UQM TECHNOLOGIES, INC.

EMPLOYMENT AGREEMENT

** 
THIS AGREEMENT is made and entered into as of January 1, 2003, by and between **UQMTECHNOLOGIES, INC.** f/k/a UNIQUE MOBILITY, INC., a corporation organized under the lawsof Colorado ("Employer"), and Donald A. French, an adult resident of Aurora,Colorado ("Executive").
**WHEREAS, Executive is currently a party to an Employment Agreement with Employerdated January 1, 2000 (the "Old Agreement"); and
**WHEREAS, Executive and Employer wish to replace the Old Agreement with thisAgreement:
**NOW, THEREFORE, in consideration of the mutual promises, covenants and conditionshereinafter set forth, Employer and Executive agree as follows:
**1.    **Termination of Old Agreement.** Upon executionof this Agreement, the Old Agreement is hereby retroactively terminated, effective as ofthe date hereof.
**2.    **Employment.** Employer hereby agrees tocontinue to employ Executive as its president and chief executive officer and Chairman ofthe Board of Directors for the term of employment set forth herein, and Executive herebyaccepts such employment, all upon the terms and conditions hereinafter set forth.
**3.    **Duties.** Executive shall perform the dutiesassigned to him by the Chief Executive Officer, subject to the control, supervision anddirection of the Chief Executive Officer.
**4.    **Performance.** During the term of Executive'semployment under this Agreement and any renewal thereof, Executive shall devoteExecutive's best efforts and full working time and attention exclusively to theperformance of the duties hereunder and to promoting and furthering the business ofEmployer, and shall not, during the term of employment, be engaged in any other businessactivity for personal pecuniary advantage. This paragraph shall not be construed aspreventing Executive from investing Executive's assets in such form or manner as will notrequire any services on the part of Executive in the operation of the affairs of thecompanies in which such investments are made, subject to the provisions of Paragraph 17hereof. Notwithstanding the foregoing, Executive may perform and assume other activitiesand obligations as the Board of Directors shall from time to time approve.
**5.    **Term of Employment, Expiration and Termination.
    (a)    Subject to the provisions ofParagraphs 15 and 16, the term of employment of Executive pursuant to this Agreement shallcommence on January 1, 2003, and shall continue through December 31, 2007 (the"Original Term of Employment").****
    (b)    Upon expiration of this Agreement, if Employerelects to not continue Executive's employment, Employer shall provide Executive notice ofsuch fact and shall pay Executive: a lump sum equal to twenty-four (24) month's salary.

    (c)    Upon expiration of this Agreement, if Employerelects to continue Executive's employment without a written employment agreement,Executive's employment shall be at will, except that Executive's employment may beterminated without cause by Employer after notice to Executive. Upon such terminationEmployer shall pay Executive: a lump sum equal to twenty-four (24) month's salary.

    (d)    On termination of Executive's employment forcause during the Original Term of Employment pursuant to Paragraph 15(a), Executive shallreceive no further salary.

    (e)    On termination of Executive's employmentwithout cause during the Original Term of Employment pursuant to Paragraph 15(c), Employershall pay Executive a lump sum equal to twenty-four (24) months' salary. In the event of amaterial breach of this Agreement by Employer that is not cured after notice fromExecutive, Executive may elect to treat such breach as a constructive termination underthis subparagraph entitling Executive to the benefits hereunder.

    (f)    On termination of Executive's employment byExecutive without cause either (i) during the Original Term of Employment pursuant toParagraph 16(b), or (ii) after expiration of the Original Term of Employment ifExecutive's employment continues without written agreement, Employer shall pay Executive alump sum equal to three (3) month's salary, and Executive shall be entitled to no otherseverance benefits, except as provided under Subparagraph 5(k). Notwithstanding theforegoing, if Executive’s termination is under the provisions of Subparagraph 5(h)regarding voluntary retirement after the age of sixty-two years and six months, theprovisions of this Subparagraph 5(f) shall not be applicable and the provisions ofSubparagraph 5(h) shall control.

    (g)    If Executive's employment is terminated as aresult of a hostile Change in Control (as defined below) of Employer, such terminationshall be deemed a termination without cause under the provisions of Paragraph 5(e), exceptthat Executive shall receive a severance amount equal to twice any amount due underParagraph 5(e). Any termination of Executive in contemplation of or within twelve (12)months after such Change in Control, except a termination for cause under Paragraph 15(a),shall be deemed a termination under this Subparagraph (g). Further, if Executive'sposition is materially changed by Employer in contemplation of or within twelve (12)months after any such Change in Control, Executive may elect to treat such change as aconstructive termination under this subparagraph entitling Executive to the benefitshereunder. *"Change of Control"* means the election of new board membersconstituting a majority of the directors then in office, which new board members were notnominated by a majority of the directors in office on the date hereof.

    (h)    Upon Executive's voluntary retirement afterage sixty-two years and six months (62 1/2) during or upon expiration of the Original Termof Employment, or any extension thereof, Executive shall receive the severance benefitsdescribed under Paragraph 5(e), i.e., as if the severance was a termination without causeby the Employer, except that the amount due shall be paid in two (2) equal installments;one-half (1/2) on termination and one/half (1/2) on the anniversary date of suchtermination. In order to exercise his rights under this Subparagraph 5(h), Executiveshall provide Employer at least six (6) months’ prior written notice of his intent todo so.

    (i)    Upon any termination of Executive, atExecutive's election, Employer shall assign to Executive or Executive's designee any lifeand disability insurance policies or other fringe benefits which may so be assigned. Anycontinued cost of such policies or benefits shall be Executive's responsibility.

    (j)    Upon the expiration or termination ofExecutive's employment, Executive or Executive's legal representative upon request shallpromptly deliver to Employer all originals and all duplicates or copies of all documents,records, notebooks and similar repositories of or containing Confidential Information asdefined in Paragraph 18 then in his possession, whether prepared by Executive or not.

    (k)    Upon any termination of Executive’semployment under the provisions of Subparagraphs 5(b), (c), (e), (g) or (h), orParagraph 10, Executive and his dependent(s) shall be entitled to continue toparticipate at Employer’s expense in Employer’s health care and hospitalizationplan(s) until Executive has reached age 65. Upon termination of Executive’semployment under the provisions of Subparagraph 5(f) (regarding termination ofExecutive’s employment by Employer without cause), Executive and his dependent(s)shall be entitled to continue to participate at Employer’s expense in Employer’shealth care and hospitalization plan(s) for a period of three (3) months after thetermination of Executive’s employment. Such benefit shall be in addition to, not inlieu of, any rights provided by law for Executive to continue to participate inEmployer’s health care and hospitalization plan(s).
**6.    **Compensation.** For the services to berendered by Executive hereunder, Employer agrees to pay Executive during the term ofemployment, and Executive agrees to accept:

    (a)    An annual base salary of $173,000. Executive'sannual base salary shall not be decreased during the Original Term of Employment.

    (b)    Executive's salary shall be paid in equalsemi-monthly installments on the fifteenth and final day of each month during the term ofhis employment.

    (c)    Executive shall receive fringe benefits inaccordance with Employer's policies and practices for employees generally (including,without limitation, participation in any stock option plans, life and disability insuranceplans, health care and hospitalization plans, medical and dental reimbursement plans,profit sharing plans, retirement plans and other employee benefit plans) for whichExecutive is qualified. At Employer's expense Executive shall have a medical exam everyyear. In addition to the foregoing, Executive shall be provided the use of an automobilefor combined business and personal use. The automobile shall be provided on similar orequivalent terms and conditions as exist for other executives who also may receive thisbenefit.

    (d)    During the last quarter of each fiscal year ofEmployment, Employer shall review Executive's performance under this Agreement andestablish goals and objectives for Executive's performance for the next fiscal year. Insuch review, Employer, in its reasonable discretion, shall consider increasing Executive'ssalary and compensation based on relevant factors such as Executive's performance,Employer's accomplishments, increase or decrease in Executive's responsibilities, and costof living increases. Any salary increases normally are to be effective on January 1 ofeach year.

    (e)    Employer has adopted a bonus plan to beadministered by its Compensation Committee and in the Compensation Committee's discretionmay award bonuses and stock options to Executive on terms to be determined by theCompensation Committee. As soon as practicable after the effective date of this Agreement,January 1, 2000, Executive shall receive an additional grant of options to purchase 70,000shares at an exercise price determined based on the "Fair Market Value" of thestock, as defined under Employer's Stock Option Plan, on the date of the grant of theoption.
**7.    **Working Facilities.** Executive shall befurnished with appropriate office space, secretarial assistance, and such other facilitiesand services as are suitable to Executive's position and adequate for the performance ofExecutive's duties.
**8.    **Expenses.** Employer shall reimburse Executivefor all reasonable expenses that Executive incurs in connection with the business ofEmployer or any of its subsidiaries and in the performance of Executive's duties underthis Agreement. Employer shall also reimburse Executive for membership fees and expensesrelated to Executive's membership in professional organizations, clubs, societies andgroups as may be approved by the Board of Directors from time to time, subject to suchrules, regulations and record-keeping requirements as may be established from time to timeby the Board.
**9.    **Vacations.** Executive shall be entitled eachyear to a vacation of four (4) weeks, during which time his compensation shall be paid infull. Vacation time accrued during each calendar year must be used by the end of eachcalendar year, or will be lost, and will not accrue from one calendar year to the next.Exceptions to the foregoing non-accrual policy may be provided under terms and conditionsapproved in writing by resolution of the Board of Directors or its compensation committeein such body's sole discretion based on prolonged extra-ordinary work demands preventingExecutive's timely taking vacation.
**10.    **Disability.** If Executive is unable toperform Executive's services by reason of illness or incapacity for a period of more thansix (6) consecutive months, and subject to the provisions of Paragraph 11, Employer mayterminate Executive's employment. Employer shall receive a credit against Executive'ssalary for any disability compensation benefit for the same calendar period received byExecutive from Worker's Compensation or any commercial insurance carrier under Paragraph11 while Executive is employed with the Employer. In the event Executive’s employmentis terminated under this Paragraph 10, Executive shall receive the severance benefitsdescribed under Subparagraphs 5(e) and 5(k), *i.e.*, as if the severance was atermination without cause by the Employer, except that the amount due shall be paid in two(2) equal installments, one-half (1/2) on termination and one-half (1/2) on theanniversary date of such termination.
**11.    **Insurance for the Benefit of Executive.**
**    (a)    Subject to the provisions of Paragraph6(c), Executive shall be covered by Employer's medical and disability insurance in effectfrom time to time, the premiums for which shall be paid for by Employer.****
    (b)    Employer shall at its expense continuouslymaintain without interruption in the name of Executive or Executive's designee or for thebenefit of Executive or Executive's designee, life insurance coverage in an amount equalto Executive's then current salary for three (3) years.
**12.    **Insurance for the Benefit of Employer.**Employer shall have the right from time to time to apply for and take out in its name andat its own expense, life, health or other insurance upon Executive in any sum or sumswhich may be deemed necessary by Employer to protect its interest under this Agreement andExecutive shall do all such things as may be necessary to assist in the procuring of suchinsurance by making a proper application therefore as may be required by the insurancecompany and submitting to the usual and customary medical examinations. Executive, inExecutive's capacity as Executive, shall have no right, title or interest in or to suchinsurance, but the same shall be solely for the benefit of Employer and any amountspayable thereunder shall be solely payable to such Employer.
**13.    **Death During Employment.** If Executive diesduring the term of his employment under this Agreement, Employer shall pay to the estateof Executive the compensation which would otherwise be payable to Executive up to the endof the third month after the month in which his death occurs. If, by that time,Executive's estate has not received any proceeds of the insurance provided for inParagraph 11, Employer shall continue Executive's salary hereunder for up to an additionalthree months, or until such insurance proceeds are received, whichever is earlier("Reimbursable Payments"), provided that Executive's estate shall reimburseEmployer for any such Reimbursable Payments made from the proceeds of such insurance.
**14.    **Representation and Warranty.** Executiverepresents and warrants that he is not now, and will not be on the date of commencement ofthis Agreement, a party to any agreement, contract or understanding, whether ofemployment, agency or otherwise, which would in any way restrict or prohibit Executivefrom undertaking and performing Executive's duties in accordance with the terms andprovisions of this Agreement.
**15.    **Termination by Employer.**

    (a)    Employer may terminate Executive's employmentfor cause, which is defined as follows:

        (i)    Fraud, malfeasance, orembezzlement against Employer's assets or conviction of any felony;

        (ii)    Except undercircumstances of disability contemplated by the provisions of Paragraph 10, cessation ofExecutive's performance of Executive's duties hereunder or deliberate and substantialfailure to perform them in a capable and conscientious manner;

        (iii)    Violation of theprovisions of Paragraph 14; or

        (iv)    Deliberate andsubstantial breach of Executive's material obligations under any other provision hereofthat is not cured within 30 days after notice to Executive of the breach.

    (b)    Should the Board of Directors of Employerdetermine cause exists, as defined in Subparagraph (a), to terminate Executive'semployment, prior to termination for such cause, Employer shall provide Executive writtennotice reasonably describing the basis for the contemplated termination and a two-weekperiod of time in which to respond in writing and in person prior to Employer's finaldetermination of cause. During the period between such notice and final determination, theBoard may suspend the performance of Executive's duties under this Agreement and directExecutive's non-attendance at work. However, Executive's right to compensation under thisAgreement shall continue through and to any final termination of employment for cause.

    (c)    Employer may terminate Executive's employmentupon three (3) months notice without cause, subject to the applicable provisions ofParagraph 5. During the period between such notice and final determination, the Board maysuspend the performance of Executive's duties under this Agreement and direct Executive'snon-attendance at work.
**16.    **Termination by Executive.**
**    (a)    Executive shall have the right toterminate his employment on forty-five (45) days' written notice to Employer of anydefault by Employer in performing its duties under this Agreement, subject to theprovisions of Paragraph 5(e) and provided that Executive may not terminate his employmentif Employer cures the default within fifteen (15) days after receiving such notice.****
    (b)    Except as provided in Subparagraph 5(h)(requiring six (6) months’ notice in the case of voluntary retirement), Executive mayterminate Executive's employment upon three (3) months notice without cause, subject tothe applicable provisions of Subparagraph 5(f).
**17.    **Restrictive Covenant.**
**    (a)    Executive agrees and covenants that,without the Board's prior written consent and except on behalf of Employer, he will not inany manner, directly or indirectly, own, manage, operate, control, be employed by,participate in, assist or be associated in any manner with any person, firm or corporationanywhere in the world whose business competes with Unique or any subsidiary of Unique.This covenant shall remain in effect until a date one (1) year after the date Executive'semployment is terminated or, if his employment is terminated pursuant to Paragraph 16(a),until the termination date. Notwithstanding any other provision of this Agreement,Executive may own up to three percent (3 %) of the outstanding stock of a competingpublicly traded corporation so long as he takes no other action furthering the business ofsuch corporation.****
    (b)    Until a date one (1) year after thetermination date, Executive shall not (i) solicit any other employee of Employer to leavethe employ of Employer, or in any way interfere with the relationship between Employer andany other employee of Employer, or (ii) induce any customer, supplier, licensee, or otherbusiness relation of Employer to cease doing business with Employer, or in any wayinterfere with the relationship between any customer or business relation and Employer.
**18.    **Confidentiality.**
**    (a)    Definitions. For purposes ofthis Agreement, the following definitions shall apply:****
        (i)    *"Inventions"*shall mean all inventions, improvements, modifications, and enhancements, whether or notpatentable, made by Executive within the scope of Executive's duties during Executive'semployment by Employer.
*        (ii)    *"ConfidentialInformation"* shall mean Employers proprietary know-how and information disclosedby Employer to Executive or acquired by Executive from Employer during Executive'semployment with Employer about Employer's plans, products, processes and services, whichEmployer protects against disclosure to third parties. Confidential Information shall notinclude the Executive's general knowledge and experience possessed prior to or obtainedduring his employment with Employer.

    (b)    Restrictions on Disclosure.
        (i)    During the period ofemployment with Employer and thereafter, Executive shall not disclose ConfidentialInformation to any third parties other than Employer, its employees, agents, consultants,contractors and designees without the prior written permission of Employer, or useConfidential Information for any purpose other than the conduct of Employer's business.

        (ii)    The restrictions ondisclosure and use set forth herein shall not apply to any Confidential Information which:
            A.    At the time of disclosure to Executive by Employer is generallyavailable to the public or thereafter becomes generally known to the public, through nofault of Executive;

            B.    Was known by Executive prior to his employment with Employer;

            C.    Executive at any time receives from a third party not under anyobligation of secrecy or confidentiality to Employer;

            D.    Employer discloses to a third party not under any obligation of secrecyor confidentiality to it; and

            E.    Executive is requested or required to disclose pursuant to a subpoenaor order of a court or other governmental agency, in which case Executive shall notifyEmployer as far in advance of disclosure as is practicable.

    (c)    Obligations Regarding Inventions.Without any royalty or any other additional consideration to Executive: (i) Executiveshall promptly inform Employer of any Inventions by a written report, setting forth theconception and reduction to practice of all inventions; (ii) Executive hereby agrees toassign and assigns to Employer all of his right, title and interest: (1) to any Inventionsmade during the term of his employment by Employer (including without limitation the rightto license or sell such Invention to others), (2) to applications for United States andforeign letters patent, and (3) to United States and foreign letters patent granted uponsuch Inventions; and (iii) Executive agrees upon request and at the sole cost and expenseof Employer to, at all times, do such acts (such as giving testimony in support of hisinventorship) and execute and deliver promptly to Employer such papers, instruments, anddocuments as from time to time may be necessary or useful to apply for, secure,maintaining, reissue, extend or defend Employer's interest in any Inventions or any or allUnited States and foreign letters patent, so as to secure Employer the full benefits ofany Inventions or discoveries or otherwise to carry into full force and effect the intentof the assignment set out in subparagraph 18(c)(ii).

    (d)    Remedies. Executive acknowledgesand agrees that Executive's disclosure of any Confidential Information would result inirreparable injury to Employer. Executive acknowledges and agrees that the ConfidentialInformation is non-public information which Employee has expanded substantial time, moneyand effort to develop and is property considered "Trade Secrets" of Employerwithin the meaning of Colorado law. Therefore, upon the breach or threatened breach of thecovenants in this paragraph by Executive, Employer shall be entitled to obtain from anycourt of competent jurisdiction a preliminary and permanent injunction prohibiting suchdisclosure and any other equitable relief that the court deems appropriate. In addition,Employer shall be entitled to seek damages.

    (e)    Any Confidential Information that is directlyor indirectly originated, developed or perfected to any degree by Executive during theterm of his employment by Employer shall be and remain the sole property of Employer.
**19.    **Resolution of Disputes.** In addition to anyother remedies available to Employer, Employer shall be entitled to specific performanceof the covenants contained in Paragraphs 17 and 18. If either party is successful inenforcing its rights under this Paragraph 19, the unsuccessful party shall reimburse thesuccessful party for all of the costs of such enforcement, including but not limited tocosts, litigation expenses and reasonable attorneys' fees. Except for an action tointerpret or enforce Paragraphs 17 or 18, any controversy or claim arising out of orrelating to the interpretation, alleged breach or enforcement of this Agreement shall besettled by arbitration before a single arbitrator in Denver, Colorado, in accordance withthe commercial rules then in effect of the American Arbitration Association, ColoradoRevised Statutes pertaining to the arbitration of civil disputes. The arbitrator, whoshall be a person experienced in negotiating and making employment agreements andresolving employment disputes and in any other pertinent areas of law, shall makereasonably detailed findings to support any decision and award. The award of thearbitrator shall be final and binding and may be entered as a judgment in any court ofcompetent jurisdiction. As part of the award in any arbitration or judicial proceedings,the prevailing party may be awarded its reasonable attorneys' fees, witness fees, expertwitness fees and related costs and expenses in the discretion of the arbitrator.
**20.    **Notices.** All notices under this Agreementshall be delivered by hand or by registered or certified mail. Notices intended forExecutive shall be addressed to Executive at 1194 S. Kalispell Street, Aurora, Colorado80017. Notices intended for Employer shall be addressed to it at 7501 Miller Drive,Frederick, Colorado 80530. All notices shall be effective upon actual delivery if by hand,or, if by mail, five (5) days after being deposited in the United States mail, postageprepaid and addressed as required by this section. Either party may by notice accomplishedin accordance with this Paragraph 20 change the address to which future notices may besent.
**21.    **Miscellaneous Provisions.
    (a)    This Agreement contains the entireagreement between the parties and supersedes all prior agreements and it shall not beamended or otherwise modified in any manner except by an instrument in writing executed byboth parties.****
    (b)    Neither this Agreement nor any rights orduties under this Agreement may be assigned or delegated by either party unless the otherparty consents in writing.

    (c)    Except as otherwise provided herein, thisAgreement shall be binding upon the inure to the benefit of the parties and theirrespective heirs, personal representatives, successors and assigns.

    (d)    This Agreement has been entered into inColorado and shall be governed by the laws of that state.

    (e)    In fulfilling their respective obligationsunder this Agreement and conducting themselves pursuant to it, each party shall actreasonably and in good faith.

    (f)    If any provisions of this Agreement shall beheld to be invalid or unenforceable for any reason, the invalid or unenforceable provisionshall be deemed severed from this Agreement and the balance of this Agreement shall remainin full force and effect and be enforceable in accordance with its terms.

** 
IN WITNESS WHEREOF, the parties have executed this Agreement the day and year firstabove written.

EXECUTIVE:

/s/ Donald A. FrenchDonald A. French

 

EMPLOYER:
**UQM TECHNOLOGIES, INC.**
 

By: /s/ William G. Rankin its PresidentWilliam G. Rankin*****************************************************************