This excerpt taken from the ENER DEF 14A filed Oct 29, 2007.
Retirement of Stanford R. Ovshinsky.
Effective August 31, 2007, Stanford R. Ovshinsky retired as an active employee and director of the Company. Many of the terms of his retirement were specified in his employment agreements with the Company and Ovonic Battery Company, which were amended and supplemented by a letter agreement dated August 23, 2007. The table below quantifies the amounts to be provided in connection with these agreements.
For the remainder of Mr. Ovshinskys life, he will receive (1) $184,000 per year (50% of his current base salary), and (2) medical and disability insurance and, to the extent currently in effect, life insurance coverage, for Mr. Ovshinsky and his spouse, if any, continuing at least at current levels, provided that the Company will not be required to provide the benefits of clause (2) if Mr. Ovshinsky or his spouse secures comparable coverage from another employer. In addition, Mr. Ovshinsky is entitled to his fiscal 2007 bonus provided for in the employment agreements, if any, and a pro rata portion of such bonus for fiscal 2008, if any.
In accordance with the applicable stock option agreements, vested stock options to purchase 321,294 shares of the Companys common stock will be exercisable until August 31, 2008. Additional options to purchase 114,000 shares of the Companys common stock, including the acceleration of vesting of the right to purchase 40,000 shares in accordance with the retirement agreement, will be exercisable until ten years after the respective grant dates, except that upon his death, such options will be exercisable until the earlier of 12 months following the date of his death or ten years after the grant date. The retirement agreement provides for the termination of all outstanding options to acquire shares of stock of Ovonic Battery Company.
The Company also conveyed to Mr. Ovshinsky the property for the Institute for Amorphous Studies (subject to adjustment as set forth in the retirement agreement), appraised at a fair market value of $1.875 million, and paid Mr. Ovshinsky $500,000 to help cover post-August 31, 2007 costs of maintenance, insurance and taxes of the Institute property. Further, the Company will provide Mr. Ovshinsky with full-time secretarial support during his life or until similar services are provided to him by
another employer without expense. The Company also conveyed two Prius automobiles free of encumbrance and with sales tax and transfer fees paid.
As a result of Mr. Ovshinskys retirement, he is subject to worldwide non-competition and non-solicitation provisions until August 31, 2010 and he is also subject to a confidentiality clause in perpetuity.
The Company will continue to indemnify, defend and hold harmless Mr. Ovshinsky to the full extent permitted under applicable law and the Companys governing documents with respect to all acts and omissions on or before August 31, 2007 in his capacity as officer, director or employee of the Company to the full extent that would apply if he had continued in such positions.
Severance Agreements of Sanjeev Kumar and Jay B. Knoll
Messrs. Kumar and Knoll entered into severance agreements with the Company as of June 5, 2006.
If such employees employment is terminated for cause, death or disability, or the employee resigns without good reason, such employee will receive any accrued but unpaid base salary and vacation and reimbursement of any expenses incurred prior to termination. Cause is defined under the agreements as:
The employee has 10 business days from the receipt of written notice to cure any termination for cause. An employee can be terminated for disability upon the expiration of three months following the determination of disability in accordance with the severance agreement. A disability means the inability of the employee, due to a physical or mental impairment, to perform the essential functions of the employees job for a period of three months despite all reasonable accommodations by the Company.
If such employees employment is terminated by the Company without cause or by such employee with good reason, such employee will receive:
Good reason is defined under the agreements as:
The Company has 10 business days from the receipt of written notice to cure any of the foregoing events.
As a condition to receiving the severance amounts in respect of a termination without cause or a resignation for good reason, the employee must sign an agreement to forever release all claims arising out of employees employment or the termination thereof, as reasonably acceptable to employee.