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EXHIBIT 10.17
EMPLOYMENT AGREEMENT
Employment Agreement dated and effective as of January 1, 1997, (this
"AGREEMENT"), between ILLINOIS SUPERCONDUCTOR CORPORATION, a Delaware
corporation (with its successors and assigns, referred to as the "COMPANY"),
and XXXXXX XXXXX ("LAVES").
PRELIMINARY STATEMENT
Laves is now employed as the executive vice president and chief
operating officer of the Company.
The Company desires to continue to employ Laves, and Laves wishes to
continue to be employed by the Company, upon the terms and subject to the
conditions set forth in this Agreement. The Company and Laves also wish to
enter into the other agreements set forth in this Agreement, all of which are
related to Laves' employment under this Agreement.
AGREEMENT
Laves and the Company therefore agree as follows:
1. EMPLOYMENT FOR TERM. The Company hereby employs Laves and Laves
hereby accepts employment with the Company for the period beginning on January
1, 1997, and ending on December 31, 1997 (the "TERM"), or upon the earlier
termination of the Term pursuant to Section 6 below. The end of the Term for
any reason shall end Laves's employment under this Agreement, but shall not
terminate Laves' or the Company's other obligations in this Agreement.
2. POSITION AND DUTIES. During the Term, Laves shall serve as the
Executive Vice-President and Chief Operating Officer of the Company. During
the Term, Laves shall also hold such additional positions and titles as the
Board of Directors of the Company (the "BOARD") may determine from time to
time. During the Term, Laves shall devote substantially all of his business
time and best efforts to his duties as an employee of the Company.
3. COMPENSATION.
(a) BASE SALARY. The Company shall pay Laves a base salary,
beginning on the first day of the Term and ending on the last day of the Term,
of not less than $170,000 per annum, payable at least monthly on the Company's
regular pay cycle for professional employees.
(b) BONUSES. Laves shall be eligible to receive a bonus of up to
fifty percent (50%) of his base salary for calendar year 1997 based on the
achievement of performance objectives if and as developed in consultation with
Laves by the President and Board of the Company, and if such performance
objectives are attained as determined in the sole discretion of the Board.
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(c) OTHER AND ADDITIONAL COMPENSATION. Sections 3(a) and 3(b)
establish minimum salary and bonus grant levels for Laves during the Term, and
shall not preclude the Board from awarding Laves a higher salary or stock
options at any time, nor shall they preclude the Board from awarding Laves
bonuses or other compensation in the discretion of the Board.
4. EMPLOYEE BENEFITS. During the Term, Laves shall be entitled to
the employee benefits, including vacation, health and other insurance benefits,
and deferred compensation arrangements, made available by the Company to any
other employee of the Company.
5. EXPENSES. The Company shall reimburse Laves for actual
out-of-pocket expenses incurred by him in the performance of his services for
the Company (in accordance with the Company's policy for such reimbursements
applicable to the Company's executive officers on the same terms generally
offered to such officers), upon the receipt of appropriate documentation of
such expenses.
6. TERMINATION.
(a) GENERAL. The Term shall end immediately upon Laves's death. The
Company may end the Term at any time for any reason or no reason, with or
without "Cause" (as defined in Section 7(a) below) in the absolute discretion
of the Board (but subject to the Company's obligations under this Agreement).
(b) NOTICE OF TERMINATION. Promptly after it ends the Term, the
Company shall give Laves notice of termination, including a statement of
whether the termination was for Cause. The Company's failure to give notice
under this Section 6(b) shall not, however, affect the validity of the
Company's termination of the Term.
7. SEVERANCE BENEFITS.
(a) "CAUSE" DEFINED. "Cause" means (i) willful malfeasance or
willful misconduct by Laves in connection with his employment; (ii) Laves'
gross negligence in performing any of his duties under this Agreement; (iii)
Laves' conviction of, or entry of a plea of guilty to, or entry of a plea of
nolo contendere with respect to, any crime other than a traffic violation or
infraction which is a misdemeanor; (iv) Laves' willful breach of any written
policy applicable to all employees adopted by the Company concerning conflicts
of interest, political contributions, standards of business conduct or fair
employment practices, procedures with respect to compliance with securities
laws or any similar matters, or adopted pursuant to the requirements of any
government contract or regulation; or (v) material breach by Laves of any of
his agreements in this Agreement.
(b) TERMINATION WITHOUT CAUSE. If the Company ends the Term prior to
December 31, 1997, other than for Cause, then the Company shall make the
"Severance Payments" (as defined below) to Laves for and during the "Severance
Period" (as defined below). The Severance Payment shall be payable in
proportionate amounts at least monthly
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on the Company's regular pay cycle for professional employees and (if the last
day of the Severance Period is not the last day of a pay period) on the last
day of the Severance Period.
For purposes of this Agreement: (i) the term "SEVERANCE PAYMENT"
means, for the period of 180 days from the commencement of the Severance
Period, an amount equal to Laves' base salary in effect on the day prior to the
date on which the Severance Period commences, and thereafter during the
Severance Period an amount equal to 50% of Laves' base salary in effect at the
time the Severance Period commenced; and (ii) the term "SEVERANCE PERIOD" means
the period commencing on the day following the date of termination of Laves'
employment with the Company and ending on the second anniversary of the date of
termination, subject to earlier termination as of the date that Laves commences
full time employment with any other person or entity.
(c) TERMINATION FOR ANY OTHER REASON. If the Company ends the Term
for Cause, or if Laves resigns as an employee or officer of the Company, or if
Laves dies, then the Company shall have no obligation to pay Laves any amount,
whether for salary, benefits, bonuses, or other compensation or expense
reimbursements of any kind, accruing after the end of the Term, and such rights
shall, except as otherwise required by law, be forfeited immediately upon the
end of the Term.
8. CONFIDENTIALITY, OWNERSHIP, AND COVENANTS OF NON-COMPETITION AND
NON-SOLICITATION.
(a) "COMPANY INFORMATION" AND "INVENTIONS" DEFINED. "COMPANY
INFORMATION" means all information, knowledge or data of or pertaining to (i)
the Company, and (ii) any other person, firm, corporation or business
organization with which the Company may do business during the Term, that is
not in the public domain (and whether relating to methods, processes,
techniques, discoveries, pricing, marketing or any other matters).
"INVENTIONS" collectively refers to any and all inventions, trade secrets,
ideas, processes, formulas, source and object codes, data, programs, other
works of authorship, know-how, improvements, discoveries, developments,
designs, and techniques regarding any of the foregoing.
(b) CONFIDENTIALITY. Except as provided in the next two
sentences, Laves covenants and agrees that all Company Information shall be
kept secret and confidential at all times during and after the end of the Term
and shall not be used or divulged by him outside the scope of his employment as
contemplated by this Agreement, except as the Company may otherwise expressly
authorize by action of the Board. In the event that Laves is requested in a
judicial, administrative or governmental proceeding to disclose any of the
Company Information, Laves will promptly so notify the Company so that the
Company may seek a protective order or other appropriate remedy and/or waive
compliance with this Agreement. If disclosure of any of the Company
Information is required, Laves may furnish the material so required to be
furnished, but Laves will furnish only that portion of the Company Information
that legally is required.
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(c) OWNERSHIP. Laves hereby assigns to the Company all of Laves'
right (including patent rights, copyrights, trade secret rights, and all other
rights throughout the world), title and interest in and to Inventions, whether
or not patentable or registrable under copyright or similar statutes, made or
conceived or reduced to practice or learned by Laves, either alone or jointly
with others, during the course of the performance of services for the Company.
Laves shall also assign to, or as directed by, the Company, all of Laves's
right, title and interest in and to any and all Inventions, the full title to
which is required to be in the United States government by a contract between
the Company and the United States government or any of its agencies. The
provisions of Sections 8(a), 8(b) and this Section 8(c) are not intended to
supersede or limit the effect of any prior confidentiality or proprietary
rights agreements previously executed by Laves.
(d) PERIOD DEFINED. "NON-COMPETITION PERIOD" means the period
beginning on the day following the date of termination of Laves' employment
with the Company and ending on the second anniversary of the day following the
date of termination of Laves' employment with the Company.
(e) COVENANTS OF NON-COMPETITION AND NON-SOLICITATION. Laves
acknowledges that his services pursuant to this Agreement are unique and
extraordinary, that the Company will be dependent upon Laves for the
development and growth of its business and related functions, and that he will
continue to develop personal relationships with significant customers of the
Company and to have control of confidential information concerning, and lists
of customers of, the Company. Laves further acknowledges that the business of
the Company is international in scope and cannot be confined to any particular
geographic area of the United States. For the foregoing reasons, Laves
covenants and agrees that during the Non-Competition Period Laves shall not,
directly or indirectly, engage in, be financially interested in, represent,
render any advice or services to, or be employed by, any other business
(conducted for profit or not for profit) that is engaged in the development or
production of (i) high temperature superconducting materials, (ii) radio
frequency filter devices, or (iii) fault current limiter devices, in any such
case for or related to uses which are or could reasonably deemed to be
competitive with the current or currently contemplated business of the Company
in the world. For the reasons acknowledged by Laves at the beginning of this
Section 8(e), Laves additionally acknowledges, covenants, and agrees that,
during the Non-Competition Period, Laves shall not, directly or indirectly,
whether on his own behalf or on behalf of any other person or entity, in any
manner (A) solicit the business of or otherwise contact in any commercial
capacity any person or entity that is, or is reasonably anticipated to become,
at the date of termination to become, a customer, supplier, or contractor of
the Company for the purpose of obtaining business of the type performed by the
Company, or (B) solicit for employment any persons who were officers or
employees of the Company upon the date of termination of his employment
hereunder, or at any time during a ninety-day period preceding such date, or
aid any competitive business organization in any attempt to hire any such
officers or employees of the Company.
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(f) EQUITABLE REMEDIES. Laves acknowledges, covenants and agrees
that, in the event he shall violate any provisions of this Section 8, the
Company will not have an adequate remedy at law and will therefore be entitled
to enforce each such provision by temporary or permanent injunctive or
mandatory relief obtained in an action or proceeding without the necessity of
posting any bond of any kind whatsoever, and without prejudice to any other
remedies that may be available at law or in equity. The foregoing restrictions
shall not preclude Laves from the ownership of not more than three percent (3%)
of the voting securities of any corporation whose voting securities are
registered under Section 12(g) of the Securities Exchange Act of 1934, even if
its business competes with that of the Company.
9. SUCCESSORS AND ASSIGNS.
(a) LAVES. This Agreement is a personal contract, and the rights
and interests that the Agreement accords to Laves may not be sold, transferred,
assigned, pledged, encumbered, or hypothecated by him. Laves shall not have
any power of anticipation, alienation or assignment of the payments
contemplated by this Agreement, all rights and benefits of Laves shall be for
the sole personal benefit of Laves, and no other person shall acquire any
right, title or interest under this Agreement by reason of any sale,
assignment, transfer, claim or judgment or bankruptcy proceedings against
Laves. Except as so provided, this Agreement shall inure to the benefit of and
be binding upon Laves and his personal representatives, distributees and
legatees.
(b) THE COMPANY. This Agreement shall be binding upon the Company
and inure to the benefit of the Company and of its successors and assigns,
including (but not limited to) any corporation that may acquire all or
substantially all of the Company's assets or business or into or with which the
Company may be consolidated or merged. This Agreement shall continue in full
force and effect in the event that the Company sells all or substantially all
of its assets, merges or consolidates, otherwise combines or affiliates with
another business, dissolves and liquidates, or otherwise sells or disposes of
substantially all of its assets. The Company's obligations under this
Agreement shall cease, however, if the successor to, the purchaser or acquiror
either of the Company or of all or substantially all of its assets, or the
entity with which the Company has affiliated, shall assume in writing the
Company's obligations under this Agreement (and deliver an executed copy of
such assumption to Laves), in which case such successor or purchaser, but not
the Company, shall thereafter be the only party obligated to perform the
obligations that remain to be performed on the part of the Company under this
Agreement.
10. ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties concerning Laves's employment with the Company
and supersedes all prior negotiations, discussions, understandings and
agreements, whether written or oral, between Laves and the Company relating to
the subject matter of this Agreement.
11. AMENDMENT OR MODIFICATION, WAIVER. No provision of this
Agreement may be amended or waived unless such amendment or waiver is agreed to
in writing signed by
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Laves and by a duly authorized officer of the Company other that Laves. No
waiver by any party to this Agreement of any breach by another party of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same time, any prior time or any subsequent time.
12. NOTICES. All notices, demands or other communications of any
kind to be given or delivered under this Agreement shall be in writing and
shall be deemed to have been properly given if (a) delivered by hand, (b)
delivered by a nationally recognized overnight courier service, (c) sent by
registered or certified United States Mail, return receipt requested and first
class postage prepaid, or (d) facsimile transmission followed by a confirmation
copy delivered by a nationally recognized overnight courier service. Such
communications shall be sent to the parties at their respective addresses as
follows:
If to Laves: Xxxxxx Xxxxx
000 Xxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
If to the Company: Illinois Superconductor Corporation
000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
with a copy to: Xxxxx X. Xxxxxx
Xxxxxxxxx & Xxxxxx
00 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Either party may change such address for delivery to the other party by
delivery of a notice in conformity with the provisions of this section
specifying such change. Notice shall be deemed to have been properly given (i)
on the date of delivery, if delivery is by hand, (ii) three (3) days after the
date of mailing if sent by certified or registered mail, (iii) one (1) day
after date of delivery to the overnight courier if sent by overnight courier,
or (iv) the next business day after the date of transmission by facsimile.
13. SEVERABILITY. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the application
of such provision to such person or circumstances other than those to which it
is so determined to be invalid and unenforceable shall not be affected, and
each provision of this Agreement shall be validated and shall be enforced to
the fullest extent permitted by law. If for any reason any provision of this
Agreement containing restrictions is held to cover an area or to be for a
length of time that is unreasonable or in any other way is construed to be too
broad or to any extent invalid, such provision shall not be determined to be
entirely null, void and of no effect; instead, it is the intention and desire
of both the Company and Laves
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that, to the extent that the provision is or would be valid or enforceable
under applicable law, any court of competent jurisdiction shall construe and
interpret or reform this Agreement to provide for a restriction having the
maximum enforceable area, time period and such other constraints or conditions
(although not greater than those contained currently contained in this
Agreement) as shall be valid and enforceable under the applicable law.
14. SURVIVORSHIP. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
15. HEADINGS. All descriptive headings of sections and paragraphs
in this Agreement are intended solely for convenience of reference, and no
provision of this Agreement is to be construed by reference to the heading of
any section or paragraph.
16. WITHHOLDING TAXES. All salary, benefits, reimbursements and
any other payments to Laves under this Agreement shall be subject to all
applicable payroll and withholding taxes and deductions required by any law,
rule or regulation of and federal, state or local authority.
17. APPLICABLE LAW: JURISDICTION. The laws of the State of
Illinois shall govern the interpretation, validity and performance of the terms
of this Agreement, without reference to rules relating to conflicts of law.
Any suit, action or proceeding against Laves with respect to this Agreement, or
any judgment entered by any court in respect thereof, may be brought in any
court of competent jurisdiction in the State of Illinois, as the Company may
elect in its sole discretion, and Laves hereby submits to the nonexclusive
jurisdiction of such courts for the purpose of any such suit, action,
proceeding or judgment.
18. INTERPRETATION AND CONSTRUCTION. Each of the parties to this
Agreement has been represented by their own counsel, each has reviewed and
approved this Agreement as executed, and neither party shall be charged with
the responsibility of having drafted any provision of this Agreement so as to
cause any rule of strict construction to be applied against such party.
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.
ILLINOIS SUPERCONDUCTOR CORPORATION
By: _____________________________
Xxx X. Xxxxx
President
_____________________________
XXXXXX XXXXX
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