Document:

EX-10.6

 

Exhibit 10.6

ALLEGHENY TECHNOLOGIES INCORPORATED

2007 INCENTIVE PLAN

ADMINISTRATIVE RULES FOR THE

NON-EMPLOYEE DIRECTOR RESTRICTED STOCK PROGRAM

Effective as of May 2, 2007

Article I. Adoption and Purpose of the Program

     1.01 Adoption. These administrative rules are adopted by the Nominating and
Governance Committee of the Board of Directors as a part of the Allegheny Technologies
Incorporated 2007 Incentive Plan (the “Plan”) pursuant to the authority reserved in Section
3.1 of the Plan. This Non-Employee Director Restricted Stock Program (the “Non-Employee
Director Restricted Stock Program”) is part of the Non-Employee Director Compensation
Program, as adopted by the Board of Directors on December 15, 2006 and effective January 1,
2007, as may be amended from time to time (the “Non-Employee Director Compensation
Program”) and shall be the guidelines for making certain automatic grants of Restricted
Stock under Article VII of the Plan and administering the grants once made.

     1.02 Purpose. The purposes of the Non-Employee Director Restricted Stock Program are
(i) to assist the Company in retaining non-employee Directors of the Company who will
contribute independent judgment and business experience to the success of the Company, (ii)
to provide a means of encouraging non-employee Directors to acquire and hold shares of
Company Common Stock and (iii) provide an opportunity to non-employee Directors to share in
the growth of the Company achieved during their respective tenures as Directors.

Article II. Definitions

     For purposes of these administrative rules, the capitalized terms set forth below shall have
the following meanings. Capitalized terms used but not defined in these administrative rules shall
have the same meanings as in the Plan.

     2.01 Award Agreement means a written agreement between the Company and a Participant
or a written acknowledgment from the Company specifically setting forth the terms and
conditions of a Restricted Stock Award granted to a Participant pursuant to Article VI of
these administrative rules, which terms and conditions may be set forth by incorporation of
these administrative rules.

     2.02 Board means the Board of Directors of the Company.

     2.03 Business Day means any day on which the New York Stock Exchange shall be open for
trading.

     2.04 Cause means a determination by the Committee that a Participant has engaged in
conduct that is dishonest or illegal, involves moral turpitude or jeopardizes the Company’s
right to operate its business in the manner in which it is now operated.

     2.05 Change in Control means any of the events set forth below:

          (a) The acquisition in one or more transactions, other than from the Company, by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange

 

 

Act) of a number of Company Voting Securities in excess of 25% of the Company
Voting Securities unless such acquisition has been approved by the Board; or

          (b) Any election has occurred of persons to the Board that causes two-thirds of the
Board to consist of persons other than (i) persons who were members of the Board on the
Effective Date, and (ii) persons who were nominated for election as members of the Board at
a time when
two-thirds of the Board consisted of persons who were members of the Board on the Effective
Date; provided, however, that any person nominated for election by the Board at a time when
at least
two-thirds of the members of the Board were persons described in clauses (i) and/or (ii) or
by persons who were themselves nominated by such Board shall, for this purpose, be deemed
to have been nominated by a Board composed of persons described in clause (i); or

          (c) Approval by the stockholders of the Company of a reorganization, merger or
consolidation, unless, following such reorganization, merger or consolidation, all or
substantially all of the individuals and entities who were the respective beneficial owners
of the Outstanding Stock and Company Voting Securities immediately prior to such
reorganization, merger or consolidation, following such reorganization, merger or
consolidation beneficially own, directly or indirectly, more than 75% of, respectively, the
then outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of directors or
trustees, as the case may be, of the entity resulting from such reorganization, merger or
consolidation in substantially the same proportion as their ownership of the Outstanding
Stock and Company Voting Securities immediately prior to such reorganization, merger or
consolidation, as the case may be; or

          (d) Approval by the stockholders of the Company of (i) a complete liquidation or
dissolution of the Company or (ii) a sale or other disposition of all or substantially all
the assets of the Company.

     2.06 Committee means the Nominating and Governance Committee of the Board.

     2.07 Company means Allegheny Technologies Incorporated, a Delaware corporation, and
its successors.

     2.08 Company Voting Securities means the combined voting power of all outstanding
voting securities of the Company entitled to vote generally in the election of the Board.

     2.09 Date of Grant means the Business Day as of which a Restricted Stock Award is
granted in accordance with Article VI of these administrative rules.

     2.10 Disability means that the Participant is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a continuous period
of not less than twelve months or is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve months, receiving income replacement benefits for
a period of not less than three months under an accident and health plan covering employees
of the Company.

     2.11 Effective Date means May 2, 2007, upon approval by the stockholders of the
Company of the Plan.

     2.12 Exchange Act means the Securities Exchange Act of 1934, as amended.

     2.13 Fair Market Value means, on any date, the average of the high and low quoted
sales prices of a share of Common Stock, as reported on the Composite Tape for the New York
Stock Exchange Listed Companies, on such date or, if there were no sales on such date, on
the last date preceding such date on which a sale was reported.

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     2.14 Non-Employee Director Compensation Program shall have the meaning set forth in
Section 1.01 of these administrative rules.

     2.15 Non-Employee Director Restricted Stock Program shall have the meaning set forth
in Section 1.01 of these administrative rules.

     2.16 Outstanding Stock means, at any time, the issued and outstanding Common Stock.

     2.17 Participant means all persons elected and qualified as non-employee Directors
eligible to participate in and receive Restricted Stock Awards under Articles V and VI of
these administrative rules.

     2.18 Plan means the Allegheny Technologies Incorporated 2007 Incentive Plan, as may be
amended from time to time.

     2.19 Retirement means a cessation of membership on the Company’s Board of Directors
for reasons other than Cause with the consent of the Board after rendering no less than one
term of service as a non-employee Director.

     2.20 Restricted Period means absent a different period set forth by the Committee with
respect to a Restricted Stock Award, the period beginning on the Date of Grant and ending
on the third anniversary of the Date of Grant.

     2.21 Restricted Stock means shares of Common Stock subject to the restrictions set
forth in these administrative rules or in an Award Agreement.

     2.22 Restricted Stock Award means a grant of Restricted Stock under Article VI of
these administrative rules.

     2.23 Common Stock means Common Stock, par value $0.10 per share, of the Company.

     2.24 Withholding Obligations means the amount of federal, state and local income and
payroll taxes if any the Company determines in good faith must be withheld with respect to
a the vesting of a Restricted Stock Award. Withholding Obligations may be settled by the
Participant, as permitted by the Committee in its discretion, in shares of Common Stock,
cash, previously owned shares of Stock or any combination of the foregoing.

Article III. Administration

     In addition to any power reserved to the Committee under Article III of the Plan, the
Non-Employee Director Restricted Stock Program shall be administered by the Committee,
which shall have exclusive and final authority and discretion in each determination,
interpretation or other action affecting the Non-Employee Director Restricted Stock Program
and its Participants. The Committee shall have the sole and absolute authority and
discretion to interpret the Non-Employee Director Restricted Stock Program, to modify these
administrative rules for the Non-Employee Director Restricted Stock Program under and make
such other determinations in connection with the Non-Employee Director Restricted Stock
Program as it may deem necessary or advisable. It is the intent of these administrative
rules and of the Committee in adopting these administrative rules to have the Non-Employee
Director Restricted Stock Program to operate as automatically and without exercise of
discretion except to the extent necessary to supplement the administrative rules.

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Article IV. Stock Issuable under the Non-Employee Director Compensation Program

     4.01 Number of Shares of Stock Issuable. The Stock to be offered under the
Non-Employee Director Restricted Stock Program shall be authorized and unissued Stock, or
Stock which shall have been reacquired by the Company and held in its treasury.

     4.02 Shares Subject to Terminated Awards. Shares of Restricted Stock forfeited as
provided in Section 6.03 of these administrative rules may again be issued under the
Non-Employee Director Restricted Stock Program.

Article V. Participation

     5.01 Participants. Participants in the Non-Employee Director Restricted Stock Program
shall be non-employee Directors of the Company. Each non-employee Director shall be
automatically eligible for participation in this Non-Employee Director Restricted Stock
Program immediately upon such person’s election and qualification as a non-employee
Director. No designation shall be required in order for a non-employee Director to be or
become eligible for participation or to participate in this Non-Employee Director
Restricted Stock Program. Each Participant shall be eligible for grants of Restricted
Stock as of the next scheduled grant date as provided by the Non-Employee Director
Restricted Stock Program. Upon a person’s election and qualification as a non-employee
Director, the Committee shall promptly provide to each such person these administrative
rules and confirm in writing the person’s eligibility to participate in the Non-Employee
Director Restricted Program.

Article VI. Grants under the Non-Employee Director Compensation Program

     6.01
Automatic Grants. Participants shall be automatically entitled to grants of shares of Restricted Stock as determined under these administrative rules. The Committee
(or its designee, who may be an employee of the Company) shall promptly document each
automatic grant in an Award Agreement and/or shares of Common Stock bearing a legend
limiting the sale thereof. However, any delay in the documentation of an automatic grant
shall not diminish the Participants rights thereto.

     6.02 Determination of Grants. Each Participant shall be entitled to and shall
receive a grant of a Restricted Stock Award with a value, determined using the Fair Market
Value on the Date of Grant, equal to $75,000 (or such other amount as the Board may
determine from time to time) in each calendar year.

          (a) For continuing non-employee directors, grants shall be made once annually
coinciding with the annual meeting of stockholders or if no such meeting is held, at such
other time as the Board or the Committee may determine. The number of shares granted shall
be determined by dividing $75,000 (or the rate then in effect) by the Fair Market Value on
the Date of Grant, rounded to the next greater whole number share.

          (b) For a non-employee director who joins the Board, the value of the Restricted Stock
Award to be granted to such director shall be $75,000 (or the rate then in effect)
multiplied by the fraction consisting of the number of months to be served in that calendar
year divided by twelve. The number of shares granted shall be determined by dividing such
amount by the Fair Market Value on the Date of Grant, rounded to the next greater whole
number share. In this instance, the Date of Grant shall be the later of the date that the
non-employee director joins the Board or the date of the annual meeting for the
then-current calendar year.

          (c) Notwithstanding the foregoing, for continuing directors in calendar year 2007, a
single grant with a Fair Market Value of $75,000 shall be made on the Business Day
coincident with or next following May 2, 2007 using the Fair Market Value on the Date of
Grant to

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determine the number of shares of Restricted Stock in such grant, rounded to the
next greater whole number share.

Article VII. Determination of Performance Reward Criteria and Delivery of Stock

     7.01 Restrictions. Unless the Committee provides for additional restrictions:

(a) None of the Restricted Shares may be sold, transferred, assigned, pledged or otherwise
encumbered or disposed of during the Restricted Period and any attempt to sell , transfer,
assign, pledge or otherwise encumber or dispose of the shares of Restricted Stock shall
automatically and without further action by the Committee cause the Restricted Stock Award
and shares of Restricted Stock evidenced thereby to be forfeited; (b) the shares of
Restricted Stock shall be forfeited without further action of the Committee or the Company
if the Participant ceases to be a member of the Board of Directors for reasons other than
those permitted under Section 7.02 of these administrative rules and (c) the Restricted
Stock shall be held in the custody of the Company or its designee until such time as the
Restricted Period shall have been completed. The shares of Restricted Stock shall bear the
following legend:

THE TRANSFERABILITY OF THESE SHARES IS SUBJECT TO THE TERMS AND CONDITIONS SET OUT
IN ADMINISTRATIVE RULES FOR THE NON-EMPLOYEE DIRECTOR RESTRICTED STOCK PROGRAM
PROMULGATED UNDER THE ALLEGHENY TECHNOLOGIES INCORPORATED 2007 INCENTIVE PLAN. A
COPY OF THOSE ADMINISTRATIVE RULES IS ON FILE AT THE OFFICE OF THE COMPANY.

     7.02 Vesting of Restricted Stock. The Restricted Period will end and shares of
Restricted Stock shall vest and become the property of each Participant at the end of the
Restricted Period of that Restricted Stock Award, provided the Participant is then a member
of the Board of Directors or if earlier upon the death, Disability or Retirement of the
Participant.

     7.03 Delivery of Shares. Except as may be provided by the Committee or elected by a
Participant pursuant to this Section 7.03, shares without restrictive legends shall be
delivered to the Participant as promptly as possible after the end of the Restricted Period
with respect to a restricted Stock Award. If, in the reasonable judgment of the
Committee or its designee, the Company has Withholding Obligations with respect to a
particular Restricted Stock Award, the shares without the restrictive legend shall not be
delivered to the Participant unless or until the Withholding Obligations are satisfied in a
manner acceptable to the Committee. All shares without restrictive legends shall be
delivered to the Participant by placing such shares or causing such shares to be placed in
the U.S. mail, postage prepaid, to the address indicated by the Participant.

Article VIII. Miscellaneous

     8.01 Application of Provisions of Plan. Except as set forth in these administrative
rules, the provisions of the Plan shall apply to these administrative rules and are
incorporated herein as if set forth at length.

     8.02 Change in Control. In the event of a Change in Control, all then uncompleted
Restricted Periods shall end and the Restricted Stock shall vest immediately coincident
with the Change in Control. In addition, shares for which a Participant elected a deferral
of delivery under Section 7.03 shall be delivered to the Participant coincident with the
Change in Control. The intent of this provision is to permit and facilitate the
Participant’s ability to deliver shares for sale or exchange in connection with that Change
in Control.

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     8.03 Securities Laws Restrictions. Any Restricted Stock Award denominated in Common
Stock shall be subject to the requirement that if at any time the Committee shall determine
that any listing or registration of the shares of Common Stock or any consent or approval
of any governmental body or any other agreement or consent is necessary or desirable as a
condition to the granting of a Restricted Stock Award or issuance of shares of Common Stock
or cash in satisfaction thereof, such grant of an award or issuance of shares of Common
Stock may not be consummated unless such requirement is satisfied in a manner acceptable to
the Committee. It is intended, unless the Committee determines otherwise, that the
Non-Employee Director Restricted Stock Program complies with Rule 16b-3 as issued by the
Securities and Exchange Commission. All interpretations of the Non-Employee Director
Restricted Stock Program relating to Statutory Insiders shall be consistent with that Rule
16b-3 and the Exchange Act. In order to maintain compliance with any of Rule 16b-3 or the
Exchange Act, the Committee may adopt such other administrative rules or provide
restrictions on outstanding Restricted Stock Awards as it in its discretion shall deem
necessary and such administrative rules or restrictions shall apply to outstanding
Restricted Stock Awards as if set forth in these administrative rules or an applicable
Award Agreement.

     8.04 Investment Representation. By accepting a Restricted Stock Award, each
Participant shall agree that the shares acquired in connection with that Restricted Stock
Award are acquired for investment and not for resale or with a view to the distribution
thereof and, upon demand, each Participant shall deliver to the Committee a written
representation to that effect in a form and substance satisfactory tot eh Committee. Upon
demand, delivery of such representation prior to the delivery of shares of Stock shall be a
condition precedent to the Participant’s right to receive such shares of Stock.

     8.05 No Rights as Stockholders. Participants shall have no rights as stockholders of
the Company prior to the actual delivery of shares of Common Stock, except that the
Participant shall be entitled to receive a cash payment equal in amount to the value of any
dividends declared and paid on shares represented by a Restricted Stock Award prior to the
end of the Restricted Period.

     8.06 Non-Uniform Determinations. The actions and determinations of the Committee need
not be uniform and may be taken or made by the Committee selectively among employees or
Participants, whether or not similarly situated.

     8.07 Amendment and Termination of Administrative Rules. The Committee shall have
complete power and authority to amend or terminate these administrative rules at any time
it is deemed necessary or appropriate. No termination or amendment of the administrative
rules may, without the consent of the Participant to whom any award shall theretofore have
been granted under the Non-Employee Director Compensation Program, adversely affect the
right of such individual under such award; provided, however, that the Committee may, in
its sole discretion, make such provision in the Award Agreement for amendments which, in
its sole discretion, it deems appropriate.

* * * * * * * * * * * * * *

6exv10w1

 

Exhibit 10.1

MUTUAL RESTRUCTURING AND SEPARATION AGREEMENT

     This Mutual Restructuring and Separation Agreement (this “Agreement”) is made and entered into
as of May 1, 2007 (the “Contract Date”), by and between Charles R. Mollo (“Employee” or “You”) and
Mobility Electronics, Inc., a Delaware corporation (the “Company” or “Employer”). Employee and the
Company are sometimes each referred to herein as a “Party” and collectively, as the “Parties”.
Terms used herein but not otherwise defined shall have the meanings ascribed thereto in the
Employment Agreement (as defined below).

WITNESSETH:

     WHEREAS, Employee and the Company are parties to that certain Employment Agreement, dated as
of June 1, 2003 (the “Employment Agreement”); and

     WHEREAS, Employee and the Company desire to restructure their business relationship as
provided herein;

     NOW, THEREFORE, in consideration of the premises and mutual promises herein contained, it is
agreed as follows:

     1. Effective June 8, 2007 (the “Separation Date”), your employment with the Company (including
your offices of Chairman of the Board, Chief Executive Officer and President) is hereby terminated
and the Employment Agreement is hereby terminated in its entirety and is of no further force or
effect, except that Sections 5, 6, 9 and 10 of the Employment Agreement shall remain in full force
and effect. The Parties understand and agree that neither the making of this Agreement nor the
fulfillment of any condition or obligation of this Agreement constitutes an admission of any
liability or wrongdoing by the Company, Employee, any Company Release (as defined below) or any
Employee Releasee (as defined below).

     2. This Agreement supersedes any and all other agreements, written or verbal, which may exist
between the Company and Employee concerning Employee’s separation from the Company, including
without limitation any representations made to Employee by any executive officer or director of the
Company.

     3. Employee Acknowledgments.

          (a) You have been advised by the Company to consult with the attorney of your choice prior to
signing this Agreement.

          (b) You have been given a period of at least twenty-one (21) days within which to consider
this Agreement.

          (c) You would not be entitled to receive the consideration offered to You and referred to in
Section 6 below but for your signing this Agreement.

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          (d) You may revoke this Agreement within seven (7) days after the date You sign it by
providing written notice of the revocation to the Company no later than the seventh day after You
sign it. The written notice of revocation may be mailed to:

	 	 	 
	 

	 	Joan E. Dawson
	 

	 	Mobility Electronics, Inc.
	 

	 	17800 N. Perimeter Drive, #200
	 

	 	Scottsdale, AZ 85255

               Alternatively, You may fax the written notice of revocation to Joan E. Dawson of Mobility
Electronics, Inc. at (480) 477-3551.

               It is understood and agreed that any notice of revocation received by the Company after the
expiration of this seven (7) day period shall be null and void.

     4. It is further expressly agreed by the Parties that this Agreement shall not become
effective or enforceable and the consideration referred to in Section 6 below will not be paid
until the seven (7) day revocation period described in Section 3(d) above has expired. Therefore,
it is expressly agreed by the Parties that the “Effective Date” of this Agreement is the first day
after the date the seven (7) day revocation period has expired.

     5. Employee represents that he has consulted or has had sufficient opportunity to discuss with
any person, including the attorney of his choice, all provisions of this Agreement, that he has
carefully read and fully understands all the provisions of this Agreement, that he is competent to
execute this Agreement, and that he is voluntarily entering into this Agreement of his own free
will and accord, without reliance upon any statement or representation of the Company or its
representatives.

     6. Provided that Employee does not revoke this Agreement and complies with his obligations
hereunder, the Company agrees as follows:

          (a) The Company will pay to Employee an amount equal to: (i) Employee’s current annual salary
of $340,080; and (ii) Employee’s maximum bonus for 2007 (which assumes that 100% of the targets
were achieved), which amount is $238,056 (collectively, the “Severance Payout Amount”). The
Severance Payout Amount shall be paid in accordance with the Company’s normal bi-weekly pay periods
in twenty-six equal installments of $22,236 (less statutory deductions), commencing on June 22,
2007, and continuing for twenty-five consecutive pay periods thereafter.

          (b) The Parties agree that the Severance Payout Amount includes all of Employee’s accrued and
unused paid time off.

          (c) The Company will reimburse Employee for medical and dental benefits, according to those
benefits chosen by Employee for continuation under The Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended (“COBRA”), until June 8, 2008. As of June 8, 2008, Employee may elect to
continue COBRA coverage at his own expense. The Company will also continue to provide Employee
with coverage under its existing Execu-Care Policy until June 8, 2008.

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     7. Effective as of the Separation Date, all restricted stock units granted under that certain
Restricted Stock Unit Award Agreement, dated as of January 13, 2005 (the “Restricted Units
Agreement”), by and between the Company and Employee, are hereby vested. The Company will use its
reasonable commercial efforts to issue a stock certificate for the shares underlying the Restricted
Units Agreement on June 8, 2007, or as soon as possible thereafter.

     8. Reference is hereby made to that certain Incentive Stock Option Agreement, dated as of
December 16, 2003, by and between the Company and Employee (the “Incentive Stock Option
Agreement”). Effective as of the Separation Date, Sections 2, 3 and 8 of the Incentive Stock
Option Agreement are hereby amended to read in their entirety as follows:

          “2. Character of Option. The Option is not an “incentive stock option” within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended.”

          “3. Term. The Option will expire on the sixth anniversary of the Date of Grant.”

          “8. Termination. The Option shall terminate on the expiration date set forth in
Section 3 above.”

This Agreement shall serve as an amendment to the Incentive Stock Option Agreement reflecting the
above amendments.

     9. Reference is hereby made to that certain Non-Qualified Stock Option Agreement, dated as of
December 16, 2003, by and between the Company and Employee (the “Non-Qualified Stock Option
Agreement”). Effective as of the Separation Date, Sections 3 and 8 of the Non-Qualified Stock
Option Agreement are hereby amended to read in their entirety as follows:

          “3. Term. The Option will expire on the sixth anniversary of the Date of Grant.”

          “8. Termination. The Option shall terminate on the expiration date set forth in
Section 3 above.”

This Agreement shall serve as an amendment to the Non-Qualified Stock Option Agreement reflecting
the above amendments.

     10. Except as provided in Section 6(c) above, Employee’s health insurance and all other
Company benefits will terminate according to the terms of the plans. This provision is not,
however, intended to waive Employee’s rights under COBRA. Employee acknowledges that the Company
will provide the COBRA notice, in accordance with federal guidelines, under which Employee may
elect continuation of coverage.

     11. Notwithstanding anything in this Agreement to the contrary, the Parties understand that to
the extent Employee may have vested rights pursuant to Employer’s group health insurance plans,
group life insurance plans, and the 401(k) plan, such rights are excluded from the scope of this
Agreement and are not terminated or released by it.

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     12. Effective as of the Separation Date, You hereby resign as a director of the Company and as
the Chairman of the Board of Directors of the Company (the “Board”); it being agreed and understood
that this Agreement shall serve as irrevocable written notice of such resignation.

     13. Commencing on the Separation Date and continuing until the second anniversary of the
Separation Date, You agree to make yourself available to consult with the Chief Executive Officer
of the Company (the “CEO”) on matters concerning the Company as reasonably requested by the CEO
from time to time; provided, however, that in no event shall You be required to devote more than
ten (10) hours of your time to performing such services during any consecutive thirty (30) day
period. You and the Company agree that You will receive no compensation for performing such
services, but You will be reimbursed for all reasonable out-of-pocket expenses you incurred in
performing such services (with any expenses over $1,000 requiring the prior written approval of the
CEO).

     14. Employee represents and acknowledges that in executing this Agreement, he does not rely
and has not relied upon any representation or statement made by the Company or any of its agents,
representatives or attorneys with regard to the subject matter, basis or effect of this Agreement
or otherwise other than the representations contained in this Agreement.

     15. Employee agrees as follows:

          (a) As a material inducement to the Company to enter into this Agreement and subject to the
terms of this Section 15, Employee hereby irrevocably and unconditionally releases, acquits and
forever discharges the Company and each of its parent, owners, stockholders, predecessors,
successors, assigns, agents, directors, officers, employees, representatives, attorneys, divisions,
subsidiaries, affiliates and all persons acting by, through, under or in concert with any of them,
(collectively “Company Releasees”), from any and all charges, complaints, claims, liabilities,
obligations, promises, agreements, controversies, damages, actions, causes of action, suits,
rights, demands, costs, losses, debts and expenses (including attorneys’ fees and costs actually
incurred), of any nature whatsoever, known or unknown (“Claim” or “Claims”) which Employee now has,
owns, holds, or which Employee at any time heretofore had, owned, or held against each of the
Company Releasees, including, but not limited to: (a) all Claims under the Age Discrimination in
Employment Act of 1967, as amended; (b) all Claims under Title VII of the Civil Rights Act of 1964,
as amended; (c) all Claims under the Employee Retirement Income Security Act of 1974, as amended;
(d) all Claims arising under the Americans With Disabilities Act of 1990, as amended; (e) all
Claims arising under the Family and Medical Leave Act of 1993, as amended; (f) all Claims related
to Employee’s employment with the Company; (g) all Claims of unlawful discrimination based on age,
sex, race, religion, national origin, handicap, disability, equal pay, sexual orientation or
otherwise; (h) all Claims of wrongful discharge, breach of an implied or express employment
contract, negligent or intentional infliction of emotional distress, libel, defamation, breach of
privacy, fraud, breach of any implied covenant of good faith and fair dealing and any other
federal, state, or local common law or statutory claims, whether in tort or in contract; (i) all
Claims related to unpaid wages, salary, overtime compensation, bonuses, severance pay, vacation pay
or other compensation or benefits arising out of Employee’s employment with the Company; (j) all
claims arising under any federal, state or local regulation, law, code or statute;

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(k) all claims of discrimination arising under any state or local law or ordinance; and (l)
all claims relating to any agreement, arrangement or understanding that Employee has, or may have,
with the Company (including, without limitation, the Employment Agreement, but specifically
excluding this Agreement, the Incentive Stock Option Agreement, the Non-Qualified Stock Option
Agreement and the Restricted Units Agreement). Notwithstanding anything to the contrary contained
in this subsection (a), the Company agrees that: (i) Employee shall remain a beneficiary under any
past and current Directors and Officers Insurance policies, and notwithstanding anything to the
contrary contained in this Agreement, Employee is not releasing in any way any coverage under said
insurance policies; and (ii) the Indemnity Agreement, dated as of May 26, 2004, by and between the
Company and Employee (the “Indemnity Agreement”) shall remain in full force and affect and shall
not be affected by this Agreement.

          (b) Employee covenants and promises not to sue or otherwise pursue legal action against the
Company, other than for breach of this Agreement or the Other Agreements (as defined below), and
further covenants and promises to indemnify and defend the Company from any and all such claims,
demands and causes of action, including the payment of reasonable costs and attorneys’ fees
relating to any claim, demand, or causes of action brought by him. Employee agrees that should any
legal action be pursued on his behalf by any person or other entity against the Company regarding
the claims released by the Company in this Agreement, Employee will not accept recovery from such
action, but will assign such recovery to the Company and agrees to indemnify the Company against
such claims and assessment of damages. Employee further represents that he has filed no lawsuits
against the Company.

          (c) Employee further promises and agrees that he will not at any time disparage the Company or
any of its employees, products, operations, policies, decisions, advertising or marketing programs,
if the effect of such disparagement reasonably could be anticipated to cause material harm to the
Company’s reputation, business, interests or to the morale among its work force, or the reputation
of any Company employee. Additionally, Employee will refer all inquiries that he receives (whether
written or oral) regarding the business or operations of the Company to the CEO (or his designee).
Employee will make reasonable efforts to transition Company information to an authorized
representative of the Company.

     16. The Company agrees as follows:

          (a) As a material inducement to Employee to enter into this Agreement and subject to the terms
of this paragraph, the Company, on its own behalf and on behalf of each of the Company Releasees,
hereby irrevocably and unconditionally releases, acquits and forever discharges Employee, and his
heirs, representatives, successors and assigns and all persons acting by, through, under or in
concert with any of them (collectively, the “Employee Releasees”), from any and all Claims which
any Company Releasee now has, owns, holds, or which any Company Releasee at any time heretofore
had, owned, or held against any of the Employee Releasees (including, without limitation, any
Claims arising out of, in connection with, or related to Employee’s involvement as an officer or
director of the Company).

          (b) The Company covenants and promises not to sue or otherwise pursue legal action against
Employee, other than for breach of this Agreement or the Other Agreements, and further covenants
and promises to indemnify and defend Employee from any and all such
claims,

5

 

demands and causes of action, including the payment of reasonable costs and attorneys’ fees
relating to any claim, demand, or causes of action brought by the Company. The Company agrees that
should any legal action be pursued on his behalf by any person or other entity against Employee
regarding the claims released in this Agreement, the Company will not accept recovery from such
action, but will assign such recovery to Employee and agrees to indemnify Employee against such
claims and assessment of damages. The Company further represents that it has filed no lawsuits
against Employee.

          (c) The Company further promises and agrees that it will not at any time disparage Employee,
if the effect of such disparagement reasonably could be anticipated to cause material harm to
Employee’s reputation.

     17. Notwithstanding anything in this Agreement to the contrary, the Company and Employee agree
that the Indemnity Agreement, Incentive Stock Option Agreement (as revised herein), the
Non-Qualified Stock Option Agreement (as revised herein) and the Restricted Units Agreement (as
revised herein) shall remain in full force and effect.

     18. If Employee or the Company determines that the other has breached this Agreement, the
non-breaching Party will notify the Party in breach of that fact in writing and the Party in breach
will be afforded ten (10) days to cure the breach.

     19. Employee acknowledges that by the date Employee executes this Agreement, he will return to
the Company any and all property of the Company, such as (but not limited to) marketing plans and
related information, product development plans and related information, trade secret information,
pricing information, vendor information, financial information, telephone lists, computer software
and hardware, keys, credit cards, vehicle, telephone, camera and office equipment. Notwithstanding
the above, Employee will be entitled to retain his computer (including any related accessories),
his phone, and all his iGo products.

     20. No waiver of any of the terms of this Agreement shall be valid unless in writing and
signed by both Parties. No waiver or default of any term of this Agreement shall be deemed a
waiver of any subsequent breach or default of the same or similar nature. This Agreement may not
be changed except by writing signed by both Parties.

     21. This Agreement shall be binding upon Employee and upon Employee’s heirs, administrators,
representatives, executors, trustees, successors and assigns, and shall inure to the benefit of
Releasees and each of them, and to their heirs, administrators, representatives, executors,
trustees, successors, and assigns.

     22. For the same aforesaid consideration, it is further expressly agreed and understood that
the Parties will promptly execute any and all documents that are necessary and appropriate to
effectuate the terms of this Agreement.

     23. For the same aforesaid consideration, it is expressly agreed and understood that the
contents of this Agreement, including its terms, any monetary consideration paid therein, and the
parties thereto, shall not be disclosed, released or communicated to any person (except their
attorneys, spouses, and tax consultants), including natural persons, corporations, partnerships,
limited partnerships, joint ventures, sole proprietorships or other business entities, except for
the

6

 

purpose of enforcing this Agreement or any provision therein or pursuant to a lawful subpoena
or except as otherwise required by applicable law (including, without limitation, Federal
securities laws). Each Party agrees to give reasonable notice to the other in the event disclosure
of this Agreement is sought by subpoena or otherwise.

     24. This Agreement is entered into and shall be interpreted, enforced and governed by the law
of the State of Arizona. Any action regarding this Agreement shall be brought in a court in
Maricopa County, Arizona. In any proceeding to enforce this Agreement, the prevailing Party shall
be entitled to costs and reasonable attorneys’ fees.

     25. Notwithstanding anything in this Agreement to the contrary, in the event that Employee
revokes this Agreement, this Agreement shall serve as written notice to Employee of the termination
of the Employment Agreement and the employment relationship created thereunder effective as of the
Contract Date; and the Parties agree that this Section 25 shall survive any such revocation.

     26. The parties agree that the Agreement may be executed in multiple originals.

     EXECUTED as of the Contract Date.

	 	 	 	 	 
	 	 	 
	 	/s/ Charles R. Mollo
 	 
	 	      Charles R. Mollo 	 
	 	 	 
	 
	 	MOBILITY ELECTRONICS, INC.

 	 
	 	By:  	/s/ William O. Hunt
 	 
	 	Printed: William O. Hunt 	 
	 	Title:  Authorized Director	 
	 

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