Exhibit 10.50
Employment Agreement - Xxxxx Xxxxxx
EMPLOYMENT AGREEMENT
AGREEMENT made as of April 14, 2003, by and between LITHIUM TECHNOLOGY
CORPORATION, a Delaware corporation (the "Corporation") and Xxxxx Xxxxxx
("Executive").
W I T N E S S E T H:
WHEREAS, the Corporation wishes to employ Executive, and Executive is
willing to accept such employment, on the terms and conditions set forth in this
Agreement; and
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements set forth herein, the parties hereto agree as follows:
1. Employment and Term. Subject to the terms and conditions of this
Agreement, the Corporation agrees to employ Executive, and Executive hereby
accepts employment by the Corporation, for a period of three years (the "Term")
commencing as of April 14, 2003 (the "Commencement Date").
2. Duties. During the Term, Executive shall serve the Corporation as
its President and Chief Operating Officer, or in such other capacity or
capacities as may be determined by the Board of Directors of the Corporation.
Subject to the direction and control of the Board of Directors, the Executive
shall have the full authority and responsibility to operate and manage, on a day
to day basis, the business and affairs of the Corporation, and shall perform
such other duties and responsibilities as are currently prescribed by the Bylaws
of the Corporation and which are customarily vested in the offices of chairman
and chief executive officer of a corporation. Executive shall perform such
executive, administrative, development, production, marketing and other services
and duties for the Corporation, or any subsidiary, affiliate or joint venture of
the Corporation, as are incidental to the positions he holds or as he may, from
time to time, be requested to hold by the Board of Directors of the Corporation.
If requested by the Board of Directors of the Corporation, Executive shall also
serve, without additional compensation, as an officer or director of any
subsidiary, affiliate or joint venture of the Corporation. During the Term,
Executive shall be available at all times to discharge his duties under this
Agreement; provided, however, that the Corporation agrees that Executive shall
be able to act as an independent director of other corporations and engage in
other professional and business endeavors so long as Executive's duties in
connection therewith do not (i) unreasonably interfere with Executive's duties
under this Agreement or (ii) cause Executive to violate in any manner his
obligations under Sections 7 and 8 of this Agreement. The Executive hereby
agrees to resign immediately from the Board of Directors of the Corporation and
from all offices with each of its subsidiaries (if any) at such time as the
Executive no longer serves the Corporation as its Chief Executive Officer.
3. Compensation.
(a) During the Term, the Corporation shall pay to Executive, in
equal installments no less frequently than twice per month (or at such other
intervals as are in effect from time to time for other executive officers of the
Corporation), a salary at the rate of $97,308 per year. Commencing on April 14,
2004 and on each anniversary of the Commencement Date thereafter during the
Term, or from time to time at the sole discretion of the Board of Directors, the
Executive's salary for the then-commencing year shall be reviewed by the Board
of Directors and may be increased, but may never be decreased, in the sole
discretion of the Board of Directors.
(b) During each fiscal year of the Term, Executive shall be
eligible to receive a target bonus of up to 40% (forty percent) of Executive's
annual salary for such fiscal year of the Corporation, the exact amount of such
bonus if any to be determined in the discretion of, and by, the Board of
Directors or the applicable committee of the Board of Directors of the
Corporation in accordance with performance thresholds for such fiscal year to be
agreed upon by the Corporation and Executive prior to March 1 of the fiscal year
to which the bonus and the performance thresholds relate, provided that with
respect to the fiscal year ending December 31, 2003 the performance thresholds
shall be agreed upon by the Corporation and Executive prior to May 31, 2003. For
any fiscal year of the Corporation during the Term that is not co-terminous with
the Term and with respect to which the Executive has been granted and earned
such a bonus, Executive shall receive a pro rated bonus, based upon the length
of service in such fiscal year.
(c) During the Term, Executive shall be entitled to four weeks
of vacation per year, and in addition thereto such personal days, sick leave and
other similar benefits in accordance with the policies of the Corporation from
time to time in effect for executives of comparable expertise and authority.
(d) Executive agrees that the Corporation may obtain key man
life insurance with respect to Executive, and in connection therewith, agrees to
submit to all reasonable and customary examinations by the provider of such life
insurance.
(e) Executive agrees to submit to, at the expense of the
Corporation, an annual physical examination by a physician of his choice.
(f) Executive shall be entitled to reimbursement for all normal
and reasonable travel, entertainment and other expenses necessarily incurred by
him in the performance of his duties hereunder. Executive shall submit on a
timely basis such itemized accounts of such expenses, together with such
vouchers or receipts for individual expense items, as the Corporation may from
time to time require under its established policies and procedures.
(g) Except as hereinafter provided, the Corporation shall pay
Executive for any period, up to a maximum of six months, during the Term in
which he is unable fully to perform his duties because of physical or mental
disability or incapacity, an amount equal to the base salary due him for such
period pursuant to Section 3(a), less the aggregate amount of all income
disability benefits which for such period he may receive or to which he may be
entitled by reason of (i) any group health insurance plan or disability
insurance plan, which is intended to function as a salary
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replacement plan, (ii) any applicable compulsory state disability law, (iii) the
Federal Social Security Act, (iv) any applicable workmen's compensation law or
similar law and (v) any plan towards which the Corporation or any subsidiary or
affiliate of the Corporation (including any predecessor of any thereof) has
contributed or for which it has made payroll deductions, such as group accident
or health policies, other than those which reimburse for actual medical
expenses.
(h) Executive shall be paid a monthly car allowance in the
amount of $500 per month, payment of which shall be in accordance with the
Corporation's procedures from time to time in effect for executives of
comparable authority.
4. Stock Options. In addition to the consideration to be paid to
Executive for his services hereunder the Corporation shall issue to Executive
under an appropriate stock incentive plan (the "Plan") options to purchase a
quantity of shares of the Corporation's Common Stock as shall be determined by
the Board of Directors or the applicable committee of the Board of Directors of
the Corporation on the terms set forth in the Plan and in the form of stock
option agreement approved by the Board or such committee for the grant of
options under the Plan.
5. Rights of Termination.
(a) For Cause. The Corporation shall have the right, at any
time effective upon notice to Executive, to terminate this Agreement and
Executive's employment hereunder for "cause" (as hereinafter defined). For
purposes of this Agreement, "cause" shall mean the breach or continued gross
neglect by Executive, or gross negligence or willful misconduct by Executive in
the performance, of any of his duties or obligations under this Agreement.
(b) Disability; Death. In the event of Executive's permanent
and total disability as determined under the Corporation's long-term disability
program or, if no such program has been adopted, the continuous absence of
Executive for 180 consecutive days or more due to physical or mental illness or
incapacity, the Corporation shall have the right to terminate this Agreement and
Executive's employment hereunder upon 30 days' prior written notice. In the
event that Executive is able to and recommences rendering services and
performing his duties hereunder within such 30-day notice period, Executive
shall be reinstated and such notice shall be without further force or effect. If
Executive dies during the Term, this Agreement shall terminate immediately upon
his death.
6. Effects of Termination.
(a) In the event that Executive's employment is terminated
pursuant to Section 5(a) hereof, (i) Executive's employment hereunder shall
immediately cease, (ii) the Corporation shall pay to the Executive his accrued
and unpaid salary, accrued vacation time and expense reimbursement through the
date of termination in accordance with the Corporation's usual procedures and
(iii) all options shall be treated in accordance with the terms of the
applicable stock incentive plan and stock option agreement pursuant to which
such options were granted. Once the amounts referred to in clause (ii) are paid,
however, the Corporation shall have no further obligation to Executive.
(b) In the event that Executive's employment is terminated
pursuant to Section 5(b) hereof, (i) Executive's employment hereunder shall
cease in accordance with Section 5(b), (ii)
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the Corporation shall pay to Executive his accrued and unpaid salary, accrued
vacation time and expense reimbursement through the date of termination (except
subject to Section 3(f) hereof in the event of disability) in accordance with
the Corporation's usual procedures, (iii) options shall be treated in accordance
with the terms of the applicable stock incentive plan and stock option agreement
pursuant to which such options were granted and (iv) in the event of the death
of Executive, any and all options (whether vested or unvested) shall be
transferred in accordance with Executive's will and become exercisable for a
period of thirty-six (36) months from the date of death, subject to the terms of
the applicable stock incentive plan.
(c) In the event that Executive's employment hereunder is
terminated by the Corporation other than pursuant to Section 5(a) or (b), then:
(i) Executive shall be entitled to receive, and the Corporation shall continue
to pay to Executive, the annual salary specified in Section 3(a) for the
remainder of the Term or for six months (whichever is longer) payment of which
shall be made in one lump sum within thirty (30) days after the termination date
net of applicable deductions and withholdings, (ii) Executive shall be entitled,
during the period for which such severance payment is being paid, to receive all
benefits under the Corporation's medical insurance, disability insurance, life
insurance and other benefit plans as are then in effect for executives of the
Corporation and (iii) all options shall be treated in accordance with the terms
of the applicable stock incentive plan and stock option agreement pursuant to
which such options were granted, except that all then exercisable options and
all then unexercisable options shall immediately become exercisable on the date
of termination, and all of the same shall remain exercisable in accordance with
the terms of the applicable plan and agreement.
(d) In the event that Executive's employment hereunder is
terminated by Executive, then: (i) the Corporation shall pay to the Executive
his accrued and unpaid salary, accrued vacation time and expense reimbursement
through the date of termination in accordance with the Corporation's usual
procedures and (ii) all options shall be treated in accordance with the terms of
the applicable stock incentive plan and stock option agreement pursuant to which
such options were granted.
(e) Executive's obligations pursuant to Sections 7 and 8 hereof
shall survive any termination of this Agreement for any reason whatsoever.
7. Confidentiality.
(a) Executive understands and acknowledges that as a result of
Executive's employment with the Corporation, and involvement with the business
of the Corporation, he is or shall necessarily become informed of, and have
access to, confidential information of the Corporation including, without
limitation, inventions, patents, patent applications, trade secrets, technical
information, know-how, plans, specifications, marketing plans and information,
pricing information, identity of customers and prospective customers and
identity of suppliers, and that such information, even though it may have been
or may be developed or otherwise acquired by Executive, is the exclusive
property of the Corporation to be held by Executive in trust and solely for the
Corporation's benefit. Executive shall not at any time, either during or
subsequent to his employment hereunder, reveal, report, publish, transfer or
otherwise disclose to any person, corporation or other entity, or use, any of
the Corporation's confidential information, without the written consent of the
Corporation's
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Board of Directors, except for use on behalf of the Corporation in connection
with the Corporation's business, and except for such information which legally
and legitimately is or becomes of general public knowledge from authorized
sources other than Executive.
(b) Upon the termination of his employment with the Corporation
for any reason, Executive shall promptly deliver to the Corporation all
drawings, manuals, letters, notes, notebooks, reports and copies thereof and all
other materials, including, without limitation, those of a secret or
confidential nature, relating to the Corporation's business which are in
Executive's possession or control. The Corporation shall reimburse Executive for
any packing or moving costs reasonably incurred by Executive in connection with
the foregoing delivery.
For purposes of this Section 7 and Section 8, the term "Corporation" includes
the Corporation and any other predecessor corporation, and affiliates
(including, without limitation, distributors, licensees, franchisees,
subsidiaries and joint ventures).
8. Non-Competition.
(a) Executive agrees that, for a period commencing on the date hereof
and ending one year after the termination of his employment with the Corporation
for any reason, he shall not, anywhere in the world, directly or indirectly:
(i) solicit or attempt to solicit business of any customers of
the Corporation (including prospective customers solicited by the
Corporation) for products or services the same or similar to those
offered, sold, produced or under development by the Corporation during
the term of his employment therewith or dealt in by Executive during
his employment with the Corporation;
(ii) otherwise divert or attempt to divert from the Corporation
any business whatsoever;
(iii) solicit or attempt to solicit for any business endeavor any
employee of the Corporation;
(iv) interfere with any employment relationship or other
business relationship between the Corporation and any other individual,
person, or other entity;
(v) use the name of the Corporation or a name similar thereto;
or
(vi) render any services as an officer, director, employee,
partner, consultant or otherwise to, or have any interest as a
stockholder, partner, lender or otherwise in, any person which is
engaged in activities which, if performed by Executive would violate
this Section 8.
(b) Executive agrees that during the term of his employment with the
Corporation, he will not, anywhere in the world, directly or indirectly engage,
directly or indirectly, as an independent contractor or otherwise, in any
activity for or on behalf of any person or entity in a competitive line of
business to that carried on by the Corporation, or engage in any manner in the
design, development,
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manufacturing, assembling, installing, and/or marketing of rechargeable lithium
battery technology or other technology competitive with the business carried on
by the Corporation or dealt in by Executive during his employment with the
Corporation.
(c) If during the one year period commencing on the termination of his
employment with the Corporation for any reason, Executive, directly or
indirectly engages, anywhere in the world, as an independent contractor or
otherwise, in any activity for or on behalf of any person or entity in a
competitive line of business to that carried on by the Corporation during the
term of his employment therewith, or engages in any manner in the design,
development, manufacturing, assembling, installing, and/or marketing of
rechargeable lithium battery technology or other technology competitive with the
business carried on by the Corporation during the term of Executive's employment
therewith or dealt in by Executive during his employment with the Corporation,
all the non-exercised vested and unvested options held by Executive shall
terminate.
(d) The provisions contained in paragraphs (b) and (c) of this Section
8 shall not prevent Executive from purchasing or owning up to five percent (5%)
of the voting securities of any corporation, the securities of which are
publicly-traded.
9. Remedies and Survival. Because the Corporation does not have an
adequate remedy at law to protect its interest in its trade secrets, privileged,
proprietary or confidential information and similar commercial assets, or its
business from Executive's competition, the Corporation shall be entitled to
injunctive relief, in addition to such other remedies and relief that would, in
the event of a breach or a threatened breach of the provisions of Sections 7 or
8, be available to the Corporation. The Corporation shall not be required to
plead or prove the inadequacy of damages. The provisions of Sections 7 and 8 and
this Section 9 shall survive any termination of Executive's employment with the
Corporation for any reason whatsoever.
10. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to its subject matter, merges
and supersedes any prior or contemporaneous agreements or understandings with
respect to its subject matter (including without limitation the 1996 Agreement),
and shall not be modified or terminated except as permitted herein or by another
agreement in writing executed by the Corporation and Executive. Failure of a
party to enforce one or more of the provisions of this Agreement or to require
at any time performance of any of the obligations hereof shall not be construed
to be a waiver of such provisions by such party nor to in any affect the
validity of this Agreement or such party's right thereafter to enforce any
provision of this Agreement, nor to preclude such party from taking any other
action at any time which it would legally be entitled to take. In the event of a
conflict between this Agreement and any of the stock option agreements entered
into between the Corporation and Executive, the terms and condition of this
Agreement shall control.
11. Severability. If any provision of this Agreement is held to be
invalid or unenforceable by any court or tribunal of competent jurisdiction, the
remainder of this Agreement shall not be affected by such judgment, and such
provision shall be carried out as nearly as possible according to its original
terms and intent to eliminate such invalidity or unenforceability.
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12. Successors and Assigns. Neither party shall have the right to
assign this personal Agreement, or any rights or obligations hereunder, without
the consent of the other party; provided, however, that upon the sale or
transfer of all or substantially all of the assets and business of the
Corporation to another party, or upon the merger or consolidation of the
Corporation with, or acquisition of the Corporation by, another corporation or
entity, this Agreement shall inure to the benefit of, and be binding upon, both
Executive and the party purchasing such assets, business and goodwill, or
surviving such merger or consolidation or acquiring the Corporation, as the case
may be, in the same manner and to the same extent as though such other party
were the Corporation. Subject to the foregoing, this Agreement shall inure to
the benefit of, and bind, the parties hereto and their legal representatives,
heirs, successors and assigns.
13. Communications. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given at the
time when mailed in any United States post office enclosed in a registered or
certified postage-paid envelope and addressed as set forth at the beginning of
this Agreement, or to such other address as any party may specify by notice to
the other parties, or delivered by Federal Express or a similar overnight
courier to such address; provided, however, that any notice of change of address
shall be effective only upon receipt.
14. Construction; Counterparts. The headings contained in this
Agreement are for convenience only and shall in no way restrict or otherwise
affect this construction of the provisions hereof. References in this Agreement
to Sections are to the sections of this Agreement. This Agreement may be
executed in multiple counterparts, each of which shall be an original and all of
which together shall constitute one and the same instrument.
15. Governing Law. This Agreement shall be governed by the laws of
the Commonwealth of Pennsylvania.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first set forth above.
LITHIUM TECHNOLOGY CORPORATION
By: /s/ Xxxxx X. Xxxx
--------------------------------
Xxxxx X. Xxxx
Chairman and Chief Executive Officer
EXECUTIVE:
/s/ Xxxxx Xxxxxx
-----------------------------------
Xxxxx Xxxxxx
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