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rights, nor any expectations of recall or rehire, by ECD or any of its subsidiaries, divisions, affiliates or joint ventures.
7. | RETURN OF COMPANY PROPERTY: |
KUMAR will immediately return to ECD any ECD property in KUMAR’s possession, together withall documents, reports, files, memoranda, records, keys, identification cards, computer access codes, software, file passwords, or any other physical or personal property which KUMAR received or prepared or helped to prepare in connection with KUMAR’s employment and which KUMAR has in KUMAR’s possession. KUMAR represents that KUMAR has not retained and will not retain any copies, duplicates, reproductions or excerpts thereof.
8. | CONFIDENTIAL AND PROPRIETARY INFORMATION: |
KUMAR acknowledges that during the course of KUMAR’s employment, KUMAR has been entrusted with certain business, financial, technical, personnel and other proprietary information and materials that are the property of ECD. KUMAR agrees not to communicate or disclose to any third party or use for KUMAR’s own account, without written consent of ECD, any of the aforementioned information or material, except as required by law, unless and until such information or material becomes generally available to the public through sources other than KUMAR. KUMAR will return to ECD the originals and all copies of any business records of ECD which are or were subject to KUMAR’s custody or control, regardless of the sources from which such records were obtained. KUMAR will certify that to the best of his knowledge and belief, and after diligent search and inquiry, KUMAR has done so. In addition, all business equipment shall be returned unless specifically agreed in writing otherwise by ECD.
KUMAR will not disparage, discredit or otherwise treat in any detrimental manner, ECD or any of its divisions, subsidiaries, affiliates, joint ventures, officers, directors and employees. ECD agrees that in official communication to the public that it will not disparage KUMAR.
KUMAR agrees that for a period of Twelve (12) Months following employment termination, KUMAR will not, directly or indirectly, on behalf of himself or any other person or entity, without the prior written approval of ECD, directly or indirectly (i) induce any person or entity to leave his or her employment with ECD, terminate an independent contractor relationship with ECD or terminate or
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reduce any contractual relationship with ECD; or (ii) induce or influence any customer, supplier or other person that has a business relationship with ECD or any subsidiary, division, affiliate or joint venture of ECD to discontinue or reduce the extent of such relationship.
KUMAR agrees that for a period of Six (6) Months following employment termination, KUMAR will not, directly or indirectly, on behalf of himself or any other person or entity, without the prior written approval of ECD, own, manage, operate, join, control, be employed by, assist, consult or participate in the ownership, management, operation or control of, or be connected in any manner, including but not limited to holding the positions of shareholder, director, officer, consultant, independent contractor, employee, partner or investor, with any Competing Enterprise. “Competing Enterprise” means and shall be limited to those entities identified in Exhibit B.
Nothing herein shall preclude KUMAR from being a member of a private equity company, investment bank, advisory firm, hedge fund or a venture capital firm that invests in or provides advisory services to the Competing Enterprises as part of its investment portfolio, providing that KUMAR does not actively participate in the day-to-day management or operation of the Competing Enterprise.
KUMAR agrees to provide any prospective employer with a copy of the non-competition paragraph of this Revised Agreement.
| 12. | LIQUIDATED DAMAGES AND INJUNCTIVE RELIEF: |
KUMAR agrees that the covenants in Paragraphs 9, 10 and 11 are reasonable and should he violate the terms of Paragraphs 9, 10 or 11, ECD shall have the right to seek and he gives his consent to the issuance of an injunction to prohibit him from further violation of these covenants including an order requiring him to immediately cease all employment or other activities in violation of these Paragraphs. While the Parties have stipulated to liquidated damages, the payment of such liquidated damages does not relieve the right of ECD to obtain an injunction prohibiting further violation.
In addition to all equitable remedies available to ECD as specified above, KUMAR agrees that as a result of a violation of Paragraphs 9, 10 or 11, that he shall be liable for liquidated damages in the form of surrender to ECD of the financial value of the options and restricted shares that are the subject of accelerated vesting under Paragraph 2F. The parties agree that the amount of actual damages suffered by ECD as a result of a violation of Paragraphs 9, 10 or 11 would be difficult to determine. The time periods specified in Paragraphs 9,
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10 and 11, as applicable, shall be extended for the period of any violation of the restriction.
If KUMAR is obligated under Paragraph 9, 10, or 11 to surrender the financial value of the options and restricted shares that are subject to accelerated vesting under Paragraph 2F, then KUMAR shall (1) forfeit any right to receive or exercise the unvested options and restricted shares that are the subject of accelerated vesting under Paragraph 2F, (2) forfeit any options that have vested under Paragraph 2F but have not then been exercised, (3) with respect to any options that have vested under Paragraph 2F and have then been exercised, pay ECD the fair market value of the shares on the date the options were exercised, less the option price, and (4) with respect to any restricted shares that have vested under Paragraph 2F, pay ECD the fair market value of the shares as of the date on which the restrictions lapsed. For purposes of this paragraph, “fair market value” will be defined as the per share closing price of ECD’s common stock on the date of exercise for options and the date on which the restrictions lapse for restricted stock.
12. | ACKNOWLEDGMENT OF ADDITIONAL CONSIDERATION: |
KUMAR acknowledges that the consideration KUMAR is receiving pursuant to this Revised Agreement is greater than the benefits he would be entitled under the June 5, 2006 Severance Agreement and KUMAR is not entitled to additional severance pay beyond the terms of this Revised Agreement.
13. | TIME PERIOD FOR REVIEW OF AGREEMENT: |
KUMAR will have an opportunity of Twenty-One (21) calendar days to review this Revised Agreement and is advised to consult with an attorney of his choosing at hisown expense. If this Revised Agreement is not signed by the end of the Twenty-One (21) calendar day review period, the offer will expire. No payments will be made under the terms of this Revised Agreement until the Agreement is signed and the seven (7) day revocation period has expired. The Parties have agreed that any changes to this Agreement, whether material or not, will not restart the 21-day review period.
KUMAR acknowledges that the consideration heis receiving pursuant to this Revised Agreement is not part of a plan or program and has been individually negotiated between the Parties and that he is not entitled to additional severance pay or benefits beyond the terms of this Revised Agreement, including the Energy Conversion Devices, Inc. Executive Severance Plan.
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This offer of severance may be revoked by ECD at any time prior to the official termination date if ECD makes the decision to retain KUMAR in KUMAR’s current or new position or to transfer KUMAR to another ECD division, subsidiary, affiliate or joint venture.
16. | UNDERSTANDING OF AGREEMENT: |
KUMAR acknowledges that he has read this entire Revised Agreement, that KUMAR has had the opportunity to consult with counsel at KUMAR’s own expense, and that KUMAR understands all of its terms and knowingly and freely enters into this Revised Agreement. KUMAR further acknowledges that KUMAR has been afforded Twenty-One (21) calendar days to consider this Revised Agreement, has been advised to seek review of this Agreement by an attorney at hisown expense, and that KUMAR has seven (7) calendar days after its execution to revoke the Revised Agreement.
This Revised Separation Agreement and Complete Release of Liability, together with any previously signed confidentiality and patent agreements, constitutes the complete and entire Agreements between the Parties relating to the termination of the employment relationship and supersedes any and all previous agreements, representations or understandings regarding termination of benefits. These Agreements may not be changed, modified or terminated unless such changes are made in writing and signed by both Parties. Any previously signed confidentiality or patent agreement shall remain in effect following termination of the employment relationship and execution of this Revised Agreement. This Revised Agreement has been separately negotiated and is intended to terminate, void and/or supersede the Severance Agreement dated June 5, 2006, between the Parties, which is hereby terminated.
Should any portion of this Revised Agreement be ruled invalid, it shall not affect the remaining provisions of this Revised Agreement, which shall remain in full force and effect.
The Parties agree that any disputes regarding this Revised Separation Agreement shall be governed by the laws of the State of Michigan, without regard to any conflicts or choice of law rule or principle that might otherwise refer
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construction or interpretation of this provision to the substantive law of another jurisdiction.
20. | ARBITRATION OF DISPUTES: |
The Parties agree that any dispute over the terms of this Revised Agreement or its enforcement shall be resolved exclusively by final and binding arbitration pursuant to the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association. The award of the arbitrator may be enforced in the federal or circuit courts for Oakland County, Michigan. ECD and KUMAR retain the right to seek equitable relief pending the outcome of the arbitration proceedings with jurisdiction and venue agreed to by the Parties in federal or circuit courts for Oakland County, Michigan.
This Agreement shall be interpreted to ensure that the payments made hereunder are exempt from, or comply with, Code Section 409A; provided, however, that nothing in this Agreement shall be interpreted or construed to transfer any liability for any tax (including a tax or penalty due as a result of a failure to comply with 409A) from KUMAR to ECD or to any other individual or entity. If KUMAR is a “specified employee” under Code Section 409A upon termination of employment, and any payments are required to be delayed under Code Section 409A(a)(2)(B)(i), such delayed payments will be aggregated and paid in a cash lump sum on the first day of the seventh month following KUMAR’S termination of employment.
IN WITNESS WHEREOF, we have set our hands the day and year first written below.
Dated: August 28, 2008 | /s/ Sanjeev Kumar |
| ENERGY CONVERSION DEVICES, INC. |
Dated: August 28, 2008 | Its: V.P.–Human Resources & Administration |
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Reaffirmation of Revised Separation Agreement
On August 28, 2008 I signed this Revised Separation Agreement. I am re-signing this Revised Agreement today, including the release of all claims from the date of my original signature through August 31, 2008.
| /s/ Sanjeev Kumar |
| SANJEEV KUMAR |
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EXHIBIT "A"
SCOPE OF RELEASE
This Release of all claims by the employee, as part of this Revised Separation Agreement, is intended and understood by all parties to release all claims by employee, without limitation, relating to the employment relationship. The list set forth below is a representative sample of the types of employment-related claims being released by the employee and is not intended to be a complete list.
Federal Law: Title VII of the Civil Rights Act of 1964 (race, color, religion, national origin or sex); the 1991 Civil Rights Act; the Age Discrimination in Employment Act of 1967 (age); the Older Workers Benefit Protection Act ("OWBPA") (age); the Vocational Rehabilitation Act of 1973 (handicap); The Americans with Disabilities Act of 1990 (Handicap); 42 U.S.C. Section 1981, 1986 and 1988 (race); the Sarbanes-Oxley Act of 2002; the Employee Retirement Income Security Act (ERISA) (Pension and employee benefits); the Equal Pay Act of 1963 (prohibits pay differentials based on sex); the Immigration Reform and Control Act of 1986; Executive Order 11246 (race, color, religion, sex or national origin); Executive Order 11141 (age); Vietnam Era Veterans Readjustment Assistance Act of 1974 (Vietnam era veterans and disabled veterans); the Federal Railroad Safety Act (45 U.S.C. Section 421 et. seq.); Section 301 of the Labor Management Relations Act, 29 U.S.C. Section 185 et. seq. (suits for breach of the Collective Bargaining Agreement); the Fair Labor Standards Act (minimum wage and overtime pay); the Labor Management Relations Act (rights protected by the National Labor Relations Board); the Occupational Safety and Health Act (safety matters); the Worker Adjustment and Retraining Notification Act (“WARN”) (notification requirements for employers who are curtailing or closing an operation), the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) (which provides health insurance continuation coverage for eligible employees), the Family and Medical Leave Act of 1993 (“FMLA”), and Federal Common Law.
Michigan Law: The Elliot-Larsen Civil Rights Act (race, color, religion, national origin, age, sex, marital status, height and weight) and any and all derivative claims; the Michigan Persons With Disabilities Act (handicap); the Michigan Wage Payment Act (MCLA 408.471) (wages and benefits); AIDS Testing and Confidentiality Act; Equal Pay; the Polygraph Protection Act of 1981 (restrictions on the use of polygraphs); Whistleblower Protection; Jury Service; Subpoenaed Victim; Job Reference Immunity; all as amended, and the common law of the State of Michigan; tort; breach of express or implied employment contract; wrongful discharge; workers' compensation retaliation; tortious interference with contractual relations and loss of consortium, constructive discharge or any other law applicable to the employment relationship.
NOTICE: Should you have any questions regarding the scope of this Release, it is strongly recommended that you seek the advice of an attorney of your choosing, and at your own expense, before signing this Revised Agreement.
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ACKNOWLEDGEMENT OF RECEIPT OF SEPARATION AGREEMENT ONLY
[EMPLOYEE COPY]
I acknowledge that I received today a copy of the Separation Agreement and Complete Release of Liability. I have been advised of the following:
| 1) | That I have Twenty-One (21) calendar days to consider this Agreement. |
| 2) | That I have the opportunity to discuss with ECD any questions or concerns I may have over the terms or language of the Agreement. |
| 3) | That I have been advised to see an attorney of my choosing, at my own expense, to review the Agreement. |
| 4) | That I should not sign the Agreement unless I fully understand its terms and enter into the Agreement of my own free will. |
| 5) | That I have seven (7) calendar days after signing the Agreement to revoke the Agreement. |
| 6) | That no other promises have been made to me beyond the terms of this Separation Agreement and Complete Release of Liability. |
| /s/ Sanjeev Kumar |
| SANJEEV KUMAR |
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ACKNOWLEDGEMENT OF RECEIPT OF SEPARATION AGREEMENT ONLY
[EMPLOYER COPY]
I acknowledge that I received today a copy of the Separation Agreement and Complete Release of Liability. I have been advised of the following:
| 1) | That I have Twenty-One (21) calendar days to consider this Agreement. |
| 2) | That I have the opportunity to discuss with ECD any questions or concerns I may have over the terms or language of the Agreement. |
| 3) | That I have been advised to see an attorney of my choosing, at my own expense, to review the Agreement. |
| 4) | That I should not sign the Agreement unless I fully understand its terms and enter into the Agreement of my own free will. |
| 5) | That I have seven (7) calendar days after signing the Agreement to revoke the Agreement. |
| 6) | That no other promises have been made to me beyond the terms of this Separation Agreement and Complete Release of Liability. |
| /s/ Sanjeev Kumar |
| SANJEEV KUMAR |
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WAIVER OF 21-DAY REVIEW PERIOD-OPTIONAL
I acknowledge that I was provided with a copy of the Separation Agreement and Complete Release of Liability on July 18, 2008. I have had an opportunity to review the Agreement, have been afforded the opportunity to have it reviewed by an attorney of my choosing, at my own expense, and have made the decision to execute the Agreement prior to the expiration of the Twenty-One (21) Calendar Day review period. Therefore, I have executed the Separation Agreement and Complete Release of Liability today, and I understand that I have seven (7) calendar days from today to revoke the Agreement. All payments under the terms of the Separation Agreement will begin no earlier than the first payroll following August 31, 2008 or the eighth (8th) day after execution of this Agreement, whichever is later.
| /s/ Sanjeev Kumar |
| SANJEEV KUMAR |
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Exhibit B
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