THIS CHANGE-IN-CONTROL AGREEMENT (this “Agreement”), made and entered into as of September 25, 2006, by and between Millennium Cell Inc., a Delaware corporation (the “Company”), and ___________________, an individual residing at...
Exhibit
10.1
FORM
OF
CHANGE-IN-CONTROL AGREEMENT
THIS
CHANGE-IN-CONTROL AGREEMENT (this “Agreement”), made and entered into as of
September
25, 2006,
by and
between Millennium Cell Inc., a Delaware corporation (the “Company”),
and
___________________, an individual residing at
______________________________________ (the
“Executive”).
WHEREAS,
the Company considers it essential to its best interests to xxxxxx the continued
employment of key management personnel and recognizes the distraction and
disruption that the possibility of a Change in Control (as defined in Section
1(f)
below)
may raise to the detriment of the Company and its stockholders; and
WHEREAS,
the Company has determined to take appropriate steps to reinforce and encourage
the continued attention and dedication of key management personnel to their
assigned duties in the face of a possible Change in Control.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained
herein, the Company and the Executive hereby agree as follows:
1. DEFINITIONS.
(a) “Affiliate”
shall mean any business entity controlling, controlled by or under common
control with the Company.
(b) “Base
Salary” shall mean the annual salary of the Executive at the time of termination
of his employment.
(c) “Beneficiary”
shall mean (i) the person or persons named by the Executive, by written notice
to the Company, to receive any compensation or benefit payable under this
Agreement or (ii) in the event of his death, if no such person is named and
survives the Executive, his estate.
(d) “Board”
shall mean the Board of Directors of the Company.
(e) “Cause”
shall mean any one of the following (all
as
reasonably determined by the Company):
(i) a
final
judgment of conviction of the Executive
for
a
felony entered by a trial court regardless of whether the Executive appeals
the
judgment; provided, however, that such felony is the type of felony that
causes
or threatens to cause material harm to the Company;
(ii) the
issuance of a final award, judgment or order by an administrative agency,
arbitrator, governmental body, governmentally-owned corporation, mediator,
self-regulatory organization or trial court that the Executive is prohibited
from performing any material duty as an employee of the Company or an Affiliate
for more than three (3) months, regardless of whether the Executive appeals
the
award, judgment or order;
(iii) a
final
judgment determining that the Executive committed, or a final conviction
of the
Executive for, a
violation of any federal, state or local law or regulation that adversely
affects the Company or an Affiliate; provided, however, that this provision
does
not apply to a violation subject only to a monetary fine or penalty of Three
Thousand Dollars
($3,000)
or
less;
(iv) the
neglect
by
the
Executive
on a
regular basis,
other
than by reason of his disability or legal incompetency, of
his
material
duties
as an
employee of the Company or an Affiliate;
(v) the
failure of the Executive, other than by reason of his disability or legal
incompetency, to carry out the lawful
business
directions of the Company or any officer of the Company who customarily gives
business directions to the Executive, and the failure continues for more
than
thirty (30) days after the Company or officer gives written notice to the
Executive specifying the nature of the failure and requesting the Executive
to
cure it;
(vi) any
act
or failure to act that
(A)
the
Executive intends to cause or to threaten to cause a material loss to the
business of the Company or an Affiliate
or
(B)
constitutes gross negligence and causes or threatens to cause a material
loss to
the business of the Company or an Affiliate;
(vii) appropriation
of the business opportunities of the Company or an Affiliate for the personal
benefit of the Executive or any person or entity in which
the
Executive has an interest;
(viii) intentional
interference with the business of the Company or an Affiliate that is a
violation of any law or provision of this Agreement, and that causes or
threatens to cause a material loss to the business of the Company or an
Affiliate;
(ix) falsification
of any information given to any director or officer of the Company or an
Affiliate; or
(x) any
act
by
the
Executive directed against the Company or an Affiliate of bribery, embezzlement,
fraud, misappropriation of assets or the receipt of kickbacks.
(f) “Change
in Control” shall mean the occurrence of any of the following:
(i) the
consummation of any
consolidation or merger of the Company pursuant to which less than
50%
of the
outstanding voting securities of the surviving or resulting company
is,
directly or indirectly, beneficially
owned
(within
the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of
1934
(the “Exchange Act”)) by
the
Company
or individuals
or entities which were stockholders of the Company prior to the consolidation
or
merger;
(ii) the
consummation of any
sale,
lease, exchange
or other
transfer (in one transaction or a series of related transactions) of all,
or
substantially all (as determined by a value of at least 50% of the fair market
value of all of the assets of the Company), of the assets of the Company
other
than any sale, lease, exchange
or other
transfer to any company in
which
the
Company or
individuals or entities which were stockholders of the Company,
directly or indirectly, beneficially
own within the meaning of Rule 13d-3 promulgated under the Exchange Act)
more
than 50%
of the
outstanding voting securities of such company after any such
transfer;
2
(iii) any
person (as such term is used in Section 13(d) of the Securities Exchange
Act of
1934, as from time to time amended (the “Exchange Act”)), other than
the
Company, a subsidiary or one or more employee benefit plans established by
the
Company for the benefit of employees of the Company or any subsidiary, shall
become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange
Act), whether directly, indirectly, of
35%
or more
of the outstanding common stock of the Company;
(iv) the
consummation
by any
entity, person or group (including any affiliate thereof, other than the
Company) of a tender offer or exchange offer pursuant
to which
the
offeror shall
become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange
Act), whether directly, indirectly, beneficially
or of record, of
50%
or
more of
the
outstanding voting securities of the Company; or
(v) a
change
in composition of the Board occurring within a rolling two-year period, as
a
result of which fewer than a majority of the directors are Incumbent Directors
(“Incumbent Directors” shall mean directors who either (x) are members of the
Board as of the date of this Agreement or (y) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority
of the
Incumbent Directors at the time of such election or nomination, but shall
not
include an individual not otherwise an Incumbent Director whose election
or
nomination is in connection with an actual or threatened proxy contest,
including but not limited to a consent solicitation, relating to the election
of
directors to the Board).
(g) “Disability”
shall mean the illness or other mental or physical disability of the Executive,
as determined by a physician mutually
acceptable
to the Company and the Executive, resulting in his inability to perform
substantially all the duties of his position for a period of six or more
consecutive months or an aggregate of six months in any 12-month
period.
(h) “Good
Reason” shall mean, without the Executive’s prior written consent or that is not
cured by the Company within thirty (30) days after its receipt of written
notice
of the Executive’s objection to the occurrence:
(i) assignment
to the Executive of
any
title,
position, duties or responsibilities that are significantly diminished when
compared with the title,
position,
duties or responsibilities of
the
Executive on the date of this Agreement;
(ii) reduction
in the
Executive’s
then
current Base Salary;
(iii) the
Company’s failure to pay the Executive any material amounts otherwise vested and
due him hereunder or under any plan, program or policy of the
Company;
or
3
(iv) the
Executive being forced to relocate to a principal place of employment which
is
more than fifty (50) miles from the current address of the Company as set
forth
in Section 5.
(i) “Exchange
Act” shall mean the Securities Exchange Act of 1934.
2. TERM
OF
AGREEMENT.
This
Agreement shall be effective immediately upon its execution by the Company
and
the Executive (the “Effective Date”) and shall remain in effect for
a
two-year period subject to the earlier
termination
of
the
Executive’s employment with the Company for
any
reason; provided,
however,
that
this Agreement shall remain in effect for
a
two-year
period commencing upon the (A) occurrence of any Change
in
Control
during
the
term
of
this Agreement or (B) termination of the Executive’s employment with the Company
in anticipation of a Change in Control.
3. ENTITLEMENT
UPON TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY THE EXECUTIVE FOR GOOD
REASON FOLLOWING,
OR IN
ANTICIPATION OF,
A CHANGE
IN CONTROL.
In
the
event of termination of the Executive’s employment within two years
following,
or in
anticipation of,
a Change
in Control (a) by the Company without Cause or (b) by the Executive for Good
Reason, he shall be entitled to the following:
(a) GENERAL
ENTITLEMENT: a prompt lump sum payment equal to:
(i) his
annual
Base
Salary through the date of termination;
(ii) payment
in lieu of any unused vacation, in accordance with the Company’s vacation policy
and applicable laws;
(iii) any
annual or discretionary bonus earned but not yet paid to him for any calendar
year prior to the year in which his termination occurs; and
(iv) reimbursement
of any reimbursable
business
expenses incurred by the Executive through the date of termination but not
yet
paid to him.
(b) CHANGE-IN-CONTROL
ENTITLEMENT:
(i) a
prompt
lump sum payment equal to 2
times
the sum of (A) his annual
Base
Salary, at the rate in effect immediately before such termination, and (B)
the
average of his annual bonuses (calculating,
for these purposes, the value of any bonuses paid in shares of common stock,
par
value $.001 per share, of the Company (the “Common Stock”) on the basis of the
closing sales price, regular way, of the Common Stock on the National
Association of Securities Dealers, Inc., Automated Quotation System (Nasdaq)
on
the date such payment is made) payable
with respect to
the
three calendar years prior to the year in which termination occurs
(or the
average of all annual bonuses
paid
to
the
Executive
if the
Executive has not been employed by the Company for each of the three calendar
years prior to the year
in
which
the
termination occurs);
4
(ii) continuing
coverage under the life, disability, accident
and
health insurance programs covering senior executives of the Company generally,
as from time to time in effect, for the two-year period immediately
following
such
termination; and
(iii) immediate
and unconditional vesting of any unvested stock options and stock grants
previously awarded to Executive and, for the one-year period following such
termination, the right to exercise any stock options held by
Executive.
(c) GOLDEN
PARACHUTE EXCISE TAX. The
Company, at its sole expense, shall cause its independent certified public
accountants (the “Accountants”) to promptly review all payments, distributions
and benefits that have been made to or provided to, and are to be made to
or
provided to, the
Executive
under this Agreement and any other agreement and plan, to determine the
applicability of Code Section 4999. If the Accountants determine that (i)
any
such payments, distributions or benefits (the “Original Payment(s)”) are subject
to excise tax under Code Section 4999, and
(ii)
the amount of the Original Payment(s), reduced by all federal, state and
local
taxes applicable thereto, including the excise tax imposed pursuant to Code
Section 4999, is less than the amount Executive would receive, after taxes,
if
he were paid only three times his Base Amount (as such term is defined in
Code
Section 280(b)(3)) less $1.00, then the payments to be made to the Executive
under this Agreement which are contingent on a Change of Control shall be
reduced to an amount which, when added to the aggregate of all other payments
to
the Executive which are contingent on a Change of Control, will make the
total
amount of such payments equal to three times his Base Amount less $1.00 (the
“Adjusted Payment(s)”). To facilitate the calculation of the applicable excise
tax, the
Executive
shall provide the Accountants with copies of the
Executive’s
Forms W-2 for the tax years the Accountants determine appropriate for their
use
in determining the application of Code Section 4999 and calculating any
reduction under this Section 3(c). The Accountants shall perform the
calculations in conformance with the provisions of this Section 3(c), and
shall
provide
the
Executive with a copy of their calculations.
(d) SECTION
409A. If and to the extent necessary to avoid the imposition of accelerated
or
additional taxes under Section 409A of the Code, any payments to Executive
under
this Agreement that would have to be paid during the six month period following
the date of termination shall be paid in a lump sum on the date that is six
months following the date of termination.
4. NO
MITIGATION
The
Company agrees that if the Executive’s employment with the Company terminates,
he shall not be obligated to seek other employment or to attempt to reduce
any
amount payable to him under this Agreement. Further, no amount of any payment
hereunder shall be reduced by any compensation earned by the Executive as
the
result of employment by a subsequent employer or otherwise.
5
5. NOTICES.
Any
notice or other communication required or permitted under this Agreement
shall
be in writing and shall be deemed to have been duly given when delivered
by
hand, electronic transmission (with a copy following by hand or by overnight
courier), by registered or certified mail, postage prepaid, return receipt
requested or by overnight courier addressed to the other party. All notices
shall be addressed as follows, or to such other address or addresses as may
be
substituted by notice in writing:
To
the
Company:
Xxx
Xxxxxxxxxx Xxx Xxxx
Xxxxxxxxx,
Xxx Xxxxxx 00000
Fax:
(000) 000-0000
To
the
Executive:
At
his
residence and facsimile address most recently filed with the
Company
6. GENERAL
PROVISIONS.
(a) AMENDMENTS.
No
provision of this Agreement may be amended, modified or waived unless such
amendment, modification or waiver shall be agreed to in writing and signed
by
the Executive and by a duly authorized officer of the Company.
(b) SEVERABILITY.
If any
provision of this Agreement shall be determined to be invalid or unenforceable
by a court of competent jurisdiction, the remaining provisions of this Agreement
shall be unaffected thereby and shall remain in full force and effect to
the
fullest extent permitted by law.
(c) PARTIAL
INVALIDITY.
If any
provision of this Agreement is held by a court of competent jurisdiction
to be
invalid, void or unenforceable, the remaining provisions shall nevertheless
continue in full force without being impaired or invalidated in any
way.
(d) GOVERNING
LAW/VENUE.
This
Agreement shall be construed, interpreted and governed in accordance with
the
laws of the State of New York,
without
reference to rules relating to conflicts of law. The state and federal courts
in
the State of New York
shall
have exclusive jurisdiction over any claims arising under this
Agreement.
(e) ENTIRE
AGREEMENT;
DEEMED
OPTION AGREEMENT. This Agreement contains the sole and entire agreement between
the parties relating to the subject matter hereof. This Agreement shall be
deemed an “Option Agreement” for purposes of Section 6.5 of the Company’s
Amended and Restated 2000 Stock Option Plan.
(f) SURVIVAL.
Notwithstanding the termination of the term of this Agreement, the duties
and
obligations of the Company, if any, following the termination of the Executive’s
employment following a Change in Control shall survive
indefinitely.
6
(g) WITHHOLDING.
The
Company may deduct and withhold from any payments hereunder the amount that
the
Company, in its reasonable judgment, is required to deduct and withhold for
any
income, employment or excise taxes, whether federal, state or
local.
(h) NO
OTHER
COMPENSATION; EMPLOYEE AT WILL.
This
Agreement shall not be construed as creating an express or implied contract
of
employment and, except as otherwise agreed in writing between the Executive
and
the Company, the Executive is and shall remain an “employee at will” and shall
not have any right to be retained in the employ of the Company.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first above written.
|
By:
/s/H.
Xxxxx Xxxx
Name:
H.
Xxxxx Xxxx
Title:
CEO
|
|
|
/s/Xxxx
Xxxxxx
Name:
Xxxx Xxxxxx
|
7
Other
Change-In-Control Agreements
Date
of
execution: September 25, 2006
Named
Officer
Xxxx
Xxxxxxxxxx
Xxxx
Xxxxxx
Xxxx
Xxxxxx
Xxx
Xxxxxxx
Xxxxxx
Xxxxxx
