Common use of Termination/Severance Pay Clause in Contracts

Termination/Severance Pay. 12.1 The employment shall automatically terminate 31 December 2014 as set out in Clause 1.1. (a) Beyond the case in Clause 12.1. the employment relationship can be terminated prior to 31 December 2014 by (i) mutual agreement, by (ii) extraordinary termination, or (iii) upon exercise of the “Call Option” or the “Buy-Out Option” (as those terms are defined in the Share Exchange Agreement) and the payment to the Executive in cash of the full Call Option Price or Buy-Out Option Price (as those terms are defined in the Share Exchange Agreement). (b) In the event that: (i) the Call Option or the Buy-Out Option is exercised and paid in full and the Company thereafter elects to terminate the employment of the Executive pursuant to clause (iii) of Clause 12.2(a) above for reasons other than an extraordinary termination, or (ii) the Executive shall terminate this Agreement by reason of the occurrence of one or more events described in Clause 12.2(d) below, then and in either event, the non-competition provisions set forth in Section 8.4 of the Share Exchange Agreement shall terminate. (c) The Company or the Executive may terminate the employment relationship by extraordinary termination in the event that the other party (i) willfully or by gross negligence commits a grave violation of any substantive obligations arising from the employment relationship, or (ii) otherwise engages in conduct rendering further existance of the employment relationship impossible. For the avoidance of doubt, the Company shall have grounds for extraordinary termination of the employment of the Executive, if the Executive (a) is convicted of any crime or other felony, (b) misappropriates any funds, business, opportunity or other benefit belonging to the Company, (c) engages in any competitive activities, (d) fails to devote his full business and professional time to the affairs of the Company and the Company Group, (e) is in material breach of his obligations under this Agreement or otherwise fails or refuses, after written notice of not less than twenty (20) days, to following the reasonable requests and direction of the Board of Directors of the Company, or (f) engages in any other act or omission that would constitute gross negligence, fraud or dereliction of his duties hereunder. In any of these events committed by the Executive, the Executive shall be entitled to receive no further benefits (including Annual Bonus) under this Agreement from and after the date of termination. (d) Grounds for extraordinary termination by the Executive are limited to (i) a material change without just cause in the nature of the Executive’s duties hereunder, (ii) the failure by the Company to timely pay the compensation to which the Executive shall be entitled to receive under this Agreement, (iii) after the expiration of all periods to cure any such default, the failure of Solar Thin Films, Inc. to perform the material covenants and agreements on its part to be performed under Section 8.5 of the Share Exchange Agreement (the “Buy-out Right”) or Section 8.6 of the Share Exchange Agreement (the “Call Option”), or (iv) after the expiration of all periods to cure any such default, the failure of Solar Thin Films, Inc. or the Company to perform any of the material covenants and agreements on their part to be performed under the Shareholders Agreement among the Company and its shareholders, including the Executive. 12.3 If the Company terminates the employment of the Executive in for any reason other than as described in Clause 12.2. then the Executive shall be entitled to receive severance pay equal to (a) his Monthly Salary (payable in equal monthly installments) for a period equal to the duration of the five (5) year period of the Executive’s non-competition agreement set forth in the Stock Exchange Agreement (unless the Company and the Executive mutually agreement to terminate such non-competition agreement; in which event severance pay shall be limited to three months salary commencing from the date of termination of such non-competition agreement), and (b) any Annual Bonus to which the Executive would otherwise be entitled to receive in the Measuring Year in which such termination occurs but at least an Annual Bonus equal to the amount of the Annual Bonus received by the Executive through the twelve (12) month period prior such termination. 12.4 In case of termination the Company is obliged to hand over the salary, the reimbursement of the remaining vacation leave, certifications to the Executive that are due to the Executive according to the rules of the Labor Code on the last working day of the Executive. 12.5 On the information set forth in Clause 76 (7) of the Labour Code: 1. Standard work order: The Executive has flexible work order. 2. Other components of the salary: Annual Bonus according to Clause 4.2 of the Agreement. 3. Day of payment: in arrears within five days after the end of the last business day of each month. 4. Date of entry into work: see Clause 1.1 of the Agreement. 5. Calculation method and the granting of ordinary holiday: see Clause 8.2 and 8.3 of the Agreement. The Executive is entitled to holiday days per year established by Clause 131 of the Labour Code.