outstanding voting capital stock of Company) of the equity interests of Company (or any
direct or indirect parent of Company), or the majority of Company's business or assets is acquired, leased or licensed by a
third party in a sale or exchange of stock, merger or consolidation, sale, lease or license of assets or joint venture
(regardless of whether Company has control of said joint venture or is a minority owner), including by way of an exchange or
tender offer, a leveraged buyout, a recapitalization, restructuring or reorganization of Company.

 

 

 

 

 

    	 	9Exhibit 10.19

 

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is dated January 3, 2016 by and between Telkonet,
Inc, a Utah corporation ("Telkonet" or "Company") and Matthew P. Koch ("Executive").

 

WHEREAS,
Executive and the Company previously entered into an employment agreement dated as of May 1, 2015 (the ''Prior Employment
Agreement");

 

WHEREAS,
the Company and the Executive desire to amend and restate the Prior Employment Agreement on the terms and conditions
set forth herein;

 

WHEREAS,
Telkonet desires to employ Executive and to secure for itself the experience, abilities and services of Executive in
the capacity of Chief Operations Officer of Telkonet upon the terms and conditions specified herein; and

 

WHEREAS,
Executive will continue to provide services to Telkonet, now pursuant to the terms of this Agreement, which will supersede
and replace the Prior Employment Agreement.

 

NOW,
THEREFORE, in consideration of the mutual covenants contained herein, and for such other good and valuable consideration,
the receipt and sufficiency of which are hereby conclusively acknowledged, the parties, intending to be legally bound, agree as
follows:

 

1.                
Duties and Scope of Employment.

 

		(a)	Positions
                                         and Duties. Telkonet hereby employs Executive in the capacity of Chief Operations
                                         Officer of Telkonet to perform such executive, management and administrative services
                                         and other customary duties consistent with Executive's position as a senior executive
                                         officer within the Company as set forth in the Telkonet by-laws and as Telkonet, by action
                                         of its Chief Executive Officer and Board of Directors ("Board"), may request
                                         from time to time.

 

		(b)	Location. Executive's place of work shall be 20800
Swenson Dr., Suite 175, Waukesha, WI 53186. The Company shall be entitled to require the Executive to travel to work at such other
places as business needs require.

 

2.                
Term. The Initial Term of the Executive's employment hereunder (the "Initial Term") shall commence
on January 3, 2016 (the "Effective Date"), and will continue for one (1) year from the Effective Date. If neither the
Company nor the Executive has provided the other with written notice of an intention to terminate this Agreement at least thirty
(30) days before the end of the Initial Term (or any subsequent renewal period), this Agreement will automatically renew for a
twelve (12) month period. For purposes of this Agreement, the word "Term" means the Initial Term and any renewal period
pursuant to the preceding sentence and any extension pursuant to clause (ii) of the following sentence. Notwithstanding the preceding
sentences (i) this Agreement may be terminated earlier as provided pursuant to
Section 6 and (ii) if a Sale of the Company occurs during the Term, then the Term shall not end before the first anniversary
of the date of the Sale of the Company. For purposes of this Agreement, the term "Sale of the Company" means any transaction
or related series or combination of transactions whereby, directly or indirectly, control of a majority (defined as greater than
50% of the outstanding voting capital stock of Company) of the equity interests of Company (or any direct or indirect parent of
Company), or the majority of Company's business or assets is acquired, leased or licensed by a third party in a sale or exchange
of stock, merger or consolidation, sale, lease or license of assets or joint venture (regardless of whether Company has control
of said joint venture or is a minority owner), including by way of an exchange or tender offer, a leveraged buyout, a recapitalization,
restructuring or reorganization of Company.

 

 

 

    	 	1	 

     

    

 

3.                 
Extent of Services. During the Term and any extension thereof, Executive shall devote his full time,
ability, attention and efforts to the performance, to the best of his abilities, of such duties and responsibilities, as described
in Section 1 above, and as the Chief Executive Officer shall determine, consistent therewith.

 

4.                  
Compensation.

 

		(a)	Salary. Executive shall be paid $143,900.00 on an
annualized basis in accordance with Telkonet's normal payroll practices, and be subject to all lawfully required withholdings.
The base salary may be increased, at any time, as determined by the Chief Executive Officer and the Board.

 

		(b)	Annual
                                         Performance Bonus. The Chief Executive Officer, the Board and the Executive will
                                         agree upon terms and conditions. The actual annual performance bonus amount will be based
                                         on metrics provided by the Board of Directors.

 

		(c)	Bonuses Upon Sale of the Subsidiary and/or Sale of the
Company. In the event of the Sale of the Subsidiary and/or the Sale of the Company (as defined in the Exhibit
A attached hereto), Executive shall be entitled to a bonus pursuant to the terms and conditions set forth in Exhibit
A.  ·

 

		(d)	Executive Participation in Telkonet Staff Benefits Plans.
During the Term, Executive shall be entitled to participate in any group health programs and other benefit plans, which may be
instituted from time-to time for Telkonet employees, and for which Executive qualifies under the terms of such plans. All such
benefits shall be provided on the same terms and conditions as generally apply to all other Telkonet employees under these plans
and may be modified by Telkonet from time-to-time.

 

		(e)	Expenses. Executive shall be reimbursed by Telkonet
for all ordinary, reasonable, customary and necessary expenses incurred by him in the performance of his duties and responsibilities.
Executive agrees to prepare documentation for such expenses as may be necessary for Telkonet to comply with the applicable rules
and regulations of the Internal Revenue Service and Telkonet's existing policy. Telkonet will provide a stipend equal to $323
per pay period to Executive for the purpose of obtaining an auto for the Executive's business use.

 

		(f)	Equity. Executive is eligible to participate in
the Company's Employee Stock Option Plan, in accordance with the terms of such plan and awards as granted by the Compensation
Committee of the Board.

 

		(g)	Stock Option. Upon execution of this Agreement (the
"Execution Date"), Executive shall receive a grant of One Million (1,000,000) stock options (the "Stock Options''),
subject to Executive's execution of a Stock Option Agreement, and granted pursuant to the Company's Employee Stock Option Plan.
The Stock Options shall be granted at fair market value as of the date of this Agreement, and shall vest over a three (3) year
period, with 33% of the shares vesting on the twelve (12) month anniversary of the Execution Date, 33% of the shares vesting on
the twenty-four (24) month anniversary of the Execution Date, and the remaining 34% of the shares 011
the thirty-six (36) month anniversary of the Execution Date.. Provided, however, that 100% of the Stock Options shall immediately
vest upon the Sale of the Subsidiary or the Sale of the Company (as those terms are defined in Exhibit
A), regardless of whether Executive remains employed by Telkonet as of the date of such sale. Executive shall have
twelve (12) months from the date of termination of his employment with the Company to exercise any Stock Options.

 

 

 

 

    	 	2	 

     

    

 

5.                 
Vacation. At full pay and without any adverse effect to his compensation, provided that all other terms
and conditions of this Agreement are satisfied, Executive shall be entitled to five (5) weeks of vacation for each full calendar
year during the term of this Agreement. Executive agrees to schedule his vacation leave in advance upon written notice to Chief
Executive Officer or other designated individuals. Carryover of vacation days shall be consistent with Company's existing policy.

 

6.                
Termination. This Agreement shall terminate in accordance with Section 2 of this Agreement, or upon the
first to occur of any of the following events:

 

		(a)	The death of Executive.

 

		(b)	The mutual consent
of Executive and Telkonet. Executive shall then receive (i) an amount equal to Executive's base salary for the period starting
on the first day after the termination and ending upon the twelve (12) month anniversary
date of the termination in accordance with the Company's payroll schedule applicable to all employees and (ii)
if the Executive elects to participate, in a timely manner, in the Company's group health insurance plan in accordance
with the mandates of the Consolidated Omnibus Reconciliation Act of 1985, as amended ("COBRA"), the Company will, pay
for any applicable health insurance premiums for such COBRA coverage, for a period starting on the first day after the termination
and ending upon the twelve (12) month anniversary date of the termination. If the Executive
becomes eligible for similar benefits from another employer, Telkonet will reimburse Executive for the Employee's share of current
employer's health insurance premium ending upon the twelve (12) month anniversary date of the termination; should the Executive
wish to continue COBRA coverage after the period of time during which the Company has agreed to pay the normal employer's share
of COBRA coverage, the Executive agrees and acknowledges that he will
be solely responsible for payment of any amounts required by the Company to continue health insurance coverage in accordance
with COBRA. The Executive agrees to notify the Company in the event he obtains other health insurance coverage within ten (10)
business days of becoming eligible for such coverage.

 

		(c)	"Cause" exists for termination. For purposes
of this Agreement, "cause" shall mean the occurrence of any of the following: (1) theft, fraud, embezzlement, or any
other act of intentional dishonesty by Executive; (2) any material breach by Executive of any provision of this Agreement which
breach is not cured within a reasonable time (but not to exceed fourteen (14) days) after written notification thereof to Executive
by Telkonet; (3) any habitual neglect of duty or misconduct of Executive in discharging any of his duties and responsibilities
under this Agreement after a written demand for performance was delivered to Executive that specifically identified the manner
in which the Board believed the Executive had failed to discharge his duties and responsibilities, and the Executive failed to
resume substantial performance of such duties and responsibilities on a continual basis immediately following such demand; (4)
commission by Executive of a felony or any offense involving moral turpitude; or (5) any default of Executive's obligations hereunder,
or any failure or refusal of Executive to comply with the policies, rules and regulations of Telkonet generally applicable to
Telkonet employees, which default, failure or refusal is not cured within a reasonable time (but not to exceed fourteen (14) days)
after written notification thereof to Executive by Telkonet. If cause exists for termination, Executive shall be entitled to no
further compensation, except for accrued leave and vacation and except as may be required by applicable law.

 

		(d)	"Good reason" exists
for Executive to terminate his employment with Telkonet. For purposes of this Agreement, "good reason" shall mean the
occurrence of any of the following: (1) any material adverse reduction in the scope of Executive's authority or responsibilities;
(2) any reduction in the amount of Executive's compensation or participation in any employee benefits; or (3) Executive's principal
place of employment is actually or constructively moved to any office or other location 75 miles or more outside of Milwaukee,
WI. If Executive terminates his employment with Telkonet for "good reason," then,
upon notice to Telkonet by Executive of such termination, Telkonet shall continue to pay Executive's base salary and provide Executive
with continued participation in each employee benefit plan, in accordance with the mandates of COBRA (see Section 6.(b)(ii)),
in which Executive participated immediately prior to the termination date for the period starting on the first day after the termination
date and ending upon expiration of the Term, or if such period is less than twelve (12) months, for a period of twelve (12) months
from such notice.

 

 

 

 

    	 	3	 

     

    

 

		(e)	If
Executive is terminated by Telkonet for any reason other than for "cause", unless such termination occurs in
connection with the Sale of the Company as defined in the attached Exhibit A, Executive shall receive: (i) an amount equal
to Executive's base salary for the period starting on the first day after the termination and ending upon the twelve (12) month
anniversary date of the termination in accordance with the Company's payroll schedule applicable to all employees and (ii)
pay for any applicable health insurance premiums, in accordance with the mandates of COBRA (see
Section 6.(b)(ii)), for a period starting on the first day after the termination and ending upon the twelve (12) month anniversary
date of the termination. If the Executive becomes eligible for
similar benefits from another employer, Telkonet will reimburse Executive for the Employee's share of current employer's health
insurance premium ending upon the twelve (12) month anniversary date of the termination.

 

		(f)	In the event of a termination
under (a), (b), (c) or (d) of this paragraph 6, within thirty (30) days of the separation date, Telkonet shall make a lump sum
payment of any back pay, Executive loans or deferments then due and owing. Notwithstanding anything to the contrary herein, this
Agreement shall not terminate or expire under (e) of this paragraph six unless and until (iii) Executive
is reimbursed for any back pay, Executive loans or deferments then due and owing.

 

		(g)	If Executive's employment
terminates by reason of death or disability, then (i) Executive will be entitled to receive benefits only in accordance with the
Company's then applicable plans, policies, and arrangements.

 

		(h)	Separation Agreement and
Release of Claims. The receipt of any severance pursuant to this Agreement will be subject to Executive signing and not revoking
a separation agreement and release of claims (the "Release") in a form reasonably acceptable to the Company, which becomes
effective within thirty (30) days following Executive's separation from service. The Release will
provide (among other things) that Executive will not disparage the Company, its directors,
or its executive officers for 12 months following the date of termination and the Company will instruct its officers and directors
not to disparage the Executive. No severance pursuant to this Agreement will be paid or provided until the Release becomes effective.

 

		(i)	No Duty to Mitigate. Executive will not be required to
mitigate the amount of any payment contemplated by this Agreement, nor will any earnings that Executive may receive from any other
source reduce any such payment.

 

		(j)	No-Inducement. In the event of a termination of
Executive's employment that otherwise would entitle Executive to the receipt of severance and other benefits pursuant to this
Agreement, Executive agrees that as a condition to receipt of such severance, during the 12 month period following termination
of employment, Executive, directly or indirectly, whether as employee, owner, sole proprietor, partner, director, founder or otherwise,
will not, solicit, induce, or influence any person to modify their employment or consulting relationship with the Company (the
"No Inducement"). If Executive breaches the No-Inducement, all payments and benefits to which Executive otherwise may
be entitled pursuant to this Section 6 will cease immediately.

 

7.                 
Surrender of Books and Papers. Upon termination of this Agreement
(irrespective of the time, manner, or cause of termination, be it for cause or otherwise), Executive shall immediately surrender
to Telkonet all books, records, or other written papers or documents entrusted to him or which he has otherwise acquired pertaining
to Telkonet and all other Telkonet property in Executive's possession, custody or control.

 

 

 

    	 	4	 

     

    

 

8.                 
Inventions and Patents. Executive agrees that Executive will promptly, from time-to time, fully inform
and disclose to Telkonet any and all ideas, concepts, copyrights, copyrightable material, developments, inventions, designs, improvements
and discoveries of whatever nature that Executive may have or produced during the term of Executive's employment under this Agreement
that pertain or relate to the then current business of Telkonet (the "Creations"), whether conceived by Executive alone
or with others and whether or not conceived during regular working hours. All Creations shall be the exclusive property of Telkonet
and shall be "works made for hire" as defined in 17 U.S.C. §101, and Telkonet shall own all rights in and to the
Creations throughout the world, without payment of royalty or other consideration to Executive or anyone claiming through Executive.
Executive hereby transfers and assigns to Telkonet (or its designee) all right, title and interest in and to every Creation. Executive
shall assist Telkonet in obtaining patents or copyrights on all such inventions, designs, improvements and discoveries being patentable
or copyrightable by Executive or Telkonet and shall execute all documents and do all things reasonably necessary (at Telkonet's
sole cost and expense) to obtain letters of patent or copyright, vest Telkonet with full and exclusive title thereto, and protect
the same against infringement by third parties, and such assistance shall be given by Executive, if needed, after termination
of this Agreement for whatever cause or reason. Executive hereby represents and warrants that Executive has no current or future
obligation with respect to the assignment or disclosure of any or all developments, inventions, designs, improvements and discoveries
of whatever nature to any previous Employer, entity or other person and that Executive does not claim any rights or interest in
or to any previous unpatented or uncopyrighted developments, inventions, designs, improvements or discoveries.

 

9.
                 Trade Secrets, Non-Competition
and Non-Solicitation.

 

		(a)	Trade Secrets. Contemporaneous
with the execution of this Agreement and during the term of employment under this Agreement, Telkonet shall deliver to Executive
or permit Executive to have access to and become familiar with various confidential information and trade secrets of Telkonet,
including without limitation, data, production methods, customer lists, product format or developments, other information concerning
the business of Telkonet and other unique processes, procedures, services and products of Telkonet, which are regularly used in
the operation of the business of Telkonet (collectively, the "Confidential Information''). For purposes of the preceding
sentence, information is not treated as being Confidential Information if it: (i) is or becomes generally available to the public
other than by Executive in violation of this Agreement; (ii) is obtained by Executive in good faith from a third party who discloses
such information to Executive on a non-confidential basis without violating any obligation of confidentiality or secrecy relating
to the information disclosed; (iii) is independently developed by Executive outside the scope of his employment without use of
Confidential Information; or (iv) is Executive's personnel information. Executive shall not disclose any of the Confidential Information
that he receives from Telkonet or their clients and customers in the course of his employment with Telkonet, directly or indirectly,
nor use it in any way, either during the term of this Agreement or for a period of five (5) years thereafter, except as required
in the course of employment with Telkonet. Executive further acknowledges and agrees that Executive owes Telkonet, a fiduciary
duty to preserve and protect all Confidential Information from unauthorized disclosure or unauthorized use. All files, records,
documents, drawings, graphics, processes, specifications, equipment and similar items relating to the business of Telkonet, whether
prepared by Executive or otherwise coming into Executive's possession in the course of his employment with Telkonet, shall remain
the exclusive property of Telkonet and shall not be removed from the premises of Telkonet without the prior written consent of
Telkonet unless removed in relation to the performance of Executive’s duties under this. Agreement. Any such files, records,
documents, drawings, graphics, specifications, equipment and similar items, and any and all copies of such materials which have
been removed from the premises of Telkonet, shall be returned by Executive to Telkonet. For purposes of this Section 9, "Telkonet"
means Telkonet, Inc., including its subsidiaries and affiliates and all successors and predecessors in interest to Telkonet.

		(b)	Non-Competition. Executive
acknowledges that he will be provided with and have access to the Confidential Information, the unauthorized use or disclosure
of which would cause irreparable injury to Telkonet, that Telkonet's willingness to enter into this Agreement is based
in material part on Executive's agreement to the provisions of this Section 9(b) and that Executive's breach of the provisions
of this Section would materially and irreparably damage Telkonet. In consideration for Telkonet's disclosure of Confidential Information
to Executive, Executive's access to the Confidential Information, and the salary paid to executive hereunder, Executive agrees
that during the term of Executive's employment under this Agreement and for one (1) year after the termination of Executive's
employment and regardless whether such termination is with or without cause, Executive shall not, directly or indirectly, either
as an executive, employee, employer, consultant, agent, principal, partner, stockholder, corporate officer, director, advisor
or in any other individual or representative capacity, engage or participate in any business
that is in competition in any manner whatsoever with the Restricted Business (as defined herein) in North America. "Restricted
Business" means any business conducted by Telkonet at the time of separation of the Executive from Telkonet.

 

 

    	 	5	 

     

    

 

		(c)	Reasonableness of Restrictions. Executive acknowledges
that the restrictions set forth in Section 9(b) of this Agreement are reasonable in scope and necessary for the protection
of the business and goodwill of Telkonet. Executive agrees that should any portion of the covenants in Section 9 be unenforceable
because of the scope thereof or the period covered thereby or otherwise, the covenant shall be deemed to be reduced and limited
to enable it to be enforced to the maximum extent permissible under the laws and public policies applied in the jurisdiction in
which enforcement is sought.

 

		(d)	Injunctive Relief; Extension of Restrictive Period.
In the event of a breach of any of the covenants, by Executive or Telkonet contained in this Agreement, it is understood that
damages will be difficult to ascertain, and either party may petition a court of law or equity for injunctive relief in addition
to any other relief which Executive or Telkonet may have under the law, including but not limited to reasonable attorneys' fees.

 

10.             
Indemnification and Insurance. 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, Certificate of Incorporation,
and standard form of Indemnification Agreement, 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.

 

11.              
Miscellaneous.

 

		(a)	This Agreement shall be binding upon the parties and their
respective heirs, executors, administrators, successors and assigns. Executive shall not assign any part of his rights under this
Agreement without the prior written consent of Telkonet.

 

		(b)	This Agreement contains the entire agreement and understanding
between the parties and supersedes any and all prior understandings and agreements between the parties regarding Executive's employment.

 

		(c)	No modification hereof shall be binding unless made in
writing and signed by the party against whom enforcement is sought. No waiver of any provisions of this Agreement shall be valid
unless the same is in writing and signed by the party against whom it is sought to be enforced, unless it can be shown through
custom, usage or course of action.

 

		(d)	This Agreement is executed in, and it is the intention
of the parties hereto that it shall be governed by, the laws of the State of Wisconsin without giving effect to applicable conflict
of laws provisions.

 

		(e)	The provisions of this Agreement shall be deemed to be
severable, and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other
provisions hereof.

 

 

 

    	 	6	 

     

    

 

		(f)	Any notice or communication permitted or required by this
Agreement shall be in writing and shall become effective upon personal service, or service by wire transmission, which has been
acknowledged by the other party as being received, or two (2) days after its mailing by certified mail, return receipt requested,
postage prepaid addressed as follows;

 

		(1)	If to Telkonet:

 

Attn; Chief Executive
Officer

20800 Swenson Dr., Suite
175

Waukesha, WI 53186.

 

		(2)	If to Executive:

 

To
the last residential address known

by the Company as provided by

Executive in writing.

 

		(g)	Acknowledgment. Executive acknowledges that he has
had the opportunity to discuss this matter with and obtain advice from his private attorney, has had sufficient time to, and has
carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this
Agreement.

		(h)	Counterparts. This Agreement may be executed in
counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding
agreement on the part of each of the undersigned.

 

 

 

 

    	 	7	 

     

    

 

IN WITNESS WHEREOF,
Telkonet and Executive have executed this Agreement as of the date first set forth above.

 

	TELKONET,INC.	 	EXECUTIVE
	 	 	 	 
	By:	/s/ Jason L. Tienor	 	/s/ Matthew P. Koch
	 	Jason L. Tienor	 	Matthew P. Koch
	 	Chief  Executive Officer	 	 
	 	 	 	 
	 	 	 	 
	Date:	January 3, 2017	 	Date: 1/3/17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page- Employment Agreement]

 

 

    	 	8	 

     

    

 

EXHIBIT
A

 

1.           
Bonus Upon Sale of the Subsidiary. Contemporaneously with Telkonet's consummation
of any Sale of the Subsidiary (as defined below), and conditioned upon the Sale of the Subsidiary resulting in a purchase price
(before any closing costs or working capital adjustments) equal to or greater than Twelve Million Five Hundred Thousand Dollars
($12,500,000) and Executive remaining employed by Telkonet through at least the date of the Sale of the Subsidiary, Executive shall
be entitled to a base bonus of Twenty-Five Thousand Dollars ($25,000) plus one third of five percent of each dollar in excess of
a purchase price of Twelve Million Five Hundred Thousand Dollars ($12,500,000). For purposes of this Agreement, a "Sale of
the Subsidiary'' means any transaction or related series or combination of transactions whereby, directly or indirectly, control
of a majority (defined as greater than 50%) of the outstanding voting capital stock of EthoStream LLC or the equity interests of
EthoStream LLC, or the majority of EthoStream LLC's business or assets is acquired, leased or licensed to a third party in a sale
or exchange of stock, merger or consolidation, sale, lease or license of assets or joint venture (regardless of whether EthoStream
LLC has control of said join venture or is a minority owner), including by way of an exchange or tender offer, a leveraged buyout,
a recapitalization, restructuring or reorganization of EthoStream LLC. For the avoidance of doubt, an example of the bonus calculation
identified in this paragraph is set forth below:

 

	Examples	 
	(all numbers in $000s)	 
	Sales Price	 	$	12,400	 	 	$	12,500	 	 	$	13,000	 	 	$	13,500	 	 	$	14,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Base Bonus (Total for All Executives)	 	 	 	 	 	$	75.0	 	 	$	75.0	 	 	$	75.0	 	 	$	75.0	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Over-performance Bonus (Total for All Executives)	 	 	 	 	 	 	 	 	 	$	25.0	 	 	$	50.0	 	 	$	75.0	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total Bonus Paid to All Executives by Company	 	 	 	 	 	$	75.0	 	 	$	100.0	 	 	$	125.0	 	 	$	150.0	 
	% Sales Price	 	 	NA	 	 	 	0.6%	 	 	 	~0.8%	 	 	 	~0.9%	 	 	 	~1.0%	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Per Executive	 	 	 	 	 	$	25.0	 	 	$	33.3	 	 	$	41.7	 	 	$	50.0	 

 

 

2.                 
Bonus for Events After Sale of the Subsidiary. After the Sale of the Subsidiary, the Company may pay Executive a
bonus for additional Company related events that Executive may be involved with following the Sale of the Subsidiary.

 

3.                  Bonus
Upon Sale of the Company. Contemporaneously with Telkonet's consummation of any Sale of the Company (as defined below),
and conditioned upon Executive remaining employed by Telkonet through at least the date of the Sale of the Company,
Company shall pay Executive a base bonus equal to six (6) months of Executive's then current base salary, plus two percent
(2%) of each dollar in excess of a purchase price of Twenty Seven Million Dollars ($27,000,000). Such bonus shall be paid in
one lump sum upon the closing of that transaction. For purposes of this Agreement, the term "Sale of the Company"
means any transaction or related series or combination of transactions whereby, directly or indirectly, control of a majority
(defined as greater than 50% of the outstanding voting capital stock of Company) of the equity interests of Company (or any
direct or indirect parent of Company), or the majority of Company's business or assets is acquired, leased or licensed by a
third party in a sale or exchange of stock, merger or consolidation, sale, lease or license of assets or joint venture
(regardless of whether Company has control of said joint venture or is a minority owner), including by way of an exchange or
tender offer, a leveraged buyout, a recapitalization, restructuring or reorganization of Company.

 

 

 

 

 

    	 	9

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