Exhibit 10.50

MAXWELL TECHNOLOGIES, INC.

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is made as of this 1st day of
August, 2003, by and between MAXWELL TECHNOLOGIES, INC. a Delaware corporation,
(“Company”) and RICHARD BALANSON (“Executive”).  The parties agree with each
other as follows:

1.             Term of Employment.  Subject to the terms and conditions set
forth in this Agreement, the Company hereby agrees to employ Executive, and
Executive agrees to be employed by the Company, for the period commencing on the
date of this Agreement and ending on the first to occur of (i) the date on which
Executive first qualifies for or elects to receive retirement benefits in
accordance with the Company’s normal retirement policies and (ii) the date on
which this Agreement is terminated by either the Company or Executive pursuant
to any subsection of Section 4 hereof.

2.             Duties of Executive.

(a)           Executive shall serve as the President and Chief Executive Officer
of the Company.  In such capacities, Executive shall report to the Board of
Directors of the Company (the “Board”) and Executive shall perform the duties
and render the services for and on behalf of the Company associated with the
positions he shall hold and as may be set forth from time to time in resolutions
of, or other directives issued by, the Board.

(b)           Executive agrees to perform such duties and render such services
to the best of his ability, devoting thereto his entire professional time,
attention and energy exclusively to the business and affairs of the Company and
its affiliates, as its business and affairs now exist and as they hereafter may
be changed, and shall not during the term of his employment hereunder be engaged
in any other business activity, whether or not such business activity is pursued
for gain or profit; provided, however, that Executive may serve (i) on civic or
charitable boards or committees and (ii) with the prior written approval of the
Board, boards of corporations or business enterprises, in each case so long as
such activities do not interfere with the performance of Executive’s obligations
under this Agreement.

(c)           The Company agrees that Executive shall be included in the slate
of nominees proposed by the Board in the Company’s proxy statements delivered to
its shareholders for election to the Board for as long as this Agreement is in
effect.

3.             Compensation of Executive.  As compensation for the services to
be performed under this Agreement:

(a)           Base Salary.  Effective as of the date of this Agreement,
Executive shall be paid a base salary at the initial annual rate of $325,000,
payable in installments consistent with the Company’s payroll practices, and
subject to normal withholding.  Executive’s base salary shall be reviewed
annually prior to each anniversary of this

 

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Agreement by the Board or its Compensation Committee and if the Board or
Committee determines, in its discretion, that Executive’s base salary is to be
increased, such increase shall be effective as of such anniversary date;

(b)           Annual Bonus.  Executive shall be entitled to an annual bonus
which shall be determined as provided in this subsection (b):

(i)            Commencing with the Company’s current fiscal year ending
December 31, 2003 and for each subsequent fiscal year of the Company, the Board
will set specific financial performance targets and the amount of Executive’s
bonus will range $0 to a maximum amount equal to 50% of Executive’s annual base
salary as in effect for such fiscal year (with a target bonus of 50% of the then
effective base salary) depending on the Board’s determination of Executive’s
success in achieving the specified targets. The financial performance targets
for fiscal year 2003 were established in January 2003 as part of the Company’s
annual financial plan.

(ii)           The bonus payable to Executive for each fiscal year, if any is
due, shall be paid to Executive, subject to normal withholding, promptly after
the completion of the audit of the Company’s financial statements for such
fiscal year.

(c)           Options.  Executive is eligible for, and has received, the grant
of stock options under the Company’s stock option programs. The Board or its
Stock Option Committee will from time to time consider making additional grants
to Executive, but the Company shall not be obligated to make any particular
grant or grants thereof.

(d)           Benefits.  Executive shall be entitled to participate in the
Company’s insurance, health, life insurance, long term disability, dental and
medical, and automobile programs as the same may exist from time to time on the
terms and conditions applicable to other senior officers of the Company. 
Nothing in this Agreement shall preclude the Company from terminating or
amending any employee benefit plan or program from time to time.  The Company
will reimburse Executive for the reasonable cost of an annual physical
examination, if Executive elects to have the same.  If Executive elects not to
participate in the Company’s medical benefits program, then Executive may elect
to have the Company maintain a life insurance policy for the Executive and
naming as designee as beneficiary with an annual premium paid by the company
equal or less than the annual premium the Company would have paid for the
Executive to be covered under the Company’s medical benefits, which currently is
approximately $ 8,400 per annum.

 (e)          Vacation.  Executive shall be entitled to four weeks vacation per
year.  Such vacation shall be taken at such times as the Company and Executive
shall mutually agree, acting reasonably, having regard to the performance of
Executive’s essential duties to the Company pursuant to the terms of this
Agreement.  Executive may accumulate unused vacation time from year to year to
the extent permitted under the Company’s vacation policy for executives as in
effect from time to time.

 

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(f)            Expenses.  Executive shall be reimbursed for all travel and other
reasonable out-of-pocket expenses actually incurred by him in connection with
the performance of his duties hereunder, subject the Company’s expense
reimbursement policies as in effect from time to time and to the receipt by the
Company of receipts and statements in a form reasonably satisfactory to it.

4.             Termination.

(a)           Termination by the Company for Cause. Notwithstanding anything to
the contrary herein contained, the Company may terminate immediately the
employment of Executive without notice and without pay in lieu of notice:

(i)            if Executive commits an act of theft, fraud or material
dishonesty or misconduct involving the property or affairs of the Company or the
carrying out of Executive’s duties; or

(ii)           if Executive commits a material breach or material non-observance
of any of the terms or conditions of this Agreement provided that Executive is
given written notice of any such breach or non-observance and fails to remedy
the same within 15 days of receipt of such notice; or

(iii)          if Executive is convicted of a felony; or

(iv)          if Executive refuses or fails to implement any reasonable
directive issued by the Company’s Board of Directors and Executive fails to
remedy the refusal or failure within 15 days of receipt of written notice
thereof; or

(v)           if Executive or any member of his family makes any personal profit
arising out of or in connection with a transaction to which the Company or any
of its subsidiaries is a party or with which it is associated without making
disclosure to and obtaining prior written consent of the Company.

Upon the termination of Executive’s employment pursuant to this Subsection (a),
this Agreement and the employment of Executive hereunder shall be wholly
terminated.  Upon any such termination, Executive shall have no claim against
the Company in respect of his employment for damages or otherwise except in
respect of payment of base salary earned, due and owing and unused vacation time
to the date of termination.

(b)           Termination by the Company Without Cause.  Notwithstanding
anything herein to the contrary, the Company may terminate Executive’s
employment hereunder at any time, for any reason or no reason, on not less than
30  days’ prior written notice.  In the event of termination pursuant to this
Subsection (b), Executive will be paid an amount equal to Executive’s annual
base salary in effect on the date of such termination of employment. Such amount
will be paid in equal monthly installments following the date of termination of
employment.

In addition, notwithstanding anything to the contrary contained herein or in the
applicable stock option agreements, all of the stock options then held by
Executive shall

 

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continue to vest in accordance with their terms until the first anniversary of
the date the Company terminates Executive’s employment under this subsection (b)
and shall be exercisable to the extent so vested by Executive on or prior to the
60th day following such first anniversary date of termination

(c)           Termination by Executive.  Executive may terminate his employment
hereunder at any time, for any reason, upon the giving of not less than 30 days’
prior written notice to the Board.  In the event of termination by Executive
under this clause (c), Executive shall be entitled to receive only his base
salary and unused vacation time due him through the effective date of
termination.  Upon the termination of Executive’s employment pursuant to this
Subsection (a), this Agreement and the employment of Executive hereunder shall
be wholly terminated.  Upon any such termination, Executive shall have no claim
against the Company in respect of his employment for damages or otherwise except
in respect of payment of base salary earned, due and owing and unused vacation
time to the date of termination.

(d)           Termination by the Company Due to Death or Disability.  The
employment of Executive shall, at the option of the Company, terminate
immediately in the event of his death or permanent disability, in which case
notice in writing from the Company shall be sent to Executive or his legal
representative.  In the event of termination under this clause (d), in addition
to any disability benefit coverage to which he may be entitled under any
disability insurance programs maintained by the Company in which he is a
participant, Executive will be paid an amount equal to six months salary at
Executive’s annual base salary rate as in effect on the date of the termination
under this clause (d). Except as provided in the preceding sentence, Executive
shall be entitled to no additional compensation under this Agreement following
the date of termination under this clause (d), other than base salary earned but
not paid, and unused vacation time accrued, through the date of termination. 
For purposes of this Agreement “permanent disability” shall mean an illness,
disease, mental or physical disability or other causes beyond Executive’s
control which makes Executive incapable of discharging his duties or obligations
hereunder, or causes Executive to fail in the performance of his duties
hereunder, for six consecutive months, as determined in good faith by the Board
based on a report of a physician selected in good faith by the Board.

(e)           Termination by Executive Upon a Change of Control.  In the event
that (x) a Change of Control (as hereinafter defined) occurs and (y) at any time
prior to the third anniversary of such Change of Control a Triggering Event (as
hereinafter defined) shall occur, then unless the Executive shall have given his
express written consent to the contrary, Executive may, upon 30 days written
notice to the Company, terminate his employment hereunder (subject, within the
first six (6) months immediately following a change of control, to Executive
offering to provide up to six (6) months of transition services for compensation
equal to the same salary and benefits in effect at the time of the change of
control).  In such event Executive shall be entitled to the following:

(i)            Following the date of the Triggering Event, Executive shall be
paid  two cash payments, each to be equal to Executive’s annual base salary in
effect on the date of the Triggering Event, with the first of such payment to be
paid within 30 days of

 

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the Triggering Event and the second of such payments to be paid on the first
anniversary of the date of the Triggering Event, in each case subject to normal
withholding.

(ii)           As of the date of the Triggering Event, notwithstanding the
vesting schedule of any stock options then held by Executive, all stock options
then held by Executive shall thereupon become fully vested; and

(iii)          For a one year period following the date of the Triggering Event,
Executive shall be provided with employee benefits substantially identical to
those to which Executive was entitled immediately prior to the Triggering Event,
subject to any changes or modifications (including reductions or terminations)
to the Company’s employee benefit and welfare plans that are made generally for
all of the Company’s senior executives.

In the event that the benefits provided for in this Subsection 4(e) to be paid
Executive constitute “parachute payments” within the meaning of section 280G of
the Internal Revenue Code of 1986, as amended (the “Code”), and will be subject
to the excise tax imposed by Section 4999 of the Code, then Executive shall
receive (a) a payment from the Company sufficient to pay such excise tax and
(b) an additional payment from the Company sufficient to pay the Federal and
California income tax arising from the payment made under clause (a) of this
sentence.  Unless the Company and Executive otherwise agree, the determination
of Executive’s excise tax liability and the Federal and California income tax
resulting from the payment under clause (a) above shall be made by the Company’s
independent accountants (the “Accountants”), whose determination shall be
conclusive and binding upon the Company and Executive for all purposes.   For
purposes of making the calculations required by this Subsection 4(e), the
Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on interpretations of the Code for which there is
a “substantial authority” tax reporting position.  The Company and Executive
shall furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make the determinations required
by this Subsection 4(e).  The Company shall bear the expenses of the Accountants
under this Subsection 4(e).

For purposes of this Subsection 4(e):

(a)           Change of Control” means the occurrence of any one of the
following:    (i) any transaction or series of transactions (as a result of a
tender offer, merger, consolidation or otherwise) that results in any person,
entity or group acting in concert, acquiring “beneficial ownership” (as defined
in rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of such percentage of the aggregate voting power of all classes of
common equity stock of the Company as shall exceed 50% of such aggregate voting
power; or (ii) a merger or consolidation of the Company, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 50% of the voting power represented by the voting
securities of the Company or such entity outstanding immediately after such
merger or consolidation; or (iii) the

 

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shareholders approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all, or substantially
all, of the Company’s assets (other than in connection with a sale or
disposition to subsidiaries of the Company or in connection with a
reorganization or restructuring of the Company); or (iv) there occurs a change
in the composition of the Board as a result of which fewer than a majority of
the directors are Incumbent Directors (as hereinafter defined).  “Incumbent
Directors” shall mean directors who either (A) are directors of the Company as
of the Commencement Date or (B) are elected, or nominated for election, to the
Board with the affirmative votes of at least a majority of the Incumbent
Directors casting votes at the time of such election or nomination.

(b)           “Triggering Event” means any of the following: (i) the termination
by the Company without Cause of Executive’s employment pursuant to
Subsection 4(a) hereof; (2) the reduction of Executive’s annual base salary or
annual incentive bonus formula from that in effect on the date of the Change of
Control; (3) the removal of Executive as the Company’s President and Chief
Executive Officer or a reduction in his duties and responsibilities; or (4) the
relocation of Executive’s principal place of employment to a location outside
San Diego County, California.

(f)            Payments.  Any amounts payable to Executive under this Section 4
shall be paid, unless otherwise specified hereunder, within 30 days of the date
the payment obligation accrues and shall be subject to normal withholding.

(g)           Exclusive Rights.  In connection with any termination under
Subsection 4(b) or 4(e), Executive shall have no claim against the Company in
respect of his employment for damages or otherwise except in respect of the
payments and other provisions specified in such Subsections.

(h)           Cooperation.  Upon any termination of employment by the Company or
by Executive hereunder, Executive shall cooperate with the Company, as
reasonably requested by the Company, to effect a transition of Executive’s
responsibilities and to ensure that the Company is aware of all matters being
handled by Executive.

5.             Resolution of Disputes.  The parties recognize that claims,
controversies and disputes may arise out of this Agreement with respect to
Executive’s employment, termination of employment, or other terms of this
Agreement or based on common law or statute, either during the existence of the
employment relationship or afterwards.  The parties agree that should any such
claim, controversy or dispute arise, the parties will use their best efforts to
resolve such dispute informally, between them.  In the event that any such
claim, controversy or dispute between Company and Executive cannot be resolved
within thirty (30) days after either party first gives notice in writing that
any such claim, controversy or dispute exists, either party may then refer the
matter to arbitration before JAMS/ENDISPUTE pursuant to its rules for resolution
of employment disputes.

The parties hereby agree that referral to arbitration shall be the sole recourse
of either party under this Agreement with respect to any such claim, controversy
or dispute and that the decision of the arbitrator shall be binding on the
parties in accordance with applicable law;

 

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provided, however, that nothing in this Section 5 shall be construed as
precluding either party from bringing an action for injunctive relief or other
equitable relief.  The parties shall keep confidential the existence of each
such the claim, controversy or dispute from third parties (other than
arbitrator), and the determination thereof, unless otherwise required by law. 
Except as provided in the following sentence, such decision rendered by the
arbitrator shall be final and conclusive and may be entered in any court having
jurisdiction thereof as a basis of judgment and of the issuance of execution for
its collection.  In rendering his or her decision, the arbitrator shall be bound
to follow California or Federal law, as applicable, in the same manner as would
a court of law.  Any claim that the arbitrator made a mistake or error in
determining or applying the appropriate law shall be subject to judicial review.

The parties further agree that the party prevailing in the arbitration shall be
entitled to its reasonable attorney’s fees and that the arbitration itself shall
take place within the County of San Diego, California, and that the internal
laws of the State of California shall apply.

6.             General Obligations of Executive.

(a)           Executive agrees and acknowledges that he owes a duty of loyalty,
fidelity and allegiance to act at all times in the best interests of the
Company, to not knowingly become involved in a conflict of interest and to not
knowingly do any act or knowingly make any statement, oral or written, which
would injure the Company’s business, its interest or its reputation unless
required to do so in any legal proceeding by a competent court with proper
jurisdiction.

(b)           Executive agrees to comply at all times with all applicable
policies, rules and regulations of the Company, including, without limitation,
the Company’s policy regarding trading in the Common Stock, as is in effect from
time to time.

7.             No Solicitation.  Executive agrees that in the event he is no
longer employed by the Company, for any reason, he shall not hire, solicit or
otherwise cause to be solicited for employment elsewhere, either directly or
indirectly, for a period of one year from his termination of employment, any
employee, officer or director of the Company or any individual who chooses not
to join the Company, provided that Executive participated actively in the
recruiting of such individual.

8.             Noncompetition.  Executive agrees that for a period of one year
following termination of his employment with the Company for any reason, he will
not, nor will he permit any entity or other person under his control to,
directly or indirectly, own, manage, operate or control, or participate in the
ownership, management, operation or control of, or be connected with or have any
interest in, as a shareholder, director, officer, employee, agent, consultant,
partner, creditor or otherwise, any business or activity which is competitive
with any business or activity engaged in by the Company or any of its
subsidiaries or affiliates anywhere within (i) the State of California, or
(ii) any other state of the United States and the District of Columbia in which
the Company engages in or has engaged in business during the past five years.

9.             Entire Agreement.  This Agreement constitutes the entire
Agreement between the parties and contains all agreements between them with the
exception of the 1995 Stock Option

 

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Plan (and any stock option agreements issued thereunder) the other employee
benefit and welfare programs maintained by the Company, and the Invention and
Secrecy Agreement dated the date of this Agreement signed by Executive, which
are supplementary to this Agreement and are each deemed to be incorporated
herein by reference.  Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements, orally or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied in this Agreement, and that no agreement, statement or promise not
contained in this Agreement shall be valid or binding.  Except for the other
agreements, plans and programs referred to in this Section 9, this Agreement
also supersedes any and all other agreements and contracts whether verbal or in
writing relating to the subject matter hereof.

10.           Amendment.  Except as otherwise specifically provided herein, the
terms and conditions of this Agreement may be amended at any time by mutual
agreement of the parties; provided that before any amendment shall be valid or
effective, it shall have been reduced to writing and signed by the Chairman of
the Board on behalf of the Company and by Executive.

11.           Invalidity.  The invalidity or unenforceability of any particular
provision of this Agreement shall not affect its other provisions, and this
contract shall be construed in all respects as if such invalid or unenforceable
provision has been omitted.

12.           Binding Nature.  Executive’s rights and obligations under this
Agreement shall not be assignable, transferable or delegable by assignment or
otherwise, and any purported assignment, transfer or delegation thereof shall be
void.  This Agreement shall inure to the benefit of, and be enforceable by, any
purchaser of substantially all of the Company’s assets, any corporate successor
to the Company or any assignee thereof.

13.           Assistance in Litigation.  Executive shall, during and after
termination of employment, upon reasonable notice, furnish such information and
proper assistance to the Company as may reasonably be required by the Company in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become a party. Except where Executive is a named
defendant, Executive shall be paid a reasonable hourly fee to be mutually agreed
upon.

14.           Indemnification.  The Company shall indemnify Executive in
accordance with its standard indemnification policy for offices and directors of
the Company and as required by applicable law.

15.           No Duty to Mitigate.  Executive shall not be required to mitigate
the amount of any payment contemplated by this Agreement (whether by seeking new
employment or in any other manner), nor shall any such payment be reduced by any
earnings that Executive may receive from any other source not paid for by the
Company.

16.           Choice of Law.  The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California except for Sections 7 and 8 hereof which shall be governed by, and
interpreted and construed in accordance with, the internal laws (without giving
effect to choice of law principles) of the jurisdiction in which either of said
Sections is being sought to be enforced.

 

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17.           Notices.  All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and, if given by telegram, telecopy or telex, shall be deemed to have
been validly served, given or delivered when sent, if given by personal
delivery, shall be deemed to have been validly served, given or delivered upon
actual delivery and, if mailed, shall be deemed to have been validly served,
given or delivered three business days after deposit in the United States mail,
as registered or certified mail, with proper postage prepaid and addressed to
the party or parties to be notified, at the following addresses:

If to Executive to:

Richard Balanson

 

If to the Company to:

Maxwell Technologies Inc.

9244 Balboa Avenue

San Diego, California  92123

Attn:  Chairman of the Board

Telephone:  (858) 503-3300

Fax:  (858) 503-3301

18.           Injunctive Relief.  The Company and Executive agree that a breach
of any term of this Agreement by Executive would cause irreparable damage to the
Company and that, in the event of such breach, the Company shall have, in
addition to any and all remedies of law, the right to any injunction, specific
performance and other equitable relief to prevent or to redress the violation of
Executive’s duties or responsibilities hereunder.

19.           Release.  If Executive’s employment hereunder shall terminate
under Subsection 4 (b) or 4(e), Executive agrees, as a condition to his
entitlement to receive the amounts specified in such Subsections to be due to
him, to execute and deliver to the Company a release in the form attached hereto
as Exhibit A.  Such release shall be delivered by Executive at the time of
termination, but shall become effective only after Executive has received all
payments specified in this Agreement to be due to him from the Company in
respect of his termination.

 

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20.           Counterparts.  This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and either of the parties to this Agreement may execute this
Agreement by signing any such counterpart.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
1st day of August, 2003.

 

“Company”

 

 

 

MAXWELL TECHNOLOGIES, INC.

 

 

 

 

 

By: /s/ Mark Rossi

 

 

 

“Executive”

 

 

 

/s/ Richard Balanson

 

Richard Balanson

 

 

 

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