EXHIBIT 10.1.23
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of May 6,
2002, by and between Beacon Power Corporation, a Delaware corporation (the
"Company"), and Xxxxxxx Xxxxxxxxxx (the "Executive").
WHEREAS, the Company desires to retain the services of the Executive and
the Executive wishes to remain employed by the Company;
WHEREAS, the Executive and the Company are currently parties to an
Employment Agreement dated October 25, 2000 (the "Former Agreement");
WHEREAS, the Company and Executive desire to enter into a new Employment
Agreement pursuant to the terms and conditions set forth below following the
expiration of the Former Agreement on October 24, 2002;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
Section 1. Term. This Agreement shall be effective for a term commencing on
October 25, 2002 (provided the Executive is an employee of the Company on that
date), and continuing for one year until terminated pursuant to Section 9. The
period of the Executive's employment hereunder is referred to as the "Employment
Period".
Section 2. Duties. The Executive shall serve the Company as Chief Technical
Officer and shall have duties and responsibilities consistent with such
position. The Executive will report to the President and Chief Executive Officer
of the Company. The Executive will generally perform his services at the
Company's principal offices, which are currently located in Wilmington,
Massachusetts, provided, however, that the Executive may be required to travel
from time to time in connection with Company business.
Section 3. Full Time; Best Efforts. During the Employment Period the
Executive shall use his best efforts to promote the interests of the Company and
shall devote his full business time and efforts to its business and affairs. The
Executive shall not engage in any business activity which could reasonably be
expected to interfere with the performance of the Executive's duties, services
and responsibilities hereunder.
Section 4. Compensation. The Executive shall be entitled to compensation as
follows:
(a) Base Salary. During the Employment Period, the Executive will receive a
salary at an annual gross rate of $157,500, (as the same may be adjusted from
time to time, the "Base Salary"), which shall be payable in accordance with the
Company's regular payroll practices. The Executive's Base Salary shall be
reviewed by the Board of Directors of the Company (the "Board") at least
annually and may be increased (but not decreased) in the Board's discretion,
depending upon the performance of the Executive and of the Company.
(b) Bonus. The Executive shall be eligible to receive an annual bonus based
on the achievement of individual and Company performance objectives. The amount
of the annual bonus will be targeted at 50% of the Executive's Base Salary, but
will be granted solely at the discretion of the Board.
(c) Withholding. The Company may withhold from compensation payable to the
Executive all applicable federal, state and local withholding taxes as required
by law.
Section 5. Benefits
(a) Generally. The Executive will be entitled to such fringe benefits as
are generally available to the Company's executive officers, including group
health and dental insurance coverage, group long and short-term disability
insurance coverage, and 401(k) plan and stock plan participation. The Company
shall not reduce in any material respect the benefits currently available to the
Executive from the Company. In the event that any insurance policy is paying
disability benefits to Executive, and if the amount of the Executive's monthly
base salary that would be paid in the absence of such disability is higher than
the monthly insurance payments, then the Company shall pay Executive an amount
per month equal to such excess, for so long as the Executive is employed with
the Company. No such difference shall be payable after the Executive's
employment is terminated with the Company.
(b) Paid Vacation. In addition to U.S. statutory holidays, the Executive
will be entitled to twenty (20) business days of paid vacation per year,
accruing at the rate of 1.66 days per month. A maximum of ten unused vacation
days in any year may be carried over and used in the next year, subject to such
policies as the Company may adopt from time to time with respect thereto.
(c) Life Insurance. The Company will provide the Executive with group term
life insurance in an amount equal to no less than two times his Base Salary (up
to a maximum of $200,000) plus $250,000.
Section 6. Expense Reimbursement. The Executive will be entitled to
reimbursement of all reasonable and necessary business expenses incurred by the
Executive in the ordinary course of business on behalf of the Company, subject
to presentation of appropriate documentation and compliance with policies
established by the Board.
Section 7. Non-Disclosure and Assignment of Invention Agreement:
Indemnification Agreement. The Executive shall execute and deliver to the
Company the Company's standard form of Invention and Non-Disclosure Agreement.
Section 8. Non-Competition and Non-Solicitation Covenants.
(a) Non-competition. The Executive agrees that his employment with the
Company for a period of twelve (12) months thereafter, he will no own, manage,
operate, control, be employed by, provide services as an independent contractor
or consultant to, own any stock or other investment in or debt of, or otherwise
be connected in any manner with the ownership, management, operation or control
of, any business or enterprise that at the time of termination, completes with
the Company or conducts business in a field for which the Board has adopted plan
to enter.
(b) Non-Solicitation. The Executive agrees that during the Employment
Period and for one (1) year thereafter, he will not attempt to persuade or
induce any employee of the Company to terminate his or her employment with the
Company for any reason.
(c) Acknowledgements by Executive. The Executive acknowledges that the
covenants set forth in this Section 8 are reasonable in scope and are no greater
than is necessary to protect the Company's legitimate business interests. The
Executive further acknowledges that any breach by him of the covenants set forth
in this Section 8 would irreparably injure the Company, and that money damages
would not adequately compensate the Company for the injuries that it would
suffer. The parties accordingly agree that in the event of any breach or
threatened breach by the Executive of any of the covenants set forth in this
Section 8, the Company may obtain, from any court of competent jurisdiction,
both preliminary and permanent injunctive relief in order to prevent the
occurrence or continuation of such injuries, without being required to prove
actual damages or post any bond or other security. Nothing in this Agreement
shall prohibit the Company form pursuing any other legal or equitable remedy
that may be available to it in the event of the Executive's breach of any
covenants set forth in this Agreement.
Section 9. Termination.
(a) Employment Termination. The employment of the Executive pursuant to
this Agreement shall terminate upon the occurrence of any of the following:
(i) At the election of the Company, for Cause, immediately upon written
notice by the Company to the Executive. For purposes of this Agreement, "Cause"
shall be deemed to exist upon a reasonable good faith finding by the Board that
the Executive has:
(1) committed an act constituting fraud, embezzlement or other felony,
determined in the reasonable opinion of the Board acting in its sole discretion,
or
(2) materially breached his obligations under this Agreement or the
Inventions and Nondisclosure Agreement, and failed to cure the same within
thirty (30) days after written notice thereof is given to him by the Company, or
(3) materially breached the Company's material policies, including but not
limited to the Company's policies regarding xxxxxxx xxxxxxx, and sexual
harassment, or
(4) engaged in willful misconduct.
(ii) At the election of the Company, without Cause, upon at least ninety
(90) days written notice by the Company to the Executive.
(iii) The death of the Executive, or (in the discretion of the Company) the
Disability of the Executive. For purposes of this Agreement, "Disability" shall
be considered to exist:
(1) if the Executive fails to perform his normal duties for at least 120
days, whether or not consecutive, during any 360-day period, or
(2) if the Executive's insurance company has confirmed that any disability
insurance benefits are going to be paid by reason of Executive's incapacitation,
or
(3) if the Board, acting in its sole discretion, concludes that the
Executive suffers from a degree of physical or mental incapacitation as a result
of illness or accident which makes it reasonably unlikely that the Executive
will be able to perform his normal duties for a period of 120 days. In reaching
this conclusion, the Board may consult third parties, including, but not limited
to, other employees, physicians, psychiatrists, and counselors.
(iv) At the election of the Executive, for any reason, upon at least thirty
(30) days' prior written notice to the Company.
(v) At the election of the Executive for Good Reason, provided that the
Executive shall have given written notice to the Company within thirty (30) days
after he becomes aware of the occurrence of any event of Good reason specifying
such event, and such event shall be continued for a period of thirty (30) days
following such notice. For purposes of this Agreement, "Good Reason" means any
of the following events:
(1) a material diminution in the duties, responsibilities, position of job
title of the Executive without the Executive's written consent, or
(2) a material breach by the Company of its obligations under this
Agreement or Indemnification Agreement, or
(3) a change in the primary location where the Executive is expected to
perform his services hereunder to a location that is more than fifty (50) miles
away from Wilmington, Massachusetts, or
(4) a Sale of the Business (as defined below). For purposes of this
Agreement, a "Sale of the Business" means (A) the acquisition by a person,
group, or party of 50% or more of the outstanding capital stock of the Company,
(B) a change of a majority of the members of the Board when the change of the
various directors occurs substantially the same time, without the approval or
consent of the members of the Board before such change, (C) the acquisition of
the Company by means of a reorganization, merger, consolidation,
recapitalization or asset sale, unless the owners of the capital stock of the
Company before such transaction continue to own more than 50% of the capital
stock of the acquiring or succeeding entity in substantially the same
proportions, or (D) the approval of a liquidation or dissolution of the Company.
(vi) The expiration of the Agreement.
(b) Effect of Termination.
(i) Termination Pursuant to Section 9(a)(i) relating to termination for
cause or Section 9(a)(iv) relating to termination at the election of Executive
for any reason. In the event the Executive's employment is terminated pursuant
to Section 9(a)(i) or Section 9(a)(iv), the Company shall pay to Executive his
accrued Base Salary through the last date of his employment hereunder (the
"Termination Date") and shall continue to provide to the Executive the benefits
described in Section 5 (the "Benefits") through the Termination Date, but shall
have no responsibility for any compensation or benefits to the Executive for any
time period subsequent to the Termination Date.
(ii) Termination pursuant to Section 9(a)(ii) relating to termination
without casuse or Section 9(a)(v) relating to termination at the election of
Executive for Good Reason. In the event the Executive's employment is terminated
pursuant to Section 9(a)(ii) or Section 9(a)(v), the Company shall:
(1) Within ten (10) business days, or as soon as is reasonably possible,
after the Termination date, pay to the Executive a cash amount equal to his then
monthly Base Salary multiplied by the number twelve (12), subject to
withholdings required by law.
(2) Continue to provide the Benefits to the Executive until the first
anniversary of the Termination Date.
(3) Within ten (10) business days, or as soon as is reasonably possible,
after the Termination date, pay the Executive an amount equal to his prior
year's bonus multiplied by a fraction, the numerator of which is the number of
full calendar months that have elapsed in the then current calendar year prior
to the Termination date, and the denominator of which is twelve (12). In no
event, shall payment under this Section 9(b)(ii)(3) exceed 50% of the
Executive's prior year's base pay.
(4) Amend the vesting provisions of any stock option agreement with the
Executive so that in the event of a termination covered by this paragraph, the
Executive's then unvested options would vest as of the Termination Date
according to the following schedule:
Percentage acceleration
If Termination occurs: of unvested options
|X| Within first six months of employment 0%
|X| Within seven and twelve months of 33%
employment
|X| After twelve full months of employment 66%
(iii) Termination pursuant to Section 9(a)(iii) relating to the death or
disability of the Executive. In the event the Executive's employment is
terminated pursuant to Section 9(a)(iii), the Company shall:
(1) Continue to pay to Executive or his estate, as the case may be, an
amount equal to his then current Base Salary for the three (3) month period
following the Termination Date.
(2) Continue for the twelve (12) month period following the Termination
Date all health and dental insurance benefits the Executive was entitled to at
the Termination Date.
(3) Amend the vesting provisions of any stock option agreement with the
Executive so that in the event of a termination covered by this paragraph, the
Executive's then unvested options would vest as of the Termination Date
according to the following schedule:
Percentage acceleration
If Termination occurs: of unvested options
|X| Within first six months of employment 0%
|X| Within seven and twelve months of 33%
employment
|X| After twelve full months of employment 66%
(iv) Golden Parachute Payment Excise Tax Protection. In the event that the
excise tax imposed by Section 4999 of the Internal revenue Code of 1986, as
amended (the "Code"), (or any successor penalty or excise tax subsequently
imposed by law) applies to any payments of benefits paid or conferred under this
Agreement, an additional amount shall be paid by the Company to the Executive
such that the aggregate after-tax amount he shall receive under this Agreement,
including this Section 9(iv), shall have a present value equal to the aggregate
after-tax amount that he would have received and retained had such excise tax
not applied to him. For this purpose, the Executive shall be assumed to be
subject to tax in each year related to computation at the ten maximum applicable
combined Federal and Massachusetts income tax rate, and the determination of the
present value payments to him shall be made consistent with the principles of
Section 280G of the Code.
(c) Continuation /Nonrenewal. Unless this Agreement has been otherwise
terminated before October 24, 2003, the Company and the Executive agree to
discuss in good faith the possible continuation of the Executive's employment,
commencing six months prior to October 24, 2003. If the Company fails to offer
the Executive a new employment agreement, with at least equivalent material
terms to this Agreement, by October 24, 2003 and in fact the Executive ceases to
be an employee of the company following October 24, 2003, the Company shall pay
the Executive a monthly amount until October 24, 2004, equal to the sum of
one-twelve of the Executive's Base Salary in effect at the expiration of the
Agreement plus one-twelve of the Executive's bonus for the most recent fiscal
year of the Company, in accordance with the Company's regular payroll practices,
less applicable holdings required by law. In the event the Executive and the
Company do not sign a new employment agreement by October 24, 2003 but the
Executive's employment with the Company continues on an at-will basis past that
date by terminates for any reason before October 24, 2004, payment of the
foregoing monthly amount will commence after such termination and continue only
until October 24, 2004. If the at-will employment continues after October 24,
2004 but then terminates, no such monthly amount will be paid.
Section 10. No Conflicting Agreements. The Executive represents and
warrants to the Company that he is not a party to or bound by any
confidentiality, non-competition, non-solicitation or other agreement or
restriction which could conflict with or be violated by the performance of his
duties for the Company.
Section 11. No Disparagement. Each party agrees that at all times following
the termination of the Executive's employment hereunder, such party shall not
make or cause to be made, directly or indirectly, any statements to any third
party that disparage or denigrate the other party or, in the case of the
Company, any of its current or former directors, officers or employees, unless
required by law.
Section 12. Enforceability. This Agreement shall be interpreted in such a
manner as to be effective and valid under applicable law, but if any provision
hereof shall be prohibited or invalid under any such law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating or nullifying the remainder of such provision or any other
provisions of this Agreement. If any one or more of the provisions contained in
this Agreement shall for any reason be construed by limiting and reducing it so
as to be enforceable to the maximum extent permitted by applicable law.
Section 13. Notices. Any notice or other communication given pursuant to
this Agreement shall be in writing and shall be personally delivered, sent by
nationally recognized overnight courier or express mail, or mailed by first
class certified or registered mail, postage prepaid, return receipt requested as
follows:
(a) If to the Executive: (b) If to the Company:
[address deleted] Beacon Power Corporation
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Chief Executive Officer
or to such address as a party shall have designated by notice to the other
party.
Section 14. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the Commonwealth of
Massachusetts without giving effect to any choice or conflict of laws provision
or rule that would cause the application of the domestic substantive laws of any
other jurisdiction.
Section 15. Amendments and Waivers. No amendment or waiver of this
Agreement or any provision hereof shall be binding upon the party against whom
enforcement of such amendment or waiver is sought unless it is made in writing
and signed by or on behalf of such party. The waiver by either party of a breach
of any provision of this Agreement by the other party shall not operate and be
construed as a waiver or a continuing waiver by that party of the same or any
subsequent breach of any provision of this Agreement by the other party.
Section 16. Binding Effect. This Agreement shall be binding on and inure to
the benefit of the parties hereto and their respective heirs, executors and
administrators, successors and assigns, except that it may not be assigned by
the Company without the Executive's consent, provided that the Company may
assign this Agreement to an entity that acquires substantially all the Company's
assets by means of an asset sale, merger or otherwise, provided further that
such entity shall agree in writing to assume and be bound by this Agreement.
This Agreement is personal to the Executive and is not assignable by him.
Section 17. Entire Agreement. This Agreement constitutes the final and
entire Agreement of the parties with respect to the matters covered hereby and
replaces and supersedes all other agreements and understandings relating hereto.
The Executive expressly acknowledges that the Former Agreement is no longer
valid and is of no force and effect following its expiration on October, 2002.
Section 18. Survivability. Sections 8 and 12 herein shall survive the
expiration and/or termination of this Agreement.
Section 19. Pronouns. Whenever the context may require, any pronouns used
in this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.
Section 20. Counterparts. This Agreement may be executed in any number of
counterparts and with counterpart signatures pages, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument
as of the date first above written.
EXECUTIVE BEACON POWER CORPORATION
_______________________ By: _____________________________
Xxxxxxx X. Xxxxxxxxxx Signature
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