AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit
10.2
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This
Amended and Restated Employment Agreement (the "Agreement"), entered
into as of April 1, 2009, is by and between Beacon Power Corporation, a Delaware
corporation (the "Company"), and Xxxxx
X. Xxxxxxx (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 the above date and
continuing until March 31, 2010, unless renewed or 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 Financial Officer and shall
have duties and responsibilities consistent with such position. Such
duties and responsibilities shall include, but not be limited to, overall
financial management of the Company. The Executive will report to the
Chief Executive Officer of the Company. The Executive will generally
perform his services at the Company's principal offices, which are currently
located in Tyngsboro, 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 $210,813 (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 of Directors of the Company (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
determined annually by the Compensation Committee of the Board in consultation
with the Executive. The amount of the annual bonus will be targeted
at an amount equal to thirty-five percent (35%) of Base Salary per
year. The Executive and the Compensation Committee of the Board will
set performance goals and targets for the annual bonus prior to March 31,
2008. The Compensation Committee shall evaluate such performance
goals and targets and such annual bonus, if any, shall be paid on March 1,
2009.
(c) Long term incentive
compensation. Effective on the effective date of this
Agreement, the Company has entered into a 2008 long term incentive compensation
arrangement with Executive, consisting of a non-qualified stock option and
restricted stock units.
(d) 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. He will also be entitled to a
fringe benefit consisting of reimbursement of the cost to the Executive (above
any applicable insurance coverage) of an executive physical every other year
(not to exceed $1,000 for each such physical). 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.
(i) In
addition to U.S. statutory holidays, the Executive will be entitled to 20
business days of paid vacation per calendar year, accruing at the rate of 1.66
days per month. The number of unused vacation days that may be
carried forward from one calendar year to the next shall be limited to up to ten
days of the current calendar year’s unused accrual (less an equal amount of any
unused PVA, defined below). For any unused vacation accrual
from the current calendar year that cannot be carried over into the next year,
the Company shall pay 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. Any such unused excess over ten vacation days from
the current calendar year that was accrued shall be forfeited.
(ii) Notwithstanding
the foregoing, any paid vacation time that the Executive had accrued prior to
January 1, 2009 (“Prior Vacation Accrual” or “PVA”) shall remain available for
the Executive’s use, provided that the Compensation Committee, in its sole
discretion, may elect from time to time to direct the Company to pay the
Executive a cash amount (based on the Executive’s then current year’s base
salary) equal to part or all of any such Prior Vacation Accrual.
(iii)
Vacation time that is used by the Executive shall first be drawn from any unused
accrual with respect to the current calendar year, and then (assuming the
current year’s accrual has been used) then from any Prior Vacation
Accrual. The Executive shall coordinate with the Chair of the Company
Compensation Committee if he wishes to use more than 20 vacation days in any
calendar year.
(iv) Upon
any termination of employment, the Company shall pay Executive a lump sum equal
to any unused PVA, plus a lump sum equal to up to ten days of current year
vacation accrual. Any remaining accrued but unused or unpaid
days shall be forfeited.
(v) The
following table illustrates these principles as applied to Executive’s actual,
unused PVA as of the date hereof and to his possible vacation day use during
calendar 2009, assuming employment through December 21, 2009:
|
Executive’s
|
Current
Accrual for
|
Examples of Conceivable
Use During 2009
|
Ex. of
|
Ex. of 2009
Accrual That
|
Ex. of Possible
Carried
|
|||||||||||||||||
|
Actual PVA
At 1/1/09
|
2009 Cal.
Yr
|
From
PVA
|
From 2009
accrual
|
Req’d Paid
to Exec.
|
Executive
Forfeits
|
Forward
to 2010
|
||||||||||||||||
|
66.28
days
|
20
days
|
- |
5
days
|
10
days
|
5
days
|
66.28
days
|
||||||||||||||||
| - | 10 | 10 | - | 66.28 | ||||||||||||||||||
| - | 20 | - | - | 66.28 | ||||||||||||||||||
|
10
days
|
20 | - | - | 56.28 | ||||||||||||||||||
| 56.28 | 20 | - | - | 10 | ||||||||||||||||||
| 66.28 | 20 | - | - | - | ||||||||||||||||||
(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
plus $1,000,000.
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.
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Section
7.
Non-Disclosure
and Assignment of Invention Agreement; Indemnification Agreement. The
parties acknowledge and agree that the Executive has executed and delivered to
the Company the Company's standard form of Invention and Non-Disclosure
Agreement and that the Company and the Executive have executed and delivered an
Indemnification Agreement in form and substance satisfactory to both parties
(the "Indemnification
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 (i) 12 months
thereafter, and (ii) the period during which the Company is providing payment to
the Executive under Section 9(c) 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 two 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
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(4) engaged in willful misconduct and
failed to cure same within 30 days after written notice thereof is given to him
by the Company.
(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. For example,
it will be considered such a diminution if in the event of a business
combination involving the Company by means of a reorganization, merger,
consolidation, recapitalization, or asset sale (other than one described below
in subparagraph 4), the Executive remains as Vice President and CFO of the
Company itself but is not appointed as the Vice President and CFO of the other
party to such combination by the 180th day
after closing (or, the Executive and the Company have not reached some other,
mutually acceptable arrangement by then).
(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 Tyngsboro, 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 in a single
transaction or series of contractually related transactions, (B) a change of a
majority of the members of the Board (other than by resignation or by any
replacement of such resigned Board member(s)) 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 own immediately after such transaction more than 50% of the capital
stock of the acquiring or succeeding entity in substantially the same
proportions (without giving effect to any funds that may be newly invested in
the Company or such acquiring or succeeding entity at about the same time), or
(D) the approval of a liquidation or dissolution of the
Company.
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(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) Pay to the Executive a cash amount
equal to his then monthly Base Salary multiplied by twelve.
(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 which was paid
(or which has been determined but not yet paid) with respect to the prior fiscal
year multiplied by a fraction, the numerator of which is the number of full
fiscal months that have elapsed in the then current fiscal 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 80% of the Executive's base
salary for the prior year. If the bonus with respect to the prior
fiscal year has not yet been determined by the date that the parties must
calculate the amount to be paid under this paragraph, then the parties shall
calculate this portion of the severance by reference to the bonus paid with
respect to the year next preceding the prior fiscal 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) Pay to the Executive a cash amount
equal to his then monthly Base Salary multiplied by twelve.
(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 which was paid
(or which has been determined but not yet paid) with respect to the prior fiscal
year multiplied by a fraction, the numerator of which is the number of full
fiscal months that have elapsed in the then current fiscal year prior to the
Termination Date, and the denominator of which is 12. In no event,
shall payment under this Section 9(b)(iii)(3) exceed 80% of the Executive's base
salary for the prior year. If the bonus with respect to the prior
fiscal year has not yet been determined by the date that the parties must
calculate the amount to be paid under this paragraph, then the parties shall
calculate this portion of the severance by reference to the bonus paid with
respect to the year next preceding the prior fiscal 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.
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(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 specifically paid or conferred only under this Agreement
(which shall not include any payments or benefits paid or conferred under the
long-term incentive compensation arrangement or the performance based long-term
incentive compensation arrangement referenced in Section 4(c)) (the “Excise Tax”), an
additional amount shall be paid by the Company to the Executive equal to the
amount of such Excise Tax (the “Gross Up Payment”); provided,
however in no event shall the aggregate amount payable by the Company to
Executive for any excise tax imposed by Section 4999 of the Code pursuant to
this Agreement and all other agreements between the Company and Executive exceed
$250,000. Any such Gross Up Payment shall be made to the Executive as
soon as practicable, but in no event later than the close of the calendar year
following the calendar in which the Excise Tax is remitted to the applicable
taxing authority. The Company and its advisers shall make the
determination of the amount of the Gross Up Payment. To the extent
that the amount of such Gross Up Payment exceeds the amount of Excise Tax
actually paid by Executive, Executive shall promptly pay to the Company such
excess amount.
(c) Continuation/Nonrenewal. Unless
this Agreement has been otherwise terminated before the end of the scheduled
Employment Period as described in Section 1, the Company and the Executive agree
to discuss in good faith the possible continuation of the Executive’s
employment, commencing six months prior to such date. If the Company
fails to offer the Executive a new employment agreement, with at least
equivalent material terms to this Agreement, by such date and in fact the
Executive ceases to be an employee of the Company (other than for Cause)
following such date the Company shall pay the Executive a monthly amount for
twelve months equal to his last prevailing monthly Base Salary, 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. If the bonus with respect to the most
recent fiscal year has not yet been determined by the date that the parties must
calculate the amount to be paid under this paragraph with respect to bonus, then
the parties shall calculate this portion of the severance by reference to the
bonus paid with respect to the year next preceding such most recent fiscal
year.
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:
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(a)
If to the
Executive:
Xxxxx
X. Xxxxxxx
|
(b)
If to the
Company:
Beacon
Power Corporation
00
Xxxxxxxxx Xxxx
Xxxxxxxxx,
XX 00000
Attn: Compensation
Committee and Chief Executive
Officer
|
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. To the extent that the final regulations under Section 409A of
the Code require modifications to this Agreement in order to avoid that
section’s penalty tax, the parties agree to discuss amending this Agreement
accordingly. Notwithstanding the foregoing, to the extent the Company
reasonably determines that any portion of the payments or benefits payable under
this Agreement is subject to Section 409A of the Code, such portion of payments
or benefits payable shall (i) to the extent required by Section 409A of the
Code, be delayed for six months from the Termination Date or (ii) to the extent
permitted under subsequent guidance from the Internal Revenue Service, be
otherwise made to comply with such Section 409A requirements, provided, however,
that any such action under this subsection (ii) that is more detrimental to
Executive than that in subsection (i) shall only be made with Executive’s
consent. To the extent required in order to avoid accelerated taxation and/or
tax penalties under Section 409A, the Executive shall not be considered to have
terminated employment with the Company for purposes of the Agreement and no
payments shall be due under the Agreement which are payable upon termination of
employment until the Executive would be considered to have incurred a
“separation from service” from the Company within the meaning of Section
409A.
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, other
than the RSU (restricted stock unit) and option agreements already in
place.
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. Survivability. Sections 6-20 herein shall survive the termination of this Agreement.
Section
20. 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.
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IN
WITNESS WHEREOF, this Agreement has been executed as a sealed instrument as of
the date first above written.
|
EXECUTIVE
|
BEACON
POWER CORPORATION
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||
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/s/ Xxxxx X. Xxxxxxx
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By:
|
/s/ F. Xxxxxxx Xxxx
|
|
|
Xxxxx
X. Xxxxxxx
|
Name: F.
Xxxxxxx Xxxx
|
||
|
Title: President
and Chief Executive
Officer
|
|||
