AMENDMENT NO. 1 TO OFFICER'S EMPLOYMENT AGREEMENT
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This AMENDMENT NO. 1 TO OFFICER'S EMPLOYMENT AGREEMENT (this
"Amendment") effective as of the 1st day of August, 2002, is entered into by and
between H Power Corp., a Delaware corporation (the "Company") and Xxxxxxx X.
Xxxx, residing at 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 (hereinafter referred
to as "Executive"). Capitalized terms used and not otherwise defined herein
shall have the meanings ascribed thereto in the Officer's Employment Agreement
(the "Agreement") dated as of November 23, 1999, between the Company and
Executive.
WHEREAS, the Company and Executive have previously entered into the
Agreement; and
WHEREAS, in accordance with the provisions of Section 14 of the
Agreement, the Company and Executive desire to amend such agreement.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. The first sentence of Section 1 of the Agreement is hereby amended
by deleting the terms "December 6, 1999" and "December 5, 2002" and replacing
such terms with "August 1, 2002" and "July 31, 2003", respectively.
2. Section 4(a) shall be amended by deleting the number "120,000.00"
and replacing it with the number "190,000."
3. Section 4(d) shall be amended by deleting such section in its
entirety and replacing it with the following:
"Reimbursement of Expenses. Consistent with established policies of the
Company as in effect from time to time for senior executives, consultants and
members of the Board, the Company shall pay to or reimburse Executive for all
reasonable and actual out-of-pocket expenses, including without limitation,
travel, hotel, automobile, telephone and cellular telephone expenses, computer
and data processing expenses and similar expenses, incurred by Executive in
performing his obligations under this Agreement; provided that Executive timely
submits reasonable documentation with respect to such expenses."
4. Section 4(e) shall be amended by deleting the term "eight" and the
number "8,000" and replacing such term and such number with "ten" and "10,000",
respectively.
5. The following shall be added as new Section 4(i) immediately
following Section 4(h):
"Travel Allowance. In the event that the primary work location at which
Executive is based is changed to a location more than 300 driving miles from his
principal residence in Bellingam, Washington, the Company will reimburse
Executive for actual expenses incurred in
non-business trips Executive makes to his Washington home, up to the amount of
$10,000 per contract year."
6. Section 5(a) shall be amended by adding the following after the last
sentence of the first paragraph thereof:
"If the Company seeks to terminate this Agreement for "cause," it must
serve written notice upon the Executive which specifically states the grounds
and facts which it claims support its termination and provide Executive with a
thirty-day period in which to substantially cure the conduct. The thirty-day
cure period need not be provided if the "cause" event is such that it is
impossible to cure under any circumstance."
7. Section 5 shall be amended by adding the following as new Section
5(b) and renumbering the remaining sections as appropriate:
"For Reasons Other Than Cause. The Company shall have the right to
terminate this Agreement for reasons other than cause by providing thirty days
(30) Notice to Executive. In the event the Executive is terminated for reasons
other than cause, the Company will continue to provide benefits and pay the
bi-weekly installments of Executive's Base Salary through the end of the term of
employment."
8. New Section 5(c) shall be amended by adding the following as the
last sentence thereof:
"In addition, the Board of Directors may, at its sole discretion, pay
to Executive's estate a pro-rata portion of any bonus Executive would have
received pursuant to Section 4(f); it being understood that the Board shall have
no obligation to award such bonus."
9. New Section 5(d) shall be amended by adding the following as the
last sentence thereof:
"In addition, the Board of Directors may, at its sole discretion, pay
to Executive a pro-rata portion of any bonus Executive would have received
pursuant to Section 4(f); it being understood that the Board shall have no
obligation to award such bonus."
10. New Section 5(e) shall be amended by deleting the first paragraph
in its entirety and replacing such paragraph with the following:
"Change in Control. (i) In the event that Executive's employment is
terminated by the Company within one year following a Change in Control (as
defined below) for any reason other than cause, death or disability, or the
Company does not renew the Agreement within the one-year period following a
Change of Control, then the Company shall pay Executive one and one-half his
annual Base Salary at his then current rate and one and one-half the latest
annual incentive compensation payment calculated by taking the highest of the
latest two incentive payments earned and paid multiplied by one and one-half,
such payment to be made in one lump sum payment at the time of termination,
provided that Executive has executed and provided to the Company a general
release in favor of the Company and its affiliates. Such payments shall be in
lieu of any and all other payments due and owing to Executive under the terms of
this
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Agreement except that the Company shall continue to pay Executive the automobile
allowance for the balance of the term of the Agreement. The Company shall also
provide to the Executive health insurance for a period of one year following
termination of Executive's employment. Executive shall not be required to seek
other employment or to otherwise mitigate the effects of such termination, and
such payments shall not be reduced by any income received from other sources
(all compensation and other benefits described above and the terms thereof shall
hereinafter be referred to collectively as the "Severance Package"). Executive
acknowledges that the Severance Package is specific consideration for the
general release and Executive's obligations under Section 7."
11. New Section 5(e)(ii)(A) shall be amended by adding the words
"change or" after the word "material" in the first and only sentence thereof.
12. New Section 5(e)(ii) shall be amended by deleting the fifth and
final paragraph thereof and replacing it in its entirety with the following:
"For purposes of this provision, a "Change in Control" shall be deemed
to have occurred if (1) any "person" (as such term is used in Sections 13(d)(3)
and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), excluding Executive, who is not a shareholder of the Company as of the
date hereof, shall have become the beneficial owner, directly or indirectly, of
Common Stock representing thirty-three and one-third percent (33 1/3%) or more
of the combined voting power of the Company's then outstanding securities,
unless three-quarters of the Board of Directors, as constituted immediately
prior to the date of the Change in Control, decide in their reasonable
discretion that no Change in Control has occurred, Executive not being allowed
to vote on such matter if he is then a Director; provided, however, that if any
such person other than Executive (whether or not a stockholder of the Company as
of the date hereof) shall become the beneficial owner, directly or indirectly,
of Common Stock representing fifty percent (50%) or more of the Company's then
outstanding securities, a Change in Control shall ipso facto have occurred; or
(2) if there is a Change in Control of a nature that, in the opinion of counsel
for the Company, would be required to be reported in response to Item 6(e) of
schedule 14A under the Exchange Act, unless three-quarters of the Board of
Directors, as constituted immediately prior to the date of the Change in
Control, decide in their reasonable discretion that no Change in Control has
occurred, Executive not being allowed to vote on such matter if he is then a
Director; or (3) in the event of a merger in which the Company is a party after
which merger the stockholders of the Company do not retain directly or
indirectly at least a majority of the beneficial interest in the voting stock of
the surviving company; or (4) in the event of the sale, exchange, or transfer of
all or substantially all of the Company's assets. If the provisions of this
Section are in any way involved in litigation or arbitration and Executive
incurs legal fees and expenses or must make a contribution to a judgment or
settlement of the matter, the Company agrees to reimburse him for any and all
expenditures."
13. Section 6 shall be amended by deleting the word "three" and the
number 3 in the first sentence thereof and replacing them with the word "five"
and the number 5, respectively.
14. Section 11 shall be amended by adding the following at the end of
the last sentence thereof:
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", or to a wholly-owned subsidary."
15. Section 15 shall be amended by adding the following after the
address of H Power Corp. listed therein:
With a copy to: Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
16. This Amendment shall be governed by and construed in accordance
with the laws of the State of Delaware.
17. This Amendment may not be amended or modified, and no provision
hereof may be waived, without the written consent of the Company and Executive.
18. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment No.
1 to Officer's Employment Agreement as of the day and year first above written.
XXXXXXX X. XXXX
By: /s/ XXXXXXX X. XXXX
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Name:
Title:
H POWER CORP.
By: /s/ H. XXXXX XXXXXXX
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Name:
Title:
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