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EXHIBIT 10.20
EMPLOYMENT AGREEMENT
Employment Agreement dated and effective as of April 12, 1999 (this
"AGREEMENT"), between ILLINOIS SUPERCONDUCTOR CORPORATION, a Delaware
corporation (with its successors and assigns, referred to as the "COMPANY"), and
Amr Abdelmonem ("ABDELMONEM").
PRELIMINARY STATEMENT
Abdelmonem has been employed by the Company since January 1995. As of
the effective date of this Agreement, Abdelmonem was appointed Vice President,
Development of the Company. In consideration of such appointment, the Company
desires to continue to employ Abdelmonem, and Abdelmonem wishes to continue to
be employed by the Company, upon the terms and conditions set forth in this
Agreement.
AGREEMENT
1. EMPLOYMENT FOR TERM. The Company hereby agrees to continue to employ
Abdelmonem, upon the terms and conditions set forth in this Agreement, and
Abdelmonem hereby accepts such continued employment with the Company upon such
terms and conditions, for the period beginning on the effective date of this
Agreement and ending on December 31, 1999 (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 Abdelmonem's employment under this Agreement, but shall not
terminate Abdelmonem's or the Company's other obligations in this Agreement.
2. POSITION AND DUTIES. During the Term, Abdelmonem shall continue to
serve as the Vice President, Development of the Company. During the Term,
Abdelmonem shall also hold such additional positions and titles as the Board of
Directors of the Company (the "BOARD") or the President and Chief Executive
Officer of the Company may determine from time to time. During the Term,
Abdelmonem 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. Effective as of April 12, 1999 and ending on
December 31, 1999, the Company shall pay Abdelmonem a base salary at a rate of
$120,000 per annum, payable at least monthly on the Company's regular pay cycle
for professional employees.
(b) BONUSES. Abdelmonem shall be eligible to receive bonuses during
the Term as determined in the sole discretion of the Board.
(c) OTHER AND ADDITIONAL COMPENSATION. Sections 3(a) and 3(b)
establish minimum salary and bonus grant levels for Abdelmonem during the Term,
and shall not
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preclude the Board from awarding Abdelmonem a higher salary or stock options at
any time, nor shall they preclude the Board from awarding Abdelmonem bonuses or
other compensation in the discretion of the Board.
4. EMPLOYEE BENEFITS. During the Term, Abdelmonem 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 Abdelmonem 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 Abdelmonem'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 Abdelmonem notice of termination, including a statement of
whether the termination was for Cause. The Company's failure to give notice
under this Section shall not, however, affect the validity of the Company's
termination of the Term.
7. SEVERANCE BENEFITS.
(a) "CAUSE" DEFINED. "CAUSE" means willful malfeasance or willful
misconduct by Abdelmonem in connection with his employment; Abdelmonem's gross
negligence in performing any of his duties under this Agreement; Abdelmonem's
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; Abdelmonem's willful and continuing 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 and continuing breach by
Abdelmonem of any of his agreements in this Agreement.
(b) TERMINATION WITHOUT CAUSE. If the Company ends the Term prior to
December 31, 1999, other than for Cause, then the Company shall make the
"Severance Payment" (as defined below) to Abdelmonem for and during the
"Severance Period" (as defined below). The Severance Payment shall be payable in
proportionate amounts at least monthly on
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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. Regardless of anything in this Agreement to the contrary,
if Abdelmonem resigns as a result of a material change, or a related series of
changes taken as a whole, in the scope or nature of his responsibilities as Vice
President, Development of the Company, such change or changes shall be deemed to
be a constructive termination of Abdelmonem's employment by the Company without
Cause for all purposes of this Agreement, including without limitation the
obligation of the Company to make the Severance Payments during 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 Abdelmonem's base salary in effect on the day prior to the
date on which the Severance Period commences; and (ii) the term "SEVERANCE
PERIOD" means the period commencing on the day following the date of termination
of Abdelmonem's employment with the Company and ending on the six-month
anniversary of the date of termination, subject to earlier termination as of the
date that Abdelmonem commences full time employment with any other person or
entity.
Abdelmonem agrees that during the Severance Period he shall endeavor
to render reasonable advisory and consulting services to the Company with
respect to matters pertaining to the business of the Company as the Board of
Directors or the President and Chief Executive Officer may reasonably request in
writing, provided that the Company acknowledges and agrees that Abdelmonem shall
be obligated to perform such services only to the extent that Abdelmonem
determines in his discretion that such services shall not interfere with the
conduct of Abdelmonem's then current business and personal affairs at the time
of any such request. The Company shall pay all reasonable out-of-pocket expenses
incurred by Abdelmonem in the performance of such advisory and consulting
services.
(c) TERMINATION FOR ANY OTHER REASON. If the Company ends the Term
for Cause, or, subject to the first paragraph of Section 7(b) above, if
Abdelmonem resigns as an employee or officer of the Company, or if Abdelmonem
dies, then the Company shall have no obligation to pay Abdelmonem 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.
(d) OPTION MATTERS. If the Company ends the Term without Cause, the
Company and Abdelmonem agree that notwithstanding any term or provision of any
agreement between Abdelmonem and the Company to the contrary, (i) all options
held by Abdelmonem to acquire shares of the common stock of the Company at the
time of termination shall immediately become vested, and shall be immediately
exercisable by Abdelmonem or his personal representative, and (ii) Abdelmonem
(or his personal representative, as the case may be) shall have the right to
exercise such vested options, and all other options previously vested in
Abdelmonem prior to the date of termination, for a period of 365 days following
such end of the Term. Abdelmonem and the Company agree that except as set forth
above, all option agreements
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referred to above shall remain in full force and effect in accordance with their
terms.
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,
Abdelmonem 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 Abdelmonem is requested in a
judicial, administrative or governmental proceeding to disclose any of the
Company Information, Abdelmonem 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, Abdelmonem may furnish the material so required to be furnished,
but Abdelmonem will furnish only that portion of the Company Information that
legally is required.
(c) OWNERSHIP. Abdelmonem hereby assigns to the Company all of
Abdelmonem's 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 Abdelmonem,
either alone or jointly with others, during the course of the performance of
services for the Company. Abdelmonem shall also assign to, or as directed by,
the Company, all of Abdelmonem'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 Abdelmonem.
(d) PERIODS DEFINED. "NON-COMPETITION PERIOD" means the period
beginning on the day following the date of termination of Abdelmonem's
employment with the Company and ending on the first anniversary of the day
following the date of termination of Abdelmonem's employment with the Company.
"NON-SOLICITATION PERIOD" means the period beginning on the day following the
date of termination of
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Abdelmonem's employment with the Company and ending on the second anniversary of
the day following the date of termination of Abdelmonem's employment with the
Company.
(e) COVENANTS OF NON-COMPETITION AND NON-SOLICITATION. Abdelmonem
acknowledges that his services pursuant to this Agreement are unique and
extraordinary, that the Company will be dependent upon Abdelmonem 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. Abdelmonem 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, Abdelmonem
covenants and agrees that during the Non-Competition Period, Abdelmonem 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 Abdelmonem at the beginning of
this Section, Abdelmonem additionally acknowledges, covenants, and agrees that,
during the Non-Solicitation Period, Abdelmonem 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. Notwithstanding the foregoing, this
Section (e) shall terminate and be of no further force or effect if the Company
fails to make any payment or otherwise perform any obligation owed to Abdelmonem
pursuant to Sections 3, 4, 5 and 7(b) above.
(f) EQUITABLE REMEDIES. Abdelmonem 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 Abdelmonem 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.
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(a) ABDELMONEM. This Agreement is a personal contract, and the
rights and interests that this Agreement accords to Abdelmonem may not be sold,
transferred, assigned, pledged, encumbered, or hypothecated by him. Except as
contemplated in Section 7(d) above, Abdelmonem shall not have any power of
anticipation, alienation or assignment of the payments contemplated by this
Agreement, all rights and benefits of Abdelmonem shall be for the sole personal
benefit of Abdelmonem, 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 Abdelmonem. Except as so provided,
this Agreement shall inure to the benefit of and be binding upon Abdelmonem 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 Abdelmonem), 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 Abdelmonem's employment with the Company and
supersedes all prior negotiations, discussions, understandings and agreements,
whether written or oral, between Abdelmonem and the Company relating to the
subject matter of this Agreement. All prior employment agreements, if any,
between the Company and Abdelmonem shall remain in full force and effect with
respect all matters addressed in such prior employment agreements occurring on
or before the effective date 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 Abdelmonem and by a duly authorized officer of the Company other than
Abdelmonem. 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
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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 Abdelmonem: Amr Abdelmonem
Illinois Superconductor Corporation
000 Xxxxxxxx Xxxxx
Xx. Xxxxxxxx, Xxxxxxxx 00000
If to the Company: Illinois Superconductor Corporation
000 Xxxxxxxx Xxxxx
Xx. Xxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
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
Abdelmonem 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.
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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 Abdelmonem 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 Abdelmonem 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 Abdelmonem 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.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.
ILLINOIS SUPERCONDUCTOR CORPORATION
By: /s/ Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX
President and Chief Executive Officer
/s/ Amr Abdelmonem
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AMR ABDELMONEM
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