EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of the
12th day of April, 1996, by and between KENETECH Corporation, a Delaware
corporation (the "Company"), and Nicholas H. Politan, an individual currently
employed by the Company or its affiliates (the "Employee" or "you").
RECITALS
A. The Employee is assuming new responsibilities as an executive officer of the
Company.
B. The Company and the Employee desire to enter into a written employment
agreement on the terms set forth below.
NOW THEREFORE, in consideration of the mutual promises contained herein,
and for other good and valuable consideration, receipt of which is hereby
acknowledged, the parties agree as follows:
AGREEMENT
1. Employment. Unless terminated in connection with a Termination For Cause
(as defined below), the Employee will be employed by the Company at an annual
base salary of $175,000 and with the same employee benefits applicable as of the
date of this Agreement.
2. Employment Duties. The Company will employ you as the Chief Financial
Officer and Vice President of the Company. You agree to perform in good faith
and to the best of your ability all services which may be required of you in
your executive position and to be available to render such services at all
reasonable times and places in accordance with reasonable directives and
assignments issued by the Company's Chief Executive Officer and the Board of
Directors. During your employment, you will devote your full time and effort to
the business and affairs of the Company within the scope of your executive
office.
3. Benefits.
3.1 Termination. The Company and you have agreed that if your
employment with the Company is terminated for any reason (other
than a Termination For Cause), (a) you will receive severance
payments equal to your base salary for a period of one (1) year
from and after the effective date of your termination, and (b)
you and your eligible dependents will continue to receive the
Company's health care coverage and life insurance (on the same
terms as you had while an employee) for one year after the date
of termination.
3.2 Bonus Payments.
(a) The Company will pay to you a bonus in the amount of $75,000 upon
the first closing of a construction finance arrangement of the
cogeneration facility located in Puerto Rico (the "Facility").
(b) The Company will pay to you a bonus in the amount of $75,000 on
December 31, 1996. The payments described in Sections 3.2 (a) and
(b) shall be referred to as the "Bonus Payments".
(c) If the Facility is sold to a third party or the Company or its
affiliates otherwise realize value therefor, or in the event of a
Change in Control (defined below), all Bonus Payments which have
not been paid will be immediately due and payable at the time of
such event.
3.3 Termination For Cause. If you commit one or more acts of fraud,
embezzlement, misappropriation of property or information or
engage in any other conduct materially adversely affecting the
business reputation of the Company, you may be terminated for
cause (a "Termination For Cause") and you will not be paid any of
the payments or benefits described in this Agreement.
3.4 Change in Control. Upon a Change In Control, the Company will pay
you a lump sum amount equal to one year's base salary. For
purposes of this Agreement, "Change in Control" means:
(i) a merger or acquisition in which the Company is not the surviving
entity, except for a transaction the principal purpose of which
is to change the State of the Company's incorporation;
(ii) the sale, transfer or other disposition of all or substantially
all of the assets of the Company in liquidation or dissolution of
the Company;
(iii)any reverse merger in which the Company is the surviving entity,
but in which fifty percent (50%) or more of the Company's
outstanding voting stock is transferred to holders different from
those who held the stock immediately prior to such merger; or
(iv) the acquisition of more than fifty percent (50%) of the Company's
outstanding voting stock pursuant to a tender or exchange offer
made by a person or related group of persons (other than the
Company or a person that directly or indirectly controls, is
controlled by or is under common control with the Company).
3.5 Withholding. The Company will deduct and withhold, from the
compensation payable to you under this Agreement, any and all
Federal, State and local income and employment withholding taxes
and any other amounts required to be deducted or withheld by the
Company under the applicable statute or regulation.
4. Death. Upon your death during employment, the employment relationship
created pursuant to this Agreement will immediately terminate, and no further
compensation will become payable to you hereunder. In connection with such
termination, the Company will only be required to pay you (or your estate) any
unpaid compensation earned for services rendered through the date of your death.
5. Restrictive Covenant. During your employment:
(i) You will devote your full working time and effort to the
performance of your duties as an executive officer of the
Company; and
(ii) You will not directly or indirectly, whether for your own account
or as an employee, consultant or advisor, provide services to any
business enterprise other than the Company, unless otherwise
authorized by the Company in writing.
However, you will have the right to perform such incidental services as are
necessary in connection with (a) your private passive investments, (b) your
charitable or community activities, and (c) your participation in trade or
professional organizations, but only to the extent such incidental services do
not interfere with the performance of your services hereunder.
6. Confidentiality. You hereby acknowledge that the Company may, from time
to time during your employment, disclose to you confidential information
pertaining to the Company's business and affairs and client base, including
(without limitation) customer lists and accounts, other similar items indicating
the source of the Company's income, and information pertaining to the salaries
and performance levels of the Company's employees. You will not, at any time
during or after such employment, disclose to any third party or directly or
indirectly make use of any such confidential information, including (without
limitation) the names, addresses and telephone numbers of the Company's
customers, other than in connection with, and in furtherance of, the Company's
business and affairs. All documents and data (whether written, printed or
otherwise reproduced or recorded) containing or relating to any such proprietary
information of the Company which come into your possession during your
employment will be returned by you to the Company immediately upon the
termination of your employment or upon any earlier request by the Company, and
you will not retain any copies, notes or excerpts thereof. Your obligations
under this Section 6 will continue in effect after termination of your
employment with the Company, whatever the reason or reasons for such
termination, and the Company will have the right to communicate with any of your
future or prospective employers concerning your continuing obligations under
this Section 6.
7. Ownership Rights. All materials, ideas, discoveries and inventions
pertaining to the Company's business, including (without limitation) all patents
and copyrights, patent applications, patent renewals and extensions, and the
names, addresses and telephone numbers of customers, will belong solely to the
Company. You will continue to be bound by all the terms and provisions of your
existing Proprietary Information and Inventions Agreements with the Company or
its subsidiaries or affiliated companies, and nothing in this document will be
deemed to modify or affect your duties and obligations under those other
agreements.
8. Indemnification. The indemnification provisions for Officers and
Directors under the Company's Bylaws will (to the maximum extent permitted by
law) be extended to you, during your employment and the period following your
termination irrespective of a Change in Control, with respect to any and all
matters, events or transactions occurring or effected during your employment.
9. Miscellaneous. The provisions of this Agreement will be binding upon
the Company, its successors and assigns (including, without limitation, the
surviving entity or successor party resulting from a Change in Control) and will
be construed and interpreted under the laws of the State of California. Each of
the parties acknowledges and agrees that upon any breach of this Agreement by
you, the Company will not have an adequate remedy at law, and will be entitled
to specific performance and other equitable relief. This Agreement incorporates
the entire agreement between you and the Company relating to the terms of your
employment and supersedes all prior agreements and understandings with respect
thereto including, without limitation, that certain Employment Agreement between
you and KENETECH Energy Systems, Inc., a subsidiary of the Company, dated
January 1, 1996. This Agreement may only be amended by written instrument signed
by you and an authorized officer of the Company. The provisions of this
Agreement will be deemed severable, and if any part of any provision is held
illegal, void, or invalid under applicable law, the remaining provisions of the
Agreement will not in any way be affected or impaired, but will remain binding
in accordance with their terms.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
date first written above.
KENETECH CORPORATION, a Delaware corporation
By___________________________
Name: Mark D. Lerdal
Title: President and Chief Executive Officer
NICHOLAS H. POLITAN