Exhibit 10.20.2
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[LETTERHEAD OF ELECTRIC FUEL CORPORATION]
January 12, 2001
Xx. Xxxxxx X. Xxxxxxx
c/o Electric Fuel Corporation
Western Industrial Park
X.X. Xxx 000
Xxxx Xxxxxxx 00000
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Dear Xxx:
Re: Your Employment Agreement dated January 1, 2000
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In connection with your employment with Electric Fuel Corporation and Electric
Fuel (E.F.C.) Ltd. (together, the "Company"), we wish to amend the Second
Amended and Restated Employment Agreement dated January 1, 2000 between you and
the Company (the "Agreement") in certain respects.
1. Notwithstanding anything to the contrary in the Agreement, it is
hereby agreed between us that we shall have the right, unilaterally on
90 days' written notice to you, to extend the term of the Agreement
until December 31, 2003.
2. As part of the consideration for your extension of the term of the
Agreement as aforesaid, we will offer you the opportunity to purchase
up to 100,000 shares of our common stock and up to 100,000 warrants to
purchase shares of our common stock, at a total purchase price of
$556,250 (based on a closing price per share of our common stock on
January 12, 2001 of $5.5625 per share), on the following terms and
conditions:
(a) The total purchase price for the shares and the warrants
will be $556,250, of which you will pay $1,000 in cash, and
the remaining $555,250 by means of a ten-year, non-recourse
promissory note dated January 12, 2001, bearing interest at
the Interest Rate.
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(b) Of the 100,000 warrants, 33,333 warrants shall be warrants to
purchase up to 33,333 shares of common stock at a purchase price
of $7.5094 per share, expiring on October 12, 2001, and 66,667
warrants shall be warrants to purchase up to 66,667 shares of
common stock at a purchase price of $8.3438 per share, expiring
on October 12, 2006. Terms of purchase of common stock pursuant
to these warrants shall be similar to the terms of purchase
provided for in subparagraph (b) above (i.e., par value in cash
and the remainder by ten-year non-recourse note bearing interest
at the Interest Rate applicable on the date of exercise of the
warrants).
(c) You shall provide security for the promissory notes referred to
above that shall be adequate under 12 U.S.C. (S) 221 et seq.
(Regulation U), which will include at a minimum all shares of our
common stock acquired by you pursuant to this paragraph 4.
(d) The proceeds of any sales of the common stock purchased by you
hereunder shall be used to reduce proportionally the amount of
your outstanding loan from us, principal and interest. For
example, if prior to the exercise of any warrants you sell 10,000
shares of the common stock purchased by you hereunder, the
proceeds of this sale will be used first to pay down 10% of the
original principal and 10% of the interest under your loan.
Furthermore, we may withhold from such proceeds such amounts for
taxes, etc. as we may be required to do under law.
(e) Should you leave the employ of the Company prior to December 31,
2002 (or December 31, 2003 should we exercise the option to
extend the term of the Agreement granted to us in paragraph one
above), all securities purchased by you under the terms of this
paragraph 4 shall revert back to the Company.
(f) You acknowledge that these securities have not been registered
under the United States Securities Act of 1933, as amended, or
the rules and regulations thereunder (the "Securities Act"), and
accordingly are restricted within the meaning of, and subject to
applicable impediments pertaining to the transfer of restricted
securities under, the Securities Act. You represent and warrant
to us that these securities are being and will be acquired by you
in good faith solely for your own account, for investment
purposes and not with a view to subdivision, distribution or
resale, and may not be sold, transferred or assigned in the
absence of an effective registration statement for these
securities under the Securities Act or an opinion of our counsel
that registration is not required under the Securities Act.
(g) As used herein, the term "Interest Rate" shall mean a rate equal
to the lesser of (i) 6.5%, and (ii) 1% over the then-current
Federal Fund Rate.
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5. In all other respects, the terms of the Agreement will govern the
relationship between us.
If the foregoing is acceptable to you, kindly sign this letter in the
space provided for your signature below, whereupon this letter will become a
binding amendment to the Agreement.
Sincerely yours,
ELECTRIC FUEL CORPORATION
By: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
President and Chief Executive Officer
ACCEPTED AND AGREED:
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
