EXHIBIT 10.1
UNIQUE MOBILITY, INC.
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of January 1, 1997, by and
between UNIQUE MOBILITY, INC., a corporation organized under the laws of
Colorado ("Employer"), and Xxx X. Xxxxxx, an adult resident of Littleton,
Colorado ("Executive").
WHEREAS, Executive is currently a party to an Employment Agreement with
Employer dated January 1, 1994 (the "Old Agreement"); and
WHEREAS, Executive and Employer wish to replace the Old Agreement with
this Agreement:
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, Employer and Executive agree as follows:
1. Termination of Old Agreement. Upon execution of this Agreement, the
Old Agreement is hereby retroactively terminated, effective as of the date
hereof.
2. Employment. Employer hereby agrees to employ Executive as its chief
executive officer and chairman of the Board of Directors for the term of
employment set forth herein, and Executive hereby accepts such employment, all
upon the terms and conditions hereinafter set forth.
3. Duties. Executive shall perform the duties assigned to Executive by
and subject to the control, supervision and direction of the Board of
Directors.
4. Performance. During the term of Executive's employment under this
Agreement and any renewal thereof, Executive shall devote Executive's best
efforts and full working time and attention exclusively to the performance of
the duties hereunder and to promoting and furthering the business of Employer,
and shall not, during the term of employment, be engaged in any other business
activity for personal pecuniary advantage. This paragraph shall not be
construed as preventing Executive from investing Executive's assets in such
form or manner as will not require any services on the part of Executive in
the operation of the affairs of the companies in which such investments are
made, subject to the provisions of Paragraph 17 hereof. Notwithstanding the
foregoing, Executive may perform and assume other activities and
obligations as the Board of Directors shall from time to time approve.
5. Term of Employment, Expiration and Termination.
(a) Subject to the provisions of Paragraphs 15 and 16, the term of
employment of Executive pursuant to this Agreement shall commence on January 1,
1997, and shall continue through December 31, 1999 (the "Original Term of
Employment").
(b) Upon expiration of this Agreement, if Employer elects to not
continue Executive's employment, Employer shall provide Executive notice of
such fact and shall pay Executive: a lump sum equal to one (1) month's salary
for each year of full-time employment with Employer, except that such sum
shall be not less than twelve (12) month's salary and shall not exceed twenty-
four (24) month's salary.
(c) Upon expiration of this Agreement, if Employer elects to continue
Executive's employment without a written employment agreement, Executive's
employment shall be at will, except that Executive's employment may be
terminated without cause by Employer after notice to Executive. Upon such
termination Employer shall pay Executive: a lump sum equal to one (1) month's
salary for each year of full-time employment with Employer, except that such
sum shall be not less than twelve (12) month's salary and shall not
exceed twenty-four (24) month's salary.
(d) On termination of Executive's employment for cause during the
Original Term of Employment pursuant to Paragraph 15(a), Executive shall
receive no further salary.
(e) On termination of Executive's employment without cause during the
Original Term of Employment pursuant to Paragraph 15(c), Employer shall pay
Executive a lump sum equal to one (1) month's salary for each year of full-
time employment with Employer, except that such sum shall be not less than
twelve (12) month's salary and shall not exceed twenty-four (24) months'
salary. In the event of a material breach of this Agreement by Employer that
is not cured after notice from Executive, Executive may elect to treat such
breach as a constructive termination under this subparagraph entitling
Executive to the benefits hereunder.
(f) On termination of Executive's employment by Executive without
cause either (i) during the Original Term of Employment pursuant to Paragraph
16(b), or (ii) after expiration of the Original Term of Employment if
Executive's employment continues without written agreement, Employer shall pay
Executive a lump sum equal to three (3) month's salary, and Executive shall be
entitled to no other severance benefits.
(g) If Executive's employment is terminated as a result of a hostile
Change in Control (as defined below) of Employer, such termination shall be
deemed a termination without cause under the provisions of Paragraph 5(e),
except that Executive shall receive at Executive's election either the annual
salary and benefits payable under this Agreement until the expiration date of
the Original Term of Employment, or any renewals thereof, or a severance
amount equal to twice any amount due under Paragraph 5(e). Any termination of
Executive in contemplation of or within twelve (12) months after such Change
in Control, except a termination for cause under Paragraph 15(a), shall be
deemed a termination under this Subparagraph (g). Further, if Executive's
position is materially changed by Employer in contemplation of or within
twelve (12) months after any such Change in Control, Executive may elect to
treat such change as a constructive termination under this subparagraph
entitling Executive to the benefits hereunder. "Change of Control" means the
election of new board members constituting a majority of the directors then
in office, which new board members were not nominated by a majority of the
directors in office on the date hereof.
(h) Upon Executive's voluntary retirement after age sixty-five
during or upon expiration of the Original Term of Employment, or any extensio
thereof, Executive shall receive the severance benefits described under
Paragraph 5(e), i.e., as if the severance was a termination without cause by
the Employer.
(i) Upon any termination of Executive, at Executive's election,
Employer shall assign to Executive or Executive's designee any life and
disability insurance policies or other fringe benefits which may so be
assigned. Any continued cost of such policies or benefits shall be Executive's
responsibility.
(j) Upon the expiration or termination of Executive's employment,
Executive or Executive's legal representative upon request shall promptly
deliver to Employer all originals and all duplicates or copies of all documents,
records, notebooks and similar repositories of or containing Confidential
Information as defined in Paragraph 18 then in his possession, whether prepared
by Executive or not.
6. Compensation. For the services to be rendered by Executive hereunder,
Employer agrees to pay Executive during the term of employment, and Executive
agrees to accept:
(a) An annual base salary of $172,793. Executive's annual base
salary shall not be decreased during the Original Term of Employment.
(b) Executive's salary shall be paid in equal semi-monthly
installments on the 15th and final day of each month during the term of his
employment.
(c) Executive shall receive fringe benefits in accordance with
Employer's policies and practices for employees generally (including, without
limitation, participation in any stock option plans, life and disability
insurance plans, health care and hospitalization plans, medical and dental
reimbursement plans, profit sharing plans, retirement plans and other employee
benefit plans) for which Executive is qualified. At Employer's expense
Executive shall have a medical exam every year. In addition to the foregoing,
Executive shall continue to be provided the use of an automobile for combined
business and personal use on similar or equivalent terms and conditions as was
provided under the old agreement.
(d) During the last quarter of each fiscal year of Employer,
Employer shall review Executive's performance under this Agreement and
establish goals and objectives for Executive's performance for the next
fiscal year. In such review, Employer, in its reasonable discretion, shall
consider increasing Executive's salary and compensation based on relevant
factors such as Executive's performance, Employer's accomplishments, increase
or decrease in Executive's responsibilities, and cost of living increases.
Any salary increases normally are to be effective on January 1 of each year.
(e) Employer has adopted a bonus plan to be administered by its
Compensation Committee and in the Compensation Committee's discretion may
award bonuses and stock options to Executive on terms to be determined by the
Compensation Committee. As soon as practicable after the effective date of
this agreement, January 1, 1997, Executive shall receive an additional grant
of options to purchase 78,000 shares at an exercise price determined based on
the "Fair Market Value" of the stock as defined under Employer's Stock Option
Plan, on the date of the grant of the option. In addition, the Board of
Directors shall submit for approval by Employer's shareholders its
recommendation that Employer's Stock Option Plan be amended to increase the
maximum number of options to shares for any individual in an appropriate and
sufficient amount above the existing maximium of 500,000 and, upon receipt of
such approval, grant Executive an additional option to 50,000 shares at an
xercise price determined based on the "Fair Market Value" of the Stock, as
defined under the Plan, on the date of the grant of the option.
7. Working Facilities. Executive shall be furnished with appropriate
office space, secretarial assistance, and such other facilities and services
as are suitable to Executive's position and adequate for the performance of
Executive's duties.
8. Expenses. Employer shall reimburse Executive for all reasonable
expenses that Executive incurs in connection with the business of Employer or
any of its subsidiaries and in the performance of Executive's duties under
this Agreement. Employer shall also reimburse Executive for membership fees
and expenses related to Executive's membership in professional organizations,
clubs, societies and groups as may be approved by the Board of Directors from
time to time, subject to such rules, regulations and record-keeping
requirements as may be established from time to time by the Board.
9. Vacations. Executive shall be entitled each year to a vacation of
five (5) weeks, during which time his compensation shall be paid in full.
Vacation time accrued during each calendar year must be used by the end of
each calendar year, or will be lost, and will not accrue from one calendar
year to the next. Exceptions to the foregoing non-accrual policy may be
provided under terms and conditions approved in writing by resolution of the
Board of Directors or its compensation committee in such body's sole
discretion based on prolonged extra-ordinary work demands preventing
Executive's timely taking vacation.
10. Disability. If Executive is unable to perform Executive's services
by reason of illness or incapacity for a period of more than six (6)
consecutive months, and subject to the provisions of Paragraph 11, Employer
may terminate Executive's employment. Employer shall receive a credit
against Executive's salary for any disability compensation benefit for the
same calendar period received by Executive from Worker's Compensation or any
commercial insurance carrier under Paragraph 11.
11. Insurance for the Benefit of Executive.
(a) Subject to the provisions of Paragraph 6(c), Executive shall be
covered by Employer's medical and disability insurance in effect from time to
time, the premiums for which shall be paid for by Employer.
(b) Employer shall at its expense continuously maintain without
interruption in the name of Executive or Executive's designee or for the
benefit of Executive or Executive's designee, life insurance coverage in an
amount equal to Executive's then current salary for three (3) years.
12. Insurance for the Benefit of Employer. Employer shall have the right
from time to time to apply for and take out in its name and at its own expense,
life, health or other insurance upon Executive in any sum or sums which may be
deemed necessary by Employer to protect its interest under this Agreement and
Executive shall do all such things as may be necessary to assist in the
procuring of such insurance by making a proper application therefor as may be
required by the insurance company and submitting to the usual and customary
medical examinations. Executive, in Executive's capacity as Executive,
shall have no right, title or interest in or to such insurance, but the same
shall be solely for the benefit of Employer and any amounts payable thereunder
shall be solely payable to such Employer.
13. Death During Employment. If Executive dies during the term of his
employment under this Agreement, Employer shall pay to the estate of Executive
the compensation which would otherwise be payable to Executive up to the end
of the third month after the month in which his death occurs. If, by that
time, Executive's estate has not received any proceeds of the insurance
provided for in Paragraph 11, Employer shall continue Executive's salary
hereunder for up to an additional three months, or until such insurance
proceeds are received, whichever is earlier ("Reimbursable Payments"),
provided that Executive's estate shall reimburse Employer for any such
Reimbursable Payments made from the proceeds of such insurance.
14. Representation and Warranty. Executive represents and warrants
that he is not now, and will not be on the date of commencement of this
Agreement, a party to any agreement, contract or understanding, whether of
employment, agency or otherwise, which would in any way restrict or prohibit
Executive from undertaking and performing Executive's duties in accordance
with the terms and provisions of this Agreement.
15. Termination by Employer.
(a) Employer may terminate Executive's employment for cause, which is
defined as follows:
i) Fraud, malfeasance, or embezzlement against
Employer's assets or conviction of any felony;
ii) Except under circumstances of disability
contemplated by the provisions of Paragraph 10, cessation of Executive's
performance of Executive's duties hereunder or deliberate and substantial
failure to perform them in a capable and conscientious manner;
iii) Violation of the provisions of Paragraph 14; or
iv) Deliberate and substantial breach of Executive's
material obligations under any other provision hereof that is not cured
within 30 days after notice to Executive of the breach.
(b) Should the Board of Directors of Employer determine cause exists,
as defined in Subparagraph (a), to terminate Executive's employment, prior to
termination for such cause, Employer shall provide Executive written notice
reasonably describing the basis for the contemplated termination and a two-
week period of time in which to respond in writing and in person prior to
Employer's final determination of cause. During the period between such notice
and final determination, the Board may suspend the performance of Executive's
duties under this Agreement and direct Executive's non-attendance at work.
However, Executive's right to compensation under this Agreement shall continue
through and to any final termination of employment for cause.
(c) Employer may terminate Executive's employment upon three (3)
months notice without cause, subject to the applicable provisions of Paragraph
5. During the period between such notice and final determination, the Board
may suspend the performance of Executive's duties under this Agreement and
direct Executive's non-attendance at work.
16. Termination by Executive.
(a) Executive shall have the right to terminate his employment on
forty-five (45) days' written notice to Employer of any default by Employer in
performing its duties under this Agreement, subject to the provisions of
Paragraph 5(e) and provided that Executive may not terminate his/her
employment if Employer cures the default within fifteen (15) days after
receiving such notice.
(b) Executive may terminate Executive's employment upon three (3)
months notice without cause, subject to the applicable provisions of
Paragraph 5(f).
17. Restrictive Covenant.
(a) Executive agrees and covenants that, without the Board's prior
written consent and except on behalf of Employer, he will not in any manner,
directly or indirectly, own, manage, operate, control, be employed by,
participate in, assist or be associated in any manner with any person, firm or
corporation anywhere in the world whose business competes with Unique or any
subsidiary of Unique. This covenant shall remain in effect until a date one
(1) year after the date Executive's employment is terminated or, if his
employment is terminated pursuant to Paragraph 16(a), until the termination
date. Notwithstanding any other provision of this Agreement, Executive may
own up to three percent (3%) of the outstanding stock of a competing publicly
traded corporation so long as he takes no other action furthering the business
of such corporation.
(b) Until a date one (1) year after the termination date, Executive
shall not (i) solicit any other employee of Employer to leave the employ of
Employer, or in any way interfere with the relationship between Employer and
any other employee of Employer, or (ii) induce any customer, supplier,
licensee, or other business relation of Employer to cease doing business with
Employer, or in any way interfere with the relationship between any customer or
business relation and Employer.
18. Confidentiality.
(a) Definitions. For purposes of this Agreement, the following
definitions shall apply:
i) "Inventions" shall mean all inventions,
improvements, modifications, and enhancements, whether or not patentable,
made by Executive within the scope of Executive's duties during
Executive's mployment by Employer.
ii) "Confidential Information" shall mean Employers
proprietary know-how and information disclosed by Employer to Executive or
acquired by Executive from Employer during Executive's employment with
Employer about Employer's plans, products, processes and services, which
Employer protects against disclosure to third parties. Confidential
Information shall not include the Executive's general knowledge and
experience possessed prior to or obtained during his/her employment
with Employer.
(b) Restrictions on Disclosure.
i) During the period of employment with Employer
and thereafter, Executive shall not disclose Confidential Information to
any third parties other than Employer, its employees, agents, consultants,
contractors and designees without the prior written permission of
Employee, or use Confidential Information for any purpose other than the
conduct of Employer's business.
ii) The restrictions on disclosure and use set forth
herein shall not apply to any Confidential Information which:
A. At the time of disclosure to Executive by Employer is
generally available to the public or thereafter becomes generally
known to the public, through no fault of Executive;
B. Was known by Executive prior to his/her employment with
Employer;
C. Executive at any time receives from a third party not
under any obligation of secrecy or confidentiality to Employer;
D. Employer discloses to a third party not under any
obligation of secrecy or confidentiality to it; and
E. Executive is requested or required to disclose pursuant
to a subpoena or order of a court or other governmental agency, in
which case Executive shall notify Employer as far in advance of
disclosure as is practicable.
(c) Obligations Regarding Inventions. Without any royalty or any
other additional consideration to Executive: (i) Executive shall promptly
inform Employer of any Inventions by a written report, setting forth the
conception and reduction to practice of all inventions; (ii) Executive hereby
agrees to assign and assigns to Employer all of his right, title and interest:
(1) to any Inventions made during the term of his employment by Employer
(including without limitation the right to license or sell such Invention to
others), (2) to applications for United States and foreign letters patent, and
(3) to United States and foreign letters patent granted upon such Inventions;
and (iii) Executive agrees upon request and at the sole cost and expense of
Employer to, at all times, do such acts (such as giving testimony in support
of his inventorship) and execute and deliver promptly to Employer such papers,
instruments, and documents as from time to time may be necessary or useful to
apply for, secure, maintaining, reissue, extend or defend Employer's interest
in any Inventions or any or all United States and foreign letters patent, so
as to secure Employer the full benefits of any Inventions or discoveries or
otherwise to carry into full force and effect the intent of the assignment set
out in subparagraph 18(c)(ii).
(d) Remedies. Executive acknowledges and agrees that Executive's
disclosure of any Confidential Information would result in irreparable injury
to Employer. Executiv acknowledges and agrees that the Confidential
Information is non-public information which Employee has expanded substantial
time, money and effort to develop and is property considered "Trade Secrets"
of Employer within the meaning of Colorado law. Therefore, upon the breach or
threatened breach of the covenants in this paragraph by Executive, Employer
shall be entitled to obtain from any court of competent jurisdiction a
preliminary and permanent injunction prohibiting such disclosure and any other
equitable relief that the court deems appropriate. In addition, Employer shall
be entitled to seek damages.
(e) Any Confidential Information that is directly or indirectly
originated, developed or perfected to any degree by Executive during the term
of his employment by Employer shall be and remain the sole property of
Employer.
19. Resolution of Disputes. In addition to any other remedies available
to Employer, Employer shall be entitled to specific performance of the
covenants contained in Paragraphs 17 and 18. If either party is successful in
enforcing its rights under this Paragraph 19, the unsuccessful party shall
reimburse the successful party for all of the costs of such enforcement,
including but not limited to costs, litigation expenses and reasonable
attorneys' fees. Except for an action to interpret or enforce Paragraphs 17 or
18, any controversy or claim arising out of or relating to the interpretation,
alleged breach or enforcement of this Agreement shall be settled by arbitration
before a single arbitrator in Denver, Colorado, in accordance with the
commercial rules then in effect of the American Arbitration Association,
Colorado Revised Statutes pertaining to the arbitration of civil disputes. The
arbitrator, who shall be a person experienced in negotiating and making
employment agreements and resolving employment disputes and in any other
pertinent areas of law, shall make reasonably detailed findings to support any
decision and award. The award of the arbitrator shall be final and binding and
may be entered as a judgment in any court of competent jurisdiction. As part
of the award in any arbitration or judicial proceedings, the prevailing party
may be awarded its reasonable attorneys' fees, witness fees, expert witness
fees and related costs and expenses in the discretion of the arbitrator.
20. Notices. All notices under this Agreement shall be delivered by hand
or by registered or certified mail. Notices intended for Executive shall be
addressed to Executive at 0000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx , Xxxxxxxx 00000.
Notices intended for Employer shall be addressed to it at 000 Xxxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxx 00000. All notices shall be effective upon actual delivery if
by hand, or, if by mail, five (5) days after being deposited in the United
States mail, postage prepaid and addressed as required by this section. Either
party may by notice accomplished in accordance with this Paragraph 20 change
the address to which future notices may be sent.
21. Miscellaneous Provisions.
(a) This Agreement contains the entire agreement between the parties
and supersedes all prior agreements and it shall not be amended or otherwise
modified in any manner except by an instrument in writing executed by both
parties.
(b) Neither this Agreement nor any rights or duties under this
Agreement may be assigned or delegated by either party unless the other party
consents in writing.
(c) Except as otherwise provided herein, this Agreement shall be
binding upon the inure to the benefit of the parties and their respective
heirs, personal representatives, successors and assigns.
(d) This Agreement has been entered into in Colorado and shall be
governed by the laws of that state.
(e) In fulfilling their respective obligations under this Agreement
and conducting themselves pursuant to it, each party shall act reasonably and
in good faith.
(f) If any provisions of this Agreement shall be held to be invalid
or unenforceable for any reason, the invalid or unenforceable provision shall
be deemed severed from this Agreement and the balance of this Agreement shall
remain in full force and effect and be enforceable in accordance with its
terms.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
EXECUTIVE:
/s/ Xxx X. Xxxxxx
Xxx X. Xxxxxx
EMPLOYER:
UNIQUE MOBILITY, INC.
By: /s/ Xxxxxx X. French
Xxxxxx X. French its Treasurer
(Name) (Position)
