EXHIBIT 10.1.20
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") entered into as of April 25,
2004, by and between Beacon Power Corporation, a Delaware corporation (the
"Company"), and Xxxxxxx Xxxxxxxxxx (the "Executive")
WHEREAS, the Executive is an employee of the Company, and the Company
desires to retain his services and he wishes to continue his employment by the
Company;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
SECTION 1. TERM. The Company shall employ the Executive for a term
commencing on April 25, 2004 and continuing until December 31, 2004 unless
terminated pursuant to Section 9. The period of the Executive's employment
hereunder is referred to as the "Employment Period."
SECTION 2. DUTIES. The Executive shall serve the Company as Vice President
and Chief Technical Officer and shall have duties and responsibilities
consistent with such position. The Executive will report to the President and
Chief Executive Officer of the Company. The Executive will generally perform his
services at the Company's principal offices, which are currently located in
Wilmington, Massachusetts; provided, however, that the Executive may be required
to travel from time to time in connection with Company business.
SECTION 3. FULL TIME; BEST EFFORTS. During the Employment Period the
Executive shall use his best efforts to promote the interests of the Company and
shall devote his full business time and efforts to its business and affairs. The
Executive shall not engage in any business activity which could reasonably be
expected to interfere with the performance of the Executive's duties, services
and responsibilities hereunder.
SECTION 4. COMPENSATION. The Executive shall be entitled to compensation as
follows:
(a) Base Salary. During the Employment Period, the Executive will receive a
salary at an annual gross rate of $157,500, (as the same may be adjusted from
time to time, the "Base Salary"), which shall be payable in accordance with the
Company's regular payroll practices applicable to senior executive officers. The
Executive's Base Salary shall be reviewed by the Board at least annually and may
be increased (but not decreased) in the Board's discretion, depending upon the
performance of the Executive and of the Company.
(b) Annual Bonus. The Executive shall be eligible to receive an annual
bonus based on the achievement of individual and Company performance objectives.
The amount of the annual bonus will be targeted at 50% of the Executive's Base
Salary, but will be granted solely at the discretion of the Board.
(c) Withholding. The Company may withhold from compensation payable to the
Executive all applicable federal, state, and local withholding taxes as required
by law.
SECTION 5. BENEFITS.
(a) Generally. The Executive will be entitled to such fringe benefits as
are generally available to the Company's executive officers, including group
health and dental insurance coverage, group long and short-term disability
insurance coverage, and 401(k) plan and stock plan participation. In the event
that any insurance policy is paying disability benefits to Executive, and if the
amount of the Executive's monthly base salary that would be paid in the absence
of such disability is higher than the monthly insurance payments, then the
Company shall pay Executive an amount per month equal to such excess, for so
long as the Executive is employed with the Company. No such difference shall be
payable after the Executive's employment expires or is terminated.
(b) Paid Vacation. In addition to U.S. statutory holidays, the Executive
will be entitled to 20 business days of paid vacation per year, accruing at the
rate of 1.66 days per month. A maximum of ten unused vacation days in any year
may be carried over and used in the next year, subject to such policies as the
Company may adopt from time to time with respect thereto. If by December 31,
each year, the Executive has accrued in excess of ten unused vacation days, the
Company shall pay (consistent with existing Company policy) the Executive a cash
amount (based on the Executive's then current year's base salary) equal to such
excess up to a maximum not to exceed ten vacation days.
(c) Life Insurance. The Company will provide the Executive with group term
life insurance in an amount equal to no less than two times his Base Salary (up
to a maximum of $200,000) plus $250,000..
SECTION 6. EXPENSE REIMBURSEMENT. The Executive will be entitled to
reimbursement of all reasonable and necessary business expenses incurred by the
Executive in the ordinary course of business on behalf of the Company, subject
to presentation of appropriate documentation and compliance with policies
established by the Board.
SECTION 7. NON-DISCLOSURE AND ASSIGNMENT OF INVENTION AGREEMENT;
INDEMNIFICATION AGREEMENT. The Executive shall execute and deliver to the
Company the Company's standard form of Invention and Non-Disclosure Agreement. .
SECTION 8. NON-COMPETITION AND NON-SOLICITATION COVENANTS.
(a) Non-competition. The Executive agrees that during the Employment Period
and for the longer of 12 months thereafter, and the period for which the Company
is providing payment to the Executive under Section 9(b)(ii) of this Agreement,
he will not own, manage, operate, control, be employed by, provide services as
an independent contractor or consultant to, own any stock or other investment in
or debt of, or otherwise be connected in any manner with the ownership,
management, operation or control of, any business or enterprise that at the time
of termination, competes with the Company or conducts business in a field in
respect of which the Board is making plans to enter.
(b) Non-solicitation. The Executive agrees that during the Employment
Period and for one year thereafter, he will not attempt to persuade or induce
any employee of the Company to terminate his or her employment with the Company
for any reason.
(c) Acknowledgments by Executive. The Executive acknowledges that the
covenants set forth in this Section 8 are reasonable in scope and are no greater
than is necessary to protect the Company's legitimate business interests. The
Executive further acknowledges that any breach by him of the covenants set forth
in this Section 8 would irreparably injure the Company, and that money damages
would not adequately compensate the Company for the injuries that it would
suffer. The parties accordingly agree that in the event of any breach or
threatened breach by the Executive of any of the covenants set forth in this
Section 8, the Company may obtain, from any court of competent jurisdiction,
both preliminary and permanent injunctive relief in order to prevent the
occurrence or continuation of such injuries, without being required to prove
actual damages or post any bond or other security. Nothing in this Agreement
shall prohibit the Company from pursuing any other legal or equitable remedy
that may be available to it in the event of the Executive's breach of any of the
covenants set forth in this Agreement.
SECTION 9. TERMINATION.
(a) Employment Termination. The employment of the Executive pursuant to
this Agreement shall terminate upon the occurrence of any of the following:
(i) At the election of the Company, for Cause, immediately upon
written notice by the Company to the Executive. For purposes of this
Agreement, "Cause" shall be deemed to exist upon a reasonable good faith
finding by the Board that the Executive has:
(1) committed an act constituting fraud, embezzlement or other
felony, determined in the reasonable opinion of the Board acting
in its sole discretion, or
(2) materially breached his obligations under this Agreement or the
Inventions and Nondisclosure Agreement, and failed to cure same
within 30 days after written notice thereof is given to him by
the Company, or
(3) materially breached the Company's material policies, including
but not limited to the Company's policies regarding xxxxxxx
xxxxxxx and sexual harassment, or
(4) engaged in willful misconduct, so long as the Board of Directors
provided Executive with a reasonable opportunity for Executive to
personally present his point of view to the Board.
(ii) At the election of the Company, without Cause, upon at least 90
days written notice by the Company to the Executive.
(iii) The death of the Executive, or (in the discretion of the
Company) the Disability of the Executive. For purposes of this Agreement,
"Disability" shall be considered to exist:
(1) if the Executive fails to perform his normal duties for at least
60 days (not counting days taken for vacation), whether or not
consecutive, during any 180-day period, or
(2) if the Executive's insurance company has confirmed that any
disability insurance benefits are going to be paid by reason of
Executive's incapacitation, or
(3) if the Board, acting in its sole discretion but after reasonable
consultation with Executive, concludes that the Executive suffers
from a degree of physical or mental incapacitation as a result of
illness or accident which makes it reasonably unlikely that the
Executive will be able to perform his normal duties for a period
of 60 days. In reaching this conclusion, the Board may consult
third parties, including, but not limited to, other employees,
physicians, psychiatrists, and counselors.
(iv) At the election of the Executive, for any reason, upon at least
90 days prior written notice to the Company.
(v) At the election of the Executive for Good Reason, provided that
the Executive shall have given written notice to the Company within 30 days
after he becomes aware of the occurrence of any event of Good Reason
specifying such event, and such event shall be continued for a period of 30
days following such notice. For purposes of this Agreement, "Good Reason"
means any of the following events:
(1) a material diminution in the duties, responsibilities, position
or job title of the Executive without the Executive's written
consent, or
(2) a material breach by the Company of its obligations under this
Agreement or the Indemnification Agreement, or
(3) a change in the primary location where the Executive is expected
to perform his services hereunder to a location that is more than
50 miles away from Wilmington, Massachusetts, or
(4) a Sale of the Business (as defined below) For purposes of this
Agreement, a "Sale of the Business" means (A) the acquisition by
a person, group, or party of 50% or more of the outstanding
capital stock of the Company, (B) a change of a majority of the
members of the Board when the change of the various directors
occurs at substantially the same time, without the approval or
consent of the members of the Board before such change, (C) the
acquisition of the Company by means of a reorganization, merger,
consolidation, recapitalization, or asset sale, unless the owners
of the capital stock of the Company before such transaction
continue to own more than 50% of the capital stock of the
acquiring or succeeding entity in substantially the same
proportions, or (D) the approval of a liquidation or dissolution
of the Company.
(b) Effect of Termination.
(i) Termination Pursuant to Section 9(a)(i) relating to
termination for cause or Section 9(a)(iv) relating to termination at
the election of Executive for any reason. In the event the Executive's
employment is terminated pursuant to Section 9(a)(i) or Section
9(a)iv), the Company shall pay to the Executive his accrued Base
Salary through the last date of his employment hereunder (the
"Termination Date") and shall continue to provide to the Executive the
benefits described in Section 5 (the "Benefits") through the
Termination Date, but shall have no further responsibility for any
compensation or benefits to the Executive for any time period
subsequent to the Termination Date.
(ii) Termination pursuant to Section 9(a)(ii) relating to
termination without cause. In the event the Executive's employment is
terminated pursuant to Section 9(a)(ii), the Company shall:
(1) Within five business days after the Termination Date, pay to the
Executive a cash amount equal to his then monthly Base Salary
multiplied by the number of months remaining in the Employment
Period, but in no event less than 12.
(2) Continue to provide the benefits described in Sections 5(a) and
5(c) to the Executive until the first anniversary of the
Termination Date.
(3) Within five business days after the Termination Date, pay the
Executive an amount equal to his bonus for the prior calendar
year multiplied by a fraction, the numerator of which is the
number of full calendar months that have elapsed in the then
current calendar year prior to the Termination Date, and the
denominator of which is 12. In no event, shall payment under this
Section 9(b)(ii)(3) exceed 50% of the Executive's base salary for
the prior year.
(iii) Termination pursuant to Section 9(a)(v) relating to termination
at the election of Executive for Good Reason. In the event the Executive's
employment is terminated pursuant to Section 9(a)(v), the Company shall:
(1) Within five business days after the Termination Date pay to the
Executive a cash amount equal to his then monthly Base Salary
multiplied by the number of months remaining in the Employment
Period, but in no event less than 12.
(2) Continue to provide the benefits described in Sections 5(a) and
5(c) to the Executive until the first anniversary of the
Termination Date.
(3) Within five business days after the Termination Date, pay the
Executive an amount equal to his bonus for the prior calendar
year multiplied by a fraction, the numerator of which is the
number of full calendar months that have elapsed in the then
current calendar year prior to the Termination Date, and the
denominator of which is 12. In no event, shall payment under this
Section 9(b)(ii)(3) exceed 50% of the Executive's base salary for
the prior year.
(iv) Termination pursuant to Section 9(a)(iii) relating to the
death or disability of the Executive. In the event the Executive's
employment is terminated pursuant to Section 9(a)(iii), the Company
shall:
(1) Continue to pay to Executive or his estate, as the case may be,
an amount equal to his then current Base Salary for the
three-month period following the Termination Date.
(2) Continue for the 12-month period following the Termination Date
all health and dental insurance benefits the Executive was
entitled to at the Termination Date.
(v) Golden Parachute Payment Excise Tax Protection. In the event
that the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code"), (or any successor penalty or
excise tax subsequently imposed by law) applies to any payments or
benefits paid or conferred under this Agreement, an additional amount
shall be paid by the Company to the Executive such that the aggregate
after-tax amount that he shall receive under this Agreement, including
this Section 9(iv), shall have a present value equal to the aggregate
after-tax amount that he would have received and retained had such
excise tax not applied to him. For this purpose, the Executive shall
be assumed to be subject to tax in each year related to the
computation at the then maximum applicable combined Federal and
Massachusetts income tax rate, and the determination of the present
value payments to him shall be made consistent with the principles of
Section 280G of the Code.
(vi) Survival. The provisions of Sections 6-19 shall survive the
termination of the Executive's employment in accordance with their
terms.
(c) Continuation/Nonrenewal. Unless this Agreement has been otherwise
terminated before December 31, 2004, the Company and the Executive agree to
discuss in good faith the possible continuation of the Executive's
employment, commencing six months prior to December 31, 2004. If the
Company fails to offer the Executive a new employment agreement, with at
least equivalent material terms to this Agreement, by December 31, 2004 and
in fact the Executive ceases to be an employee of the Company following
December 31, 2004, the Company shall pay the Executive a monthly amount
until December 31, 2005, equal to the sum of one-twelfth of the Executive's
Base Salary in effect at the expiration of the Agreement plus one-twelfth
of the Executive's bonus for the most recent fiscal year of the Company, in
accordance with the Company's regular payroll practices, less applicable
withholdings required by law. In the event the Executive and the Company do
not sign a new employment agreement by December 31, 2004 but the
Executive's employment with the Company continues on an at-will basis past
that date but terminates for any reason before December 31, 2005, payment
of the foregoing monthly amount will commence after such termination and
continue only until December 31, 2005. If the at-will employment continues
after December 31, 2005 but then terminates, no such monthly amount will be
paid.
SECTION 10. NO CONFLICTING AGREEMENTS. The Executive represents and
warrants to the Company that he is not a party to or bound by any
confidentiality, non-competition, non-solicitation or other agreement or
restriction that could conflict with or be violated by the performance of his
duties for the Company.
SECTION 11. NO DISPARAGEMENT. Each party agrees that at all times following
the termination of the Executive's employment hereunder, such party shall not
make or cause to be made, directly or indirectly, any statements to any third
party that disparage or denigrate the other party or, in the case of the
Company, any of its current or former directors, officers or employees, unless
required by law.
SECTION 12. ENFORCEABILITY, ETC. This Agreement shall be interpreted in
such a manner as to be effective and valid under applicable law, but if any
provision hereof shall be prohibited or invalid under any such law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating or nullifying the remainder of such provision or any other
provisions of this Agreement. If any one or more of the provisions contained in
this Agreement shall for any reason be held to be excessively broad as to
duration, geographical scope, activity, or subject, such provisions shall be
construed by limiting and reducing it so as to be enforceable to the maximum
extent permitted by applicable law.
SECTION 13. NOTICES. Any notice or other communication given pursuant to
this Agreement shall be in writing and shall be personally delivered, sent by
nationally recognized overnight courier or express mail, or mailed by first
class certified or registered mail, postage prepaid, return receipt requested as
follows:
(a) If to the Executive: (b) If to the Company:
Address withheld Beacon Power Corporation
Attn: Chief Executive Officer
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
or to such other address as a party shall have designated by notice to the other
party.
SECTION 14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the Commonwealth of
Massachusetts without giving effect to any choice or conflict of laws provision
or rule that would cause the application of the domestic substantive laws of any
other jurisdiction.
SECTION 15. AMENDMENTS AND WAIVERS. No amendment or waiver of this
Agreement or any provision hereof shall be binding upon the party against whom
enforcement of such amendment or waiver is sought unless it is made in writing
and signed by or on behalf of such party. The waiver by either party of a breach
of any provision of this Agreement by the other party shall not operate and be
construed as a waiver or a continuing waiver by that party of the same or any
subsequent breach of any provision of this Agreement by the other party.
SECTION 16. BINDING EFFECT. This Agreement shall be binding on and inure to
the benefit of the parties hereto and their respective heirs, executors and
administrators, successors and assigns, except that it may not be assigned by
the Company without the Executive's consent, provided that the Company may
assign this Agreement to an entity that acquires substantially all of the
Company's assets by means of an asset sale, merger or otherwise, provided
further that such entity shall agree in writing to assume and be bound by this
Agreement. This Agreement is personal to the Executive and is not assignable by
him.
SECTION 17. ENTIRE AGREEMENT. This Agreement constitutes the final and
entire agreement of the parties with respect to the matters covered hereby and
replaces and supersedes all other agreements and understandings relating hereto
(including the Employment Agreement dated December 1, 2001 between the parties).
SECTION 18. PRONOUNS. Whenever the context may require, any pronouns used
in this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.
SECTION 19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and with counterpart signature pages, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument
as of the date first above written.
EXECUTIVE BEACON POWER CORPORATION
/s/Xxxxxxx X. Xxxxxxxxxx By: /s/Xxxx X. Xxxxx
------------------------ ------------------------
Xxxxxxx X. Xxxxxxxxxx Xxxx X. Xxxxx
Chief Technical Officer Director
