EXHIBIT 10.2
CONSULTING AND SEVERANCE AGREEMENT
THIS CONSULTING AND SEVERANCE AGREEMENT (this "Agreement") is made and
entered into effective as of May 10, 2002 by and between AER Energy Resources,
Inc., a Georgia corporation ("AER Energy") and Xxxxx X. Xxxxxxx, a resident of
Atlanta, Georgia ("Consultant"), in which the parties hereto, in consideration
of the mutual covenants contained herein and for $1.00 and other good and
valuable consideration, do hereby agree as follows:
1. Termination of Employment. Consultant hereby resigns from his
employment with AER Energy, effective as of May 10, 2002 (the "Resignation
Date"). Consultant will no longer be an officer or employee of AER Energy on
and after the Resignation Date. Consultant will thereafter remain available to
provide services to AER Energy pursuant to the terms of this Agreement. After
the Resignation Date, Consultant will have no right to further employment with
AER Energy, and AER Energy will have no obligation to employ Consultant.
2. Consulting; Term. For the period (the "Consulting Period")
commencing on May 10, 2002 and ending on the Termination Date (as defined
herein), AER Energy hereby engages Consultant as a consultant and Consultant
hereby accepts such engagement, all upon the terms and conditions set forth in
this Agreement. The Termination Date shall be the earlier of (a) November 15,
2002 or (b) the date that the Consultant begins full-time employment (defined
as being required to work not less than 40 hours per week for a particular
employer).
3. Duties and Responsibilities.
(a) Working Time and Responsibilities. During the
Consulting Period, Consultant shall undertake such consulting projects
as AER Energy shall request. Consultant will work closely with AER
Energy's President, the Chief Executive Officer and the Chairman of
the Board, as well as the other officers and directors of AER Energy.
During the Consulting Period, Consultant shall devote the following
amounts of working time to his duties under this Agreement:
(i) In each of May and June 2002, Consultant
shall be required to work no more than two full days per
week. In each of July and August 2002, Consultant shall be
required to work no more than one full day per week. In each
of September, October and November 2002, Consultant shall be
required to work no more than one half day per week. However,
in each case above, Consultant may be required to work
additional days in a week so long as the number of days
worked in the next week or subsequent weeks is reduced by the
number of extra days so worked.
(ii) Consultant shall choose which days he
desires to work, although the Chief Executive Officer and the
President may require Consultant to work on specific days in
accordance with the needs of AER Energy. All of Consultant's
duties shall be performed at the principal offices of AER
Energy unless otherwise requested by the President or the
Chief Executive Officer. Consultant shall be available for
reasonable travel as appropriate to perform his duties under
this Agreement.
(iii) During the Consulting Period, Consultant
shall also be available for such telephonic consultations as
may be required by the President or the Chief Executive
Officer.
(b) Performance of Duties. Consultant shall perform such
duties to the best of his abilities, shall use his best efforts to
promote the success of the business of AER Energy and shall not manage
or direct, whether as a consultant or an employee, any other business
activity that is engaged in the business of developing and licensing
zinc air batteries and related technologies for portable electronic
devices. Nothing herein shall prohibit Consultant from seeking other
employment with a company that may be competitive with AER Energy. AER
Energy will provide Consultant with such facilities and personnel as
AER Energy deems appropriate for the performance of his duties under
this Agreement. Consultant shall not be an employee of AER Energy.
4. Compensation; Reimbursement of Expenses.
(a) Consulting Fee. AER Energy will pay Consultant a
consulting fee of $22,324.86 per month until the Termination Date.
(b) Reimbursement of Expenses. AER Energy will reimburse
Consultant for all of his reasonable administrative and travel
expenses incurred outside of the Atlanta, Georgia metropolitan area in
the performance of his duties under this Agreement; provided that
Consultant has obtained prior approval from the Chief Executive
Officer for such expenses.
(c) Outplacement Support. AER Energy will pay up to
$6,500 of the Consultant's outplacement support fees to assist
Consultant in locating new full-time employment.
(d) COBRA Coverage. From May 10, 2002 until December 31,
2002 (or until such earlier time as Consultant is no longer covered
under the health insurance provisions of the Consolidated Omnibus
Budget Reconciliation Act ("COBRA")), AER Energy will continue
Consultant's health insurance coverage by making payments pursuant to
COBRA. Consultant agrees that he has no claims to any benefits or
payments from AER Energy except as they are expressly set forth
herein.
5. Effect on Existing Stock Options. AER Energy will cause all
of Consultant's outstanding stock options to be amended so that they shall
remain exercisable until the earlier of their current term or June 30, 2006.
6. Director Status. AER Energy will nominate Consultant for
election to the Board of Directors at the AER Energy 2002 Annual Meeting of
Shareholders for a term of one year. The Board of Directors may, in its
discretion, nominate Consultant for election to the Board of Directors for
subsequent terms.
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7. Ownership and Non-Disclosure.
(a) Work Product. Except as expressly provided in this
Agreement, AER Energy alone shall be entitled to all benefits, profits
and results arising from or incidental to Consultant's performance of
the consulting services described in this Agreement (the "Services").
To the greatest extent possible, any work product, property, data,
documentation or information or materials prepared, conceived,
discovered, developed or created by Consultant in connection with
performing the Services or any other of his employment
responsibilities to date at AER Energy ("Work Product") shall be
deemed to be "work made for hire" as defined in the Copyright Act, 17
U.S.C.A. ss. 101 et seq., as amended, and owned exclusively and
perpetually by AER Energy. Consultant hereby unconditionally and
irrevocably transfers and assigns to AER Energy all intellectual
property or other rights, title and interest Consultant may currently
have (or in the future may have) by operation of law or otherwise in
or to any Work Product. Consultant shall execute and deliver to AER
Energy any transfers, assignments, documents or other instruments that
AER Energy may deem necessary or appropriate to vest complete and
perpetual title and ownership of any Work Product and all associated
rights exclusively in AER Energy. AER Energy shall have the right to
adapt, change, revise, delete from, add to and rearrange the Work
Product or any part thereof written or created by Consultant, and to
combine the same with other works to any extent, and to change or
substitute the title thereof, and in this connection Consultant hereby
waives the "moral rights" of authors as that term is commonly
understood throughout the world including, without limitation, any
similar rights or principles of law which Consultant may now or later
have by virtue of the law of any locality, state, nation, treaty,
convention or other source. Unless otherwise specifically agreed,
Consultant shall not be entitled to any compensation in addition to
that provided for in Section 4 for any exercise by AER Energy of its
rights set forth in this Section 7(a).
(b) Trade Secrets and Confidential Information. Through
exercise of his rights and performance of his obligations under this
Agreement, and as President and Chief Executive Officer of AER Energy
prior to the date hereof, Consultant has been and will be exposed to
"Trade Secrets" and "Confidential Information" (as those terms are
defined in this Section 7(b)). "Trade Secrets" shall mean information
or data of or about AER Energy or any affiliate or other entity from
which AER Energy has licensed or during the Consulting Period will
license technology, including, but not limited to, technical or
nontechnical data, formulas, patterns, compilations, programs, devices,
methods, techniques, drawings, processes, financial data, financial
plans, products plans, or lists of actual or potential customers,
clients, distributors, or licensees, that: (i) derive economic value,
actual or potential, from not being generally known to, and not being
readily ascertainable by proper means by, other persons who can obtain
economic value from their disclosure or use; and (ii) are the subject
of efforts that are reasonable under the circumstances to maintain
their secrecy. To the extent the foregoing definition is inconsistent
with a definition of "trade secrets" mandated under applicable law,
the latter definition shall govern for purposes of interpreting
Consultant's obligations under this Agreement. "Confidential
Information" shall mean valuable, non-public, competitively sensitive
data and information relating to the business of AER Energy or any of
its affiliates, any other entity from which AER Energy
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has licensed or during the Consulting Period will license technology,
or any other entity to which AER Energy has or will license its
technology (including any such technology that is or will be licensed
from others) any subsidiary or affiliate, other than Trade Secrets.
Consultant acknowledges and agrees that any unauthorized disclosure or
use of any Trade Secrets or Confidential Information would be wrongful
and would likely result in immediate and irreparable injury to AER
Energy. Except as required to perform his obligations under this
Agreement or except with Company's prior written permission,
Consultant shall not, without the express prior written consent of AER
Energy, redistribute, market, publish, disclose or divulge to any
other person or entity, or use or modify for use, directly or
indirectly in any way for any person or entity: (i) any Trade Secrets
at any time (during or after the Consulting Period) during which such
information or data shall continue to constitute a "trade secret"
under applicable law; and (ii) any Confidential Information during the
Consulting Period and for a period of four (4) years after termination
of the Consulting Period. Consultant shall cooperate with any
reasonable confidentiality requirements of AER Energy. Consultant
shall immediately notify AER Energy of any unauthorized disclosure or
use of any Trade Secrets or Confidential Information of which
Consultant becomes aware.
(c) Return of Materials. At any point during the
Consulting Period at the specific request of AER Energy, or, in any
event, immediately after the Consulting Period has been terminated,
Consultant will return to AER Energy all Work Product (including any
copies or reproductions thereof and any materials constituting or
containing Trade Secrets or Confidential Information of AER Energy)
that are in Consultant's possession or control.
(d) Acknowledgment. The parties acknowledge and agree
that the covenants of Consultant in this Section 7 (collectively, the
"Protective Covenants") are reasonable as to time, scope and territory
given AER Energy's need to protect its substantial investment in its
Work Product, Confidential Information and Trade Secrets, and
particularly given (a) the compensation and benefits that are to be
provided Consultant, (b) the complexity and competitive nature of AER
Energy, and (c) that Consultant has sufficient skills to find
alternative, commensurate employment or consulting work in
Consultant's field of expertise that would not entail a violation of
the Protective Covenants. The parties further acknowledge that any
breach or threatened breach of a Protective Covenant by Consultant is
likely to result in irreparable injury to AER Energy, and therefore,
in addition to all remedies provided at law or in equity (which
remedies shall be cumulative and not mutually exclusive), AER Energy
shall be entitled to file suit in a court of competent jurisdiction to
seek a temporary restraining order and a permanent injunction to
prevent a breach or contemplated breach of the Protective Covenant.
(e) No Effect of Termination. The termination of the
Consulting Period or this Agreement shall not limit or otherwise
affect the agreements and covenants set forth in this Section 7.
8. Indemnification. AER Energy shall indemnify Consultant with
respect to his service under this Agreement to the full extent permitted by the
Georgia Business Corporation Code.
9. Termination.
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(a) Termination with Cause by AER Energy. AER Energy may
terminate its obligations under this Agreement upon the breach or
default by Consultant of any provision of this Agreement or any other
agreement between Consultant and AER Energy if such breach or default
is not remedied within thirty days after written notice thereof to
Consultant.
(b) Termination on Account of Death or Medical
Disability. AER Energy may terminate its obligations under this
Agreement upon the death of Consultant or upon the expiration of 60
days following the commencement of a continuous period of medical
disability (either physical or mental) of Consultant causing him to
have been substantially unable to perform his duties pursuant to this
Agreement for such sixty-day period; provided, however, that any stock
option which has previously been granted to Consultant (as such
agreement may be amended) shall continue in effect to the extent
provided in the stock option agreement. A state of "medical
disability" may be conclusively established by the parties' agreement
that such state exists or by the issuance of a letter confirming such
disability written by a duly licensed and practicing physician
selected by AER Energy. A state of medical disability shall commence
upon the first day Consultant is substantially unable to perform his
duties hereunder because of any medical disability.
10. Releases.
(a) Mutual Releases. Consultant hereby releases,
discharges and acquits forever the AER Energy Releasees (as defined
below) from any and all debts, claims, demands, liabilities,
assessments, actions or causes of action, whether in law or in equity,
whether direct or indirect, whether presently known or unknown,
absolute or contingent, arising under any law, rule, regulation,
ordinance, agreement, guideline or other standard of conduct of any
kind whatsoever (collectively, "Claims") which Consultant had, now
has, or may have had against any of the AER Energy Releasees from the
beginning of time up to the date of this Agreement. Except as provided
in Section 10(c), AER Energy hereby releases, discharges and acquits
forever Consultant from any and all Claims which AER Energy had, now
has, or may have had against Consultant from the beginning of time up
to the date of this Agreement. Unless the context plainly requires
otherwise, the term "AER Energy Releasees" includes AER Energy and its
owners, shareholders, directors, officers, partners, agents,
attorneys, parent entities, employees, successors, assigns, affiliates
and subsidiaries, and each of their respective owners, shareholders,
directors, officers, partners, agents, attorneys, parent entities,
employees, successors, assigns, affiliates and subsidiaries.
(b) Employment-Related Claims. Without limiting the
foregoing release, Consultant waives all rights he may have had or now
has to pursue any and all remedies available to him under any cause of
action whatsoever against the AER Energy Releasees, including without
limitation, claims of wrongful discharge, emotional distress,
defamation, breach of contract, breach of the covenant of good faith
and fair dealing, the Employee Retirement Income Security Act, and any
other laws and regulations relating to employment, including any and
all employment laws of the State of Georgia. Consultant further
acknowledges and expressly agrees that he is waiving any and all
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rights he may have had or now has to pursue any claim of
discrimination, including but not limited to, any claim of
discrimination based on sex, age, race, national origin, disability,
or on any other basis, under Title VII of the Civil Rights Act of
1964, the Americans With Disabilities Act of 1990, the Equal Pay Act
of 1963, the Age Discrimination in Employment Act of 1967, the Civil
Rights Act of 1866, any other analogous law of the State of Georgia,
and all other laws and regulations relating to employment.
(c) Exception for Ownership and Non-Disclosure Claims.
Notwithstanding anything in Section 10(a) to the contrary, AER Energy
shall be permitted to assert against Consultant a Claim arising out of
an alleged breach of any agreement, representation or covenant
contained in Section 7 hereof.
11. Miscellaneous.
(a) Severability. All the agreements set forth in this
Agreement are independent agreements and severable from one another,
and the unenforceability or invalidity of any provision of this
Agreement shall not affect the validity or enforceability of the
remaining provisions of this Agreement; provided, however, that should
any judicial body interpreting this Agreement deem any provision to be
unreasonably broad in time, territory, scope or otherwise, AER Energy
and Consultant intend for the judicial body, to the greatest extent
possible, to reduce the breadth of the provision to the maximum
legally allowable parameters rather than deeming such provision
totally unenforceable or invalid.
(b) Assignment; Successors in Interest. Except for the
transfer of options by will or the laws of descent and distribution as
provided in the stock option agreement described in Section 4 of this
Agreement, Consultant shall have no right to assign or transfer any or
all of his rights and obligations under this Agreement without the
prior written consent of AER Energy. This Agreement shall be binding
upon the parties to this Agreement and their respective legal
representatives, heirs, devises, legatees and successors and assigns
(whether or not permitted), shall inure to the benefit of the parties
to this Agreement and their respective permitted legal representatives
and permitted successors and assigns, and any reference to a party to
this Agreement shall also be a reference to a successor or permitted
assign.
(c) Notices. All notices or other communications
provided for under this Agreement shall be in writing signed by the
party making the same and shall be either delivered in person or
mailed by first-class mail (postage prepaid) addressed to:
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If to Consultant, to:
Xxxxx X. Xxxxxxx
If to AER Energy, to:
Xxxxxxxx X. Xxxxxx, President
AER Energy Resources, Inc.
0000 Xxxxxxxxx Xxxxxxx, Xxxxx X
Xxxxxx, XX 00000
Fax No. (000) 000-0000
with a copy to:
Xxxx X. Xxxxxxx
Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Fax No. (000) 000-0000
or to such other person or at such different address as a party to
this Agreement may furnish to the other in writing pursuant to the
foregoing.
(d) Gender; Number; Captions. Whenever the context of
this Agreement requires, the gender of any pronoun includes the other
genders, and the singular number includes the plural. Titles and
captions in this Agreement are inserted only as a matter of
convenience and for reference and in no way define, limit, extend or
describe the scope of this Agreement or the intent of its provisions.
(e) Controlling Law; Integration; Amendment; Waiver.
This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of Georgia. This Agreement
supersedes all prior negotiations, agreements and understandings
between the parties to this Agreement (except for such stock option
agreements between AER Energy and Consultant which shall remain in
full force and effect, except as contemplated to be amended by this
Agreement), constitutes the entire agreement between the parties to
this Agreement as to the subject matter of this Agreement, and may not
be altered or amended except in writing signed by the parties to this
Agreement. The failure of either party to this Agreement at any time
or times to require performance of any provision of this Agreement
shall in no manner affect the right to enforce the same; and no waiver
by either party to this Agreement of any provision or of a breach of
any provision of this Agreement, whether by conduct or otherwise, in
any one of more instances shall be deemed or construed either as a
further or continuing waiver of any such provision or breach or as a
waiver of any other provision or of a breach of any other provision of
this Agreement.
(f) Counterparts. This Agreement may be signed by each
party upon a separate copy, and in such case one counterpart of this
Agreement shall consist of two copies to reflect the signature of each
party. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement or its terms to produce or
account for more than one of such counterparts.
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(g) Review and Revocation. Consultant hereby
acknowledges and understands, and AER Energy agrees that:
(i) Consultant may have at least 21 days after
receipt of this Agreement within which he may review and
consider, discuss with an attorney of his own choosing, and
decide to execute or not execute this Agreement;
(ii) Consultant has seven days after the
execution of this Agreement within which he may revoke this
Agreement;
(iii) In order to revoke this Agreement,
Consultant or his attorney must give written notice to AER
Energy by delivering a letter to X.X. Xxxxx, AER Energy's
Chief Financial Officer, and to Xxxx X. Xxxxxxx, its legal
counsel, stating that Consultant is revoking this Agreement.
To effect a revocation, delivery of the letter must be made
on or before seven days after the execution of this
Agreement. The letter shall be delivered and addressed
pursuant to the notice provisions set forth in Section 11(c)
above;
(iv) This Agreement shall not become enforceable
until after the expiration of seven days following the date
Consultant executes this Agreement and it will only become
enforceable if Consultant does not revoke the Agreement as
provided for herein; and
(v) In the event that Consultant revokes this
Agreement pursuant to this provision, the amendments
described herein to Consultant's stock option agreements will
also be immediately revoked. If Consultant revokes this
Agreement, he agrees that he immediately will return to AER
Energy any and all consideration already paid by AER Energy
under this Agreement.
(h) Voluntary Agreement. Consultant represents and
warrants that he (i) has fully read this Agreement, (ii) understands
all the terms and conditions set forth herein, and (iii) is entering
into this Agreement voluntarily and without promise or benefit other
than as set forth herein. Consultant further acknowledges that he may
have at least 21 days within which to consider this Agreement, that he
was advised to consult with an attorney of his own choosing concerning
the releases and waivers contained in and the terms of this Agreement,
and that the waivers he has made, the releases he has given, and the
terms that he has agreed to herein are made knowingly, consciously,
and with full appreciation that he is forever foreclosed from pursuing
any of the rights so waived and released.
[Signatures appear on the next page]
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DULY EXECUTED by the undersigned, as of March 25, 2002.
/s/ Xxxxx X. Xxxxxxx
-------------------------------------------
Xxxxx X. Xxxxxxx
AER ENERGY RESOURCES, INC.
By: /s/ X.X. Xxxxx
----------------------------------------
X.X. Xxxxx, Chief Financial Officer
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