EXECUTIVE EMPLOYMENT AGREEMENT

EXECUTIVE EMPLOYMENT AGREEMENT

The Employment Agreement is entered into this 25th day of March, 2013 and effective April 1, 2013 between Axion Power International, Inc., a Delaware corporation, having a place of business at 3601 Clover Lane, New Castle, Pennsylvania 16105 (the "Company") and Thomas G. Granville 329 Edgebrook Lane, New Wilmington, PA 16105, (the “Executive”).

NOW, THEREFORE, in consideration of the promises and of the mutual covenants and agreements herein contained, the parties hereto agree as follows:

In determining whether to continue to term the employment of any Executive Officer, the board will use as a metric, the failure of the Company to meet at least 75% of its Total Net Sales and EBITDA projections for any prior six month period beginning January 1, 2014. Such projections will be published and made available to the board no later than the 10th day prior to each six month period beginning on January 1 and including June 1 of the applicable calendar years. In determining accountability for the failure to reach such projections, the board shall make exceptions for an Act of God, or a failure of a single source supplier to meet its supply commitments due to an act unforeseeable by the Company and unavoidable to remedy due to an unavoidable inability to establish an alternate second supplier of the item, or any other event that the board deems completely beyond the control of the Company. 

In addition, The Executive shall be allowed an automobile allowance of $750.00 per month to be applied to the car of his choice. The Executive shall be entitled to reimbursement at the maximum allowable mileage rate under applicable income tax rules for all reasonable business use of his personal vehicle.

For the purposes of this Agreement, "cause" for termination by the Company shall mean (i) a material breach of this Agreement by Executive; (ii) a breach of Executive's duty of loyalty to the Company or any act of dishonesty with respect to the Company or its stockholders, customers or suppliers; (iii) Executive's continued failure or refusal to perform, in any material respect, any duty or responsibility to the Company which is normally attached to Executive's position(after notice and a 10-day cure period), provided, however, any subsequent failure or refusal to perform such duty or responsibility shall entitle the Company to terminate employment for Just Cause without notice or an opportunity to cure; (iv) Executive's gross negligence or willful misconduct in performing those duties which are normally attached to Executive's position; (v) the commission by Executive of an act of fraud, conversion, misappropriation (including the unauthorized use or disclosure of confidential or proprietary information of the Company) or embezzlement or crime of moral turpitude; (vi) a conviction of or guilty plea or confession by Executive to any fraud, conversion, misappropriation, embezzlement or felony; (vii) the exposure of the Company to any criminal liability or loss of business opportunity or reduction in revenues or increase in losses substantially caused by the conduct of Executive which results in a material adverse effect upon the Company's business, operations, financial condition or results of operations or the exposure of the Company to any bona fide claims which may result in civil liability caused by Executive's unlawful harassment in employment; or (viii) the repeated taking of any action prohibited (a) by the Board or any of the Executive Officers, provided that Executive has received at least one written notice of having taken an action so prohibited, or (b) by this Agreement. For purposes of this Agreement, "Executive's duty of loyalty to the Company" shall include Executive's fiduciary obligation to place the interests of the Company ahead of Executive's personal interests and thereby not knowingly profit personally at the expense of the Company, and shall also include specifically the affirmative obligation to disclose promptly to the Board any known conflicts of interest Executive may have with respect to the Company, and the negative obligations not to usurp corporate opportunities of the Company, not to engage in any "conflict-of-interest" transactions with the Company (without the approval of the Board), and not to compete directly with the Company (without the approval of the Board). Good Reason shall mean the occurrence or failure to cause the occurrence, as the case may be, without your express written consent, of any of the following circumstances: (i) material demotion (except in connection with the termination of your employment for Cause or as a result of your death, or temporarily as a result of your illness or other absence), (ii) a relocation of the Company's executive office in New Castle, PA to a location more than 70 miles from its current location; (iii) any material breach by the Company of any provision of this Agreement; or (iv) failure of any successor to the Company (whether direct or indirect and whether by merger, acquisition, consolidation or otherwise) to assume in a writing delivered to you upon the assignee becoming such, the obligations of the Company hereunder.

If any portion of this Agreement is found by a court of competent jurisdiction to be too broad to permit enforcement of such restriction to its full extent, then such restriction shall be enforced to the maximum extent permitted by law, and the Executive hereby consents and agrees that such scope may be judicially modified accordingly in any proceeding brought to enforce such restriction. All provisions of this Agreement are severable, and the unenforceability or invalidity of any single provision hereof shall not affect any remaining provision. The Executive acknowledges and agrees that the Company's remedy at law for any breach of any of his obligations hereunder would be inadequate, and agrees and consents that temporary and permanent injunctive relief may be granted in any proceeding that may be brought to enforce any provision of this Agreement without the necessity of proof of actual damage and without any bond or other security being required. Such remedies shall not be exclusive and shall be in addition to any other remedy which the Company may have.

IN WITNESS WHEREOF, the parties have signed this Agreement intending to be bound thereby.

AXION POWER INTERNATIONAL, INC.

EXHIBIT A

Executive Agreement

AXION POWER INTERNATIONAL, INC.

EXECUTIVE AGREEMENT

I AM EMPLOYED OR DESIRE TO BE EMPLOYED BY AXION IN A CAPACITY IN WHICH I MAY RECEIVE OR CONTRIBUTE TO CONFIDENTIAL INFORMATION. IN CONSIDERATION OF SUCH EMPLOYMENT OR CONTINUED EMPLOYMENT, AND THE WAGES OR SALARY AND OTHER EXECUTIVE BENEFITS IN COMPENSATION FOR MY SERVICES, AND IN CONSIDERATION OF BEING GIVEN ACCESS TO CONFIDENTIAL INFORMATION; I AGREE THAT:

NOTICE: This is to notify you that paragraph A of this Axion "Executive Agreement" you are being asked to sign as a condition of your employment does not apply to an Invention for which no equipment, supplies, facility or trade secret information of Axion was used and which was developed entirely on your own time, and (1) which does not relate (a) directly to the business of Axion or (b) to Axion's actual or demonstrably anticipated research or development, or (2) which does not result from any work performed by you for Axion. If any exists, a detailed list of it should be attached to this agreement as an addendum.

IN WITNESS WHEREOF, the parties have signed this Agreement intending to be bound thereby.

AXION POWER INTERNATIONAL, INC.

Exhibit B

Sample SEPARATION AGREEMENT AND RELEASE

AXION POWER INTERNATIONAL, INC. and AXION POWER BATTERY MANUFACTURING, INC. (“Employer”), and ___________ (“Executive”) hereby agree that:

1.          Separation Date. Executive’s last day of employment with Employer shall be (insert date) (the “Separation Date”). Executive and Employer agree that Executive’s separation from Employer is by mutual agreement. Executive shall have no duty to report to work after the Separation Date.

2.          Return of Company Property and Confidential Information. On or before the Separation Date, Executive shall return all property of Employer (whether owned, leased or otherwise belonging to Employer) in her possession or under her control or in the possession or control of a third party at her direction, including, but not limited to, keys, access cards, company credit cards, cell phones, blackberry devices, documents, records, paper and electronic files (including computer disks, thumb drives, etc.). Executive specifically agrees to return any and all confidential and/or proprietary information of the Employer in Executive possession, custody or control, including, without limitation, trade secrets, policy and procedure manuals, customer lists and contact information, customer preferences and specifications, other confidential customer data, supplier and vendor lists and other confidential supplier and vendor information, sales and marketing information, business plans, business development reports, marketing strategies, computer processes and programs, computer software, software designs and code, computer reports, cost and pricing data, financial information, worksheets, ledgers, accounts, memoranda, correspondence, reports, profit information, financial data, drawings, engineering, product or process specifications and documentation, customer and client proposals, techniques and systems, productivity reports, status reports, conference reports, project cost estimates, project change orders, project cost analyses, invoices, unpublished designs, patterns and prospective trade identification, employee compensation data, production processes, improvements, developments, designs and technologies, and any other information or knowledge concerning the Employer, its customers, and its business or methods of doing business, whether or not in tangible form, that is of a proprietary and/or confidential nature, and/or has been heretofore or hereafter will be treated as confidential or secret by Employer (hereinafter collectively referred to as “Confidential Information”). By signing this Agreement, Executive hereby represents and warrants that all such Confidential Information and other Employer property have been returned to Employer, and that Executive has not retained any such Confidential Information or Employer property or any copies thereof.

3.          Consideration by Employer. In consideration for signing this Separation Agreement and Release and compliance with promises made herein, Employer agrees:

4.          Payments as Consideration. Executive understands and agrees that he/she would not be entitled to receive severance monies specified in Paragraph 3 above, except for her execution of this Separation Agreement and Release and the fulfillment of the promises contained herein.

5.          Non-Disclosure. Executive acknowledges that in the course of performing services for the Employer, Executive had access to, developed and/or contributed certain Confidential Information, as defined above, concerning the Employer and its business. Executive hereby covenants and agrees that he/she shall not directly or indirectly, at any time prior or subsequent to the Separation Date, disclose, divulge, disseminate, publish, furnish or make accessible to any third party, or use for Executive’s own personal or professional purposes, profit or benefit, any of the Employer’s Confidential Information.

6.          Assignment. The rights and protections of the Employer shall extend to any of its successors or assigns and this Agreement may be assigned without Executive’s consent.

7.          Taxes. Executive is, and hereby agrees, to be responsible for the payment of any and all federal, state, and/or local taxes which may be payable on the consideration paid for this Agreement. Executive agrees to indemnify and hold harmless the Employer and its insurers, individually or collectively, from and against any and all claims for federal, state and/or local taxes which may be payable on the consideration paid for this Agreement. Executive expressly acknowledges that the Employer has not made, nor herein makes, any representation about the tax consequences of any consideration provided by the Employer to Executive pursuant to this Agreement, and Executive represents and agrees that he/she is not relying on the advice of the Employer or its attorneys as to the legal, tax, or other consequences of this Agreement.

8.          Release. In consideration of the payments referenced in paragraph 3, Executive hereby releases, remises and forever discharges Employer, including its shareholders, directors, officers, employees, agents, predecessors, successors, parent companies, affiliates, subsidiaries, assigns, attorneys and insurers from any and all claims, damages, demands, causes of action, suits, debts due, and sums of money of whatever kind and nature which Executive ever had, could have in the future, or now has against Employer arising out of or in any way related to or resulting from Executive’s employment with Employer and/or the cessation thereof. Executive knowingly and voluntarily releases and forever discharges Employer from any and all claims that he/she has or may have against Employer as of the date of her execution of this Separation Agreement and Release, including, but not limited to, any alleged violation of Title VII of the Civil Rights Act of 1964, as amended; The Civil Rights Act of 1991; Sections 1981 through 1988 of Title 42 of the United States Code, as amended; The Employee Retirement Income Security Act of 1974, as amended; The Immigration Reform and Control Act, as amended; The Americans with Disabilities Act of 1990, as amended; The Age Discrimination in Employment Act of 1967 (“ADEA”), as amended; The Older Workers Benefit Protection Act; The Worker Adjustment and Retraining Notification Act, as amended; The Occupational Safety and Health Act, as amended; The Family and Medical Leave Act; The Fair Labor Standards Act; The Vocational Rehabilitation Act of 1973; The Equal Pay Act; The Pennsylvania Human Relations Act, as amended; The Pennsylvania Wage Payment and Collection Law, as amended; The Pennsylvania Minimum Wage Act, as amended; The Pennsylvania Equal Pay Law, as amended; any other federal, state or local civil or human rights law or any other local, state or federal constitution, statute, regulation or ordinance; any public policy, contract, tort, or common law; or any claim for costs, fees, or other expenses including attorneys’ fees.

9.          No Claim Exists. Should Executive file any charge or complaint on his/her own behalf or participate in any charge or complaint which may be made by any other person or organization on her behalf before any federal, state, or local court or administrative agency against Employer, Executive agrees that he/she will not accept any relief or recovery therefrom. Executive confirms that no charge, complaint or action exists in any forum or form.

10.         Waiver of Right to Assist. Executive understands that if this Agreement were not signed, Executive would have the right to voluntarily assist other individuals or entities in bringing claims against Employer. Executive hereby waives that right and he/she will not provide any such assistance other than assistance in an investigation or proceeding conducted by the United States Equal Employment Opportunity Commission or as otherwise required by law.

11.         Confidentiality. Executive and Employer recognize and acknowledge their mutual interests in maintaining the confidentiality of this Agreement, and agree that each shall keep the fact and terms of this Agreement and the discussions leading to this Agreement strictly confidential. Executive and Employer promise and agree not to disclose, either directly or indirectly, in any manner whatsoever, any information of any kind regarding the terms and amounts paid under this agreement, to any person or organization, including but not limited to representatives of local, state or federal agencies, present and former officers, employees and agents of Employer, and other members of the public. The parties agree that the unauthorized disclosure of the existence or terms of this Agreement shall be considered a material breach of this Agreement, that such breach shall provide a separate and independent cause of action to the other Party to this Agreement, and that this Agreement may be used as evidence in a subsequent proceeding in which the other Party alleges a breach of this Agreement. In the event of a breach of this Paragraph, the breaching party acknowledges that the non-breaching party shall be entitled to injunctive or other equitable relief necessary to enforce this Paragraph. In the event that Employer or Executive takes steps to seek relief from an alleged breach of this Paragraph, all of the remaining provisions of this Agreement shall remain in full force and effect. Executive agrees to inform those persons who had knowledge of the fact and terms of this Agreement on the date hereof that they are bound by the same terms of confidentiality in this Agreement that apply to Executive. The provisions of this Paragraph shall not prohibit Executive from disclosing the fact and terms hereof to such accounting, legal, or similar professional advisors as he/she may from time to time engage. This Paragraph shall not prohibit Employer from disclosing the fact of and terms hereof to Employer’s accounting, legal, or similar professional advisors and to such employees of Employer who, as part of their employment duties in terms of personnel functions at Employer are required to have this information; however, all such employees shall be informed of the confidentiality of the fact of and terms of this Agreement, and they are bound by the same terms of confidentiality as apply to Employer.

12.         Severability. Should any part of this Agreement be rendered or declared invalid by a court of competent jurisdiction of the Commonwealth of Pennsylvania, such invalidation of such part or portion of this Agreement should not invalidate the remaining portions thereof, and they shall remain in full force and effect. However, if, within two (2) years from the date of this Agreement, any portion of the general release language is ruled to be unenforceable for any reason, the parties will enter into good faith discussions to amend the general release language to conform to all applicable laws regarding enforceability. If the parties are unable to mutually agree on an appropriate amendment to the general release language, Executive shall return the consideration paid hereunder to Employer.

13.         No Admission of Liability. Executive agrees that neither this Separation Agreement and Release nor the furnishing of the consideration for this Release shall be deemed or construed at any time for any purpose as an admission by Employer of any liability or unlawful conduct of any kind.

14.         Non-Disparagement. The parties mutually agree that they shall not make any statements to third parties with the intent or effect of disparaging the other party.

15.         Right to Review. Executive agrees that he/she has been given at least twenty-one (21) days after the receipt of this Separation Agreement and Release to consider its terms and decide whether or not to sign it, but that he/she can freely and knowingly waive the twenty-one (21) day period and execute the Agreement before the end of the twenty-one (21) day period, the effect of which is to begin the running of the seven (7) day period described below.

16.         Right to Revoke. Executive is aware that he/she may change her mind and freely revoke this Release, only insofar as it applies to any claim he/she may have under the Age Discrimination in Employment Act (ADEA), at any time during the seven (7) days after it is signed, in which case, the provisions of the Release as to the ADEA, only, will have no force or effect. Executive understands and agrees that, upon his/her execution of this Agreement, the payment of the severance sum specified herein will be held by Employer until the expiration of this seven (7) day revocation period, after which the payment will be tendered to Executive if he/she has not exercised her revocation rights under this paragraph. Executive understands and agrees that any revocation under this section must be in writing and delivered to counsel for Employer, at the address, which follows, postmarked within seven (7) days of Executive’s signing of this Agreement to be effective: Jolie Kahn, Esq., 1800 John F Kennedy Blvd., Suite 1400, Philadelphia, PA 19103. If the last day of the revocation period is a Saturday, Sunday, or legal holiday, then the revocation period shall not expire until the next following day which is not a Saturday, Sunday, or legal holiday. The parties acknowledge and agree that any revocation by Executive under this paragraph shall apply only to any claims Executive may have or assert under the ADEA, and is not effective to revoke Executive’s waiver and release of any other claims pursuant to this Release.

17.         Right to Consult with Counsel. Executive has been and/or is hereby advised to review this Separation Agreement and Release with Executive attorney, and expressly acknowledges that Executive has read and understands the Agreement and enters into the Agreement of Executive own free will and as a competent adult.

18.         Binding Effect. This Separation Agreement and Release shall be binding upon and inure to the benefit of all the parties hereto and their respective shareholders, partners, associates, members, officers, directors, employees, administrators, agents, predecessors, successors, parent companies, affiliates, subsidiaries, insurers, assigns, representatives, executors and heirs.

19.         Choice of Law. This Separation Agreement and Release shall be interpreted, endorsed and governed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to its conflict of law rules.

20.         Modification. The terms or conditions of this Separation Agreement and Release may not be modified, altered or changed except upon express written consent of both parties wherein specific reference is made to this Agreement. Any waiver of the terms or covenants hereof must be in a writing executed by the party waiving compliance. Failure of any party at any time or times to require performance of any provision hereof shall in no manner affect his/her or its right at a later time to enforce the same. No waiver by a party of a breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed to be or construed as a further or continuing waiver of such term or covenant.

21.         Competency. The parties declare that each has fully participated in the negotiation of this Agreement, that each has carefully read this Agreement and reviewed its terms, that each has been given an opportunity to consult with legal counsel to the extent any party so desires, and that each agrees to it for the purpose of making a full and final compromise as to all matters referenced herein.

IN WITNESS WHEREOF, the parties hereto have caused this Separation Agreement and Release to be executed on their behalf as of the day and year indicated below.