EXHIBIT 10.1
August 21, 1998
Xx. Xxxxx X. Xxxxx VIA HAND DELIVERY
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Dear Xxx:
This letter confirms our discussions and the agreement made
between you and Electrosource, Inc. ("XXXX") regarding your
resignation from your employment with XXXX, ELSI's payment of
special separation compensation, and various related matters. The
terms of ELSI's offer in this regard are stated below, and your
acceptance of such terms will be shown by your signature in the
space provided at the end of this letter. On behalf of XXXX, I
want to express appreciation for your service and contributions,
and wish you success in your future endeavors.
1. Resignation from Employment and from All Offices. Based on
your voluntary resignation for the purpose of retirement, your
employment with XXXX will terminate effective with the close of
business on Monday, August 31, 1998 (the "Separation Date"). By
your agreement and signature below, you also resign effective as
of the Separation Date from your offices of General Counsel and
Vice President, and all other offices, if any, held by you with
XXXX and any of ELSI's subsidiary or affiliated companies.
2. Salary and Benefits. In accordance with ELSI's existing
policies or at its discretion, you have received or will receive
the following payments and benefits pursuant to your employment
with XXXX and your participation in its benefit plans:
(a) Payment of your regular base salary ($10,426.66 per
month), less all legal deductions, through the Separation Date;
(b) Payment of accrued and unused vacation leave benefits,
if any, as of the Separation Date;
(c) Health and dental benefits through the Electrosource
group insurance plan through the Separation Date, subject to your
COBRA continuation rights in accordance with applicable law;
(d) Continuation of your Group Term Life, Accidental Death
and Dismemberment and Short and Long Term Disability insurance
coverage through the Separation Date, with no conversion option
available for any of this insurance;
(e) Participation in the Section 125 Plan through the
Separation Date and return of any unreimbursed election monies
thereafter pursuant to Plan terms;
(f) Payment of vested benefits in the Electrosource 401 k
Plan in accordance with the terms of the Plan;
(g) On your timely election, exercise of options in the
1996 Stock Option Plan of Electrosource, Inc. (the "Plan") in
accordance with the terms of the Plan and Option Grants 00000578,
00000579, 00000580, 00000581, 00000582, 00000583, 00000685, as
amended or replaced prior to the Separation Date, a summary of
which is attached to this letter as Exhibit A and by reference
made a part hereof; and
(h) On your timely election, exercise of contractual
warrants in accordance with the terms January 2, 1997, Securities
Subscription Agreement/Executive Officers and Warrant Agreement
and Stock Purchase Warrant dated January 23, 1997, as amended or
replaced prior to the Separate Date, attached to this letter as
Exhibits B-1 and B-2 and by reference made a part hereof.
The amounts paid in accordance with subparagraphs (a) and (b) of
this paragraph are gross amounts, subject to lawful deductions,
including any deductions you have previously authorized, and will
be paid to you, within six days after the Separation Date.
After the termination of your employment, you are entitled at
your option to continue your group health insurance and dental
coverage at your own expense, in accordance with applicable law.
Please complete a COBRA election form, which will be furnished to
you, and return it to the undersigned at your earliest
convenience, in accordance with the terms of the election form,
if you elect to continue such insurance coverage. Continued
coverage for yourself and your family will cost $424.50 per
month.
XXXX will settle promptly all authorized reimbursable business
expenses, if any, when you have submitted appropriate expense
reports along with the required receipts and documenting
information. Please submit any request for reimbursement as soon
as possible, but not later than September 30, 1998.
By your signature on this letter, you represent and warrant that
on the advice of counsel you have no other claims or entitlements
to Company wages or benefits other than as set forth herein.
3. Special Separation Compensation. Contingent upon your
acceptance of the terms of this Agreement, XXXX offers you, in
consideration of your undertakings set forth in Paragraphs 6
(General Release), 7 (Confidentiality, Nonprosecution,
Nondisparagement, and Cooperation), and 8 (Agreement Not to Seek
Reemployment) of this Agreement, in addition to the pay and
benefits you will receive pursuant to Paragraph 2, the following
Special Separation Compensation:
(a) Continuation of your pay after the Separation Date
stated in this letter through the earlier of (i) your obtaining
full-time employment and receiving cash compensation at or above
your regular base salary rate, or (ii) October 31, 1998, at your
regular base salary rate. Payment will be made in equal bi-
weekly installments of $4,812.31 on ELSI's regular bi-weekly pay
dates commencing on the Effective Date of this Agreement (as
defined in Paragraph 14). The foregoing sums are gross amounts,
subject to lawful deductions. It is expressly the mutual intent
of you and XXXX that the foregoing amounts are tendered and shall
be accepted and treated as wages in lieu of notice for purposes
of the Texas Unemployment Compensation Act, with the result
according to law that you should not be eligible for receipt of
unemployment compensation benefits during the period of time over
which such continuing wages are paid.
(b) If you elect continuation of your group health and
dental insurance coverage under COBRA as referred to in Paragraph
2, payment by XXXX, for a period not to exceed two months after
the Separation Date stated in this letter, of such portion of the
health and dental insurance premiums as is equivalent to the
amount that would have been paid by XXXX on your behalf if you
had continued employment with XXXX during such period. Further
upon your election of such COBRA continuation, by your signature
below you authorize XXXX to withhold from the payments described
in Paragraph 3(a) the portion of premium required to be paid by
you, on the same cost allocation basis as if you had continued
employment with XXXX during the period of ELSI's payments.
By executing this Agreement, you acknowledge and agree
that neither XXXX nor any of the other Released Parties (as
defined in Paragraph 6 below) has any prior legal obligation to
provide all or any portion of the Special Separation Compensation
to you. You also acknowledge and agree that your acceptance of
the Special Separation Compensation and attendant obligations as
described in this Agreement is in consideration of the promises
and undertakings of XXXX as set forth herein.
4. Return of Property/Orderly Transaction. You must return to
XXXX by no later than the close of business on August 31, 1998,
or as soon thereafter as is possible with respect to any items
not then immediately available, any and all items of ELSI's
property, including without limitation keys, computers, software,
calculators, equipment, credit cards, technical data, forms,
files, manuals, correspondence, business records, personnel data,
lists of employees, salary and benefits information, lists of
suppliers and vendors, contracts, contract information,
brochures, catalogs, training materials, computer tapes and
diskettes or other portable media, computer-readable files and
data stored on any hard drive or other installed or portable
device, and data processing reports, any other process- or
technical-procedures-related information, and any and all other
XXXX documents or property which you have had possession of or
control over during the course of your employment with XXXX.
Consistent with your ethical obligations as an attorney, and as
the Company's General Counsel, you will provide me on or before
your Separation Date with a written summary of all outstanding
Company legal and financial matters of which you are aware, the
current status, any applicable deadline dates, and if the matter
is being handled by outside counsel, the name and telephone
number of the counsel.
5. Use of Confidential Information. Whether or not you accept
the terms of this Agreement, you are hereby notified that all of
the documents and information to which you have had access during
your employment, including but not limited to all information
pertaining to any specific business transactions in which XXXX or
any of the other Released Parties (as defined in Paragraph 6
below) were, are, or may be involved, all information concerning
salary and benefits paid to current or former employees of XXXX
or any of the other Released Parties, all personnel information
relating in any way to current or former employees of XXXX or
those of any of the other Released Parties, all information
pertaining in any way to technical processes and procedures of
XXXX, all legal, financial and budgetary information, all other
information specified in Paragraph 4 above, and in general, the
business and operations of XXXX or any of the other Released
Parties, except such information as has been publicly disclosed
by XXXX or any of the other Released Parties, are considered
confidential and are not to be disseminated or disclosed by you
to any other parties, except as may be required by law or
judicial process. In the event it appears that you will be
compelled by law or judicial process to disclose such
confidential information, to avoid potential liability you should
notify ELSI's CEO in writing immediately upon your receipt of a
subpoena or other legal process.
6. General Release. In consideration of the Special Separation
Compensation described in Paragraph 3 above, you and your family
members, heirs, successors, and assigns (collectively the
"Releasing Parties") hereby release, acquit, and forever
discharge any and all claims and demands of whatever kind or
character, whether vicarious, derivative, or direct, that you or
they, individually, collectively, or otherwise, may have or
assert against: (i) XXXX; (ii) any affiliated entity of XXXX or
its shareholders; or (iii) any officer, member of ELSI's or any
affiliate's Board of Directors, fiduciary, agent, employee,
representative, insurer, attorney, or any successors and assigns
of the persons or entities just named (collectively the "Released
Parties"). This General Release includes but is not limited to
any claim or demand based on any federal, state, or local
statutory or common law or constitutional provision that applies
or is asserted to apply, directly or indirectly, to the
formation, continuation, or termination of your employment
relationship with XXXX. Thus, you and the other Releasing
Parties agree not to make any claims or demands against XXXX or
any of the other Released Parties such as for wrongful discharge;
any form of unlawful employment discrimination; retaliation;
breach of contract (express or implied); breach of any duty of
good faith and fair dealing; violation of the public policy of
the United States, the State of Texas, or any other state;
intentional or negligent infliction of emotional distress;
tortious interference with contract; promissory estoppel;
detrimental reliance; defamation of character; duress; negligent
misrepresentation; intentional misrepresentation or fraud;
invasion of privacy; loss of consortium; assault; battery;
conspiracy; bad faith; negligent hiring, retention, or
supervision; any intentional or negligent act of personal injury;
any alleged act of harassment or intimidation; or any other
intentional or negligent tort; or any alleged violation of the
Age Discrimination in Employment Act of 1967, as amended; Title
VII of the Civil Rights Act of 1964, as amended; the Americans
with Disabilities Act of 1990; the Family and Medical Leave Act
of 1993; the Employee Retirement Income Security Act of 1974; the
Fair Labor Standards Act; the Fair Credit Reporting Act; the
Texas Commission on Human Rights Act; and the Texas Wage Payment
Statute.
The effect of your acceptance of this Agreement is to release,
acquit, and forever discharge any and all claims and demands of
whatever kind or character that you or any of the other Releasing
Parties may now have or hereafter have or assert against XXXX or
any of the other Released Parties for any liability, whether
vicarious, derivative, or direct. This release includes any
claims or demands for damages (actual or punitive), back wages,
future wages or front pay, commissions, bonuses, severance
benefits, medical expenses and the costs of any counseling,
reinstatement or priority placement, promotion, accrued vacation
leave benefits, past and future medical or other employment
benefits (except as to which there is existing contractual or
vested entitlement as identified in Paragraph 2 herein) including
contributions to any employee benefit plans, retirement benefits
(except as to which there is vested entitlement as identified in
Paragraph 2 herein), relocation expenses, compensatory damages,
injunctive relief, liquidated damages, penalties, equitable
relief, attorney's fees, costs of court, disbursements, interest,
and any and all other loss, expense, or detriment of whatever
kind or character, resulting from, growing out of, connected
with, or related in any way to the formation, continuation, or
termination of your employment relationship with XXXX. This
General Release does not apply to any rights or claims that may
arise after the date this Agreement is executed.
7. Confidentiality, Nonprosecution, Nondisparagement, and
Cooperation.
(a) The terms of this Agreement shall be and remain
confidential, and shall not be disclosed by you to any persons
other than the Releasing Parties and your spouse, attorney, and
accountant or tax return preparer if such persons have agreed to
keep such information confidential. Notwithstanding the
foregoing, either party may make any disclosures concerning the
terms of this Agreement that are required by law.
(b) Except as requested by XXXX or as compelled by law or
judicial process, you will not assist, cooperate with, or supply
information of any kind to any individual or private-party
litigant or their agents or attorneys (i) in any proceeding,
investigation, or inquiry raising issues under the Age
Discrimination in Employment Act of 1967, Title VII of the Civil
Rights Act of 1964, the Americans with Disabilities Act of 1990,
the Family and Medical Leave Act of 1993, the Employee Retirement
Income Security Act of 1974, the Fair Labor Standards Act, the
Fair Credit Reporting Act, the Texas Commission on Human Rights
Act, the Texas Wage Payment Statute, or any other federal, state,
or local law involving the formation, continuation, or
termination of your employment relationship, or the employment of
other persons, by XXXX or any of the other Released Parties; or
(ii) in any other litigation against XXXX or any of the other
Released Parties.
(c) Except as permitted by law, you will not initiate any
investigation or inquiry, or any other action of any kind,
including an administrative charge with any governmental agency,
with respect to ELSI's facilities, employment practices, or
business operations, relating to the termination of your
employment as provided for in this Agreement or otherwise.
(d) You will not make to any other parties any statement,
oral or written, which directly or indirectly impugns the quality
or integrity of ELSI's or any of the other Released Parties'
business or employment practices, or any other disparaging or
derogatory remarks about XXXX or any of the other Released
Parties, their officers, directors, stockholders, managerial
personnel, or other employees. XXXX shall instruct its officers
not to make any disparaging or derogatory remarks about you.
(e) It shall not be a breach of the obligations set forth
in this Paragraph for you, your spouse, or your attorneys to
state to any person that any differences, if you believe any to
exist, between you and XXXX have been settled or satisfactorily
resolved.
(f) You agree to cooperate fully and completely with XXXX
or any of the other Released Parties in any matter related to
ELSI's business or activities, as follows: (i) to be available at
mutually agreeable times, personally or by telephone, as
necessary, at such reasonable times and without unreasonable
interference with your employment or personal activities, to
provide such information as may be from time to time requested by
XXXX in its sole discretion in connection with various matters in
which you were involved during your employment with XXXX; and
(ii) in all pending and future litigation involving XXXX or any
of the other Released Parties, which obligation includes your
promptly meeting with counsel for XXXX or the other Released
parties at reasonable times upon their request, and providing
testimony in court or upon deposition that is truthful, accurate,
and complete, according to information known to you. If you
appear as a witness in any pending or future litigation at the
request of XXXX or any of the other Released Parties, XXXX agrees
to reimburse you, upon submission of substantiating
documentation, for necessary and reasonable expenses incurred by
you as a result of your testifying.
8. Agreement Not to Seek Reemployment. You acknowledge that
XXXX and the other Released Parties have no obligation to employ
or to hire or rehire you, to consider you for hire, or to deal
with you in any respect with regard to future employment or
potential employment at any location, office, or place of
business. Therefore, and in order to prevent the occurrence of
any future dispute regarding employment opportunities, you hereby
agree: (i) that you will not apply for or otherwise seek
employment by XXXX or its affiliates at any time in the future,
at any location, office, or place of business, and (ii) that your
forbearance to seek future employment as just stated is purely
contractual and is in no way involuntary, discriminatory, or
retaliatory.
9. Nonadmission of Liability or Wrongdoing. This Agreement does
not in any manner constitute an admission of liability or
wrongdoing on the part of XXXX or any of the other Released
Parties, but XXXX and the other Released Parties expressly deny
any such liability or wrongdoing; and, except to the extent
necessary to enforce this Agreement, neither this Agreement nor
any part of it may be construed, used, or admitted into evidence
in any judicial, administrative, or arbitral proceedings as an
admission of any kind by XXXX or any of the other Released
Parties.
10. Authority to Execute. You represent and warrant that you
have the authority to execute this Agreement on behalf of all the
Releasing Parties. You further agree to indemnify fully and hold
harmless XXXX and any of the other Released Parties from any and
all claims brought by the Releasing Parties or derivative of your
own with respect to the subject matter of this Agreement,
including the amount of any such claims XXXX or any of the other
Released Parties are compelled to pay, and the costs and
attorney's fees incurred in defending against all such claims.
11. Governing Law and Interpretation. This Agreement and the
rights and duties of the parties under it shall be governed by
and construed in accordance with the laws of the State of Texas.
If any provision of this Agreement is held to be unenforceable,
such provision shall be considered separate, distinct, and
severable from the other remaining provisions of this Agreement,
and shall not affect the validity or enforceability of such other
remaining provisions; and in all other respects, this Agreement
shall remain in full force and effect. If any provision of this
Agreement is held to be unenforceable as written but may be made
to be enforceable by limitation thereof, then such provision
shall be enforceable to the maximum extent permitted by
applicable law. The language of all parts of this Agreement
shall in all cases be construed as a whole, according to its fair
meaning, and not strictly for or against any of the parties.
12. Breach of Agreement. Should you fail to comply with any of
your obligations as set forth in this Agreement, you further
acknowledge and agree that in addition to any other legal or
equitable remedy available, XXXX will have no obligation to pay
you the Special Separation Compensation described above, and you
may be required to repay the Special Separation Compensation
provided to you by this Agreement; but that all other provisions
of this Agreement shall remain in full force and effect. You may
also be liable for ELSI's damages and its attorney's fees and
expenses resulting from your breach of any provision in this
Agreement.
13. Expiration of Offer. ELSI's offer of the proposed Special
Separation Compensation will expire at 12:01 a.m. on the twenty-
second day following the date of this letter, i.e. on September
12, 1998. You may accept this offer at any time before
expiration by signing this letter in the space provided below,
and returning it to the undersigned by personal or messenger
delivery, or overnight delivery service. Whether or not you
execute this Agreement, you will receive the items set forth in
Paragraph 2, and are required to follow the obligations set forth
in Paragraphs 4 and 5.
14. Effective Date. This Agreement will become effective and
enforceable upon the expiration of seven days after your
execution of it ("Effective Date"). At any time before the
Effective Date of this Agreement, you may revoke your acceptance.
15. Consultation With an Attorney. You have the right and are
encouraged to consult with an attorney of your choosing before
executing this Agreement.
16. Voluntary Agreement. You acknowledge that execution of this
Agreement is knowing and voluntary on your part, and you have had
a reasonable time to deliberate regarding its terms.
17. Entire Agreement. This Agreement, and its attached exhibits
A, B-1 and B-2, together with the plans referenced in paragraph 2
herein contain and constitute the entire understanding and
agreement between you and XXXX, and may be modified only by a
written contemporaneous agreement executed by both you and an
authorized official of XXXX.
________________________________________
If you are in agreement with the foregoing provisions,
please execute, in front of a notary, both originals of this
letter in the space provided below. You should return one
executed original as provided above, and maintain the other in
your files. This letter shall then constitute a valid and
binding agreement by and between XXXX and you, effective as of
the expiration of seven days after the date of your execution.
Sincerely,
ELECTROSOURCE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Chairman, President and CEO
ACCEPTED AND AGREED TO:
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
Date Signed: August 31, 1998
[This agreement must be signed on or after the last date of
employment.]
State of Texas
County of Xxxx
This instrument was acknowledged before me on 8/31/98 by
Xxxxx X. Xxxxx.
/s/ Xxxxxx X. Xxxxxxx (Seal)
Notary Public, in and for
The State of Texas
Commission Expires: 7/17/99
EXHIBIT A
to Severance Agreement
dated August 31, 1998
Personnel Option Status Electrosource, Inc. Page: 1
ID: 00-0000000-0 File: Optstmt
AS OF 2809 IH 35 South Date: 8/21/98
8/19/98 Xxx Xxxxxx, XX 00000 Time: 1:54:42 PM
Xxxxx X. Xxxxx ID: 0157
1507 Falcon Ledge
Xxxxxx, XX 00000
Number Option Plan Type Granted Price Exercised Vested Cancelled Unvested Outstanding Exercisable
Date
00000578 10/30/96 1996 ISO 5,000 $36.2500 0 5,000 0 0 5,000 5,000
00000579 10/30/96 1996 ISO 5,000 $35.0000 0 5,000 0 0 5,000 5,000
00000580 10/30/96 1996 ISO 500 $33.7500 0 500 0 0 500 500
00000581 10/30/96 1996 ISO 1,667 $12.5000 0 1,667 0 0 1,667 1,667
00000582 10/30/96 1996 ISO 9,500 $11.6000 0 6,333 0 3,167 9,500 6,333
00000583 10/30/96 1996 ISO 8,500 $5.2800 0 8,500 0 0 8,500 8,500
00000685 6/25/97 1996 ISO 17,500 $6.9380 0 5,833 0 11,667 17,500 5,833
47,667 0 32,833 0 14,834 47,667 32,833
Information Currently on File
Tax Rate % Broker Registration Alternate Address
Federal 28.00
Medicare 1.45
Social Security 6.2
EXHIBIT B-1
to Severance Agreement
dated August 31, 1998
SECURITIES SUBSCRIPTION AGREEMENT
EXECUTIVE OFFICERS
THE OFFERING OF SECURITIES OF ELECTROSOURCE, INC. HEREUNDER HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), IN RELIANCE UPON THE AVAILABILITY OF
EXEMPTION FROM REGISTRATION PROVIDED BY SECTION 4(2) OF SAID ACT
AND REGULATION D OF THE GENERAL RULES AND REGULATIONS PROMULGATED
THEREUNDER. THERE ARE SUBSTANTIAL RESTRICTIONS UPON TRANSFER OF
THE SECURITIES. ACCORDINGLY, THE SECURITIES ARE NOT FREELY
TRANSFERABLE AND MAY HAVE TO BE HELD UNTIL TRANSFER MAY BE MADE
PURSUANT TO A REGISTERED TRANSACTION OR AN EXEMPTION FROM
REGISTRATION.
THIS SECURITIES SUBSCRIPTION AGREEMENT dated as of January
2, 1997 (the "Agreement"), is executed by the undersigned
"Purchaser" in connection with the private placement of common
stock and warrants of Electrosource, Inc., a corporation
organized under the laws of Delaware, with its principal
executive offices located at 0000 XX 00 Xxxxx, Xxx Xxxxxx, Xxxxx
00000 (hereinafter referred to as "Company").
1. Agreement to Subscribe; Purchase Price.
(a) Subscription. The undersigned Purchaser hereby
subscribes for and agrees to purchase 3,810 shares of the
Company's Common Stock ("Shares") for $6.5625 per share or
$25,003.13 in total ("Purchase Price").
(b) Warrants. For purchase of the Common Stock, the
Purchaser shall also receive warrants ("Warrants") for
purchase of 25,003 shares (a warrant for every $1.00
invested) of common stock at the exercise price of $7.56 per
share. The warrants shall have a two (2) year term. The
form of the warrant is attached hereto as Exhibit "A."
(c) Payment. The Purchase Price shall be paid by
delivering immediately available funds by check or wire
transfer as directed by Company for delivery of the Shares
and Warrants versus payment.
(d) Closing. The closing of the transactions contemplated
by this Agreement shall occur on or before January 17, 1997,
or such earlier or later date as is mutually agreed to by
Purchaser and Company.
2. Company Representations.
(a) Corporate Power. The Company has all requisite legal
and corporate power to execute and deliver this Agreement,
and all requisite and legal corporate power to sell and
issue the Shares and Warrants and to carry out and perform
its obligations under the terms of this Agreement.
(b) Authorization. All corporate action on the part of The
Company necessary for the authorization, execution, delivery
and performance of this Agreement, the authorization, sale,
issuance and delivery of the Shares and Warrants and the
performance of the company's obligations hereunder has been
taken or will be taken prior to closing. This Agreement,
when executed and delivered, shall constitute the valid and
binding obligation of the Company, enforceable in accordance
with its terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of
debtors, rules of law governing specific performance,
injunctive relief or other equitable remedies, and
limitations of public policy. The Shares and Warrants
issued in compliance with the provisions of this Agreement
will be validly issued, fully paid and non-assessable and
free of any liens or encumbrances; provided, however, that
the Shares and Warrants are subject to restrictions on
transfer under state and/or federal securities laws as set
forth herein. The Shares and Warrants are not subject to
any preemptive rights or rights of first refusal.
3. Purchaser Representation.
The Purchaser hereby represents and warrants to the Company
as follows, and acknowledges and agrees that the Company will
rely upon such representations and warranties in accepting the
subscription of the undersigned for the purchase of the Shares:
(a) The Purchaser is an executive officer of the Company
and is fully familiar with its business and financial
condition.
(b) No representations or warranties have been made to the
Purchaser by the Company, or any agent, employee or
affiliate of the Company, and in entering into this
transaction the Purchaser is not relying upon any
information other than the information contained in the
documents and reports filed by the Company with the
Securities and Exchange Commission under the Securities
Exchange Act of 1934 (the "SEC filings").
(c) The Purchaser is aware that:
(i) there are substantial risks incident to an
investment in the Shares, and such investment is
speculative and involves a high degree of risk of loss
of its entire investment in the Company;
(ii) no Federal or State agency has passed upon the
sale of the Shares or made any finding or determination
concerning the fairness of this investment, and the
terms of the offering may not conform to the guidelines
of certain state securities administrators;
(iii) the Company has and may continue to have a
significant need for cash for operating expenses and
other purposes; that the aggregate proceeds from the
sale of the Shares alone may not be sufficient to
satisfy the cash requirements of the Company for any
appreciable period of time; that other sources of funds
may not be available;
(iv) the industry in which the Company is engaged is
occupied by several firms, some of which will be
substantially greater in size and have financial
resources and personnel staff larger and more
established than those of the Company, and there can be
no assurance that the Company will be able to compete
in the market effectively;
(d) The Purchaser understands that an investment in the
Company is an illiquid investment and further recognizes and
agrees that because the Shares have not been registered
under applicable securities laws or an exemption from such
registration is available, the Purchaser must bear the
economic risk of the investment for an indefinite period of
time. The Purchaser further acknowledges that each
certificate representing Shares will bear a legend to the
effect that the Shares have not been registered under any
securities law and setting forth or referring to the
restrictions on transferability and sale of the shares. The
Purchaser further acknowledges that the Company will issue
stop transfer orders to its transfer agent restricting
transfer of the Shares in the absence of registration under
the securities laws or exemption therefrom.
(e) The Purchaser acknowledges that there are substantial
restrictions on the transferability of the Shares. Unless
the Shares are registered under the Securities Act and any
applicable state securities law, the Shares may not be, and
the Purchaser agrees that they shall not be, sold unless
such sale is exempt from such registration under the
Securities Act and any other applicable state blue sky laws
or regulations. The Purchaser further acknowledges that the
Company is under no obligation to aid it in obtaining any
exemption from the registration requirements. The Purchaser
also acknowledges responsibility for compliance with all
conditions on transfer imposed by any securities
administrator of any state.
(f) The Purchaser is acquiring the Shares for its own
account, as principal, and not for the account of any other
person.
4. Shareholder Approval.
Purchase of the Shares and Warrants is subject to the
approval of the shareholders of the Company at the next
annual general meeting. If the purchase is not approved,
the purchase price will be returned with interest at the
prime rate.
ELECTROSOURCE, INC. (PURCHASER)
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxx
Printed Name: Xxxxxxx X. Xxxxxxx Printed Name: Xxxxx X. Xxxxx
Its: Executive VP, Marketing
EXHIBIT A
to Securities Subscription Agreement
Executive Officers (Exhibit B-1)
(Warrant No.) WT-_______
ELECTROSOURCE, INC.
WARRANT AGREEMENT
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON
ITS EXERCISE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS
OF ANY STATE. THIS WARRANT MAY NOT BE EXERCISED, AND
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON
ITS EXERCISE MAY BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED, IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND SUCH LAWS OR
AN OPINION OF COUNSEL FOR THE HOLDER OF THIS WARRANT
REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT
THAT AN EXEMPTION FROM REGISTRATION THEREUNDER IS
AVAILABLE. NEITHER THE OFFERING OF THIS WARRANT NOR
ANY OFFERING MATERIALS HAVE BEEN REVIEWED BY AN
ADMINISTRATOR UNDER SUCH ACT OR ANY APPLICABLE STATE
LAW.
Warrant to Purchase
January 17, 1997 _________ Shares
of Common Stock
The undersigned, Electrosource, Inc. (the "Company"), a
Delaware corporation, for good and valuable consideration desires
to grant to __________________________________ ("Purchaser") a
warrant or option to acquire shares of Common Stock in the
Company. The option covered hereby is granted pursuant to the
terms of a Subscription Agreement ("Subscription Agreement")
dated as of December 20, 1996 between the Company and Purchaser,
and all provisions of that Agreement are incorporated herein by
reference. Defined terms shall have the same meaning as in the
Subscription Agreement.
1. Warrant. The Company does hereby grant to Purchaser
the exclusive option to purchase from the Company all or any part
of an aggregate of ____________________________ (__________)
shares ("Shares") of Common Stock of the Company at the price of
Seven and 56/100 Dollars ($7.56) per share.
2. Term. The Option shall be exercisable as provided in
the Subscription Agreement and otherwise at any time until the
option expires or terminates in accordance with the provisions
hereof. This option shall in any event terminate at 5:00 o'clock
P.M., San Marcos, Texas time two (2) years after its date of
grant.
3. Exercise. To exercise this option, Purchaser shall
give written notice of such election to the Company at its
Corporate Headquarters, Attention Corporate Secretary, so as to
be received by the Company within the period this option is
exercisable, which notice shall specify the number of shares to
be purchased and be accompanied by payment in full. Payment for
such shares may be by check or wire transfer, as directed by the
Company.
4. Share Issue. Upon receipt by the Company of proper
notice of exercise of this Warrant, the Company as promptly as
practicable and subject to the other provisions in this Warrant,
shall deliver a certificate or certificates representing Shares
so purchased, and shall pay all original issuance or transfer
taxes on the exercise of this Warrant, and all other fees and
expenses necessarily incurred by the Company in connection
therewith. Certificates evidencing such Shares may have endorsed
thereon such language as may be deemed necessary or advisable by
counsel for the Company in order to ensure compliance with the
applicable securities laws or regulations. Registration rights
shall be as set forth in the Subscription Agreement.
5. Change in Capitalization; Merger; Liquidation. The
number of Shares of Common Stock covered by this Warrant, and the
price per share shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common
Stock resulting from a subdivision or combination of shares or
the payment of a stock dividend in shares of Common Stock to
holders of outstanding shares of Common Stock. If the Company
shall be the surviving corporation in any merger or
consolidation, recapitalization, reclassification of shares or
similar reorganization, Purchaser shall be entitled to purchase,
at the same times and upon the same terms and conditions as are
provided in this Warrant, the number and class of shares of stock
or other securities to which it would have been entitled to
receive as a result of such transaction as if the Purchaser had
exercised the Warrant in full on the record date for the
transaction in question. In the event of a dissolution or
liquidation of the company or a merger or consolidation in which
the Company is not the surviving corporation, this Warrant shall
terminate upon the effective date thereof, except to the extent
that another corporation assumes such Warrant or substitutes
another option therefore. In the event of a change of the
Company's shares of Common Stock with par value into the same
number of shares with a different par value or without par value,
the shares resulting from any such change shall be deemed to be
Common Stock.
IN WITNESS WHEREOF, the Parties have executed this
Agreement on the date first written above.
ELECTROSOURCE, INC. (PURCHASER)
By: By:
Printed Name: Printed Name:
Its: Its:
EXHIBIT B-2
to Severance Agreement
dated August 31, 1998
ELECTROSOURCE, INC.
STOCK PURCHASE WARRANT
To Purchase Shares of Common Stock of
ELECTROSOURCE, INC.
Expiring January 23, 1999
No. W10A-102
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON
ITS EXERCISE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS
OF ANY STATE. THIS WARRANT MAY NOT BE EXERCISED, AND
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON
ITS EXERCISE MAY BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED, IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND SUCH LAWS OR
AN OPINION OF COUNSEL FOR THE HOLDER OF THIS WARRANT
REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT
THAT AN EXEMPTION FROM REGISTRATION THEREUNDER IS
AVAILABLE. NEITHER THE OFFERING OF THIS WARRANT NOR
ANY OFFERING MATERIALS HAVE BEEN REVIEWED BY AN
ADMINISTRATOR UNDER SUCH ACT OR ANY APPLICABLE STATE
LAW.
Warrant to Purchase
January 23, 1997 25,003 Shares
of Common Stock
The undersigned, Electrosource, Inc. (the "Company"), a
Delaware corporation, for good and valuable consideration desires
to grant to Xxxxx X. Xxxxx ("Purchaser") a warrant or option to
acquire shares of Common Stock in the Company. The option
covered hereby is granted pursuant to the terms of a Subscription
Agreement ("Subscription Agreement") dated as of January 23, 1997
between the Company and Purchaser, and all provisions of that
Agreement are incorporated herein by reference. Defined terms
shall have the same meaning as in the Subscription Agreement.
1. Warrant. The Company does hereby grant to Purchaser
the exclusive option to purchase from the Company all or any part
of an aggregate of Twenty-five Thousand Three (25,003) shares
("Shares") of Common Stock of the Company at the price of Seven
and 56/100 Dollars ($7.56) per share.
2. Term. The Option shall be exercisable upon shareholder
approval and otherwise as provided in the Subscription Agreement
and otherwise at any time until the option expires or terminates
in accordance with the provisions hereof. This option shall in
any event terminate at 5:00 o'clock P.M., San Marcos, Texas time
two years after its date of grant.
3. Exercise. To exercise this option, Purchaser shall
give written notice of such election to the Company at its
Corporate Headquarters, Attention Corporate Secretary, so as to
be received by the Company within the period this option is
exercisable, which notice shall specify the number of shares to
be purchased and be accompanied by payment in full. Payment for
such shares may be by check or wire transfer, as directed by the
Company.
4. Share Issue. Upon receipt by the Company of proper
notice of exercise of this Warrant, the Company as promptly as
practicable and subject to the other provisions in this Warrant,
shall deliver a certificate or certificates representing Shares
so purchased, and shall pay all original issuance or transfer
taxes on the exercise of this Warrant, and all other fees and
expenses necessarily incurred by the Company in connection
therewith. Certificates evidencing such Shares may have endorsed
thereon such language as may be deemed necessary or advisable by
counsel for the Company in order to ensure compliance with the
applicable securities laws or regulations. Registration rights
shall be as set forth in the Subscription Agreement.
5. Change in Capitalization; Merger; Liquidation. The
number of Shares of Common Stock covered by this Warrant, and the
price per share shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common
Stock resulting from a subdivision or combination of shares or
the payment of a stock dividend in shares of Common Stock to
holders of outstanding shares of Common Stock. If the Company
shall be the surviving corporation in any merger or
consolidation, recapitalization, reclassification of shares or
similar reorganization, Purchaser shall be entitled to purchase,
at the same times and upon the same terms and conditions as are
provided in this Warrant, the number and class of shares of stock
or other securities to which it would have been entitled to
receive as a result of such transaction as if the Purchaser had
exercised the Warrant in full on the record date for the
transaction in question. In the event of a dissolution or
liquidation of the company or a merger or consolidation in which
the Company is not the surviving corporation, this Warrant shall
terminate upon the effective date thereof, except to the extent
that another corporation assumes such Warrant or substitutes
another option therefore. In the event of a change of the
Company's shares of Common Stock with par value into the same
number of shares with a different par value or without par value,
the shares resulting from any such change shall be deemed to be
Common Stock.
IN WITNESS WHEREOF, the Parties have executed this
Agreement on the date first written above.
ELECTROSOURCE, INC. PURCHASER
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxx
Printed Name: Xxxxxxx X. Xxxxxxx Printed Name: Xxxxx X. Xxxxx
Its: President Its:
