Employment Agreement
Exhibit
1.1
This
Employment Agreement (“Agreement”) is made as of the
29th day of November, 2010, between Ener1,
Inc., a Florida corporation (the “Company”), and Xxxxxx
Xxxxxxxxx (the “Executive”).
Whereas,
the Company desires to retain the benefit of the Executive’s skill, knowledge
and experience in order to insure the continued successful operation of its
business and that of its operating subsidiaries, and the Executive desires to
render services to the Company;
Whereas,
the Company has determined that it is in the Company’s best interest to secure
the services of the Executive and to provide the Executive certain additional
benefits; and
Whereas,
the Executive and the Company desire to enter into this Agreement setting forth
the terms and conditions for the employment relationship of the Executive with
the Company;
Now,
Therefore,
in consideration of the mutual covenants and agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. Employment. The
term of this Agreement shall extend from the date first above written (the
“Commencement Date”)
until the third anniversary of the Commencement Date; provided, however, that the
term of this Agreement shall automatically be extended for one additional year
on the anniversary of the Commencement Date and on each anniversary thereafter
unless, not less than six months prior to each such date, either party shall
have given notice (in accordance with Section 16 of this Agreement) to the other
that it does not wish to extend this Agreement. Notwithstanding the
foregoing, the term of this Agreement shall also terminate upon any Date of
Termination (as defined in Section 4) and may be referred to herein as the
“Term.”
2. Position and
Duties. During the Term, the Executive shall serve as the
Chief Accounting Officer and Vice President of Finance of the Company, and shall
have such powers and duties as may from time to time be prescribed by the Chief
Executive Officer (“CEO”) of the Company and for
the Board of Directors of the Company (the “Board”), provided that such
duties are consistent with the Executive’s position or other positions that the
Executive may hold from time to time. The Executive shall devote the Executive’s
full working time and efforts to the business and affairs of the Company.
Notwithstanding the foregoing, the Executive may (a) serve on other boards of
directors of any entity that is not religious, charitable or community activity
related only with the approval of the Board, and (b) engage in religious,
charitable or other community activities without the approval of the Board as
long as such services and activities are disclosed to the Board and do not
materially interfere with the Executive’s performance of the Executive’s duties
to the Company as provided in this Agreement.
3. Compensation and Related
Matters.
(a) Base Salary. The
Executive’s initial annual base salary shall be $225,000. The Executive’s base
salary shall be redetermined annually by the CEO or the Compensation Committee
of the Board (the “Committee”). The base salary
in effect at any given time is referred to herein as “Base Salary.” The Base Salary
shall be payable in accordance with the Company’s then current payroll
practice.
(b) Bonuses. The
Executive may from time to time be eligible to earn an annual cash bonus
pursuant to the terms of the Ener1, Inc. Amended and Restated 2007 Stock
Incentive Plan (as amended, the “Plan”) or any other similar
plan in effect from time to time.
(c) Incentive
Equity. The Executive may from time to time be granted awards
under and pursuant to the terms of the Plan or any other similar plan in effect
from time to time. For any awards that include the grant or issuance of stock,
the Company agrees that sufficient shares of stock will be available and validly
issued.
(d) Expenses. The
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in performing services hereunder during the
Term, in accordance with the policies and procedures then in effect and
established by the Company for its senior executive officers.
(e) Other Benefits. The
Executive shall also be entitled to participate in any pension plan,
profit-sharing plan, life, medical, dental, disability, or other insurance plan
or other plan or benefit as from time to time is in effect during the term of
this Agreement that the Company may provide generally for management-level
employees of the Company and in accordance with the terms of such plan or
benefit.
(f) Vacations. The
Executive shall be entitled to paid vacation days in each calendar year in
accordance with the Company’s then current vacation policy. The Executive shall
also be entitled to all paid holidays given by the Company to its employees
generally.
4. Termination. The
Executive’s employment hereunder may be terminated without any breach of this
Agreement under the following circumstances:
(a) Death. The
Executive’s employment hereunder shall terminate upon the Executive’s
death.
(b) Disability. The
Company may terminate the Executive’s employment if the Executive is disabled
and unable to perform the essential functions of the Executive’s then existing
position or positions under this Agreement with or without reasonable
accommodation for a period of 180 days (which need not be consecutive) in any
12−month period. If any question shall arise as to whether during any period the
Executive is disabled so as to be unable to perform the essential functions of
the Executive’s then existing position or positions with or without reasonable
accommodation, the Executive may, and at the request of the Company shall,
submit to the Company a certification in reasonable detail by a physician
reasonably selected by the Company to whom the Executive or the Executive’s
guardian has no reasonable objection as to whether the Executive is so disabled
or how long such disability is expected to continue, and such certification
shall for the purposes of this Agreement be conclusive of the issue. The
Executive shall cooperate, to the extent practicable, with any reasonable
request of the physician in connection with such certification. If such question
shall arise and the Executive shall fail to submit such certification, the
Company’s determination of such issue shall be binding on the Executive. Nothing
in this Section 4(b) shall be construed to waive the Executive’s rights, if any,
under existing law, rule or regulation, including, without limitation, the
Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans
with Disabilities Act, 42 U.S.C. §12101 et seq.
(c) Termination by Company for
Cause. At any time during the Term, subject to the remainder
of this Section 4(c), the Company may terminate the Executive’s employment
hereunder for Cause. For purposes of this Agreement, “Cause” shall mean: (i) a
willful act of dishonesty by the Executive with respect to any matter involving
the Company or any subsidiary or affiliate, or (ii) conviction of the Executive
of a crime involving moral turpitude, or (iii) the gross or willful failure by
the Executive to substantially perform the Executive’s duties with the Company;
or (iv) a material breach of this Agreement, the Confidentiality Agreement or
the Inventions Agreement; or (v) the willful or intentional engaging by the
Executive in conduct within the scope of the Executive’s employment that causes
injury, monetarily or otherwise, to the Company. Notwithstanding the
foregoing, Company shall not be permitted to terminate Executive’s employment
hereunder for reasons pertaining to Cause as is set forth in any of Section
4(c)(iii), Section 4(c)(iv) and/or Section 4(c)(v), unless and until such Cause
exists and remains uncured for a period of at least 30 days after a written
demand for substantial performance is received by the Executive from the Board
which specifically identifies the manner in which the Board believes the
Executive has not substantially performed the Executive’s duties. For purposes
of Section 4(c)(i), Section 4(c)(iii) and Section 4(c)(v) hereof, no act, or
failure to act, on the Executive’s part shall be deemed “willful” unless done,
or omitted to be done, by the Executive without reasonable belief that the
Executive’s act, or failure to act, was in the best interests of the Company and
its subsidiaries and affiliates.
(d) Termination by Company Without
Cause. At any time during the Term, the Company may terminate
the Executive’s employment hereunder without Cause. For the avoidance of doubt,
any termination by the Company of the Executive’s employment under this
Agreement which does not constitute a termination for Cause under Section 4(c),
or result from the death or disability of the Executive under Section 4(a) or
4(b) shall be deemed a termination without Cause.
(e) Termination by the
Executive. At any time during the Term, the Executive may
terminate the Executive’s employment hereunder for any or no reason, including,
but not limited to, Good Reason. If the Executive provides notice to the Company
under Section 1 that the Executive elects to discontinue the extensions, such
action shall be deemed a voluntary termination by the Executive and one without
Good Reason. For purposes of this Agreement, “Good Reason” shall mean that
the Executive has complied with the “Good Reason Process” (hereinafter defined)
following the occurrence of any of the following events: (i) without Executive’s
consent, a material diminution in the Executive’s responsibilities, authority or
duties; (ii) except for a diminution that is part of a broader set of salary
reductions applicable to the Company’s other senior executives, without
Executive’s consent, a material diminution in the Executive’s Base Salary; (iii)
without Executive’s consent, a material change in the geographic location at
which the Executive provides services to the Company; or (iv) the material
breach of this Agreement by the Company. “Good Reason Process” shall
mean that (i) the Executive reasonably determines in good faith that a Good
Reason condition has occurred; (ii) the Executive notifies the Company in
writing of the occurrence of the Good Reason condition within 60 days of the
occurrence of such condition; (iii) the Executive provides Company with a period
not less than 30 days following such notice (the “Cure Period”) to remedy the
condition; (iv) notwithstanding such efforts, the Good Reason condition
continues to exist; and (v) the Executive terminates the Executive’s employment
within 60 days after the end of the Cure Period. If the Company cures
the Good Reason condition during the Cure Period, then Good Reason shall be
deemed not to have occurred, and Executive shall be deemed to not have
terminated the Executive’s employment in connection therewith.
(f) Notice of
Termination. Except for termination as specified in Section
4(a), any termination of the Executive’s employment by the Company or any such
termination by the Executive shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon.
(g) Date of
Termination. “Date of Termination” shall
mean: (i) if the Executive’s employment is terminated by the Executive’s death,
the date of the Executive’s death; (ii) if the Executive’s employment is
terminated by the Company for Cause under Section 4(c), the date on which Notice
of Termination is given after all applicable notice and cure periods provided
therein; (iii) if the Executive’s employment is terminated by the Company under
Section 4(b) or 4(d), 30 days after the date on which a Notice of Termination is
given; (iv) if the Executive’s employment is terminated by the Executive under
Section 4(e) without Good Reason, 30 days after the date on which a Notice of
Termination is given, and (v) if the Executive’s employment is terminated by the
Executive under Section 4(e) with Good Reason, the date on which a Notice of
Termination is given after the end of the Cure
Period. Notwithstanding the foregoing, in the event that the
Executive gives a Notice of Termination to the Company, the Company may
unilaterally accelerate the Date of Termination and such acceleration shall not
result in a termination by the Company for purposes of this
Agreement.
5. Compensation Upon
Termination.
(a) Termination
Generally. If the Executive’s employment with the Company is
terminated for any reason during the Term, within 30 days of the Date of
Termination, the Company shall pay or provide to the Executive (or to the
Executive’s authorized representative or estate) any earned but unpaid Base
Salary, incentive compensation earned but not yet paid, unpaid expense
reimbursements, accrued but unused vacation and any vested benefits the
Executive may have under any employee benefit plan of the Company through the
Date of Termination (the “Accrued Benefit”). The
Executive shall not be entitled to receive any other termination payments or
termination benefits from the Company except as specifically provided in Section
5(b) or Section 6.
(b) Termination by the Company Without
Cause or Resignation by the Executive for Good Reason. If the
Executive’s employment is terminated by the Company without Cause as provided in
Section 4(d) or the Executive terminates the Executive’s employment for Good
Reason as provided in Section 4(e), then the Company shall, through the Date of
Termination, pay the Executive the Executive’s Accrued Benefit. Additionally, if
(i) the Executive’s employment is terminated by the Company without Cause as
provided in Section 4(d) or by the Executive for Good Reason as provided in
Section 4(e), (ii) the Executive signs a general release of claims in a form and
manner reasonably satisfactory to the Company (the “Release”) within 21 days (or
such other time as is required by law to make the Release effective and is set
forth in the Release) of the receipt of the Release and does not revoke such
Release during the seven-day revocation period, and (iii) the Executive complies
with the Nondisclosure and Inventions Agreement between the Executive and the
Company attached hereto as Exhibit A (as
amended, the “Inventions
Agreement”), the Confidentiality Agreement between the Executive and the
Company attached hereto as Exhibit B (as
amended, the “Confidentiality
Agreement”) and the covenants set forth in Section 8 of this Agreement
(collectively with the Inventions Agreement and the Confidentiality Agreement,
the “Restrictive
Covenants”), then:
(i) the
Company shall pay the Executive an amount equal to 0.5 times the Executive’s
then annual Base Salary and such amount shall be paid out in a lump sum on the
first payroll date after the Date of Termination or expiration of the seven-day
revocation period for the Release, if later; provided, however, if the
Company has not provided the Executive with a form of Release reasonably
satisfactory to the Company by February 1st
following the calendar year in which the Date of Termination occurs then such
amount shall be paid out no later than March 15th
following the calendar year in which the Date of Termination
occurs;
(ii) upon
the Date of Termination, all vested stock options shall be exercisable until the
earlier of 3 months after the Date of Termination or the date of expiration of
the stock option pursuant to the applicable plan and/or award agreement pursuant
to which the stock option was granted; and
(iii) the
Company shall allow the Executive to continue to participate, at the Executive’s
election, in the Company’s then current health insurance plan and any other
Company plan in which employees are generally permitted to continue to
participate post-termination of employment, and in which the Executive was
enrolled at the time of such termination and at the Company’s expense for the
initial period of six (6) months from the Date of Termination; provided, however, that such
continued participation shall in all cases be subject to the applicable law and
the plan’s terms and conditions governing participation by non-employees after
their termination of employment.
6. Change in Control
Payment. The provisions of this Section 6 set forth certain
terms regarding the Executive’s rights and obligations upon the occurrence of a
Change in Control (as defined below) of the Company. These provisions are
intended to assure and encourage in advance the Executive’s continued attention
and dedication to the Executive’s assigned duties and the Executive’s
objectivity during the pendency and after the occurrence of any such
event. These provisions shall apply in lieu of, and expressly
supersede, the provisions of Section 5(b) upon a termination of employment, if
such termination of employment occurs anytime between 3 months before and 12
months after the occurrence of the first event constituting a Change in Control,
provided that such first event occurs during the Term. These provisions shall
terminate and be of no further force or effect beginning 12 months after the
occurrence of a Change in Control.
(a) Change in
Control. If (i) anytime between 3 months before and 12 months
after a Change in Control, the Executive’s employment is terminated by the
Company without Cause as provided in Section 4(d) or the Executive terminates
the Executive’s employment for Good Reason as provided in Section 4(e), (ii) the
Executive signs the Release within 21 days (or such other time as is required by
law to make the Release effective and is set forth in the Release) of the
receipt of the Release and does not revoke the Release during the seven-day
revocation period, and (iii) the Executive complies with the Restrictive
Covenants, then
(i) the
Company shall pay the Executive an amount equal to one (1) times the Executive’s
then annual Base Salary and such amount shall be paid out in a lump sum on the
first payroll date after the Date of Termination or the expiration of the
seven-day revocation period for the Release, if later; provided, however, if the
Company has not provided the Executive with a form of Release reasonably
satisfactory to the Company by February 1st
following the calendar year in which the Date of Termination occurs then such
amount shall be paid out no later than March 15th
following the calendar year in which the Date of Termination
occurs;
(ii) upon
the Date of Termination, all stock options and other stock-based awards held by
the Executive in which the Executive is not vested shall fully vest and such
vested amount shall become exercisable or nonforfeitable as of the Date of
Termination (and with respect to each stock option, such stock option shall be
exercisable until the earlier of 3 months after the Date of Termination or the
date of expiration of the stock option pursuant to the applicable plan and/or
award agreement pursuant to which the stock option was granted);
and
(iii) the
Company shall allow the Executive to continue to participate, at the Executive’s
election, in the Company’s then current health insurance plan and any other
Company plan in which employees are generally permitted to continue to
participate post-termination of employment, and in which the Executive was
enrolled at the time of such termination and at the Company’s expense for the
initial period of twelve (12) months from the Date of Termination; provided, however, that such
continued participation shall in all cases be subject to the applicable law and
the plan’s terms and conditions governing participation by non-employees after
their termination of employment.
(b) Additional
Limitation.
(i) Anything
in this Agreement to the contrary notwithstanding, in the event that any
compensation, payment or distribution by the Company to or for the benefit of
the Executive, whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise (the “Severance Payments”), would,
but for this Section 6(b), be subject to the excise tax imposed by Section 4999
of the Internal Revenue Code of 1986, as amended (the “Code”), the following
provisions shall apply:
(A) If
the Severance Payments, reduced by the sum of (1) the Excise Tax (as defined
below) and (2) the total of the Federal, state, and local income and employment
taxes payable by the Executive on the amount of the Severance Payments which are
in excess of the Threshold Amount (as defined below), are greater than or equal
to the Threshold Amount, the Executive shall be entitled to the full benefits
payable under this Agreement.
(B) If
the Threshold Amount is less than (x) the Severance Payments, but greater than
(y) the Severance Payments reduced by the sum of (1) the Excise Tax and (2) the
total of the Federal, state, and local income and employment taxes on the amount
of the Severance Payments which are in excess of the Threshold Amount, then the
benefits payable under this Agreement shall be reduced (but not below zero) to
the extent necessary so that the maximum Severance Payments shall not exceed the
Threshold Amount.
(ii) For
the purposes of this Section 6(b), “Threshold Amount” shall mean
three times the Executive’s “base amount” within the meaning of Section
280G(b)(3) of the Code and the regulations promulgated thereunder less one
dollar ($1.00); and “Excise
Tax” shall mean the excise tax imposed by Section 4999 of the Code, and
any interest or penalties incurred by the Executive with respect to such excise
tax.
(iii) The
determination as to which of the alternative provisions of Section 6(b)(i) shall
apply to the Executive shall be made by a nationally recognized accounting firm
selected by the Company (the “Accounting Firm”), which shall
provide detailed supporting calculations both to the Company and the Executive
within 15 business days of the Date of Termination, if applicable, or at such
earlier time as is reasonably requested by the Company or the Executive. For
purposes of determining which of the alternative provisions of Section 6(b)(i)
shall apply, the Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation applicable to individuals for
the calendar year in which the determination is to be made, and state and local
income taxes at the highest marginal rates of individual taxation in the state
and locality of the Executive’s residence on the Date of Termination, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive, absent fraud or manifest
error.
(c) Definitions. For
purposes of this Section 6, the following terms shall have the following
meanings:
“Change in Control” shall be
deemed to occur with respect to the Company if a person or group of persons
shall acquire direct or indirect beneficial ownership (whether as a result of
stock ownership, revocable or irrevocable proxies, or otherwise) of securities
of the Company pursuant to a transaction or series of related transactions, such
that after the consummation and as a result of such transaction(s), the persons
constituting all of the equity holders of the Company immediately prior to the
commencement of such transactions(s) fail to directly or indirectly own,
immediately after the consummation of such transactions(s), more than 50% of (i)
the total combined voting power with respect to the election of directors of the
Company, or (ii) the issued and outstanding common equity of the Company (or
surviving entity, in the case of a merger, consolidation, asset sale, or similar
transaction).
7. Compliance with Code Section
409A. Notwithstanding anything herein to the contrary, (a) if at the time
of Executive’s termination of employment with the Company Executive is a
“specified employee” as defined in Section 409A of the Code and the deferral of
the commencement of any payments or benefits otherwise payable hereunder as a
result of such termination of employment is necessary in order to prevent any
accelerated or additional tax under Section 409A of the Code, then the Company
will defer the commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits ultimately paid or
provided to Executive) until the date that is six months following Executive’s
termination of employment with the Company (or, if earlier, the Executive’s
death), and (b) if any other payments of money or other benefits due to
Executive hereunder could cause the application of an accelerated or additional
tax under Section 409A of the Code, such payments or other benefits shall be
deferred if deferral will make such payments or other benefits compliant under
Section 409A of the Code, or otherwise such payments or other benefits shall be
restructured, to the extent possible, in a manner, as determined by the
Committee and subject to the approval and consent of the Executive, that does
not cause such an accelerated or additional tax.
8. Covenants.
(a) Litigation and Regulatory
Cooperation. During and after the Term, the Executive shall
reasonably cooperate at no out-of-pocket expense with the Company and all of its
subsidiaries and affiliates (including its and their outside counsel) in
connection with the contemplation, prosecution and defense of all phases of
existing, past and future claims or actions which relate to events or
occurrences that transpired while the Executive was employed by the Company. The
Executive’s cooperation as identified above in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf of
the Company at mutually convenient times. During and after the Term, the
Executive also shall reasonably cooperate at no out-of-pocket expense with the
Company in connection with any investigation or review of any federal, state or
local regulatory authority as any such investigation or review relates to events
or occurrences that transpired while the Executive was employed by the Company.
The Company shall reimburse the Executive for any and all out-of-pocket expenses
that are incurred in connection with the Executive’s performance of obligations
pursuant to this Section 8(a) after receipt of documentation evidencing such
expenditure(s).
(b) Disparagement. During
and after the Term for a period of 30 months, the parties hereunder agree not to
make any disparaging statements concerning the other or any of their respective
subsidiaries, assigns, spouses, heirs, companies, affiliates or current or
former officers, directors, shareholders, employees or agents (collectively,
“Non-Disparagement
Parties”). The parties further agree not to take any actions or conduct
themselves in any way that would reasonably be expected to affect adversely the
reputation or good will of the other party or any of their respective
Non-Disparagement Parties. The parties further agree that neither of them shall
voluntarily provide information to or otherwise cooperate with any other
individual or other entity that is contemplating or pursuing litigation against
any of the other party or any of their respective Non-Disparagement Parties;
provided, however, that any
party may participate in or otherwise assist in any investigation or inquiry
conducted by the EEOC, SEC or any other applicable government agency or any
litigation or proceeding between them. These nondisparagement obligations shall
not in any way affect the parties’ obligation to testify truthfully in any legal
proceeding.
(c) Inventions Agreement and
Confidentiality Agreement. In consideration for the
Company’s undertakings under this Agreement, the Executive has and will execute
and abide by the terms of the Inventions Agreement and the Confidentiality
Agreement, which are appended hereto and the terms of which are incorporated by
reference. The Executive acknowledges that the terms of the Inventions Agreement
and the Confidentiality Agreement are reasonable and necessary to safeguard
confidential information and inventions and to protect the Company’s goodwill
with its customers and that the terms of the Inventions Agreement and the
Confidentiality Agreement are reasonable in duration and geographic scope, given
the worldwide nature of the Company’s business.
(d) Non-Competition and
Non-Solicitation. In order to protect the confidential
information, business, and goodwill of the Company, and due to the special,
unique and extraordinary services provided by the Executive, the Executive
agrees that, during the Executive’s employment, and for a period of six (6)
months after separation from employment, the Executive will not, on behalf of
any person or entity other than the Company, directly or
indirectly:
(i) in
a competitive capacity and in or from the geographic area in which the Company
operates, own, manage, control, finance, operate or participate in the
ownership, management or operation of, or act as an agent, consultant, or be
employed with, any business engaged in the development, production, marketing,
sale or servicing of rechargeable, lithium-ion batteries and/or battery systems
for energy storage (the “Competitive Business”); provided, however, after the
Date of Termination the Executive may be employed by or serve on the board of
directors of any entity who engages in the Competitive Business as long as (A)
the revenue generated by the entity and related to the Competitive Business is
less than 5% of the total revenue of such entity and (B) the Executive has no
involvement in such entity’s Competitive Business. The Executive further agrees
that the Executive will not assist in the research and development of products
where such research and development would be aided by the confidential
information learned in the course of the Executive’s employment with the Company
or which compete with those products or services of the Competitive
Business;
(ii) provide
or offer to provide products or services that compete with the Company’s
products or services of the Competitive Business to: (A) any customer of the
Company; (B) any customer of the Company with whom the Executive has had contact
in furtherance of the provision of or the offer to provide Company products or
services or over which the Executive has had responsibility during the last two
years of employment; (C) any prospective customer with whom the Executive has
had contact (either directly or indirectly) in furtherance of the provision of
or the offer to provide Company products or services or over which the Executive
had responsibility during the Executive’s last two years of employment; or (D)
any customer or prospective customer about whom the Executive has obtained
confidential information;
(iii) request
or advise any customer of the Company, or any person or entity having business
dealings with the Company, to withdraw, curtail, or cease such business with the
Company; or
(iv) encourage,
solicit, induce, or attempt to encourage, solicit or induce any other employee,
agent or representative of the Company to leave his/her employment (or terminate
his/her relationship) with the Company or hire or attempt to hire for any
competitor or other person, in a competitive or any other business, any person
who is an employee, agent or representative of the Company at such time (or who
was an employee, agent or representative of the Company at any time within the
preceding 180 days).
The
parties expressly agree that the terms of this Section 8(d) are reasonable,
enforceable, and necessary to protect the Company’s interests and to prevent
unfair competition by the Executive. The parties further agree that the
restricted period of time set forth herein (i.e., six (6) months) is a
material term of this Agreement and that the Company is entitled to the
Executive’s compliance with these terms during that full period of time.
Therefore, the Executive agrees that the restricted period of time will be
tolled during any period of noncompliance and that if the Company is required to
seek injunctive relief or other relief, the restricted period of time set forth
herein will not commence until the Executive is in compliance with this Section
8(d). The Executive also agrees that this Section 8(d) does not affect the
Executive’s ability to earn a livelihood.
(e) Return of Property. As
soon as possible in connection with any termination of the Executive’s
employment under this Agreement, the Executive shall return to the Company all
Company property, including, without limitation, computer equipment, software,
keys and access cards, credit cards, files and any documents (including
computerized data and any copies made of computer data or software) containing
information concerning the Company, its business or its business relationships
(in the latter two cases, actual or prospective). The Executive shall also
commit to deleting and finally purging, to the extent possible, any duplicates
of files or documents that may contain Company information from any computer or
other device that remains the Executive’s property after any Date of
Termination.
(f) Injunction. The
Executive agrees that it would be difficult to measure any damages caused to the
Company which might result from any breach by the Executive of the Executive’s
obligations under this Section 8, and that in any event money damages would be
an inadequate remedy for any such breach. Accordingly, subject to Section 9 of
this Agreement, the Executive agrees that if the Executive breaches, or proposes
to breach, any provision of this Agreement, the Company shall be entitled, in
addition to all other remedies that it may have, to an injunction or other
appropriate equitable relief to restrain any such breach without showing or
proving any actual damage to the Company.
(g) Indemnification. The
Executive shall be indemnified by the Company against those claims, sums,
amounts, damages, actions or matters arising in connection with the Executive’s
status as an employee, officer, director or agent of the Company, in accordance
with the Company’s indemnity policies for its senior executives, subject to
applicable law.
(h) Survival. Notwithstanding
anything herein to the contrary, this Section 8 shall survive indefinitely the
termination of the Executive’s employment and/or the termination or expiration
of this Agreement.
(i) Change in
Control. The provisions of Section 8(d) shall not apply after
termination of employment if the Executive suffers a termination of employment
anytime between 3 months before and 12 months after a Change in
Control.
9. Settlement and Arbitration of
Disputes. Any controversy or claim arising out of or relating
to this Agreement or the breach thereof shall be settled exclusively by
arbitration in accordance with the laws of the State of Florida by three
arbitrators, one of whom shall be appointed by the Company, one by the Executive
and the third by the first two arbitrators. If the first two arbitrators cannot
agree on the appointment of a third arbitrator, then the third arbitrator shall
be appointed by the American Arbitration Association in New York, New York. Such
arbitration shall be conducted in New York, New York in accordance with the
Employment Dispute Resolutions Rules of the American Arbitration Association,
except with respect to the selection of arbitrators which shall be as provided
in this Section 9. Judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. This Section 9 shall be
specifically enforceable. Notwithstanding the foregoing, this Section 9 shall
not preclude either party from pursuing a court action for the sole purpose of
obtaining a temporary restraining order or a preliminary injunction in
circumstances in which such relief is appropriate; provided that any other
relief shall be pursued through an arbitration proceeding pursuant to this
Section 9.
10. Consent to
Jurisdiction. To the extent that any court action is permitted
consistent with or to enforce the terms of Section 9 or any other provision of
this Agreement, the parties hereby consent to and designate the jurisdiction and
venue of New York, New York as being proper and appropriate (“New York
Courts”). Accordingly, with respect to any such court action,
the Executive (a) submits to the personal jurisdiction of such courts; (b)
consents to service of process; (c) waives, and agrees not to plead or to make,
any claim that any such action or proceeding brought in New York Courts has been
brought in an improper or inconvenient forum; and (d) waives any other
requirement (whether imposed by statute, rule of court, or otherwise) with
respect to personal jurisdiction or service of process.
11. Integration. This
Agreement, together with the Inventions Agreement and the Confidentiality
Agreement, constitutes the entire agreement and understanding between the
parties with respect to the subject matter hereof and supersedes all prior
agreements between the parties concerning such subject matter. In the
event of a conflict among this Agreement, the Inventions Agreement and the
Confidentiality Agreement, the following shall be the order
of control: this Agreement, then Inventions Agreement, then the
Confidentiality Agreement. Neither the Inventions Agreement or
Confidentiality Agreement shall be modified without the written consent and
approval of the Executive.
12. Withholding. All
payments made by the Company to the Executive under this Agreement shall be net
of any tax or other amounts required to be withheld by the Company under
applicable law.
13. Successor to the
Executive. This Agreement and the rights of the Executive
hereunder are personal to the Executive and are not, without the prior written
consent of the Company, assignable by the Executive. This Agreement shall inure
for the benefit (and not burden) of and be enforceable by the Executive’s
personal representatives, executors, administrators, heirs, distributees,
devisees and legatees. In the event of the Executive’s death after the
Executive’s termination of employment but prior to the completion by the Company
of all payments due the Executive under this Agreement, the Company shall
continue such payments to the Executive’s beneficiary designated in writing to
the Company prior to the Executive’s death (or to the Executive’s estate, if the
Executive fails to make such designation).
14. Enforceability. If
any portion or provision of this Agreement (including, without limitation, any
portion or provision of any section of this Agreement) shall to any extent be
declared illegal or unenforceable by a court of competent jurisdiction or by an
arbitrator, the court or arbitrator (as applicable) shall limit the application
of such portion or provision and proceed to enforce the Agreement as so limited
or modified. Consequently, the remainder of this Agreement, or the application
of such portion or provision in circumstances other than those as to which it is
so declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
15. Waiver. No waiver
of any provision hereof shall be effective unless made in writing and signed by
the waiving party. The failure of any party to require the performance of any
term or obligation of this Agreement, or the waiver by any party of any breach
of this Agreement, shall not prevent any subsequent enforcement of such term or
obligation or be deemed a waiver of any subsequent breach.
16. Notices. Any
notices, requests, demands and other communications provided for by this
Agreement shall be sufficient only if in writing and delivered in person or sent
by a nationally recognized overnight courier service or by registered or
certified mail, postage prepaid, return receipt requested, to the Executive at
the last address the Executive has filed in writing with the Company or, in the
case of the Company, at its corporate office at 0000 Xxxxxxxx, Xxxxx 00X, Xxx
Xxxx, Xxx Xxxx 00000 (or such other address as is provided by the Company),
attention to the CEO.
17. Effect on Other
Plans. Nothing in this Agreement shall be construed to limit
the rights of the Executive under the Company’s benefit plans, programs or
policies (including, without limitation, the Plan); provided, however, to the
extent there is a limitation set forth in this Agreement such limitation set
forth in this Agreement shall control.
18. Amendment. This
Agreement may be amended or modified only by a written instrument signed by the
Executive and by a duly authorized representative of the Company.
19. Governing Law. This
is a Florida contract and shall be construed under and be governed in all
respects by the laws of the State of Florida, without giving effect to the
conflict of laws principles of such State. With respect to any disputes
concerning federal law, such disputes shall be determined in accordance with the
law as it would be interpreted and applied by the United States Court of Appeals
for the Eleventh Circuit.
20. Counterparts. This
Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be taken to be an original; but such counterparts
shall together constitute one and the same document.
21. Successor to
Company. The Company may unilaterally assign this Agreement to
a related entity, a successor, or an assign. The Company, however, shall require
any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the Company
expressly to assume and agree to perform this Agreement to the same extent that
the Company would be required to perform it if no succession had taken place.
Failure of the Company to obtain an assumption of this Agreement at or prior to
the effectiveness of any succession shall be a material breach of this
Agreement.
22. Gender
Neutral. Wherever used herein, a pronoun in the masculine
gender shall be considered as including the feminine gender unless the context
clearly indicates otherwise.
23. Representation by
Counsel. The Company and the Executive each acknowledge that
each party to this Agreement has had the opportunity to be represented by
counsel in connection with this Agreement. Accordingly, any rule of law or any
legal decision that would require interpretation of any claimed ambiguities in
this Agreement against the party that drafted it, has no application and is
expressly waived.
[Remainder
of Page Intentionally Left Blank.]
In
Witness Whereof, the parties have executed this Employment Agreement
effective on the date and year first above written.
|
Ener1,
Inc.
|
|
|
By:
|
/s/
Xxxxxxx Xxxxxxxxxxxx
|
|
Xxxxxxx
Xxxxxxxxxxxx, C.E.O.
|
|
|
“Executive”
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| /s/ Xxxxxx Xxxxxxxxx | |
| Printed: Xxxxxx Xxxxxxxxx | |
Exhibit
A
Inventions
Agreement
|
Exhibit
A
|
Exhibit
B
Confidentiality
Agreement
|
Exhibit
A
|
