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United
States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): May 28, 2024
Pineapple
Energy Inc.
|
(Exact
name of registrant as specified in its charter) |
|
|
Minnesota |
|
001-31588 |
|
41-0957999 |
|
(State or other jurisdiction of incorporation) |
|
(Commission
File Number) |
|
(IRS
Employer Identification No.) |
|
|
|
|
|
|
|
10900
Red Circle Drive
Minnetonka,
MN |
|
55343 |
|
(Address of principal
executive offices) |
|
(Zip Code) |
Registrant’s
telephone number, including area code: (952) 996-1674
N/A
(Former
name or former address, if changed since last report.)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant
to Section 12(b) of the Act
Title of each class |
Trading
Symbol(s) |
Name
of each exchange on which registered |
Common
Stock, par value, $.05 per share |
PEGY |
The
Nasdaq Stock Market, LLC |
Indicate by check mark whether
the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter)
or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging
growth company ☐
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02. Departure of Directors
or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On
May 28, 2024, the Board of Directors of Pineapple Energy Inc. (the “Company”) appointed
James R. Brennan as the Company’s Chief Operating Officer, effective
May 28, 2024. Mr. Brennan, age 59, has served as the Company’s Senior Vice President,
Corporate Development since November 2022 and was the Chief Growth Officer at SUNation Energy from March 2015 until it was acquired
by the Company in November 2022. He has over 30 years of experience in strategy, corporate development, sales and marketing management,
and international business while deploying software, services and devices. Mr. Brennan has also earned a Master of Business Administration
in Finance from New York University and a Bachelor of Science in Electrical Engineering from Cornell University.
There
were no changes to Mr. Brennan’s compensation in connection with his appointment as Chief Operating Officer. Mr. Brennan
is party to an employment agreement with the Company (the “Employment Agreement”) related to his position as Senior
Vice President, Corporate Development, a copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.
The Employment Agreement has not been amended in connection with Mr. Brennan’s appointment as Chief Operating Officer.
On November
9, 2022, the Company entered into a Transaction Agreement (the “Transaction Agreement”) with Solar Merger Sub, LLC,
a New York limited liability company and wholly owned subsidiary of the Company, Scott Maskin, James Brennan, Scott Sousa and
Brian Karp (collectively, the “Sellers”), and Scott Maskin as representative of each seller, pursuant to which the
Company acquired all of the issued and outstanding equity of SUNation Solar Systems, Inc. and five of its affiliated entities
(collectively, “SUNation”), directly or indirectly, from the Sellers. Mr. Brennan was appointed as the Senior Vice
President, Corporate Development, of the Company, received 494,007 shares of Company common stock as consideration in the transaction
and was granted an inducement award of 65,455 restricted stock units in connection with his employment with the Company.
The Company
acquired SUNation from the Sellers for an aggregate purchase price of $18,440,533, comprised of (a) $2,390,000 in cash consideration
paid at closing, (b) the issuance at closing of a $5,000,000 Short-Term Limited Recourse Secured Promissory Note payable to Messrs.
Maskin and Brennan (the “Short-Term Note”), (c) the issuance at closing of a $5,486,000 Long-Term Promissory Note
payable to Messrs. Maskin and Brennan (the “Long-Term Note”), with a fair value of $4,830,533 at the acquisition date,
and (d) the issuance at closing of an aggregate of 1,480,000 shares of Company common stock. The purchase price also includes
potential earn-out payments of up to $5,000,000 in the aggregate based on the percentage of year-over-year EBITDA growth of the
SUNation businesses in 2023 and 2024.
The
Short-Term Note was paid in full on June 1, 2023. The Long-Term Note is unsecured and
matures on November 9, 2025. It carries an annual interest rate of 4% until the first anniversary of issuance, then 8% thereafter
until the Long-Term Note is paid in full. The Company will be required to make a principal payment of $2.5 million on the second
anniversary of the Long-Term Note. As of October 15, 2023, the full $5.5 million remained outstanding under the Long-Term Note
and the Company had paid an aggregate amount of interest on the Long-Term Note of $31,263.
On May 14,
2024, the Company received a demand letter sent by Messrs. Maskin and Brennan for its failure to pay the first earnout payment
of $2,500,000 under the Transaction Agreement, which was due on May 5, 2024.
Item 9.01. Financial Statements
and Exhibits.
(d) Exhibits
EXHIBIT
INDEX
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
|
|
PINEAPPLE ENERGY INC. |
|
|
|
Date: June 3, 2024 |
|
By: |
/s/ Eric Ingvaldson |
|
|
|
Eric Ingvaldson |
|
|
|
Chief Financial Officer |
Exhibit 10.1
November
9, 2022
To:
Jim Brennan
Re:
Offer of Employment
Dear
Jim:
I
am pleased to offer you the full-time position of Senior Vice President, Corporate Development of Pineapple Energy Inc., (the
“Company”), reporting to Kyle Udseth, Chief Executive Officer, beginning Thursday November 10, 2022.
Your
salary will be annualized at $235,000. Your bonus opportunity will be 35% of your base salary, and it is discretionary based on
the organization’s ability to meet financial goals established by the Board of Directors.
The
terms and conditions of your employment are detailed in the Employment Agreement that is enclosed with and incorporated into this
letter.
We
appreciate your commitment to Pineapple Energy Inc and its subsidiaries, and we look forward to your continued contribution to
the strategic business efforts of the organization.
Pineapple
Energy, through its benefits and culture, has a lot to offer you and we are confident that you have a lot to offer the Company.
Please do not hesitate to contact me if you have any questions.
Sincerely,
|
I
accept the offer as outlined above |
__________________________
Kyle
Udseth
Chief
Executive Officer
Pineapple
Energy Inc |
__________________________
Jim
Brennan
Dated:
_____________ |
|
|
10900 Red Circle Drive • Minnetonka,
MN • 1-800-268-5130 • 952-996-1674 • www.pineappleenergy.com
EMPLOYMENT
AGREEMENT
This
Employment Agreement (“Agreement”) is effective as of the 20th day of October, 2022 (“Effective Date”),
by and between Pineapple Energy Inc., a Minnesota corporation (the “Company”) and Scott Maskin (the “Employee”).
A.
The Company desires to hire Employee as detailed below. Employee has thoroughly reviewed
and considered the terms of this Employment Agreement, and accepts all terms set forth below.
B. During
his employment, Employee will have access to extremely sensitive confidential, proprietary and trade secret information relating
to the Company, its employees, and its customers. As a result, Employee’s employment with the Company is strictly conditioned
on Employee agreeing to the confidentiality provisions and post-employment restrictions in this Agreement. Employee has reviewed,
considered, and accepts all such provisions as set forth below.
In
consideration of the foregoing, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged
by the Company and Employee, the parties agree as follows:
| 1. | Employment
Duties; No Conflict; Contingency. The Company hereby employs Employee and Employee
accepts such employment. Employee agrees to perform the duties consistent with his position
and other duties as may be requested by the Company from time to time. Employee will
perform his duties with a high level of professionalism and integrity. Employment pursuant
to this Agreement is subject to all Company policies in effect throughout Employee’s
employment. During the term of this Agreement, Employee will not render or perform services
for any other corporation, firm, entity or person that are inconsistent with the provisions
of this Agreement except as expressly permitted by the Company in writing. |
| 2. | Employment
at Will. Employee’s employment with the Company is at-will and continues until
terminated by the Company or Employee for any reason. The “Termination Date”
shall mean the date of cessation of the Employee’s employment with the Company
(whether voluntarily or involuntarily) without regard to any notice of termination or
pay in lieu of notice of termination. The first ninety (90) days of employment shall
be considered a probationary period, which period does not alter the at-will nature of
employment. |
| (a) | Duration.
The term of the Employee’s employment with the Company commences on the Effective
Date and will terminate 12/31/24, unless terminated earlier in accordance with Section
4 below or mutually renewed (the “Initial Term”). |
| (a) | Base
Salary. The Company shall pay Employee base salary in the annualized amount of $235,000
(“Base Salary”), less applicable taxes and withholding, payable in accordance
with the Company’s standard payroll practices. |
| (b) | Employee
Bonus Program. Employee shall be eligible for the Company’s Employee Bonus
Program, starting 1/1/23. Employee’s potential bonus shall be up to thirty-five
percent (35%) of Employee’s Base Salary. Any Bonus payable under this Section 3(b)
shall be paid as a lump sum by March 15 (“Bonus Pay Date”) of the calendar
year following the year for which the Bonus was calculated. The Employee Bonus Program
is discretionary based on goals established by the Company’s Board of Directors
and may be changed from time to time. |
| (c) | Benefits.
Employee shall be entitled to participate in all employee benefit plans or programs offered
by the Company to all its employees, subject to the eligibility requirements and terms
of such plans or programs, including, as of the Effective Date, cellphone reimbursement,
medical, dental, vision, life, and critical illness/accident insurance; the Company 401(k)
plan, Employee Stock Purchase Plan, and Health Savings Account. |
| 4. | Termination.
This Agreement may be terminated at any time upon sixty (60) days’ written notice
by (a) the Company to Employee in person or by certified mail to Employee’s address
on record at the Company, or (b) Employee to the then-current Chair of the Company Board
of Directors in person or by certified mail to the Company. |
| (a) | Upon
termination of this Agreement, Employee shall be entitled to receive (i) Base Salary
owed through the Termination Date, (ii) reimbursement of reasonable expenses incurred
as of the Termination Date. Such amount shall be paid within fourteen (14) days of the
Termination Date. Employee acknowledges and agrees that said payments, as applicable,
shall be in full satisfaction of any amount due to Employee by the Company, and Employee
shall not be entitled to any further payment, severance, benefits continuation, damages,
or any additional compensation whatsoever. |
| (b) | For
purposes of this Agreement, “Cause” means: (i) gross negligence or gross
neglect of duties; (ii) commission of any felony, or a gross misdemeanor involving
moral turpitude that in the reasonable determination of the Board is materially and demonstrably
injurious to the Company or that impairs Employee’s ability to substantially perform
Employee’s duties with the Company or a subsidiary; (iii) fraud, disloyalty, dishonesty
or willful violation of any law or a willful violation of a Company policy that, after
warning, remains a continuing violation, committed in connection with the Employee’s
employment; (iv) conduct that, in the reasonable business judgment of the Company’s
Board, results in damage to the Company’s business, property, reputation, or goodwill
(v) material breach of or inability to perform Employee’s obligations under this
Agreement other than by reason of disability or death; or (vi) failure to follow a lawful
directive of the Company’s Board; provided, however, that “Cause” shall
not exist unless the Company has first provided written notice to the Employee of the
initial occurrence of one or more of the conditions under clauses (i) or (iii) through
(vi) above within thirty (30) days of the condition’s occurrence, such condition
is not fully remedied by the Employee within thirty (30) days after the Employee’s
receipt of written notice from the Company. |
| (c) | For
purposes of this Agreement, “Good Reason” means: an initial occurrence of any of the following without the Employee’s
consent: (i) a substantial adverse change in the nature or scope of the Employee’s responsibilities, authorities, powers,
functions or duties such that the Employee would no longer be considered to be a member of senior management of the Company; (ii)
a reduction in the Employee’s annual Base Salary except for across the board salary reductions similarly affecting all or
substantially all management employees; or (iii) the relocation of offices at which the Employee is principally employed to a
location more than fifty (50) miles from such offices; provided, however, that “Good Reason” shall not exist unless
the Employee has first provided written notice to the Company of the initial occurrence of one or more of the conditions under
clauses (i) through (iii) above within thirty (30) days of the condition’s occurrence, such condition is not fully remedied
by the Company within thirty (30) days after the Company’s receipt of written notice from the Employee, and the Employee’s
date of termination as a result of such event occurs within ninety (90) days after the initial occurrence of such event. |
| (d) | Termination
by the Company for Cause; Termination by the Employee for any reason other than Good Reason: If the Employee’s employment
is terminated (i) by the Company for Cause or (ii) by the Employee for any reason other than Good Reason, then the Company shall
pay or provide the Employee only with the benefits itemized in 4(a). |
| (e) | Termination
by the Company other than for Cause or Disability, or resignation by the Employee for Good Reason: If the Employee’s employment
is terminated by the Company for any reason other than Cause or Disability, or the Employee’s employment is terminated by
the Employee for Good Reason, in either case with the Employee’s date of termination occurring during the Employment Term,
then the Company shall: (i) pay or provide the Employee the benefits itemized in 4(a) and (ii) subject to the Employee signing
and not rescinding a release of claims in a form acceptable to Employee and the Company (the “Release”) and the Employee
strictly complying with the terms of this Agreement and any other written agreement between the Employee and the Company or any
of its Affiliates as of the date each of the installments described below is to be paid, the Company shall pay to the Employee
as severance pay a total amount equal to one hundred percent (100%) of the annual Base Salary as of the date of termination, subject
to applicable tax withholdings, payable in substantially equal installments in accordance with the Company’s regular payroll
during the period from the Employee’s date of termination through and the twelve (12) month anniversary of the Employee’s
date of termination; provided, however, that any installments that otherwise would be payable on the Company’s regular payroll
dates between the Employee’s date of termination and the sixtieth (60th) calendar day after the Employee’s date of
termination will be delayed until the Company’s first regular payroll date that is more than sixty (60) days after the Employee’s
date of termination and included with the installment payable on such payroll date. |
| (f) | Termination
due to Disability or death: If the Employee’s employment is terminated due to Disability
or the Employee’s death, then the Company shall pay or provide the Employee (or
the Employee’s estate, if applicable) only with the benefits itemized in 4(a).
For purposes of this Agreement, “Disability” means: the inability of the
Employee to perform the Employee’s material duties hereunder after reasonable accommodation
due to a physical or mental injury, infirmity or incapacity which
has lasted or can reasonably be expected to last for one hundred eighty (180)
days (including weekends and holidays) in any three hundred sixty-five (365) day period
as determined by the Company’s Board of Directors in its reasonable discretion. |
| 5. | Proprietary
Information. During the course of employment Employee will have access to the Company’s
proprietary and trade secret information. Maintaining the confidentiality of such information
is important to the Company’s competitive position in the industry and ultimately
to the Company’s ability to achieve financial success and provide employment opportunities.
Employee will not discuss the business affairs and operations of the Company with anyone
outside of the Company except when required in the normal course of business. To the
extent Employee has access to proprietary and/or trade secret information, she is responsible
for the security of that information. Extreme care must be exercised to insure that such
information is safeguarded to protect the Company, its suppliers, clients, and employees. |
| 6. | Confidential
Information. Employee recognizes and acknowledges that Employee will have access
to certain information of the Company and that such information is confidential and constitutes
valuable, special and unique property of the Company. The Employee shall not at any time,
either during or after termination of employment, directly or indirectly disclose to
others, use, copy or permit to be copied, except as directed by law or in accordance
with Employee’s duties for or on behalf of the Company, its successors, assigns
or nominees, any Confidential Information of the Company (regardless of whether developed
by the Employee), without the prior written consent of the Company. The term “Confidential
Information” means any secret or non-public information or know-how relating to
the Company and its business, and shall include but not be limited to information relating
to the Company’s plans, customers, costs, prices, personnel, business relationships,
uses and applications of products and services, results of investigations, studies owned
or used by the Company, and all products, processes, compositions, computer programs,
and servicing, marketing or operational methods and techniques at any time used, developed,
investigated, made or sold by the Company, before or during the term of this Agreement,
that are not readily available to the public or that are maintained as confidential by
the Company. Employee shall maintain in confidence any Confidential Information of third
parties, received as a result of the Employee’s employment, in accordance with
the Company’s obligations to such third parties and the policies established by
the Company. |
Consistent
with state and federal law, nothing in this Agreement (a) is intended to limit Employee’s right to discuss the terms, wages,
and working conditions of her employment; or (b) prohibits Employee from reporting possible violations of law to a government
agency or attorney, including information about trade secrets in a document filed in a lawsuit if the disclosure is made in confidence,
good faith, solely for the purpose of reporting or investigating a suspected violation of law and is done only as permitted by
law.
| 7. | Non-Solicitation,
Non-Interference and Non-Competition. As a result of employment with the Company,
Employee will acquire considerable knowledge about, and expertise in, certain areas of
the Company’s business. Employee will also gain knowledge of, and have contact
with, customers and suppliers of the Company. Employee acknowledges that she may be able
to utilize such knowledge and expertise following termination of service with the Company,
to the serious detriment of the Company if she solicits business from customers of the
Company or interferes with the Company’s relationships with its customers, business
partners or employees. Accordingly, she agrees that: |
| (a) | Non-Solicitation,
Non-Interference with Customers. During employment and for one (1) year after termination
of employment, Employee will not directly or indirectly (i) solicit any customer or business
partner of the Company, (ii) take any action intended to, or that has the effect of,
interfering with the Company’s relationship with any customer or business partner
or otherwise resulting in a customer or business partner reducing or ceasing their business
relationship with the Company; or (iii) provide, to any customer with whom Employee had
contact during employment or about whom Employee had access to Confidential Information,
any products or services that are competitive with those that were offered by the Company
during Employee’s employment. |
| (b) | Non-Solicitation
of Employees. During employment and for one (1) year after termination of employment,
Employee will not directly or indirectly approach, solicit, entice, hire or attempt to
approach, solicit entice or hire any employee of the Company to leave the employment
of the Company. |
| (c) | Non-
Competition. During employment and for one (1) year after termination of employment, Employee will not directly or indirectly
engage in any business that is the same as or substantially similar to the business in which the Company engages during the term
of Employee’s employment; provided, however, that this restriction shall apply only to the geographic market of the Company.
Employee shall be deemed to engage in a business if she directly or indirectly engages or invests in, owns, manages, operates,
controls or participates in the ownership, management, operation or control of, is employed by, associated or in any manner connected
with, or renders services or advice to, any business that provides products or services that are the same as or substantially
similar to the products and/or services provided by the Company during Employee’s employment. Provided, however, that Employee
may invest in the securities of any enterprise (but without otherwise participating in the activities of such enterprise) if two
conditions are met: (a) such securities are listed on any national or regional securities exchange or have been registered under
Section 12(g) of the Securities Exchange Act of 1934 and (b) Employee does not beneficially own (as defined Rule 13d-3 promulgated
under the Securities Exchange Act of 1934) in excess of one percent of the outstanding capital stock of such enterprise. |
| (d) | Tolling
of Restrictive Period. In the event Employee breaches any provision of this Section 7, the applicable restrictive period herein
shall be tolled during the time of Employee’s breach. Upon cessation of any such breach, the restrictive period shall continue
and shall be extended by the time period of the applicable breach. |
| (e) | Presentment
to any New Employer. For one year after termination of employment, Employee will
give a copy of this Agreement to any subsequent employer prior to Employee’s first
day of work so that the new employer can evaluate whether Employee’s work for that
employer may be in violation of this Agreement. |
| 8. | Inventions;
Works Made for Hire. For purposes of this Agreement, “Inventions"
means all ideas, improvements, discoveries, concepts, original works of authorship, modifications,
formulations, software programs, product development or ideas (whether patentable or
not) relating to the business of the Company that are generated, conceived or reduced
to practice by Employee during employment with the Company either alone or in conjunction
with others, during or outside of working hours. Any patent application (including provisional
applications, international applications, and the like) on which Employee is named as
an inventor that is both: (a) filed within one (1) year after termination of employment;
and (b) relates to the business of Company; shall be presumed to cover an Invention conceived
by Employee during employment with the Company, subject to proof to the contrary by good
faith, written and duly collaborated records establishing that such Invention was conceived
and made following termination of employment. Employee agrees to document all Inventions
in writing and promptly disclose such Inventions to the Company. All original works of
authorship made by Employee (solely or jointly with others) within the scope of employment
with the Company (or her prior employment) and that are protectable by copyright are
“works made for hire,” pursuant to United States Copyright Act (17 U.S.C.,
Section 101). |
| (a) | Ownership
and Assignment of Inventions. Subject to the limitations of Minnesota Statute §181.78
set forth below, all Inventions are the exclusive property of the Company (whether any
Invention was generated, conceived or reduced to practice prior to the execution of this
Agreement). Employee hereby assigns and agrees to assign in the future (when any such
Inventions are first reduced to practice or first fixed in a tangible medium, as applicable,
or are otherwise assignable) to the Company all Employee’s right, title and interest
in and to any and all Inventions, whether or not patentable or registrable under copyright
or similar statutes, made or conceived or reduced to practice or learned by Employee,
either alone or jointly with others, during Employee’s employment with the Company.
Inventions assigned to the Company or to a third party as directed by the Company are
referred to as “Company Inventions.” Employee hereby waives and agrees not
to assert any proprietary rights in or with respect to a Company Invention. Employee
will sign and deliver any documents necessary to fully assign ownership of any Invention
to the Company. Employee will, at the Company’s expense, provide all assistance
reasonably required for the Company to perfect, protect and use rights to Inventions.
Employee will maintain appropriate documentation relating to Inventions and sign all
documents and do all things the Company deems necessary or desirable to document and
record the transfer of Employee’s right, title and interest in Inventions to the
Company or a third party designated by the Company, and enable the Company to obtain
patent protection for Inventions anywhere in the world. |
| (b) | Exclusions.
The terms of this Section 8 do not apply to any invention for which no equipment, supplies, facilities or trade secret
information of the Company was used and that was developed entirely on
Employee’s own time and that (i) does not relate directly to the business of
the Company or to the Company’s actual or demonstrably anticipated research or
development; or (ii) does not result from any work performed by Employee for the
Company. |
| (c) | Continuing
Obligations. The obligations of this Section 8 continue beyond the termination of
employment with the Company as to Inventions conceived or made by Employee during Employee’s
employment and are binding upon Employee’s assigns, executors, administrators and
other legal representatives. |
| 9. | Conflict
of Interests. The Company expects all employees to conduct business according to
the highest ethical standards of conduct. Employee is expected to devote her best efforts
to the interests and business of the Company. Business dealings that create, or appear
to create, a conflict between the interests of the Company and Employee are prohibited.
The Company recognizes the right of employees to engage in activities outside of their
employment that are of a private nature and unrelated to the Company’s business.
However, Employee must disclose any possible conflicts so that the Company may assess
and prevent potential conflicts of interest from arising. A potential or actual conflict
of interest may occur when an employee is in a position to influence a business decision
that may result in personal gain to the employee, a family member, or personal acquaintance.
It is not possible to specify every action that might create a conflict of interest.
Any question regarding whether an action or proposed course of conduct could create,
or appear to create, a conflict of interest should immediately be presented to the Chief
Executive Officer or the Human Resources Department for review. |
| 10. | Restrictions
Reasonable. Employee acknowledges that the restrictions in this Agreement are reasonable
under the circumstances. Employee hereby waives all defenses to the enforcement thereof
by the Company. If any provision of this Agreement is deemed void or invalid by a court,
the remaining provisions shall remain in full force and effect and Employee agrees that
the court has the power to replace such void or invalid provisions with such other enforceable
and valid provisions as are as close as possible to the original in form and effect. |
| 11. | Section
409A Compliance. The parties intend that the benefits and rights described in this
Agreement comply with Section 409A of the Internal Revenue Code and the Treasury Regulations
and other guidance promulgated or issued thereunder (“Section 409A”) to the
extent that the requirements of Section 409A are applicable hereto, and the provisions
of this Agreement will be construed in a manner consistent with that intention.
If Employee or the Company believes at any time that any such benefit or right subject
to Section 409A does not so comply, it will promptly advise the other and will negotiate
reasonably and in good faith to amend the terms of such benefits and rights such that
they comply with Section 409A (with the most limited possible economic effect on Employee
and on the Company). Each payment under this Agreement is intended to be treated
as one of a series of separate payments for purposes of Code Section 409A and Treasury
Regulation §1.409A-2(b)(2)(iii) (or any similar or successor provisions). |
Notwithstanding
the foregoing, the Company does not make any representation that the payments or benefits under this Agreement are exempt from,
or satisfy, the requirements of Section 409A and the Company shall have no liability or other obligation to indemnify or hold
harmless Employee or any beneficiary for any tax, additional tax, interest or penalties if any provision of this Agreement or
any action taken with respect thereto is deemed to violate any of the requirements of Section 409A.
| 12. | Severability.
Any provision of this Agreement that is prohibited or unenforceable under Minnesota law
shall be ineffective to the extent of the prohibition or unenforceability and shall be
severed from the balance of this Agreement, without affecting the remaining provisions
of this Agreement. |
| 13. | Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns. |
| 14. | Entire
Agreement. This Agreement and the Exhibit A hereto constitute the entire agreement
between Employee and the Company with respect to the subject matter of this Agreement
and supersede all previous understandings, communications, representations and agreements,
whether verbal or written, with respect to the subject matter hereof. This Agreement
may not be modified except by subsequent agreement in writing signed by the Company and
Employee. |
| 15. | Post-Employment
Cooperation. Employee agrees to cooperate and assist the Company in the handling
or investigation of any administrative charges, government inquires, claims, threats
or lawsuits involving the Company that relate to matters that arose while the Employee
was an employee of the Company. The Company will reimburse Employee for out-of-pocket
expenses incurred in connection with such cooperation. |
| 16. | Notice.
Unless otherwise provided herein, any notice required or given under the terms of
this Agreement shall be in writing and delivered personally, or sent by registered or
certified mail, return receipt requested, postage prepaid, or sent by nationally recognized
overnight carrier, postage prepaid, or sent by facsimile transmission to the Company
at the Company’s principal office and facsimile number in Minnetonka, Minnesota,
or to Employee at the address set forth below. Notice shall be deemed given (a) when
delivered if personally delivered; (b) three business days after having been placed in
the mail, if delivered by registered or certified mail; (c) the business day after having
been placed with a nationally recognized overnight carrier, if delivered by nationally
recognized overnight carrier, and (d) the business day after transmittal when transmitted
with electronic confirmation of receipt, if transmitted by facsimile. Until changed by
notice pursuant to this Section 16, the following shall be the address and facsimile
number to which notices shall be sent: |
If
to the Company, to: |
If
to Employee, to: |
|
Attn:
Kyle Udseth, CEO |
|
|
|
Pineapple
Holdings Inc. |
|
Attn:
Jim Brennan |
|
10900
Red Circle Drive
Minnetonka,
MN 55343
Fax:
(952) 946-1835 |
|
40
Grassmere Avenue
Oakdale,
NY 11769
|
|
|
|
|
|
|
|
|
| 17. | Governing
Law; Breach. This Agreement shall be governed by and construed in accordance with
the laws of Minnesota, without reference to conflicts of laws. In the event either party
is deemed by a court of appropriate jurisdiction to have breached this Agreement, the
nonbreaching party shall be entitled to recover all costs, expenses and attorney’s
fees incurred in enforcing the terms of this Agreement. |
| 18. | Survival.
The provisions of Sections 5, 6, 7, 8, 10, 11, 12, 13, 14, 15, 17, 18 and 19 survive termination of this Agreement (and, for the
avoidance of doubt, any termination of Employee’s employment with the Company). |
| 19. | Termination
of Prior Agreements. By signing below, Employee acknowledges and agree that: (b)
all prior employment or similar agreements (whether written or verbal) between Employee
and Transition Networks/CSI (collectively, the “Prior Agreements”), together
with all of Employee’s rights under the Prior Agreements, are hereby terminated
as of the date hereof; (c) any notice that may be required in connection with the termination
of the Prior Agreements is hereby waived; (d) notwithstanding the termination of the
Prior Agreements or any other provision of this Agreement, the provisions of the Prior
Agreements that impose confidentiality, non-disclosure, non-solicitation, non-competition
and other similar obligations on Employee (the “Existing Restrictive Covenants”)
shall continue in full force and effect in accordance with their respective terms and
Employee agrees to strictly abide by such provisions; and (e) the other provisions of
the Prior Agreements shall continue in effect to the extent necessary to permit the Company
or its successors or assigns to enforce the Existing Restrictive Covenants. |
[Signature
page follows]
Accordingly,
this Employment Agreement is effective as of the Effective Date.
Pineapple
Energy, Inc.
By: _____________________________ |
_____________________________ |
Its:
Chief Executive Officer
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May 28, 2024 |
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