SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. __)
ENERGY CONVERSION DEVICES, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $.01 PER SHARE
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(Title and Class of Securities)
292659 109
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(CUSIP Number)
ROBERT C. STEMPEL
C/O ENERGY CONVERSION DEVICES, INC.
1675 WEST MAPLE ROAD
TROY, MI 48084
(248) 290-1900
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
JANUARY 15, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g),check the following
box [ ].
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SCHEDULE 13D
CUSIP No. 292659 109 Page 2 of 38 Pages
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Robert C. Stempel
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,120,904
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
8 SHARED VOTING POWER
9 SOLE DISPOSITIVE POWER
1,120,904
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,120,901
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.2%
14 TYPE OF REPORTING PERSON*
IN
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Item 1. Security and Issuer.
This Statement relates to the Common Stock, par value $.01 per
share, of Energy Conversion Devices, Inc. (the "Issuer"). The
principal executive offices of the Issuer are located at 1675 West
Maple Road, Troy, Michigan 48084.
Item 2. Identity and Background.
This Statement is being filed by Robert C. Stempel. Mr.
Stempel's business address is 1675 West Maple Road, Troy, Michigan
48084. Mr. Stempel is the Chairman of the Board of Directors and
Executive Director of the Issuer.
During the last five years, Mr. Stempel has not been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Mr. Stempel is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
Mr. Stempel has used personal funds to acquire the shares of
the Issuer's Common Stock held by him as of the date of this
Statement. Mr. Stempel anticipates that he will use personal funds
to pay the exercise price applicable upon the exercise of the stock
options presently owned by him.
Item 4. Purpose of Transaction.
Except as disclosed pursuant to Item 6 below, Mr. Stempel as
of the date of this Statement does not have any plan or proposal
which relates to or would result in any of the events or
transactions described in Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
As of the date of this Statement, Mr. Stempel beneficially
owned 1,120,904 shares of Common Stock, representing 8.2% of the
Issuer's outstanding Common Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
At its July 8, 1998 meeting, the Board of Directors of the
Issuer approved the terms of an Executive Employment Agreement,
Restricted Stock Agreement and Stock Option Agreement between the
Issuer and Mr. Stempel. The foregoing agreements were executed and
delivered on behalf of the Issuer and Mr. Stempel as of January 15,
1999.
Pursuant to these agreements, Mr. Stempel agreed, subject to
certain conditions, to continue to serve as an executive officer of
the Issuer through September 2005 and
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the Issuer agreed to make a restricted stock grant to Mr. Stempel
consisting of 430,000 shares of Common Stock to be exchanged for an
equal number of shares of Class B Common Stock upon stockholder
authorization of the Class B Common Stock and to grant Mr. Stempel
an option to acquire up to 300,000 shares of Common Stock.
Description of the Executive Employment Agreement. The
Executive Employment Agreement provides that Mr. Stempel will serve
as the Executive Director of the Issuer for a term ending September
30, 2005. During the term of his employment, Mr. Stempel will be
entitled to receive an annual salary as determined by the Board of
Directors from time to time. The Executive Employment Agreement also
provides for discretionary bonuses to be determined by the Board of
Directors based on Mr. Stempel's individual performance and the
financial performance of the Issuer. The Executive Employment
Agreement also requires the Issuer to provide Mr. Stempel with
non-wage benefits, including insurance, pension and profit sharing,
stock options, automobile use or allowance and organizational
membership fees, of the types provided generally by the Issuer to
its senior executive officers. The Issuer will not be obligated to
provide such non- wage benefits to the extent Mr. Stempel is
entitled to receive comparable benefits on substantially equivalent
terms from any prior or future employer.
The Executive Employment Agreement permits Mr. Stempel to
retire as an officer and employee of the Issuer and to resign his
employment in the event he becomes subject to any mental or physical
disability which, in the good faith determination of Mr. Stempel,
materially impairs his ability to perform his regular duties as an
officer of the Issuer. Mr. Stempel is also permitted to terminate
the Executive Employment Agreement in the event the Issuer's
stockholders fail to approve the authorization of the Class B Common
Stock at the Issuer's annual meeting of stockholders. The Executive
Employment Agreement permits the Issuer to terminate Mr. Stempel's
employment upon the occurrence of certain defined events, including
the material breach by Mr. Stempel of certain non-competition and
confidentiality covenants contained in the Executive Employment
Agreement, his conviction of certain criminal acts or his gross
dereliction or malfeasance of his duties as an officer and employee
of the Issuer (other than as a result of his death or mental or
physical disability).
Mr. Stempel's entitlement to compensation and benefits under
the Executive Employment Agreement will generally cease effective
upon the date of the termination of his employment, except that the
Issuer will be required to continue to provide Mr. Stempel and his
spouse with medical, disability and life insurance coverage for the
remainder of their lives or until the date they secure comparable
coverage provided by another employer.
Description of the Restricted Stock Agreement. The Issuer on
January 15, 1999 entered into the Restricted Stock Agreement with
Mr. Stempel. On that date, the Issuer made a restricted stock grant
to Mr. Stempel consisting of 430,000 shares of Common Stock. The
Restricted Stock Agreement contemplates that the Issuer will submit
a proposal at its next annual meeting of stockholders to amend the
Issuer's Certificate of Incorporation to authorize 430,000 shares of
a new Class B Common Stock. The newly authorized shares of Class B
Common Stock will be in addition to the 500,000 shares of Class A
Common Stock presently authorized under the Issuer's Certificate of
Incorporation.
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Upon the authorization of the Class B Common Stock by the
Issuer's stockholders, Mr. Stempel will be required to surrender the
shares of Common Stock originally issued to him pursuant to the
Restricted Stock Agreement in exchange for an equal number of shares
of Class B Common Stock. If the Issuer's stockholders do not
authorize the Class B Common Stock, the Restricted Stock Agreement
provides that Mr. Stempel will be entitled to hold the shares of
Common Stock originally issued to him pursuant to the Restricted
Stock Agreement. The restricted shares held by Mr. Stempel are
referred to collectively in the Restricted Stock Agreement as the
"Restricted Stock."
The terms of the Class B Common Stock are intended to be
substantially similar to those of the Issuer's Class A Common Stock.
The principal difference between the Class A Common Stock and the
Class B Common Stock is with respect to voting rights. Each share of
Class B Common Stock will initially entitle the holder to one vote
on all matters to be voted upon by the Issuer's stockholders. Except
as otherwise required under Section 242 of the Delaware General
Corporation Law, the Common Stock, the Class A Common Stock and the
Class B Common Stock will initially vote together as a single class
on all matters.
The Issuer's amended Certificate of Incorporation will
provide, however, that each share of Class B Common Stock will
become entitled to 25 votes as of the first date (the "Conversion
Date") upon which all of the outstanding shares of the Issuer's
Class A Common Stock have been converted into Common Stock and no
shares of Class A Common Stock are outstanding. The Issuer intends
to seek stockholder approval at the annual meeting for an extension
of the existing preferential voting rights of the Class A Common to
September 30, 2005. The preferential voting rights of the Class B
Common Stock, if triggered, will also expire on September 30, 2005.
After the Conversion Date, holders of Class B Common Stock and
Common Stock will vote as a single class on all matters, except that
separate class voting will be required with respect to (i) the
merger or consolidation of the Issuer with another corporation, (ii)
the liquidation or dissolution of the Issuer, (iii) the sale of all
or substantially all of the assets of the Issuer, (iv) any amendment
to the Issuer's Certificate of Incorporation for which class voting
is required by Section 242 of the Delaware General Corporation Law
and (v) any authorization of additional shares of the Issuer's
Common Stock or Class B Common Stock.
The Class B Common Stock will be convertible into Common Stock
on a share-for-share basis at any time at the option of the holder.
In addition, the Class B Common Stock will be deemed to be converted
into Common Stock on September 30, 2005. The Issuer's amended
Certificate of Incorporation will provide that the foregoing
mandatory conversion date may be extended in the future with the
approval of the Issuer's stockholders voting together as a single
class.
The Restricted Stock Agreement provides that all of the shares
of Restricted Stock will be deemed to vest if Mr. Stempel is serving
as a director and officer of the Issuer on September 30, 2005. If
Mr. Stempel ceases to serve as a director of the Issuer prior to
September 30, 2005, other than as a result of his death, disability
or a change in control of the Issuer, all of the shares of
Restricted Stock will be forfeited by Mr. Stempel. The Restricted
Stock Agreement provides for partial vesting of the Restricted Stock
if Mr. Stempel is serving as a director, but not an officer, of the
Issuer on September 30, 2005,
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and in the event of his death or resignation due to disability prior
to such date. The Restricted Stock Agreement also provides for
immediate vesting of all of the shares of Restricted Stock upon the
occurrence of a change in control of the Issuer provided that Mr.
Stempel was serving as a director of the Issuer on the date 90 days
prior to the date of such change in control. For purposes of the
Restricted Stock Agreement, a "change in control" will include (i)
any sale, lease, exchange or other transfer of all or substantially
all of the Issuer's assets, (ii) the approval by the Issuer's
stockholders of any plan or proposal of liquidation or dissolution
of the Issuer, (iii) the consummation of any consolidation or merger
of the Issuer in which the Issuer is not the surviving or continuing
corporation or pursuant to which the Issuer's voting securities
would be converted into cash, securities or other property, (iv) the
acquisition by any person of 30 percent or more of the combined
voting power of the then outstanding securities having the right to
vote for the election of directors, (v) changes in the composition
of the majority of the Board of Directors and (vi) the bankruptcy or
insolvency of the Issuer.
The Restricted Stock Agreement provides that Mr. Stempel will
be entitled to all voting and dividend rights with respect to the
Restricted Stock, whether or not the Restricted Stock is deemed to
have vested. Mr. Stempel will cease to be entitled to such voting or
dividend rights with respect to any shares of Restricted Stock which
are forfeited by Mr. Stempel in accordance with the provisions of
the Restricted Stock Agreement.
Transfer of the shares of Restricted Stock by Mr. Stempel will
be prohibited except as expressly provided in the Restricted Stock
Agreement. Following the date upon which any shares of Class B
Common Stock constituting Restricted Stock are deemed to have
vested, the Restricted Stock Agreement permits Mr. Stempel, or his
executor or legal representative, to convert the vested shares of
Class B Common Stock into shares of Common Stock and to transfer
such shares of Common Stock subject to any restrictions on transfer
arising under the federal or applicable state securities laws. In
addition, the Restricted Stock Agreement provides that at any time
and from time to time after the Conversion Date, Mr. Stempel, so
long as he is then serving as a director of the Issuer, may deliver
written notice to the Issuer designating one or more persons then
serving as a director of the Issuer as a permitted transferee of all
or a portion of the Restricted Stock held by Mr. Stempel. The Board
of Directors may at any time after Mr. Stempel's designation approve
the person or persons designated by Mr. Stempel as a permitted
transferee. In connection with the Board's approval of a permitted
transferee, the Board may establish conditions to such approval,
including the number of shares of Restricted Stock permitted to be
transferred to such person and the terms and conditions under which
such person will be permitted to hold such shares. The incumbent
Board of Directors may rescind its approval of any person as a
permitted transferee of the Restricted Stock at any time preceding a
change in control of the Issuer.
Upon Mr. Stempel's death or resignation as a director of the
Issuer due to disability, the Restricted Stock Agreement permits Mr.
Stempel, or his executor or legal representative, to transfer shares
of Restricted Stock, whether or not deemed vested, to those
permitted transferees approved by the Board of Directors, subject to
any conditions related to such approval imposed by the Board. The
Restricted Stock Agreement further provides that effective as of the
date of any such permitted transfer of Restricted Stock, the Issuer
will issue to Mr. Stempel, or his executor or legal representative,
a number of shares of Common Stock equal to the number of shares of
Restricted Stock which were
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deemed to be vested shares as of the date of Mr. Stempel's death or
resignation as a director due to disability.
The Issuer is obligated under the terms of the Restricted
Stock Agreement to file upon the request of Mr. Stempel a
registration statement with the Securities and Exchange Commission
registering the resale of the vested shares of Common Stock issuable
to Mr. Stempel upon the conversion or transfer of Class B Common
Stock and upon the exercise of the option granted to Mr. Stempel
pursuant to the Stock Option Agreement. The Issuer is obligated to
pay all registration expenses (excluding underwriters discounts and
commission) in connection with the preparation and filing of such
registration statement and to indemnify and defend Mr. Stempel
against certain liabilities arising with respect to the registration
and sale of such shares, including certain liabilities arising under
the Securities Act of 1933, as amended.
Description of Stock Option Agreement. Pursuant to the Stock
Option Agreement, the Issuer granted Mr. Stempel an option to
purchase up to 300,000 shares of Common Stock at an exercise price
of $10.688 per share, the fair market value of the Common Stock as
of the date of the Stock Option Agreement. The option granted to Mr.
Stempel may be exercised from time to time in whole or in part
commencing as of the date of the Stock Option Agreement and ending
on the tenth anniversary of such date. The option is not subject to
vesting requirements and may be exercised by Mr. Stempel prior to or
after the termination of his service as an executive officer and
director of the Issuer.
The Stock Option Agreement provides that the number of shares
of Common Stock issuable to Mr. Stempel thereunder and the
applicable exercise price per share will be subject to appropriate
adjustment in connection with any stock split, stock dividend,
reverse stock split, combination of shares, merger, recapitalization
or other reorganization affecting the Issuer's Common Stock.
Item 7. Material to Be Filed as Exhibits
(i) Executive Employment Agreement
(ii) Restricted Stock Agreement
(iii) Stock Option Agreement
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Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
January 22, 1999 /s/ Robert C. Stempel
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Date Robert C. Stempel
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EXHIBITS
EXHIBIT NUMBER DESCRIPTION PAGE NUMBER
1 Executive Employment 10
Agreement
2 Restricted Stock Agreement 18
3 Stock Option Agreement 31
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EXHIBIT 1
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT dated as of January 15, 1999 by
and between Energy Conversion Devices, Inc., a Delaware corporation (the
"Company"), and Robert C. Stempel (the "Executive").
The Executive currently serves as the Chairman of the Board of
Directors and Executive Director of the Company. In order to induce the
Executive to enter into this Agreement and to continue to devote his full
business time and attention to the business and affairs of the Company, the
Company and the Executive have entered into this Agreement and the Company has
agreed to enter into a Stock Option Agreement (the "Stock Option Agreement") and
a Restricted Stock Agreement (the "Restricted Stock Agreement"), each dated as
of the date hereof, pursuant to which the Company has agreed to grant to the
Executive an option to acquire certain shares of the Company's Common Stock, par
value $.01 per share, and to issue to the Executive certain shares of its Class
B Common Stock, par value $.01 per share (the "Class B Common Stock"), upon the
terms and subject to the conditions set forth therein.
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Executive do
hereby agree as follows:
Section 1. Employment and Duties. Upon the terms and subject
to the conditions set forth in this Agreement, the Company agrees to employ the
Executive as its Executive Director and the Executive hereby accepts such
employment and agrees to perform such services as would be customary for such
position or as otherwise reasonably requested from time to time by the Company's
Board of Directors. Except in connection with normal business travel, the
Executive shall not be required to perform his duties under this Agreement at a
location other than the Detroit metropolitan area.
Section 2. Other Employment. The Company acknowledges and
agrees that the Executive may, in addition to his position as Executive Director
of the Company, serve as a senior advisor to EV Global Motors, an outside
director of other publicly held corporations and as a director and officer of
subsidiaries of the Company, and may divide his time between the Company, such
other publicly held corporations and the Company's subsidiaries as necessary and
appropriate, provided that the Executive shall spend such time and efforts as
reasonably necessary to fulfill his duties on behalf of the Company.
Section 3. Term. The term of employment under this Agreement
(the "Employment Period") shall commence as of the date hereof and shall remain
in effect until September 30, 2005 unless earlier terminated as hereinafter
provided. The Employment Period shall be automatically renewed for successive
one year periods after the initial term unless terminated by either the
Executive or the Company by giving written notice of termination at least 120
days in advance of the renewal date.
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Section 4. Compensation.
4.1 Salary. For all the services to be rendered by the
Executive hereunder, the Company agrees to pay, during the Employment Period, an
annual salary, determined by the Board of Directors of the Company from time to
time, payable every two weeks or otherwise according to the Company's regular
pay schedule for salaried employees.
4.2 Bonus. During the Employment Period, the Executive shall
be entitled to receive annual bonuses as may be deemed advisable by the Board of
Directors of the Company based on the individual performance of the Executive
and the financial performance of the Company.
4.3 Other Benefits. During the Employment Period, the
Executive shall be eligible for all non-wage benefits, including health,
disability and life insurance, pension and profit sharing, stock option,
automobile use or allowance, and organizational membership fees, that the
Company provides generally for its senior executive officers. The Company shall
not be obligated to provide any such non-wage benefit to the Executive if and so
long as the Executive is entitled to receive a comparable benefit on
substantially equivalent terms from any prior or subsequent employer.
Section 5. Business Expenses. Subject to policies established
from time to time by the Company, the Company shall reimburse the Executive for
the reasonable, ordinary and necessary expenses incurred by him in connection
with the performance of his duties hereunder, including ordinary and necessary
travel expenses and entertainment expenses.
Section 6. Covenants of Executive.
6.1 Non-Competition During the Employment Period. During the
Employment Period, except as provided in Section 2, the Executive shall not,
without the Company's prior written consent, which may be withheld at the
Company's sole discretion, engage in any other business activity for gain,
profit or other pecuniary advantage (except the investment of funds in such form
or manner as shall not require any material services on the part of the
Executive in the operation of the affairs of the companies in which such
investments are made) or engage in or any manner be connected or concerned,
directly or indirectly, whether as an officer, director, stockholder, partner,
owner, employee, creditor or otherwise, with the operation, management or
conduct of any business anywhere in the world that competes with the business of
the Company or that utilizes technology of a nature similar to that utilized by
the Company.
6.2 Confidentiality. During the Employment Period and
following the termination thereof for any reason, the Executive shall not
disclose or make any use of, for his own benefit or for the benefit of any
business or entity other than the Company, any secret or confidential
information or any other information of or pertaining to the Company, its
business, products, financial affairs, licensees, customers or services not
generally known by the public and which was acquired by him during his
affiliation with the Company.
6.3 Inventions and Secrecy. Except as otherwise provided in
this Section 6.3, the Executive shall (a) promptly disclose to the Company all
inventions, ideas, devices, processes, formulas, compositions, techniques and
research and development information
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(whether patentable or unpatentable and whether or not reduced to practice) made
or conceived by him alone or jointly with others from the time of entering the
Company's employ until such employment is terminated for any reason, relevant or
pertinent in any way, whether directly or indirectly, to the Company's business
or resulting from or suggested by any work which he may have done for the
Company or at its request, (b) at all times during his employment with the
Company, assist the Company (at the Company's expense) to obtain and develop for
the Com pany's benefit patents on such inventions, ideas, devices, processes,
formulas, compositions, techniques and research and development, information,
and (c) do all such acts and execute, acknowledge and deliver all such
instruments as may be necessary or desirable in the opinion of the Company to
vest in the Company the entire interest in such inventions, ideas, devices,
processes, formulas, compositions, techniques and research and development
information.
6.4 Competition Following Termination. If the employment of
the Executive is terminated by the Company for Cause (as defined in Section 7.1)
or if the Executive voluntarily terminates his employment with the Company, then
within the three-year period immediately following such termination of the
Executive's employment with the Company, the Executive shall not, without the
prior written consent of the Company, which consent may be withheld at the sole
discretion of the Company, engage in or in any manner be connected or concerned,
directly or indirectly, whether as an officer, director, stockholder, partner,
owner, employee, creditor or otherwise with the operation, management or conduct
of any business anywhere in the world that competes with the business of the
Company at the time of such termination or that utilizes technology of a nature
similar to that utilized by the Company at the time of such termination.
Notwithstanding the foregoing, in no event shall the restrictions of this
Section 6.4 continue beyond September 30, 2005. Neither the Executive's
termination of his employment with the Company due to the Company's breach of
this Agreement, nor the Executive's election not to renew the Employment Period
pursuant to Section 3, shall be deemed to constitute a voluntary termination of
the Executive's employment for purposes of this Agreement.
6.5 Solicitation of Employees and Customers Following
Termination. Within the three-year period immediately following termination of
the Executive's employment with the Company for any reason (other than
termination by the Company without Cause), the Executive shall not, without the
Company's prior written consent, which may be withheld at the Company's sole
discretion, directly or indirectly, on his own behalf or on behalf of any other
person or entity (a) solicit, contact, interfere with or divert any licensee or
customer of the Company, or any pro spective customer identified by or on behalf
of the Company, during the Executive's association with the Company or (b)
solicit or hire any person then employed by the Company or employed by the
Company at any time during the preceding 12-month period.
6.6 Acknowledgment. The Executive acknowledges that the
restrictions set forth in this Section 6 are reasonable in scope and essential
to the preservation of the Company's business and proprietary properties and
that the enforcement thereof shall not in any manner preclude the Executive, in
the event of the Executive's termination of employment with the Company, from
becoming gainfully employed in such manner and to such extent as to provide a
standard of living for himself, the members of his family, and those dependent
upon him of at least the sort and fashion to which he and they have become
accustomed and may expect.
6.7 Severability. The covenants of the Executive contained in
this Section 6 shall each be construed as an agreement independent of any other
provision in this Agreement,
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and the existence of any claim or cause of action of the Executive against the
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of such covenants. The parties
hereby expressly agree that it is not the intention of any party hereto to
violate any public policy, statutory or common law, and that if any sentence,
paragraph, clause or combination of the same of this Agreement is in violation
of the law of any state where applicable, such sentence, paragraph, clause or
combination of the same shall be void in the jurisdictions where it is unlawful,
and the remainder of such paragraph and this Agreement shall remain binding on
the parties to make the covenants of this Agreement binding only to the extent
that it may be lawfully done under existing applicable laws. In the event that
any part of any covenant of this Agreement is determined by a court of law to be
overly broad thereby making the covenant unenforceable, the parties hereto
agree, and it is their desire, that such court shall substitute a judicially
enforceable limitation in its place, and that as so modified the covenant shall
be binding upon the parties as if originally set forth herein.
Section 7. Termination.
7.1 Termination for Cause. The Company shall have the option
to terminate the Employment Period for cause ("Cause") in the event of (a) a
material breach by the Executive of the covenants provided in Section 6 of this
Agreement, (b) the commission by the Executive of theft or embezzlement of
material items of Company property, (c) the conviction of the Executive of a
crime resulting in material injury to the business, property or reputation of
the Company, or (d) the Executive's gross dereliction or malfeasance in the
performance of his duties hereunder (other than as a result of the Executive's
death or mental or physical disability), provided that such dereliction or
malfeasance continues uncorrected during the notice period described in the next
sentence. Any termination pursuant to this Section 7.1 shall be effective only
upon the expiration of a 120-day period following delivery by the Company to the
Executive of a written notice of such termination, setting forth in reasonable
detail the grounds for such termination, if the circumstance or event providing
such grounds is not cured by the Executive during such 120-day period.
7.2 Retirement, Disability and Death. The Executive shall have
the right at any time to terminate the Employment Period in connection with the
Executive's retirement as an officer of the Company or in the event the
Executive becomes subject to any Disability. For purposes of this Section 7.2,
the term "Disability" means any physical or mental disability, or any
combination of physical or mental disabilities, which, in the good faith
determination of the Executive, materially impairs the ability of the Executive
to perform his regular duties as an officer of the Company. The Employment
Period shall automatically terminate in the event of the Executive's death.
7.3 Failure to Authorize Class B Common Stock. The Executive
shall have the right to terminate the Employment Period in the event of the
failure of the Company's stockholders to approve the proposed amendment to the
Company's Certificate of Incorporation to authorize the Class B Common Stock as
provided in Section 3 of the Restricted Stock Agreement.
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7.4 Survival of Covenants. The covenants of the Executive set
forth in Sections 6.2, 6.4 and 6.5 of this Agreement shall survive the
termination of the Employment Period or termination of this Agreement,
regardless of the reason therefor, and shall continue in effect for the periods
specified in such Sections.
7.5 Continuation of Insurance. Following termination or
expiration of this Agreement for any reason, the Company shall, at its expense,
continue the medical, disability and life insurance coverage of the Executive
and the Executive's spouse, as in effect at such time, for the remainder of the
lives of the Executive and the Executive's spouse or until the date the
Executive or the Executive's spouse secures comparable coverage provided by
another employer.
8. General Provisions.
8.1 Notice. Any notice required or permitted hereunder shall
be made in writing (a) either by actual delivery of the notice into the hands of
the party thereunder entitled, or (b) by the mailing of the notice in the United
States mail, certified or registered mail, return receipt requested, all postage
prepaid and addressed to the party to whom the notice is to be given at the
party's respective address set forth below, or such other address as the parties
may from time to time designate by written notice as herein provided.
As addressed to the Company:
Energy Conversion Devices, Inc.
1675 West Maple Road
Troy, Michigan 48084
With a copy (which shall not constitute notice) to:
Chester T. Kamin, Esq.
Jenner & Block
One IBM Plaza
Chicago, Illinois 60611
As addressed to the Executive:
Robert C. Stempel
Energy Conversion Devices, Inc.
c/o 1675 West Maple Road
Troy, Michigan 48084
With a copy (which shall not constitute notice) to:
William L. Weber, Jr., Esq.
Daniels & Kaplan, P.C.
401 South Old Woodward Avenue
Suite 350
Birmingham, Michigan 48009-6613
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<PAGE>
The notice shall be deemed to be received in case (a) on the
date of its actual receipt by the party entitled thereto and in case (b) on the
third day after date of its mailing.
8.2 Amendment and Waiver. No amendment or modification of this
Agreement shall be valid or binding upon the Company unless made in writing and
signed by an officer of the Company duly authorized by the Company's Board of
Directors or upon the Executive unless made in writing and signed by him. The
waiver by any party of the breach of any provision of this Agreement by any
other party shall not operate or be construed as a waiver of any subsequent
breach.
8.3 Governing Law. THE VALIDITY AND EFFECT OF THIS AGREEMENT
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE CONSTRUED AND
DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS,
OF THE STATE OF MICHIGAN.
8.4 Entire Agreement. This Agreement (together with the Stock
Option Agreement, the Restricted Stock Agreement and any other agreements
pursuant to which the Executive has been granted stock options by the Company)
contains all of the terms agreed upon by the parties with respect to the subject
matter hereof and supersedes all prior agreements, arrangements and
communications between the parties dealing with such subject matter, whether
oral or written.
8.5 Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the transferees, successors and assigns of the
Company, including any company or corporation with which the Company may merge
or consolidate, and shall be binding upon the Executive and shall inure to the
benefit of the Executive and his heirs, executors, personal representative and
beneficiaries.
8.6 Remedies for Breach. The Executive specifically
acknowledges that his services under this Agreement are unique and extraordinary
and that irreparable injury shall result to the Company and its business and
property in the event of a breach of the terms and conditions of this Agreement
to be performed by him (including, but not limited to, leaving the employment
provided for hereunder). The Executive, therefore, agrees that in the event of
his breach of any of the terms and conditions of this Agreement to be performed
by him (including, but not limited to, leaving the employment provided for
hereunder) the Company shall be entitled, if it so elects, to institute and
prosecute proceedings in any court of competent jurisdiction, either at law or
in equity and without posting any bond or other security, to enjoin him from
performing services for any other person, firm or corporation in violation of
any of the terms of this Agreement, and to obtain damages for any breach of this
Agreement. In the event of the breach by the Company of any of the terms and
conditions of this Agreement to be performed by it, the Executive's remedies
shall be similarly free of limitations. The remedies provided herein shall be
cumulative and in addition to any and all other remedies which either party may
have at law or in equity.
8.7 Costs of Enforcement. In the event of any suit or
proceeding by the Executive seeking to enforce the terms, covenants or
conditions of this Agreement, the Executive, if he prevails, shall in addition
to all other remedies and relief that may be available
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under this Agreement or applicable law recover his reasonable attorneys' fees
and costs as shall be determined and awarded by the court.
8.8 Headings. Numbers and titles to paragraphs hereof are for
information purposes only and, where inconsistent with the text, are to be
disregarded.
8.9 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
when taken together, shall be and constitute one and the same instrument.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the date and year first written above.
ENERGY CONVERSION DEVICES, INC.
By: /s/ Stanford R. Ovshinsky
------------------------------------
Stanford R. Ovshinsky
Its: President and Chief Executive Officer
/s/ Robert C. Stempel
------------------------------------
Robert C. Stempel
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<PAGE>
EXHIBIT 2
RESTRICTED STOCK AGREEMENT
RESTRICTED STOCK AGREEMENT dated as of January 15, 1999 by and
between Energy Conversion Devices, Inc., a Delaware corporation (the "Company"),
and Robert C. Stempel (the "Executive").
The Executive currently serves as the Chairman of the Board of
Directors and Executive Director of the Company. In order to induce the
Executive to continue to devote his full business time and attention to the
business and affairs of the Company, the Company and the Executive have entered
into an Executive Employment Agreement dated as of the date hereof (the
"Employment Agreement") and the Company has agreed to grant to the Executive an
option to acquire certain shares of the Company's Common Stock, par value $.01
per share ("Common Stock"), pursuant to a Stock Option Agreement dated as of the
date hereof (the "Stock Option Agreement") and to issue to the Executive certain
shares of its Common Stock and Class B Common Stock, par value $.01 per share,
upon the terms and subject to the conditions set forth in this Agreement.
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Executive do
hereby agree as follows:
1. Defined Terms. As used in this Agreement, the following
capitalized terms shall have the meanings indicated in this Section 1:
"Certificate of Amendment" means the Certificate of Amendment
in the form attached to this Agreement as Annex A authorizing the Class B Common
Stock.
"Change in Control" means a change in control of the Company
of a nature that would be required to be reported in response to Item 1(a) of
the Current Report on Form 8-K, as in effect as of the date of this Agreement,
promulgated pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), whether or not the Company is then
subject to the reporting requirements of the Exchange Act; provided that,
without limitation, such a change in control shall be deemed to have occurred if
(a) there shall be consummated any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially all
of the Company's assets, (b) the stockholders of the Company approve any plan or
proposal of liquidation or dissolution of the Company, (c) there shall be
consummated any consolidation or merger of the Company in which the Company is
not the surviving or continuing corporation or pursuant to which the Company's
voting securities would be converted into cash, securities or other property,
(d) any "person" or "group" (as such terms are used in Section 13(d) and 14(d)
of the Exchange Act) other than the Executive shall become, after the date of
this Agreement, the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
30% or more of the combined voting power of the Company's then-outstanding
voting securities ordinarily having the right to vote for the election of
directors, (e) individuals who, as of the date of this Agreement, constitute the
Board of Directors of the Company (the "Board" generally, and as of
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<PAGE>
the date hereof, the "Incumbent Board") shall cease for any reason to constitute
a majority of the Board, provided that any person becoming a director subsequent
to the date of this Agreement whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board (other than an election or nomination
of an individual whose initial assumption of office is in connection with an
actual or threatened election contest relating to the directors of the Company,
as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) shall be, for purposes of this Agreement, considered as though
such person were a member of the Incumbent Board, (f) a proceeding is instituted
in a court of competent jurisdiction seeking a decree or order for relief in
respect of the Company in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Company or for any substantial part of
its property, or for the winding-up or liquidation of its affairs, and such
proceeding remains undismissed or unstayed and in effect for a period of 60
consecutive days or such court enters a decree or court granting the relief
sought in such proceeding, or (g) the Company commences a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereinafter in
effect, consents to the entry of an order for relief in an involuntary case
under any such law, or consents to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of or for any substantial part of its property, or makes a
general assignment for the benefit of creditors, or fails generally to pay its
debts as they become due, or take any corporate action in furtherance of any of
the foregoing. Notwithstanding the foregoing, no Change in Control shall be
deemed to occur as a result of any transfer of beneficial ownership of shares of
Common Stock or Class A Common Stock from Stanford R. Ovshinsky to Iris M.
Ovshinsky.
"Class A Common Stock" means the Company's Class A Common
Stock, par value $.01 per share.
"Class B Common Stock" means the Company's Class B Common
Stock, par value $.01 per share.
"Code" has the meaning set forth in Section 10(b).
"Common Stock" means the Company's Common Stock, par value
$.01 per share.
"Company" means Energy Conversion Devices, Inc., a Delaware
corporation.
"Conversion Date" means the first date as of which all
outstanding shares of Class A Common Stock have been converted into shares of
Common Stock and no shares of Class A Common Stock are issued and outstanding.
"Demand Registration" has the meaning set forth in Section
11(a).
"Disability" means any physical or mental disability, or any
combination of physical or mental disabilities, which, in the good faith
determination of the Executive, materially
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impairs the ability of the Executive to perform his regular duties as a director
or officer of the Company.
"Excise Tax" has the meaning set forth in Section 10(d).
"Executive" means Robert C. Stempel.
"Gross-Up Payment" has the meaning set forth in Section 10(d).
"Payment" has the meaning set forth in Section 10(d).
"Permitted Transferee" has the meaning set forth in Section
7(b).
"Piggyback Registration" has the meaning set forth in Section
11(e).
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with the provisions of Section 11 of this
Agreement, including all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, printing expenses, messenger and
delivery expenses, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding discounts and
commissions) and other persons retained by the Company.
"Registrable Securities" means, collectively, (a) any shares
of Common Stock which are deemed to have vested in accordance with the
provisions of Section 5, (b) any shares of Common Stock issued or issuable upon
the conversion of shares of Class B Common Stock which are deemed to have vested
in accordance with the provisions of Section 5 and (c) any shares of Common
Stock issued or issuable upon the exercise of the stock option granted to the
Executive pursuant to the Stock Option Agreement.
"Restricted Stock" has the meaning set forth in Section 3. For
purposes of this Agreement, the term "Restricted Stock" shall also include (a)
any Common Stock issued or issuable upon the conversion of the shares of Class B
Common Stock issued to the Executive pursuant to this Agreement and (b) any
equity securities of the Company or any of its subsidiaries issued or issuable
in connection with any stock dividend, stock split, combination of shares,
merger, consolidation, recapitalization, spin-off or similar transaction with
respect to or affecting the shares of Common Stock or Class B Common Stock
issued to the Executive pursuant to this Agreement or any Common Stock issued or
issuable with respect thereto.
"Securities Act" has the meaning set forth in Section 11(a).
"Transfer" means any sale, assignment, conveyance, pledge,
hypothecation, transfer or other disposition.
2. Grant of Common Stock. Upon the terms and subject to the
conditions set forth in this Agreement, the Company hereby agrees to issue to
the Executive, as of the date of this Agreement, 430,000 shares of Common Stock.
The Company hereby acknowledges receipt from the Executive of $4,300,
representing an amount equal to the aggregate par value of the Common Stock. The
Company accordingly represents and warrants to the Executive that
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the foregoing shares of Common Stock have been validly issued and are fully paid
and nonassessable.
3. Stockholder Approval of Class B Common Stock. The Company
shall submit to its stockholders at its next annual meeting of stockholders a
proposal to amend the Company's Certificate of Incorporation as set forth in the
Certificate of Amendment. The proxy materials delivered to the Company's
stockholders in connection with such meeting shall include the recommendation of
the Company's Board of Directors that the Company's stockholders vote in favor
of and approve the proposal to amend the Company's Certificate of Incorporation
and the Company shall otherwise use its reasonable best efforts to cause such
proposal to be approved by its stockholders. Immediately after such stockholder
meeting, provided that such proposal has been approved by the requisite vote of
the Company's stockholders, the Company shall cause the Certificate of Amendment
to be filed with the Secretary of State of the State of Delaware in accordance
with the requirements of the Delaware General Corporation Law. Immediately
following the filing of the Certificate of Amendment, the Executive shall
surrender to the Company the shares of Common Stock issued to the Executive
pursuant to Section 2, together with appropriate stock powers duly executed in
blank, and in exchange therefor the Company shall issue to the Executive an
equal number of shares of Class B Common Stock. Upon surrender to the Company,
the shares of Common Stock formerly held by the Executive shall resume the
status of authorized but unissued shares of Common Stock. If the proposal to
approve the Certificate of Amendment is not approved by the Company's
stockholders as contemplated by this Section 3, then the Executive shall be
entitled to continue to hold the shares of Common Stock issued to him pursuant
to Section 2. The shares of Common Stock and Class B Common Stock issued to the
Executive pursuant to this Agreement are referred to collectively as the
"Restricted Stock."
4. Dividend and Voting Rights.
(a) So long as the Executive continues to serve as a director
of the Company and irrespective of whether the Restricted Stock is deemed
to have vested in accordance with the provisions of Section 5, the
Executive shall be entitled to exercise all voting rights with respect to
the Restricted Stock, including all preferential voting rights to which
the holders of Class B Common Stock may become entitled from and after the
Conversion Date, and shall be entitled to receive all dividends and
distributions payable in respect of the Restricted Stock.
(b) Except as otherwise provided in Section 8, as of the date
the Executive ceases to serve as a director of the Company for any reason,
the Executive, or his executor or legal representative, shall (i)
immediately cease to be entitled to exercise any preferential voting
rights with respect to any shares of Class B Common Stock held by the
Executive or his estate and (ii) cease to be entitled to receive any
dividend or distribution thereafter payable in respect of the Restricted
Stock.
5. Vesting.
(a) The Restricted Stock shall be deemed to have vested (i) in
full on September 30, 2005, if the Executive is serving as both a director
and an officer of the Company on such date, (ii) in part, as provided in
Section 5(b), on September 30, 2005, if the Executive is serving as a
director, but not as an officer, of the Company on such date, (iii) in
part, as provided in
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<PAGE>
Section 5(b), upon the Executive's death prior to September 30, 2005 if
the Executive is serving as a director of the Company as of the date of
his death, (iv) in part, as provided in Section 5(b), upon the Executive's
resignation as a director of the Company prior to September 30, 2005 due
to Disability, (v) in full upon the occurrence of a Change in Control
prior to September 30, 2005 provided that the Executive was serving as a
director of the Company on the date 90 days prior to the occurrence of
such Change in Control, and (vi) in full in the event the Executive is not
nominated as a director of the Company or if the Executive is nominated as
a director but not elected by the Company's stockholders.
(b) If (i) the Executive is serving as a director, but not an
officer, of the Company on September 30, 2005, (ii) the Executive dies
prior to September 30, 2005 while serving as a director of the Company or
(iii) the Executive resigns as a director of the Company prior to
September 30, 2005 due to Disability, the number of shares of Restricted
Stock that will be deemed to have vested for purposes of this Agreement
will be equal to (A) 5,308.65 shares, multiplied by the number of full
calendar months in the period commencing as of January 1, 1999 and ending
on September 30, 2005 or the date of the death or resignation of the
Executive, as applicable, during which the Executive served both as a
director and an officer of the Company and (B) 2,654.325 shares,
multiplied by the number of full calendar months in the period commencing
as of January 1, 1999 and ending on September 30, 2005 or the date of the
death or resignation of the Executive, as applicable, during which the
Executive served as a director, but not an officer, of the Company.
(c) In addition to any shares of Restricted Stock which may be
deemed to have vested in accordance with the provisions of Section 5(b),
if the Executive dies prior to September 30, 2005 while serving as a
director of the Company, the Executive shall be deemed to have vested in
an additional number of shares of Restricted Stock equal to quotient
determined by dividing (i) the total number of shares of Restricted Stock
minus the number of shares of Restricted Stock deemed to have vested upon
the Executive's death in accordance with the provisions of Section 5(b) by
(ii) 2.
6. Forfeiture and Conversion of Restricted Shares.
(a) Except as otherwise provided in Section 8, as of the date
the Executive ceases for any reason to serve as a director of the Company,
any shares of Restricted Stock which are not deemed to have vested as of
such date in accordance with the provisions of Section 5 shall be
immediately forfeited by the Executive and neither the Executive, his
estate nor any other person acting on behalf of the Executive or claiming
any interest in his estate shall have any further rights or interests in
any such forfeited shares of Restricted Stock. Except as otherwise
provided in Sections 7 and 8, all shares of Class B Common Stock which are
forfeited by the Executive shall be deemed to have been converted into
shares of Common Stock immediately upon such forfeiture and shall not be
reissued by the Company.
(b) Except as otherwise provided in Sections 7 or 8, within 30
days after the date the Executive ceases for any reason to serve as a
director of the Company, any shares of Class B Common Stock which are
deemed to have vested in accordance with the provisions of Section 5 as of
the date of the Executive's cessation of service as a director shall be
converted into shares of Common Stock and share certificates evidencing
such shares of Common Stock shall be issued to the Executive or his estate
or legal representative.
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7. Restrictions on Transfer.
(a) Except as otherwise expressly provided in this Section 7,
the Executive shall not Transfer any interest in any share of Restricted
Stock.
(b) At any time and from time to time after the Conversion
Date, the Executive, so long as he is then serving as a director of the
Company, may deliver written notice to the Secretary of the Company
designating one or more persons also then serving as a director of the
Company as a permitted transferee of all or a portion of the Restricted
Stock pursuant to this Section 7(b). At any time after the date such
notice of designation is delivered by the Executive, the Board, acting
upon the vote or consent of the majority of the directors then in office
(excluding for this purpose the Executive), may approve the person or
persons designated in the Executive's notice of designation and each such
person, as of the date of such approval by the Board, shall be deemed to
be a "Permitted Transferee" for purposes of this Agreement. The Board,
acting as aforesaid, may in connection with the approval of any person as
a Permitted Transferee stipulate conditions on such approval (including
the number of shares of Restricted Stock permitted to be transferred to
such person and the terms and conditions under which such person will be
permitted to hold such shares). At any time during the period commencing
on the date of the approval of any person as a Permitted Transferee and
ending upon the occurrence of a Change in Control, those directors
constituting the Incumbent Board, acting upon the vote or consent of the
majority of such directors (excluding for this purpose the Executive), may
act to rescind such approval, in which event such person shall thereafter
no longer be deemed to be a Permitted Transferee for purposes of this
Agreement, or to modify the terms and conditions under which such
Permitted Transferee is permitted to hold shares of Restricted Stock
transferred to such Permitted Transferee.
(c) The Executive or his executor or legal representative may,
upon Executive's death or his resignation as a director of the Company due
to Disability, Transfer all or any portion of the Restricted Stock,
without regard to whether such Restricted Stock is deemed to have vested
in accordance with Section 5, to any Permitted Transferee subject to any
conditions relating to such Transfer determined by the Board in accordance
with the provisions of Section 7(b).
(d) Upon any Transfer of Restricted Stock pursuant to the
provisions of Section 7(c), the Company, as of the effective date of such
Transfer, shall issue to the Executive (or to his estate in the event of
the Executive's death) a number of shares of Common Stock equal to the
number of shares of Restricted Stock included in such Transfer which were
deemed to have vested in accordance with the provisions of Section 5 as of
the date of the Executive's death or resignation as a director.
(e) Following the date upon which any shares of Class B Common
Stock have deemed to have vested in accordance with the provisions of
Section 5, the Executive or his executor or legal representative may at
any time convert such shares into shares of Common Stock and may at any
time thereafter Transfer such shares of Common Stock, subject to any
restrictions on Transfer arising under the federal or applicable state
securities laws.
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8. Change in Control. Notwithstanding any provision of this
Agreement to the contrary, if the Executive's cessation of service as a director
or officer of the Company occurs as of result of, or directly or indirectly in
connection with, a Change in Control, then (a) the Executive shall continue to
be entitled to exercise all preferential voting rights to which the holders of
the Class B Common Stock may be entitled, (b) all of the Restricted Stock shall
be deemed to have vested immediately upon the occurrence of such Change in
Control and (c) none of the Restricted Stock shall be required to be forfeited
or converted by the Executive or his estate.
9. Delivery of Shares; Stock Legends.
(a) At all times during the period during which the Transfer
of the Restricted Stock is prohibited in accordance with the provisions of
Section 7, all stock certificates evidencing the Restricted Stock shall be
held in custody by the Company for the Executive's account. Upon the
expiration or termination of such period, the Company shall deliver to the
Executive or his estate, as applicable, stock certificates, without any
legend other than as to applicable securities law transfer restrictions,
evidencing the number of shares of Restricted Stock which are deemed to
have vested in accordance with the provisions of Section 5. Except as
otherwise provided in Section 7, upon the forfeiture of any Restricted
Stock, such Restricted Stock shall be transferred to the Company, without
further action by the Executive, as an issued, reacquired share, and shall
be deemed to have been converted into shares of Common Stock immediately
upon such forfeiture and shall not be reissued by the Company.
(b) Each certificate evidencing shares of Restricted Stock
shall be imprinted with a legend in substantially the following form:
"The securities represented by this certificate were
originally issued on January 15, 1999, and have not been
registered under the Securities Act of 1933, as amended. The
transfer of the securities represented by this certificate is
subject to the conditions specified in the Restricted Stock
Agreement dated as of January 15, 1999, between the Energy
Conversion Devices, Inc., a Delaware corporation (the
"Company") and Robert C. Stempel, and the Company reserves the
right to refuse the transfer of such securities until such
conditions have been fulfilled with respect to such transfer.
A copy of such conditions will be furnished by the Company to
the holder hereof upon written request and without charge."
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10. Tax Matters.
(a) The Restricted Stock issued to the Executive pursuant to
this Agreement shall be deemed to have been issued at the fair market
value thereof as of the date of the initial issuance thereof as provided
in this Agreement or, in the case of any securities constituting
Restricted Stock issued after such initial issuance date, as of the date
of issuance of such security. For this purpose, the fair market value of
each share of Class B Common Stock shall be deemed to be equal to the
closing sale price of a share of Common Stock on the date of issuance
thereof as reported by The Nasdaq Stock Market, Inc.
(b) The Executive acknowledges that he will be taxed on the
value of the Restricted Stock as of the date such Restricted Stock is
deemed to have vested in accordance with the provisions of Section 5. The
Executive further acknowledges that he understands that he may make an
election under Section 83(b) of the Internal Revenue Code of 1986, as
amended (the "Code"), to be taxed on the value of the Restricted Stock as
of the date of this Agreement rather than in the years the Restricted
Stock is deemed to have vested. The Executive, after consulting with his
personal legal, tax and financial advisors, hereby notifies the Company
that he does not intend to make such an election with respect to the
Restricted Stock to be issued to him pursuant to this Agreement.
(c) Upon the vesting of the Restricted Stock, the Company
shall be entitled to make appropriate arrangements to satisfy any tax
withholding requirements provided by applicable law.
(d) If, as a result of the immediate vesting of the Restricted
Stock in connection with a Change in Control as provided in Section 8(b),
any payment or benefit (within the meaning of Section 280G(b)(2) of the
Code) to the Executive or for the Executive's benefit paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise in connection with the Executive's employment with the Company
(a "Payment") would be subject to the excise tax imposed by Section 4999
of the Code, or any interest or penalties are incurred by the Executive
with respect to such excise tax (such excise tax, together with any such
interest and penalties, are collectively referred to as the "Excise Tax"),
then the Executive will be entitled to receive an additional payment (a
"Gross-Up Payment") from the Company in an amount such that after payment
by the Executive of all taxes (including any interest or penalties imposed
with respect to such taxes and any Excise Tax imposed upon the Gross-Up
Payment), the amount of the Gross-Up Payment retained by the Executive
equals the Excise Tax imposed upon such Payment.
11. Registration Rights.
(a) Upon the terms and subject to the conditions set forth in
this Section 11, the Executive or his estate or legal representative may
request a single registration (the "Demand Registration") under the
Securities Act of 1933, as amended (the "Securities Act"), of all or part
of the Registrable Securities.
(b) The Registration Expenses of the holders of Registrable
Securities shall be paid by the Company in connection with the Demand
Registration.
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(c) The Company shall not include in the Demand Registration
any securities which are not Registrable Securities without the prior
written consent of the Executive or his estate or legal representative. If
the Demand Registration is an underwritten offering and the managing
underwriters advise the Company that in their opinion the number of
Registrable Securities and, if permitted hereunder, other securities
requested to be included in such offering exceeds the number of
Registrable Securities and other securities which can be sold in an
orderly manner in such offering within a price range acceptable to the
Executive or his estate or legal representative, the Company shall include
in such registration prior to the inclusion of any securities which are
not Registrable Securities the number of Registrable Securities requested
to be included which in the opinion of such underwriters can be sold in an
orderly manner within the price range of such offering.
(d) The Company may postpone for up to 180 days the filing or
the effectiveness of a registration statement for the Demand Registration
if the Company determines in good faith that such Demand Registration
would reasonably be expected to have an adverse effect on any proposal or
plan by the Company to engage in any acquisition of assets (other than in
the ordinary course of business), merger, consolidation or tender offer or
to enter into any material license agreement, joint venture arrangement or
similar transaction; provided that in such event, the holders of
Registrable Securities shall be entitled to withdraw such request and, if
such request is withdrawn, such Demand Registration shall not count as the
permitted Demand Registration hereunder and the Company shall pay all
Registration Expenses in connection with such registration.
(e) Whenever the Company proposes to register any of its
securities under the Securities Act (other than pursuant to a Demand
Registration and other than registrations on Form S-4, Form S-8 or any
similar or successor registration forms) and the registration form to be
used may be used for the registration of Registrable Securities (a
"Piggyback Registration"), the Company shall give prompt written notice
to the Executive of its intention to effect such a registration and shall
include in such registration all Registrable Securities with respect to
which the Company has received written requests for inclusion therein
within 15 days after the giving of the Company's notice.
(f) The Registration Expenses of the holders of Registrable
Securities shall be paid by the Company in connection with all Piggyback
Registrations.
(g) If a Piggyback Registration is an underwritten primary
registration on behalf of the Company, and the managing underwriters
advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the
number which can be sold in an orderly manner in such offering within a
price range acceptable to the Company, the Company shall include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Registrable Securities and any other securities requested to
be included in such registration by holders entitled to registration
rights in connection therewith, pro rata among such holders based on the
number of shares requested to be included in such registration, and (iii)
third, other securities requested to be included in such registration
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(h) If a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's securities, and the
managing underwriters advise the Com pany in writing that in their opinion
the number of securities requested to be included in such registration
exceeds the number which can be sold in an orderly manner in such offering
within a price range acceptable to the holders initially requesting such
registration, the Company will include in such registration (i) first, the
securities requested to be included therein by the holders requesting such
registration, (ii) second, the Registrable Securities and any other
securities requested to be included in such registration by holders
entitled to registration rights in connection therewith, pro rata among
such holders based on the number of shares requested to be included in
such registration, and (iii) third, other securities requested to be
included in such registration.
(i) Whenever the holders of Registrable Securities have
requested that any Registrable Securities be registered pursuant to this
Agreement, the Company shall use its reasonable best efforts to effect the
registration and the sale of such Registrable Securities in accordance
with the intended method of disposition.
(j) The Company agrees to indemnify, to the extent permitted
by law, each holder of Registrable Securities, its officers and directors
and each person who controls such holder (within the meaning of the
Securities Act) against all losses, claims, damages, liabilities and
expenses caused by any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
the same are caused by or contained in any information furnished in
writing to the Company by such holder expressly for use therein or by such
holder's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company has
furnished such holder with a sufficient number of copies of the same. In
connection with an underwritten offering, the Company shall indemnify such
underwriters, their officers and directors and each person who controls
such underwriters (within the meaning of the Securities Act) to the same
extent as provided above with respect to the indemnification of the
holders of Registrable Securities.
(k) In connection with any registration statement in which a
holder of Registrable Securities is participating, each such holder shall
furnish to the Company in writing such information and affidavits as the
Company reasonably requests for use in connection with any such
registration statement or prospectus and, to the extent permitted by law,
shall indemnify the Company, its directors and officers and each person
who controls the Company (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses resulting
from any untrue or alleged untrue statement of material fact contained in
the regis tration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or necessary to
make the statements therein not misleading, but only to the extent that
such untrue statement or omission is contained in any information or
affidavit so furnished in writing by such holder; provided that the
obligation to indemnify shall be individual to each holder and shall be
limited to the net amount of proceeds received by such holder from the
sale of Registrable Securities pursuant to such registration statement.
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<PAGE>
(l) The registration rights provided in this Section 11 shall
be exercisable only after the vesting of the Restricted Stock in
accordance with the provisions of Section 5 and shall not be deemed to
permit the Transfer of any Restricted Stock otherwise prohibited in this
Agreement.
12. Miscellaneous.
(a) Any notice required or permitted hereunder shall be made
in writing (i) either by actual delivery of the notice into the hands of
the party thereunder entitled, or (ii) by the mailing of the notice in the
United States mail, certified or registered mail, return receipt
requested, all postage prepaid and addressed to the party to whom the
notice is to be given at the party's respective address set forth below,
or such other address as the parties may from time to time designate by
written notice as herein provided.
As addressed to the Company:
Energy Conversion Devices, Inc.
1675 West Maple Road
Troy, Michigan 48084
With a copy (which shall not constitute notice) to:
Chester T. Kamin, Esq.
Jenner & Block
One IBM Plaza
Chicago, Illinois 60611
As addressed to the Executive:
Robert C. Stempel
c/o Energy Conversion Devices, Inc.
1675 West Maple Road
Troy, Michigan 48084
With a copy (which shall not constitute notice) to:
William L. Weber, Jr., Esq.
Daniels & Kaplan, P.C.
401 South Old Woodward Avenue
Suite 350
Birmingham, Michigan 48009-6613
The notice shall be deemed to be received in case (i) on the
date of its actual receipt by the party entitled thereto and in case (ii)
on the third day after date of its mailing.
(b) No amendment or modification of this Agreement shall be
valid or binding upon the Company unless made in writing and signed by an
officer of the Company duly authorized by the Company's Board of Directors
or upon the Executive unless made in writing
Page 28 of 38
<PAGE>
and signed by him. The waiver by any party of the breach of any provision
of this Agreement by any other party shall not operate or be construed as
a waiver of any subsequent breach.
(c) THE VALIDITY AND EFFECT OF THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE CONSTRUED AND DETERMINED IN
ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS, OF THE
STATE OF MICHIGAN.
(d) This Agreement (together with the Employment Agreement,
the Stock Option Agreement and any other agreements pursuant to which the
Executive has been granted stock options by the Company) contains all of the
terms agreed upon by the parties with respect to the subject matter hereof and
supersedes all prior agreements, arrangements and communications between the
parties dealing with such subject matter, whether oral or written.
(e) This Agreement shall be binding upon and shall inure to
the benefit of the transferees, successors and assigns of the Company,
including any company or corporation with which the Company may merge or
consolidate, and shall be binding upon the Executive and shall inure to
the benefit of the Executive and his heirs, executors, personal
representative and beneficiaries.
(f) In the event of any suit or proceeding by the Executive
seeking to enforce the terms, covenants or conditions of this Agreement,
the Executive, if he prevails, shall in addition to all other remedies and
relief that may be available under this Agreement or applicable law
recover his reasonable attorneys' fees and costs as shall be determined
and awarded by the court.
(g) Numbers and titles to paragraphs hereof are for
information purposes only and, where inconsistent with the text, are to be
disregarded.
(h) This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
when taken together, shall be and constitute one and the same instrument.
* * * * *
Page 29 of 38
<PAGE>
IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.
ENERGY CONVERSION DEVICES, INC.
By: /s/ Stanford R. Ovshinsky
--------------------------------------------
Stanford R. Ovshinsky
Its: President and Chief Executive Officer
/s/ Robert C. Stempel
-------------------------------------------
Robert C. Stempel
Page 30 of 38
<PAGE>
EXHIBIT 3
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT dated as of January 15, 1999 by and
between Energy Conversion Devices, Inc., a Delaware corporation (the "Company"),
and Robert C.
Stempel (the "Executive").
The Executive currently serves as the Chairman of the Board of
Directors and Executive Director of the Company. In order to induce the
Executive to continue to devote his full business time and attention to the
business and affairs of the Company, the Company and the Executive have entered
into an Executive Employment Agreement dated as of the date hereof (the
"Employment Agreement") and the Company has agreed to issued to the Executive
certain shares of its Class B Common Stock, par value $.01 per share, pursuant
to a Restricted Stock Agreement dated as of the date hereof (the "Restricted
Stock Agreement") and to grant to the Executive an option to acquire certain
shares of the Company's Common Stock, par value $.01 per share, upon the terms
and subject to the conditions set forth in this Agreement.
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Executive do
hereby agree as follows:
1. Defined Terms. As used in this Agreement, the following
capitalized terms shall have the meanings indicated in this Section 1:
"Aggregate Exercise Price" has the meaning set forth in
Section 3(b).
"Common Stock" means shares of the Company's Common Stock, par
value $.01 per share; provided that if there is a change such that the
securities issuable upon exercise of the Option are issued by an entity other
than the Company or there is a change in the class of securities so issuable,
then the term "Common Stock" shall mean one share of the securities issuable
upon exercise of the Option if such securities is issuable in shares, or shall
mean the smallest unit in which such securities is issuable if such securities
is not issuable in shares.
"Company" means Energy Conversion Devices, Inc., a Delaware
corporation.
"Executive" means Robert C. Stempel.
"Exercise Price" has the meaning set forth in Section 2.
"Exercise Period" has the meaning set forth in Section 3(a).
"Exercise Time" has the meaning set forth in Section 3(b).
"Liquidating Dividend" has the meaning set forth in Section 6.
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<PAGE>
"Market Price" means, as to any securities, the average of the
closing prices of the sales of such securities on all domestic securities
exchanges on which such securities may at the time be listed, or, if there have
been no sales on any such exchange on any day, the average of the highest bid
and lowest asked prices on all such exchanges as the end of such day, or, if on
any day such securities is not so listed, the average of the representative bid
and asked prices quoted in The Nasdaq Stock Market, Inc. as of 4:00 P.M., New
York City time, on such day, or, if on any day such securities is not quoted in
The Nasdaq Stock Market, Inc., the average of the highest bid and lowest asked
prices on such day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar successor organization,
in each such case averaged over a period of 21 days consisting of the day as of
which "Market Price" is being determined and the 20 consecutive business days
prior to such day; provided that if such securities is listed on any domestic
securities exchange the term "business days" as used in this sentence means
business days on which such exchange is open for trading. If at any time such
securities is not listed on any domestic securities exchange or quoted in The
Nasdaq Stock Market, Inc. or the domestic over-the counter market, the "Market
Price" shall be the fair value thereof determined jointly the Company and the
Executive; provided that if such parties are unable to reach agreement within a
reasonable period of time, such fair value shall be determined by an appraiser
jointly selected by the Company and the Executive. The determination of such
appraiser shall be final and binding on the Company and the Executive, and the
fees and expenses of such appraiser shall be paid by the Company.
"Option" has the meaning set forth in Section 2.
"Organic Change" has the meaning set forth in Section 5(c).
"Purchase Rights" has the meaning set forth in Section 7.
2. Grant of Option. Upon the terms and subject to the
conditions set forth in this Agreement, the Company hereby grants the Executive
the option (the "Option") to purchase up to 300,000 shares of the Company's
Common Stock at an exercise price of $10.688 per share (the "Exercise Price").
The number of shares issuable upon the exercise of the Option and the Exercise
Price are subject to adjustment as provided in this Agreement.
3. Exercise of Option.
(a) The Executive may exercise, in whole or in part (but not
as to a fractional share of Common Stock), the Option at any time and from
time to time after the date of this Agreement to and including the tenth
anniversary of the date hereof (the "Exercise Period"). The Company shall
give the Executive written notice of the expiration of the Exercise Period
at least 30 days but not more than 90 days prior to the expiration of the
Exercise Period.
(b) The Option shall be deemed to have been exercised when the
Company has received all of the following items (the "Exercise Time"):
(i) a written notice of exercise executed by or on
behalf of the Executive;
(ii) a copy of this Agreement; and
Page 32 of 38
<PAGE>
(iii) either (A) a check payable to the Company in an
amount equal to the product of the Exercise Price multiplied by the
number of shares of Common Stock being purchased upon such exercise
(the "Aggregate Exercise Price") or (B) the surrender to the Company
of securities of the Company having a Market Price equal to the
Aggregate Exercise Price of the Common Stock being purchased upon
such exercise.
(b) Certificates for shares of Common Stock purchased upon
exercise of the Option shall be delivered by the Company to the Executive
within five business days after the date of the Exercise Time. In
connection with any partial exercise of the Option, unless the Option has
expired or been exercised in full, the Company shall prepare a new
agreement, substantially identical hereto, representing the rights
formerly represented by this Agreement that have not expired or been
exercised and shall, within such five-day period, deliver such new
agreement to the Executive.
(c) The Common Stock issuable upon the exercise of the Option
shall be deemed to have been issued to the Executive at the Exercise Time,
and the Executive shall be deemed for all purposes to have become the
record holder of such Common Stock at the Exercise Time.
(d) The Executive acknowledges that the exercise of the Option
may subject the Company to a tax withholding obligation. The Company and
the Executive agree to cooperate to effect any such tax withholding in a
mutually agreeable fashion.
(e) The issuance of certificates for shares of Common Stock
upon exercise of the Option shall be made without charge to the Executive
for any issuance tax in respect thereof or other cost incurred by the
Company in connection with such exercise and the related issuance of
shares of Common Stock. Each share of Common Stock issuable upon exercise
of the Option shall, upon payment of the Exercise Price therefor, be fully
paid and nonassessable and free from all liens and charges with respect to
the issuance thereof.
(f) The Company shall not close its books against the transfer
of any share of Common Stock issued or issuable upon the exercise of the
Option in any manner which interferes with the timely exercise of the
Option. The Company shall from time to time take all such action as may be
necessary to assure that the par value per share of the unissued Common
Stock acquirable upon exercise of this Agreement is at all times equal to
or less than the Exercise Price then in effect.
(g) The Company shall at all times reserve and keep available
out of its authorized but unissued shares of Common Stock, solely for the
purpose of issuance upon the exercise of the Option, such number of shares
of Common Stock issuable upon the exercise of the Option in full. The
Company shall take all such actions as may be necessary to assure that all
such shares of Common Stock may be so issued without violation of any
applicable law or governmental regulation or any requirements of any
domestic securities exchange upon which shares of Common Stock may be
listed (except for official notice of issuance which shall be immediately
delivered by the Company upon each such issuance).
Page 33 of 38
<PAGE>
4. Fractional Shares. If a fractional share of Common Stock
would, but for the provisions of Section 3(a), be issuable upon exercise of the
Option, the Company shall, within five business days after the date of the
Exercise Time, deliver to the Executive a check payable to the Executive in lieu
of such fractional share in an amount equal to the difference between the Market
Price of such fractional share as of the date of the Exercise Time and the
Exercise Price of such fractional share.
5. Adjustment of Exercise Price and Number of Shares.
(a) In order to prevent dilution of the rights granted under
this Agreement, the Exercise Price and the number of shares of Common
Stock obtainable upon exercise of this Agreement shall be subject to
adjustment from time to time as provided in this Section 5.
(b) If the Company at any time subdivides (by any stock split,
stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the
Exercise Price in effect immediately prior to such subdivision shall be
proportionately reduced and the number of shares of Common Stock
obtainable upon exercise of the Option shall be proportionately increased.
If the Company at any time combines (by reverse stock split or otherwise)
one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, the Exercise Price in effect immediately prior
to such combination shall be proportionately increased and the number of
shares of Common Stock obtainable upon exercise of the Option shall be
proportionately decreased.
(c) Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Company's
assets to another person or entity or other transaction which is effected
in such a way that holders of Common Stock are entitled to receive (either
directly or upon subsequent liquidation) stock, securities or assets with
respect to or in exchange for Common Stock is referred to herein as an
"Organic Change." Prior to the consummation of any Organic Change, the
Company shall make appropriate provision (in form and substance
satisfactory to the Executive) to insure that the Executive shall
thereafter have the right to acquire and receive in lieu of or addition to
(as the case may be) the shares of Common Stock immediately theretofore
acquirable and receivable upon the exercise of the Option, such shares of
stock, securities or assets as may be issued or payable with respect to or
in exchange for the number of shares of Common Stock immediately
theretofore acquirable and receivable upon exercise of the Option had such
Organic Change not taken place. In any such case, the Company shall make
appropriate provision (in form and substance satisfactory to the
Executive) with respect to the Executive's' rights and interests to insure
that the provisions of this Section 5 shall thereafter be applicable to
the Option (including, in the case of any such consolidation, merger or
sale in which the successor entity or purchasing entity is other than the
Company, an immediate adjustment of the Exercise Price to the value for
the Common Stock reflected by the terms of such consolidation, merger or
sale, and a corresponding immediate adjustment in the number of shares of
Common Stock acquirable and receivable upon exercise of the Option). The
Company shall not effect any such consolidation, merger or sale unless
prior to the consummation thereof the successor entity (if other than the
Company) resulting from consolidation or merger or the entity purchasing
such assets assumes by written instrument (in form and substance
satisfactory to the Executive)
Page 34 of 38
<PAGE>
the obligation to deliver to the Executive such shares of stock,
securities or assets as, in accordance with the foregoing provisions, the
Executive may be entitled to acquire.
(d) Promptly following any adjustment of the Exercise Price,
the Company shall give written notice thereof to the Executive setting
forth in reasonable detail and certifying the calculation of such
adjustment.
6. Liquidating Dividends. If the Company declares or pays a
dividend upon the Common Stock payable otherwise than in cash out of earnings or
earned surplus (determined in accordance with generally accepted accounting
principles, consistently applied) except for a stock dividend payable in shares
of Common Stock (a "Liquidating Dividend"), then the Company shall pay to the
Executive at the time of payment thereof the Liquidating Dividend which would
have been paid to the Executive on the Common Stock had the Option been fully
exercised immediately prior to the date on which a record is taken for such
Liquidating Dividend, or, if no record is taken, the date as of which the record
holders of Common Stock entitled to such dividends are to be determined.
7. Purchase Rights. If at any time the Company grants, issues
or sells any options, warrants, convertible securities or rights to purchase
stock, securities or other property pro rata to the record holders of any class
of Common Stock (the "Purchase Rights"), then the Executive shall be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Executive could have acquired if the Executive had
held the number of shares of Common Stock acquirable upon complete exercise of
the Option immediately before the date on which a record is taken for the grant,
issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of Common Stock are to be determined for the
grant, issuance or sale of such Purchase Rights.
8. No Voting Rights; Limitations of Liability. This Agreement
shall not entitle the Executive to any voting rights or other rights as a
stockholder of the Company pertaining to the Common Stock issuable to the
Executive upon the exercise of the Option. No provision hereof, in the absence
of affirmative action by the Executive to purchase Common Stock, and no
enumeration herein of the rights or privileges of the Executive, shall give rise
to any liability of the Executive for the Exercise Price of Common Stock
acquirable by exercise of the Option or as a stockholder of the Company.
9. Registration Rights. The Executive shall be entitled to
registration rights with respect to the shares of Common Stock issuable upon the
exercise of the Option as provided in the Restricted Stock Agreement.
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<PAGE>
10. Miscellaneous.
(a) Any notice required or permitted hereunder shall be made
in writing (i) either by actual delivery of the notice into the hands of
the party thereunder entitled, or (ii) by the mailing of the notice in the
United States mail, certified or registered mail, return receipt
requested, all postage prepaid and addressed to the party to whom the
notice is to be given at the party's respective address set forth below,
or such other address as the parties may from time to time designate by
written notice as herein provided.
As addressed to the Company:
Energy Conversion Devices, Inc.
1675 West Maple Road
Troy, Michigan 48084
With a copy (which shall not constitute notice) to:
Chester T. Kamin, Esq.
Jenner & Block
One IBM Plaza
Chicago, Illinois 60611
As addressed to the Executive:
Robert C. Stempel
c/o Energy Conversion Devices, Inc.
1675 West Maple Road
Troy, Michigan 48084
With a copy (which shall not constitute notice) to:
William L. Weber, Jr., Esq.
Daniels & Kaplan, P.C.
401 South Old Woodward Avenue
Suite 350
Birmingham, Michigan 48009-6613
The notice shall be deemed to be received in case (i) on the
date of its actual receipt by the party entitled thereto and in case (ii)
on the third day after date of its mailing.
(b) No amendment or modification of this Agreement shall be
valid or binding upon the Company unless made in writing and signed by an
officer of the Company duly authorized by the Company's Board of Directors
or upon the Executive unless made in writing and signed by him. The waiver
by any party of the breach of any provision of this Agreement by any other
party shall not operate or be construed as a waiver of any subsequent
breach.
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<PAGE>
(c) THE VALIDITY AND EFFECT OF THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE CONSTRUED AND DETERMINED IN
ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS, OF THE
STATE OF MICHIGAN.
(d) This Agreement (together with the Employment Agreement,
the Restricted Stock Agreement and any other agreements pursuant to which the
Executive has been granted stock options by the Company) contains all of the
terms agreed upon by the parties with respect to the subject matter hereof and
supersedes all prior agreements, arrangements and communications between the
parties dealing with such subject matter, whether oral or written.
(e) This Agreement shall be binding upon and shall inure to
the benefit of the transferees, successors and assigns of the Company,
including any company or corporation with which the Company may merge or
consolidate, and shall be binding upon the Executive and shall inure to
the benefit of the Executive and his heirs, executors, personal
representative and beneficiaries.
(f) In the event of any suit or proceeding by the Executive
seeking to enforce the terms, covenants or conditions of this Agreement,
the Executive, if he prevails, shall in addition to all other remedies and
relief that may be available under this Agreement or applicable law
recover his reasonable attorneys' fees and costs as shall be determined
and awarded by the court.
(g) Numbers and titles to paragraphs hereof are for
information purposes only and, where inconsistent with the text, are to be
disregarded.
(h) This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
when taken together, shall be and constitute one and the same instrument.
* * * * *
Page 37 of 38
<PAGE>
IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.
ENERGY CONVERSION DEVICES, INC.
By: /s/ Stanford R. Ovshinsky
------------------------------------------
Stanford R. Ovshinsky
Its: President and Chief Executive Officer
/s/ Robert C. Stempel
-----------------------------------------
Robert C. Stempel
Page 38 of 38
