Exhibit 10.2
CHANGE OF CONTROL SEVERANCE
AGREEMENT
THIS CHANGE OF CONTROL SEVERANCE
AGREEMENT (the “ Agreement ”) is made as of the
day of July, 2008 between Active
Power, Inc., (the “ Company ”), and
, an individual resident of
(“ Employee ”). Employee and the Company are
collectively referred to herein as the “ Parties
.”
1. At-Will Employment Status;
Term . Employee is currently employed by the Company. Employee
is employed on an “at will” basis, which means that
either the Company or Employee may terminate Employee’s
employment with the Company at any time and for any or no reason.
This Agreement shall terminate upon the date that all obligations
of the parties hereto under this Agreement have been satisfied or,
if earlier, on the date, prior to a Change in Control (as defined
in the Active Power, Inc. 2000 Stock Incentive Plan (the “
Plan ”)), Employee is no longer employed by the
Company.
2. Acceleration Upon Termination
After a Change in Control . Although Employee’s
employment is at-will, in the event that Employee is terminated by
the Company without Cause (as defined below) or resigns with Good
Reason (as defined below) within twelve months after a Change in
Control, all shares of stock that are issuable upon exercise of all
options granted to Employee by the Company prior to the date of the
Change in Control shall fully vest as of the date of such
termination, to the extent such stock options are outstanding and
unvested at the date of such termination, and all shares of stock
of the Company that were purchased prior to the Change in Control
and that is subject to a right of repurchase by the Company (or its
successor) shall have such right of repurchase lapse with respect
to all of the shares. If Employee’s employment with the
Company terminates other than as a result of a termination by the
Company without Cause or resignation with Good Reason within the
twelve months following a Change of Control, then Employee shall
not be entitled to receive any benefits hereunder, but may be
eligible for those benefits (if any) as may then be established
under the Company’s then existing severance and benefits
plans and policies at the time of such termination.
3. Conditions Precedent . Any
accelerated vesting contemplated by Section 2 above are
conditional on Employee:
(a) continuing to comply with the
terms of this Agreement and the Proprietary Information and
Nondisclosure Agreement between Employee and the Company (the
“ Confidentiality Agreement ”);
(b) delivering and not revoking, a
separation agreement including a general release of claims relating
to Employee’s employment and/or this Agreement against the
Company or its successor, its subsidiaries and their respective
directors, officers and stockholders and affirmation of obligations
hereunder and under the Confidentiality Agreement in a form
acceptable to the Company or its successor; and
(c) in the event of a resignation
for Good Reason, providing the Company with written notice of the
acts or omissions constituting the grounds for Good Reason within
ninety (90) days of the initial existence of the grounds for
Good Reason and a reasonable opportunity for the Company to cure
the conditions giving rise to such Good Reason, which shall not be
less
than thirty (30) days following the date of
notice from Employee. If the Company cures the conditions giving
rise to such Good Reason within thirty (30) days of the date
of such notice, Employee will not be entitled to severance payments
and/or benefits contemplated by Section 2 above if Employee
thereafter resigns from the Company based on such grounds. Unless
otherwise required by law, no severance payments and/or benefits
under Section 2 will be paid and/or provided until after the
expiration of any relevant revocation period.
4. Definitions . For purposes
of this Agreement,
(a) Cause . For purposes of
this Agreement, “ Cause ” shall mean
(i) Employee’s continued failure to substantially
perform the duties and obligations of Employee’s position
(for reasons other than death or Disability), which failure, if
curable within the discretion of the Company, is not cured to the
reasonable satisfaction of the Company within thirty (30) days
after receipt of written notice from the Company of such failure;
(ii) Employee’s failure or refusal to comply with
reasonable written policies, standards and regulations established
by the Company from time to time which failure, if curable in the
discretion of the Company, is not cured to the reasonable
satisfaction of the Company within thirty (30) days after
receipt of written notice of such failure from the Company;
(iii) any act of personal dishonesty, fraud, embezzlement,
misrepresentation, or other unlawful act committed by Employee that
results in a substantial gain or personal enrichment of Employee at
the expense of the Company; (iv) Employee’s violation of
a federal or state law or regulation applicable to the
Company’s business, which violation was or is reasonably
likely to be materially injurious to the Company;
(v) Employee’s violation of, or a plea of nolo
contendere or guilty to, a felony under the laws of the United
States or any state; or (vi) the Employee’s material
breach of the terms of the Confidentiality Agreement.
(b) Good Reason . For
purposes of this Agreement, “ Good Reason ”
shall mean, without Employee’s written consent:
(i) there is a material reduction of the level of
Employee’s compensation (excluding any bonuses) (except where
there is a general reduction applicable to the management team
generally); (ii) there is a material reduction in
Employee’s overall responsibilities or authority, or scope of
duties, it being understood that a reduction in Employee’s
responsibilities or authority following a Change in Control (as
defined in the Plan) shall not constitute Good Reason unless there
also occurs a demotion in Employee’s title or position; or
(iii) a material change in the geographic location at which
Employee must perform his services; provided, that in no instance
will the relocation of Employee to a facility or a location of
fifty (50) miles or less from Employee’s then current
office location be deemed material for purposes of this
Agreement.
(c) The Board shall make all
determinations relating to termination, including without
limitation any determination regarding Cause.
5. Tax Treatment . The
Company makes no representations or warranties with respect to the
tax consequences of the benefits to Employee under the terms of
this Agreement. Employee agrees and understands that Employee is
responsible for payment of any local, sta
