EMPLOYMENT AGREEMENT
Exhibit
10.45
THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is made effective as of the
1st
day of
April, 2007, by and between Ener1, Inc., a Florida corporation with its offices
at 000 Xxxx Xxxxxxx Xxxxx Xxxx, Xxxxx 000, Xx. Xxxxxxxxxx, Xxxxxxx 00000 (the
“Corporation”), and Xxxxxxx Xxxx (the “Executive”).
WHEREAS,
the Corporation desires to retain the Executive in the position described
herein, and the Executive desires to assume such position, on the terms and
conditions set forth herein.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements made
herein, and intending to be legally bound hereby, the Corporation and the
Executive agree as follows:
1. Employment;
Duties.
(a) Employment
and Employment Period.
The
Corporation will commence the employment of the Executive beginning April 1,
2007 (the “Commencement Date”) and shall continue to employ the Executive until
April 1, 2008 (the “Initial Term”). Executive’s employment shall then
automatically renew for subsequent one year periods following the termination
of
the Initial Term or any subsequent term, unless either party gives written
notice to the other at least 45 days prior to the termination of such period
of
its intent not to extend or renew this Agreement. The Initial Term and all
subsequent terms are referred to herein as the “Employment Period.”
(b) Offices,
Duties and Responsibilities.
The
Executive shall hold the title of President of the Corporation and Vice Chairman
of EnerDel’s Board of Directors. The Executive shall report to the Board of
Directors of the Corporation (the “Board”). The Executive shall maintain offices
at the Corporation’s Ft. Lauderdale office and the Corporation’s plant in
Indianapolis, Indiana, and will work from one of these offices
in
addition to spending time in the Detroit area necessary for business and
customer development so long as such time is approved in advance by the Chief
Executive Officer of the Company,
unless
traveling on the Corporation’s official business. The
Corporation will pay for a furnished apartment or equivalent accommodations,
rental car and out of pocket expenses for the first year of employment from
the
Commencement Date. It is understood that the Company may have to establish
a
business development and marketing and sales office in the Detroit area.
(c) Job
Description.
The
Executive
will
recommend strategic partners and new business opportunities worth pursuing.
Additionally, the Executive will have daily responsibility for the Corporation’s
operations (EnerDel, EnerFuel, NanoEner and other subsidiaries and affiliates)
including all issues inside the Corporation. The Executive will interview and
understand each key employee’s role and be able to make organizational and
structural changes across the board that will allow successful implementation
of
the Corporation’s business plan.
(d) Devotion
to Interests of the Corporation.
Except
as expressly authorized by the Board, until the effective date of notice of
termination of this Agreement by either the Executive or the Corporation or
the
end of the Employment Period, the Executive shall render his business services
solely in the performance of his duties hereunder. Notwithstanding the
foregoing, the Corporation acknowledges that the Executive presently serves
on
the board of directors for non-battery related companies and may continue to
do
so for such entities to the extent such service does not exceed 5% of his
business time and does not interfere with his ability to fulfill his obligations
to the Corporation.
(e)
2. Base
Compensation and Fringe Benefits.
(a) Base
Compensation.
The
Corporation shall pay the Executive a base salary at the rate of $360,000 per
year (“Base Salary”) paid bi-monthly at the Corporation’s normal payroll
intervals, with deduction of such amounts as may be required to be withheld
under applicable law and regulations. Upon successful completion of two of
the
milestones set forth in Schedule I attached hereto within the first six months
from the Commencement Date, the Base Salary will be adjusted to $410,000 per
year. Thereafter, annual increases to this Base Salary shall be as determined
by
the Board of Directors at the beginning of each fiscal year of the Corporation,
beginning January 1, 2008; provided, however, that two of the milestones
achieved that result in an adjustment to the Base Salary after six months will
not be counted for future merit increases and all weight applied to the
accomplishment of milestones will be in the judgment of the Board of Directors.
Upon the Commencement Date, the Corporation will also pay the Executive a one
time payment of $30,000 as compensation for certain lost opportunities. The
Corporation will also ensure prompt payments of the March, 2007 or any other
invoices under a previous Consulting Agreement with the Executive.
(b) Fringe
Benefits.
The
Executive shall be entitled to eligibility
for enrollment in the Corporation’s medical, dental and life insurance plans in
accordance with the available coverage there under to senior executives of
the
Corporation. All other benefits generally available to regular full-time
employees will be made available to the Executive pursuant to the applicable
personnel policies of the Corporation. Executive shall be entitled to four
(4)
weeks paid vacation per year. The Executive shall be authorized to travel
business class both domestically and internationally. The Executive shall have
a
corporate credit/debit card for authorized business use.
(c) Bonus
Compensation.
You
will be eligible to receive a cash bonus of up to 100% of the base salary based
on mutually agreed upon objectives tied to the business plan objectives and
stock price performance as provided on Schedule I hereto in the fiscal years
2007 and 2008. In addition, you will be eligible for a cash bonus for investment
funds that you introduce to the Company (other than companies or individuals
that the Company and/or its officers, directors or shareholders have already
contacted or that come through other introductions) of 3% of the total net
investment 1% of which will be payable in common stock of the Company and 2%
of
which will be payable in cash.
(d) Equity
Interest.
(1) On
the
Commencement Date, two (2) million shares of restricted stock will be awarded
upon commencement, vesting upon the accomplishment of certain corporate specific
milestones specified on Schedule I hereto.
(2) Three
(3)
million options to purchase common stock of the Corporation with a strike price
as follows: (i) 1.5 million at $0.28 per share and (ii) 1.5 million at the
price
of $0.35 per share. These options will not vest until the stock price of the
common stock underlying the options has reached $1 per share (adjusted for
stock
splits, reverse stock splits, etc.).
(3) Both
(1)
and (2) above assume that you are still employed with the Corporation the date
that vesting would have occurred (including the notice period for termination).
During the first year after the Commencement Date, the Executive will have
30
days after termination of this Agreement to exercise any vested shares or
options. If this Agreement is terminated after the first anniversary of the
Commencement Date, the Executive will have one year from the date of the
termination to exercise those shares or options that vested prior to
termination.
(4) Except
as
specifically provided herein, to the extent permissible under Xxxxxxx 000 xx
Xxxxxx Xxxxxx Internal Revenue Code and to the extent agreed to between
Executive and the Board, shall be incentive stock options. All Options granted
hereunder shall be also granted pursuant to the Company’s 2007 Stock Option
Plan. All Options issued under this Agreement shall be adjusted for mergers,
stock splits, stock spin-offs, reverse stock splits and similar
events.
3. Trade
Secrets.
The
Executive shall not use (except for the benefit of the Corporation while
employed hereunder) or disclose to anyone any of the Corporation’s trade secrets
or other confidential information. The term “trade secrets or other confidential
information” includes, by way of example, matters of a technical nature, such as
scientific, trade and engineering secrets, “know-how,” formulae, secret
processes, recipes or machines, inventions, computer programs (including
documentation of such programs) and research projects, and matters of a business
nature, such as proprietary information about costs, profits, markets, sales,
lists of customers, and other information of a similar nature to the extent
not
available to the public, and plans for future development. After termination
of
this Agreement, the Executive shall not use or disclose trade secrets or other
confidential information unless such information (a) becomes a part of the
public domain other than through a breach of this Agreement or (b) is disclosed
to the Executive by a third party who is entitled to receive and disclose such
information or (c) was in the Executive’s possession prior to the Commencement
Date.
4. Return
of Documents and Property.
Upon
the end of the Employment Period or upon the effective date of notice of the
Executive’s or the Corporation’s election to terminate this personal
representatives) shall deliver to the Corporation (a) all documents and
materials containing trade secrets or other confidential information relating
to
the business and affairs of the Corporation, and (b) all documents,
materials and other property belonging to the Corporation, which in either
case
are in the possession or under the control of the Executive (or his heirs or
personal representatives).
5. Discoveries
and Works.
All
discoveries and works made or conceived by the Executive during his employment
by the Corporation, jointly or with others, that relate to the Corporation’s
activities shall be owned by the Corporation. The term “discoveries and works”
includes, by way of example, inventions, computer programs (including
documentation of such programs), technical improvements, processes, drawings
and
works of authorship. The Executive shall (i) promptly notify, make full
disclosure to, and execute and deliver any documents requested by, the
Corporation to evidence or better assure title to such discoveries and works
in
the Corporation, (ii) assist the Corporation in obtaining or maintaining for
itself at its own expense United States and foreign patents, copyrights, trade
secret protection or other protection of any and all such discoveries and works,
and (iii) promptly execute, whether during his employment by the Corporation
or
thereafter, all applications or other endorsements necessary or appropriate
to
maintain patents and other rights for the Corporation and to protect its title
thereto. Set forth on Schedule II attached hereto is a list of inventions,
patented or unpatented, including a brief description thereof, which are owned
by the Executive, which the Executive conceived or made prior to his employment
by the Corporation and which are excluded from this Agreement.
6. Termination;
Resignation.
(a) Parties’
Rights to Terminate.
The
Executive may terminate this Agreement by resignation at any time, upon 60
days’
prior written notice (the “Notice Period”), and the Corporation may terminate
this Agreement with “cause,” as defined below, or without cause upon 60 days’
prior written notice. “Cause” shall mean (i) the failure of the Executive to
perform his duties as set forth in this Agreement or as may be reasonably
imposed from time to time on the Executive by law (whether or not reasonable)
or
the Board, provided such duties are consistent with his position, in a manner
substantially consistent with the manner prescribed by the Board (other than
any
such failure resulting from incapacity due to physical or mental illness),
(ii)
the engaging by the Executive in misconduct materially and demonstrably
injurious to the Corporation, (iii) the commission, conviction or indictment
of
the Executive for commission of a felony, whether or not such felony was
committed in connection with the Corporation’s business, or (iv) the
circumstances described in Section 7 hereof, in which case the provisions of
Section 7 shall govern the rights and obligations of the parties.
(b) Termination
for Cause; Resignation without Good Reason.
In the
event the Corporation terminates this Agreement for “cause” or the Executive
resigns without “good reason,” as defined herein, the Executive’s rights
hereunder shall cease as of the effective date of such termination (30 days
after notice), except as otherwise provided in Section 6(c) and 7, and Executive
shall be entitled to payment of all amounts of Base Salary, any bonus payments
actually earned but unpaid, accrued but unused vacation, reimbursements for
appropriate expenses incurred prior to the termination date, and any other
amounts payable under Corporation policy or applicable law that are due or
accrued as of the termination date.
(c) Termination
Without Cause or Resignation with Good Reason.
In the
event that the Corporation terminates the Executive’s employment without cause
or the Executive terminates his employment for good reason within one year
of
the Commencement Date, the Corporation shall pay to the Executive the Base
Salary for 120 days from the date of the notice of termination. After the first
year from the Commencement Date, if the Corporation terminates the Executive’s
employment without cause or the Executive terminates his employment for good
reason, the Corporation shall pay the Executive 180 days’ Base Salary
(including, not in addition to, any notice period). Other than as set forth
in
this paragraph, in no event shall the Corporation pay any other severance unless
agreed to by the Parties.
(d) Good
reason means (i) a material reduction of the Executive's duties, title,
position, reporting status, or responsibilities; (ii) a reduction of the
Executive's Base Salary as in effect immediately prior to such reduction; (iii)
a material, uncured breach by the Corporation of this Agreement; or (v) the
Corporation’s failure to maintain appropriate D&O insurance .The Corporation
shall have the ability to cure any action that constitutes good reason during
the Notice Period.
7. Disability;
Death.
(a) If,
prior to the expiration or termination of the Employment Period, the Executive
shall be unable to substantially perform his duties by reason of disability
or
impairment of health for at least three consecutive calendar months, the
Corporation shall have the right to terminate this Agreement by giving written
notice to the Executive to that effect, but only if at the time such notice
is
given such disability or impairment is still continuing. After giving such
notice, (i) the Employment Period shall terminate with the payment of the
Executive’s base compensation for the month in which notice is given and the
payment of a pro rata
portion
of any bonus that would have been payable to Executive under Section 2(c) had
he
not become disabled, (ii) the Restricted Stock and all unvested Options (and
any
other option or restricted stock granted to him) will vest in full on the
effective date of termination and (with respect to the Option or any option)
expire 6 months after the effective date of termination, and (iii) all of the
Executive’s benefits under this Agreement shall terminate, except that the
Executive shall receive such accidental disability benefits to which the
Executive may be entitled under the plans of the Corporation then in effect.
In
the event of a dispute as to whether the Executive is disabled within the
meaning of this Section 8(a), either party may from time to time request a
medical examination of the Executive by a doctor appointed by the Chief of
Staff
of a hospital selected by mutual agreement of the parties, or as the parties
may
otherwise agree, and the written medical opinion of such doctor shall establish
a presumption as to whether the Executive has become disabled and the date
when
such disability arose. Such presumption shall become binding and conclusive
upon
the parties unless, within 20 days of the date of receipt of such written
medical opinion, the party disputing such opinion provides a contrary written
medical opinion from two doctors appointed by the same Chief of Staff which
appointed the first doctor, in which event the opinions of the latter two
doctors shall become binding and conclusive upon the parties. The cost of any
such medical examinations shall be borne by the Corporation, except that the
Executive shall bear the cost of any medical examinations sought in order to
rebut a presumption of disability.
(b) If,
prior
to the expiration or termination of the Employment Period, the Executive shall
die, the Corporation shall pay to the Executive’s estate (or to the revocable
living trust previously specified by the Executive) his base compensation
through the end of the month in which the Executive’s death occurred and a
pro rata
portion
of any bonus (if any) that would have been payable to the Executive under
Section 2(c) had his death not occurred, at which time the Employment Period
shall terminate without further notice. In addition, all of the Executive’s
benefits under this Agreement shall terminate, except that the Executive’s
estate shall receive such accidental death benefits to which the Executive
may
be entitled under the plans of the Corporation then in effect.
8. Non-Competition/Non-Solicitation.
(a)
During the term of this Agreement and for any period for which the Executive
receives severance from the Corporation following the termination of this
Agreement, the Executive will not compete, directly or indirectly, with the
Corporation, or any of its parent corporations, subsidiaries or affiliates,
in
the businesses of the Corporation, including, without limitation, the
Corporation’s energy related businesses based upon its proprietary technology.
Such restriction shall include, but not be limited to, ownership (direct or
indirect, including without limitation by a member of the Executive’s family) of
any interest in a business that is in competition (as described above) with
the
Corporation, and being an officer, shareholder, director, executive or
contractor of or consultant to any such business, whether or not for
compensation; provided that, the
foregoing shall not prohibit Executive from owning five percent (5%) or less
of
the outstanding equity securities of any corporation or entity, nor shall it
prohibit him from owning any interest, whether as a creditor or stockholder,
in
the Corporation.
The
Executive further agrees that, during the above period, he will not, in any
capacity, except in connection with the performance of services hereunder,
either separately, jointly or in association with others, directly or indirectly
solicit or contact, with regard to a business competitor of the Corporation,
any
of the Corporation’s agents, suppliers, customers or prospects, as shown by the
Corporation’s records, that were agents, suppliers, customers or prospects of
the Corporation at any time during the year immediately preceding the
termination of employment hereunder, where the purpose of such solicitation
or
contact is to compete with, or is intended to compete with, the Corporation.
The
Executive further agrees that, during the above period, he will not, in any
capacity, either separately, jointly or in association with others, directly
or
indirectly, solicit any of the Corporation’s executives, employees, or
consultants.
(b) If
a
court determines that the foregoing restrictions are too broad or otherwise
unreasonable under applicable law, including with respect to time or space,
the
court is hereby requested and authorized by the parties hereto to revise the
foregoing restrictions to include the maximum restrictions allowed under the
applicable law. The Executive expressly agrees that breach of the foregoing
would result in irreparable injuries to the Corporation, that the remedy at
law
for any such breach will be inadequate and that upon breach of this provision,
the Corporation, in addition to all other available remedies, shall be entitled
as a matter of right to seek injunctive relief in any court of competent
jurisdiction.
9. Enforcement.
The
Executive agrees that the Corporation’s remedies at law for any breach or threat
of breach by him of the provisions of Sections 3, 4, 5 and 8 hereof will be
inadequate, and that the Corporation shall be entitled to an injunction or
injunctions (and temporary restraining orders and preliminary injunctions,
as
the case may be) to prevent breaches of the said provisions and to enforce
specifically the terms and provisions thereof, in addition to any other remedy
to which the Corporation may be entitled at law or equity.
10. Severability.
Should
any provision of this Agreement be determined to be unenforceable or prohibited
by any applicable law, such provision shall be ineffective to the extent, and
only to the extent, of such unenforceability or prohibition without invalidating
the balance of such provision or any other provision of this Agreement, and
any
such unenforceability or prohibition in any jurisdiction shall not invalidate
or
render unenforceable such provision in any other jurisdiction.
11. Assignment.
The
Executive’s rights and obligations under this Agreement shall not be assignable
by the Executive. The Corporation’s rights and obligations under this Agreement
shall be assignable by the Corporation, including as incident to the transfer,
by merger or otherwise, of all or substantially all of the business of the
Corporation. In the event of any such assignment by the Corporation, all rights
of the Corporation hereunder shall inure to the benefit of the
assignee.
12. Notices.
Any
notice required or permitted under this Agreement shall be deemed to have been
effectively made or given if in writing and personally delivered or mailed
properly addressed in a sealed envelope, postage prepaid by certified or
registered mail. Unless otherwise changed by notice, notice shall be properly
addressed to Executive if addressed to:
Xxxxxxx
Xxxx
International
Business & Technology Management LLC
XX
Xxx
0000
Xxxxxxxxxx
Xxxxx, XX 00000-0000
and
properly addressed to the Corporation if addressed to:
Xxxxx
Xxxxx
Chief
Executive Officer
Ener1,
Inc.
000
Xxxx
Xxxxxxx Xxxxx Xxxx, Xxxxx 000
Xx.
Xxxxxxxxxx, Xxxxxxx 00000
with
a
copy to:
Xxxxxx
X.
Xxxxx
General
Counsel
Ener1,
Inc.
000
Xxxx
Xxxxxxx Xxxxx Xxxx, Xxxxx 000
Xx.
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile:
(000) 000-0000
Email:
xxxxxx@xxxx0xxxxx.xxx
13. Award
to Prevailing Party in Dispute.
In the
event either of the parties to this Agreement commences any action or proceeding
arising out of, or relating in any way to, this Agreement, the prevailing party
shall be entitled to recover, in addition to any other relief awarded to such
party, his or its costs, expenses and reasonable attorneys’ fees.
14. Additional
Documents to be Executed by the Executive.
The
obligations of the Corporation under this Agreement shall be subject to the
execution and delivery, by the Executive, of the Corporation’s Business Code of
Conduct, and other standard in-processing documentation normally required of
all
incoming employees. The obligations of the Executive thereunder shall be
additive and complementary to the Executive’s obligations
hereunder.
15. Miscellaneous.
This
Agreement constitutes the entire agreement, and supersedes all prior agreements,
of the parties hereto relating to the subject matter hereof, and there are
no
written or oral terms or representations made by either party other than those
contained herein. The validity, interpretation, performance and enforcement
of
this Agreement shall be governed by the laws of the State of Florida. The
headings contained herein are for reference purposes only and shall not in
any
way affect the meaning or interpretation of this Agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
effective as of the day and year first above written.
| ENER1, INC. | EXECUTIVE | ||
|
|
|||
| By: | |||
|
Name: Xxxxx
Xxxxx
Title:
Chief
Executive Officer
|
Xxxxxxx Xxxx |
SCHEDULE
I
Milestones
Milestones
for vesting of restricted stock
|
1.
|
The
Executive shall deliver a definitive agreement(s) between the Company
or
EnerDel and a strategic partner for the development of EnerDel’s battery
technology for certain defined applications that includes an
investment.from the strategic partner and that receives approval.from
the
Company’s Board of Directors.
|
|
2.
|
The
Executive shall (i) deliver a plan for the use of the Ft. Lauderdale
battery facility and related equipment; (ii) receive approval for
the plan
from the Company’s Board of Directors, and (iii) implement the plan to
achieve the plan’s goals as outlined in the
plan.
|
Milestones
for Base Salary increase and Annual Salary Adjustments
Within
the first 6 months (2) of the following must be accomplished to justify an
increase in Base Salary:
|
(1)
|
Bring
2 board of director candidates for Ener1, that are acceptable to
the
current BOD.
|
|
(2)
|
Reorganize
the management structure of Ener1 Inc and/or EnerDel or other subsidiaries
to facilitate executing our goals and to increase efficiency of operations
of Ener1.
|
| (3) |
Attract
and retain new human capital to Ener1 to facilitate executing our
goals
and to increase efficiency of
operations.
|
|
(4)
|
Succeed
with winning Phase II of USABC.and winning an OEM or equivalent contract
or GM E-Flex proposal or equivalent high-profile project (GE or
other)
|
|
(5)
|
Completion
of strategic partnership for
EnerDel
|
SCHEDULE
II
Inventions
None.
