EMPLOYMENT
AGREEMENT
Clean Diesel Technologies, Inc.
– Michael L. Asmussen
AGREEMENT made as of the date set forth below by
and between Michael L. Asmussen, 1731 Centennial Drive, Canton,
MI 48187 (“Executive”) and Clean Diesel
Technologies, Inc., a Delaware corporation (the
“Company”), having a place of business at Suite 1100,
10 Middle Street, Bridgeport, CT 06604.
WHEREAS, the Company desires certain services
for itself and Executive desires to contract with the Company to
perform such services;
NOW THEREFORE, in consideration of the mutual
covenants hereinafter recited, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1.
Term : This
Agreement shall be effective as of the expiration of the seven (7)
day revocation period in Section 12, below (the “Commencement
Date”), and shall continue thereafter until terminated by
either party as provided below.
2.
Scope of Work; Title:
Retroactive to February 10, 2009, Executive shall be
President and Chief Executive Officer of the Company. In
such employment, Executive shall on a full-time basis direct all of
Executive’s efforts toward the performance of such duties as
shall be assigned to Executive by the Board of Directors of the
Company. “Full time” shall mean no outside business
activities without the Company’s prior
consent. Executive's place of employment shall be the
Company's corporate headquarters at the above address.
3.
Compensation : (a)
Base Salary. As of February 10, 2009, The Company agrees to
cause Executive to be paid for Executive’s services hereunder
a Base Salary at the initial rate of Two Hundred Eighty Five
Thousand Dollars ( $285,000) per year. Executive
shall be paid such amounts by the Company according to its normal
and customary procedures from time to time in effect but not less
often than monthly. Such Base Salary shall be reviewed not later
than February 10, 2010.
(b) Restricted Shares . The Company,
effective upon the Commencement Date, shall issue to Executive
under the Company’s Incentive Plan, Forty Thousand Shares of
the Company’s Common Stock, par $0.01, restricted, however,
so that of such Restricted Shares, there may only be sold,
assigned, transferred or hypothecated by the Executive his heirs
and assigns, Thirteen Thousand Three Hundred Thirty Three (13,333)
Shares after the vesting date of February 10, 2010; Twenty Six
Thousand Six Hundred Sixty Six (26,666) Shares after the vesting
date of February 10, 2011; and Forty Thousand (40,000) Shares after
the vesting date of February 10, 2012; and, provided further, that
as a condition for any sale, assignment, transfer or hypothecation
of the Restricted Shares, that on each of the foregoing vesting
dates Executive shall continue to be employed by Company
as President and Chief Executive Officer unless such employment
terminated as a result of disability or death or “at
will” by the Company. The Certificates evidencing the
Restricted Shares shall bear a legend and shall be subject to a
stop order with respect to the foregoing restriction. The Executive
shall be entitled to vote the Restricted Shares and receive
dividends thereon, if any, pending the vesting dates; provided,
however, that any such dividends shall be subject to forfeiture
under the above restrictions and shall be held in a suspense
account and paid over to Executive within sixty (60) days after the
vesting dates of the Restricted Shares as to which such dividends
shall be allocable.
(c) Annual Cash Bonus . During the term
of this Agreement, Executive shall participate in the
Company’s annual cash bonus plan with a Target Participation
Percentage of Fifty Percent (50%) of Executive’s then Base
Salary calculated on a combination of the Company’s
operational results and Executive’s completed goals and
objectives but subject to the limitations that no cash bonus is
payable if the combined operational results and the
Executive’s goals and objectives shall not have been at least
Seventy Five Percent (75%) attained, as determined in the judgment
of the Compensation & Nominating Committee of the Board of
Directors of the Company, and no cash bonus may exceed in any event
One Hundred Twenty Five Percent (125%) of the Executive’s
Target Participation Percentage, all as annually approved in
advance by the Compensation Committee of the Board.
(d) Stock Options. Executive
from time to time shall be entitled to participate in stock option
or other equity Awards under the Company’s Incentive Plan in
the discretion of the Board of Directors and on terms and
conditions similar to those of other officers of the
Company.
(e) Relocation . Executive shall be
entitled to the relocation benefits and services as set out on
Schedule A (“Relocation”) to this Agreement.
(f) Change in Control Bonus . If a change
in control of the Company shall occur during the term of this
Agreement and such change in control shall have been approved or
authorized in advance by a majority of the Board of Directors of
the Company, then the Company shall pay to Executive within sixty
(60) days of such change in control, a cash bonus equal to the
Executive’s then Base Salary. “Change in control”
has the same meaning as set out in the Company’s Incentive
Plan.
(g) Profit Enhancement to Bonus Plan .
If, during the term of this Agreement, a fiscal year of the Company
shall, as evidenced by the audited financial statements of the
Company for that year, show a pre-tax profit of not less than $2
million, then the annual bonus pool for all employees in that year
on a one time basis for that year only shall be increased by an
amount equal to thirty percent (30%) of the bonus pool as otherwise
calculated.
(h) Corporate Benefits . Executive shall
participate also in such other benefit programs as the Company may
customarily extend to its Employees as a class. This
Agreement may not be construed to prevent the Company from
rescinding any benefit programs for Executive so long as such
rescission applies to Employees as a class.
4.
Expenses : Executive shall be
reimbursed by the Company in accordance with Company policies for
all ordinary and necessary out-of-pocket expenses incurred by
Executive in performing Executive’s services
hereunder. Such expenses shall be reported from
time-to-time by Executive on the Company’s customary forms of
expense report and submitted for approval to the Company pursuant
to its policies from time to time in effect.
5.
Termination of Employment : (a) Just Cause
. The Company may at any time terminate this Agreement
for Just Cause. “Just Cause” shall mean, as
determined by the Board of Directors in its sole discretion,
conviction of Executive under, or a plea of guilty by the Executive
to, any charge which would constitute a felony under the laws of
Connecticut, regardless of jurisdiction; any instance of fraud,
embezzlement, self-dealing, insider trading or similar malfeasance
with respect to the Company regardless of the amount involved; any
instance of material disloyalty, insubordination, or disparagement
of the Company to an outside party; or any instance of substance
abuse of a controlled substance or, otherwise, a pattern of
substance abuse which limits Executive’s performance of
Executive’s duties.
(b) Disability . The Company
may terminate this Agreement at any time upon the physical
disability of Executive, if the Directors in their sole discretion
shall determine that, as a result of physical disability Executive
has for a period of six months been substantially absent from
Executive’s customary place of work and unable to perform
Executive’s customary duties.
(c) At Will . Either of
Executive or Company may terminate this Agreement at any time on
three (3) month’s written notice one to the
other. Where Company shall terminate this Agreement for
other than just cause or physical disability, the Company shall
continue the Executive’s Basic Salary and Corporate Benefits
as defined above and in the amount and form then enjoyed by the
Executive. Such salary and benefit continuation shall be offset by
any income from personal services earned by the Executive, if any,
from sources other than the Company for a period which ends on the
first anniversary of the Executive’s termination at will by
the Company. Any period of salary continuation shall not be
extended by any notice period, but shall include a notice period.
If this employment is terminated by the Employee, he will, at any
time, give three (3) months advance notice and shall not be
entitled to any further compensation after such notice period.
Executive shall be paid his Base Salary and be furnished with
Corporate Benefits during the notice period, if (i) Executive works
for Company through to the end of the notice period, or, (ii)
Company shall expressly waive Executive’s working through to
the end of the notic
