OFFICER'S EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of June 11, 2001, between H Power Corp.,
a Delaware corporation, having its principal place of business at 0000 Xxxxx
Xxxxxx, Xxxxxxx, Xxx Xxxxxx 00000 (hereinafter referred to as the "Company"),
and Xxxxxx Xxxxxx Xxxx II, residing at 0000 Xxxx Xxxx Xxxxx, Xxxxxx, XX 00000
(hereinafter referred to as "Executive"). (The Company and Executive are
collectively referred to as the "Parties.")
1. TERM OF EMPLOYMENT
Subject to the provisions of this Agreement, the Company hereby agrees
to employ Executive, and Executive hereby agrees to be employed by the Company,
for a term commencing June 11, 2001 and ending June 11, 2004. This contract will
renew automatically in one year increments unless written notice is given by
either party of an intent to terminate the contract within six months prior to
the expiration date then in effect for the contract.
2. TITLES AND DUTIES
Subject at all times to the supervision and direction of the Chief
Executive Officer of the Company (the "CEO"), Executive shall be employed as
Chief Operating Officer of the Company and shall have such duties, authority,
rights and obligations as are usually inherent in such position and as the CEO
may reasonably require. In general, Executive shall use his very best efforts to
promote the business of the Company.
In the event that Executive is elected or appointed as a Director of
the Company or as a Director or an Officer of the Company's affiliated or
subsidiary companies, whether now existing or hereafter acquired, Executive
consents to serve in such capacity or capacities as the Board of Directors of
the Company (the "Board") may determine, without additional compensation;
provided that Executive understands and acknowledges that the Company is under
no obligation to elect Executive to the Board.
Executive shall primarily render his services at the Company's Monroe,
North Carolina facility located at 0000 Xxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxx
Xxxxxxxx 00000, or at such other place or places as the CEO shall designate, it
being understood that Executive may be required from time to time to render
services at the Company's principal place of business or Canadian facility.
3. EXCLUSIVE EMPLOYMENT
Executive shall devote substantially all his business time, ability and
attention to the business of the Company. Executive shall not directly or
indirectly render any services of a business, commercial, or professional
nature, to any other person or organization, whether for
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compensation or otherwise, that is in competition directly or indirectly with
the business of the Company.
(a) Executive shall refrain from any act which involves a conflict
of interest between the exercise of his position in the
Company and his personal interest.
(b) Executive shall refrain from exploiting any business
opportunity of the Company for the achievement of an advantage
for himself or for another.
(c) Executive shall disclose to the Company any information and
deliver to it any document that pertains to its affairs and
which came into his possession by virtue of his position with
the Company.
4. COMPENSATION & BENEFITS
For the full and faithful performance of his services as set forth
hereunder, Executive shall be entitled to the following:
(a) Base Salary. During the term of this Agreement, Executive
shall be paid an annual salary of Two Hundred Thousand Dollars
($200,000), payable in bi-weekly installments, subject to all
applicable withholding, social security and other payroll
taxes.
(b) Salary Adjustments. The rate of salary shall be reviewed by
the Board not less often than annually and may be increased
(but not decreased) from time to time in such amounts as the
Board in its discretion may provide; it being understood,
however, that the Board shall have no obligation to increase
said salary.
(c) Benefit Programs. Executive shall be entitled to participate
in all employee benefit programs of the Company available to
senior executives of the Company, as such programs may be in
effect from time to time, including, without limitation:
pension or other retirement plans; profit sharing plans; group
life insurance; accidental death and dismemberment insurance;
hospitalization, surgical and major medical coverage; sick
leave, vacation and holiday benefits; and other employee
benefit programs sponsored by the Company; provided, however,
that there is no obligation on the part of the Company to
provide these benefits to senior executives. Such programs may
be amended or terminated if done so for all or a material
portion of the Company's executives.
(d) 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.
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(e) Automobile. Executive shall be entitled to an automobile
allowance of ten thousand dollars ($10,000) per annum.
(f) Bonuses. In addition to all other compensation, Executive
shall be entitled to receive such bonuses as the Board shall
determine, in its sole discretion, from time to time; it being
understood that the Board shall have no obligation to award
such bonuses.
(g) Stock Options. Executive shall be granted ten-year
non-qualified stock options to purchase 250,000 shares of the
Company's Common Stock, par value $.001 per share, at a price
equal to the fair market value of the Common Stock on the
first day of Executive's employment, pursuant to the H Power
Corp. 2000 Stock Option Plan. The options may be exercised as
follows: one-third as of June 11, 2002, one-third as of June
11, 2003, and the final third as of June 11, 2004.
(h) Relocation Expenses. Consistent with established policies of
the Company as in effect from time to time for senior
executives, the Company shall pay to or reimburse Executive
for reasonable expenses incurred by Executive relating to his
relocation to Monroe, North Carolina or within 50 miles
thereof; provided that Executive timely submits reasonable
documentation with respect to such expenses.
(i) Social Club Membership Dues. Executive shall be entitled to
receive reimbursement for dues payable by Executive for
membership in a country club located in Monroe, North Carolina
or within 50 miles thereof.
(j) Vacation. Executive will be entitled to three weeks vacation
during the first five years of service, four weeks during the
second five years of service and five weeks vacation for
service in excess of 10 years.
5. TERMINATION OF EMPLOYMENT
(a) For Cause. The Company shall have the right to terminate this
Agreement immediately after written notification to Executive
specifying the basis for the termination, upon the occurrence
of any one of the following events which shall constitute
"cause": the willful failure by Executive to abide by the
terms of this Agreement; or fraud, misappropriation,
embezzlement, theft, dishonesty or similar actions by
Executive; or the habitual or willful neglect by Executive of
his employment duties; or the habitual or willful disregard of
mandates of the Board or the Chief Executive Officer of the
Company; or the willful performance of an unauthorized act
outside the scope of his office; or an act of moral turpitude
by Executive which tends to reflect unfavorably on the
Company.
In the event that the Company terminates Executive's
employment for cause, Executive shall be entitled only to the
unpaid bi-weekly installments of his Base Salary up to and
including the date of termination and to his approved Business
Expense Reimbursement not paid prior to termination.
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(b) In the Event of Death. This employment agreement shall
terminate in the event of Executive's death, in which case
Executive's estate shall be entitled to the bi-weekly
installments of Executive's Base Salary for a period of six
months following the date of death and Executive's Business
Expense Reimbursement not paid prior to his death. 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.
(c) In the Event of Disability. The Company shall have the right
to terminate this Agreement in the event of Executive's
inability to substantially perform the essential functions of
his job duties hereunder for a period of three months out of
any six month period during his employment, whether such
inability results from illness, accident or otherwise.
In the event that the Company terminates Executive's
employment during the term of this Agreement as a result of
Executive's Disability, Executive shall be entitled to the
bi-weekly installments of his Base Salary for a period of six
months following the date of termination; Executive's Business
Expense Reimbursement not paid prior to termination; and the
continuation of Executive's health and welfare benefits
through the end of the terms of this Agreement. 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.
(d) 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, then the Company
shall pay Executive one-half his annual Base Salary at his
then current rate and one-half of the latest annual incentive
compensation payment calculated by taking the highest of the
latest two incentive payments earned and paid divided by two,
such payment to be made in one lump sum payment at the time of
termination. Such payments shall be in lieu of any and all
other payments due and owing to Executive under the terms of
this 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").
(ii) Executive may terminate his employment hereunder
within one year following a Change of Control for Good Reason;
provided that, (x) the Company has been given notice setting
forth in reasonable detail the nature of the Good Reason and
(y) a period of at least thirty (30) days in which the Company
may remedy the circumstances giving rise to such Good Reason
has expired, and
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the Company fails to so remedy such circumstances. For
purposes of this Agreement, "Good Reason" shall mean:
(A) the assignment to Executive of any
duties materially inconsistent with Executive's
position, duties and responsibilities as set forth in
Section 2 of this Agreement or any action by the
Company which results in a material diminution in
Executive's position, authority, duties or
responsibilities, excluding for this purpose any
isolated or inadvertent action by the Company which
is remedied by the Company promptly after receipt of
notice thereof from the Executive; or
(B) any failure by the Company to comply in
all material respects with the provisions of Section
4 of this Agreement regarding Executive's
compensation, benefits, vacation, and expenses other
than an isolated or inadvertent action by the Company
which is remedied by the Company promptly after
receipt of notice thereof from the Executive.
In the event that Executive terminates his employment for Good
Reason following a Change in Control, then the Company shall
pay Executive the Severance Package.
For purposes of this provision, a "Change in Control"
shall be deemed to have occurred: if 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")), other than 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?%) 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, the 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 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.
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6. UNAUTHORIZED DISCLOSURE
During the period of his employment and for a period of three (3) years
thereafter, Executive shall not, without the prior written consent of the Board,
disclose to any person other than as required by law or court order (10 days'
prior written notice having been given to the Company in order to formulate a
response), or other than to an employee of the Company, or to a person to whom
disclosure is necessary or appropriate in connection with the performance by
Executive of his duties as an executive of the Company, any confidential
information obtained by him while in the employ of the Company with respect to
any of the Company's products, services, customers, suppliers, marketing
techniques, patents, proprietary technologies, trade secrets, methods, or future
plans, the disclosure of which will be damaging to the Company; provided,
however, that confidential information shall not include any information known
generally to the public (other than as a result of unauthorized disclosure by
Executive).
7. RESTRICTIVE COVENANT
During the period of his employment and for a period of two (2) years
thereafter, Executive shall not enter into competition with the Company or any
affiliate of the Company without the prior consent of the Board. For purpose of
this paragraph 7, competition shall mean the association of Executive with a
company, corporation, firm or partnership, whether as an employee, consultant,
partner, principal, agent, representative or shareholder, directly or indirectly
(except as a holder, directly or indirectly, of less than Five (5%) Percent of
the outstanding securities of any corporation whose stock is listed for trading
on any securities exchange or are traded in the over-the-counter market) which
competes, directly or indirectly, with the Company in any business in which the
Company is presently engaged or will be engaged upon termination of Executive's
employment, unless such association shall be for purposes and shall impose
duties upon Executive that do not directly relate to the Company's business
activities. If a court of competent jurisdiction should determine that the
period, scope, or geographical area of the restrictions set forth in this
paragraph 7 are unreasonable under the circumstances then existing, the Parties
agree that the period, scope, or geographical area that is reasonable under such
circumstances shall be substituted for the stated period, scope, or geographical
area.
During the term of his employment and for a period of two (2) years
thereafter, Executive shall neither solicit, induce and/or suggest to any of the
employees, consultants to, or other persons having a substantial contractual
relation with, the Company to leave such employ, cease counseling or terminate
such contractual relationship with the Company nor to join Executive as a
partner, co-venturer, employee, investor, or otherwise, in any substantial
business activity whatsoever.
Executive shall at no time take any action or make any statement that
could discredit the reputation of the Company or its personnel, products or
services.
8. INVENTIONS OR DISCOVERIES
Executive shall fully and promptly disclose to the Company any and all
improvements, discoveries, and inventions made or conceived by him, whether or
not patentable, whether or not during the working hours of his employment or
with the use of the Company's facilities,
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materials or personnel, and whether solely or jointly with others, during his
employment by the Company, which result from or relate to the business of the
Company in any way.
Any and all such improvements, discoveries, and inventions are and
shall remain the sole and exclusive property of the Company without royalty or
payment of any further consideration to Executive, on his own behalf and on the
behalf of his heirs, assigns, executors, administrators, and any other legal
representative. Executive hereby assigns and transfers all of his right, title
and interest in and to all such improvements, discoveries, and inventions to the
Company, including, but not limited to, any applications for United States
and/or foreign letter patents and any United States and/or foreign patents that
shall be granted. Executive shall apply, at the Company's request and expense,
for United States and foreign letters patent, whether in his name or otherwise
as the Company shall desire, and shall execute and deliver to the Company
without charge to the Company, but at its expense, such written instruments and
shall do such other acts as may be necessary or appropriate in the opinion of
the Company to obtain and maintain United States and/or foreign letters patent
or other proprietary rights and shall vest the entire right entitled thereto in
the Company.
9. EQUITABLE RELIEF
Executive hereby represents that the services to be performed by him
are of a special, unique, unusual, extraordinary and intellectual character
which gives them a peculiar value, the loss of which cannot be reasonably or
adequately compensated in damages in an action at law and that any violation of
this Agreement will cause the Company immediate and irreparable harm. Executive
therefore expressly agrees that, in addition to any other rights or remedies
which the Company may possess, the Company shall be entitled to injunctive and
other equitable relief to prevent a breach of this contract by the Company.
10. INDEMNIFICATION
Executive shall indemnify and save harmless the Company from all
liability from loss, damage or injury to persons or property resulting from the
gross negligence or willful misconduct of Executive.
11. ASSIGNABILITY
No rights or obligations under this Agreement may be assigned or
transferred by Executive except:
(a) Executive's rights to compensation and benefits to be paid
hereunder in the event of death shall, in the event of death,
pass to his estate, or to his designated beneficiary and may
be transferred by will or operation of law, and
(b) Executive's rights under the Company's plans, programs and
policies may be assigned or transferred in accordance with the
terms of such plans, programs and policies.
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The rights and obligations of the Company under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of
the Company. The Company shall have the right to assign this Agreement to a
successor in the event of a merger, consolidation, sale of a substantial portion
of its assets or a similar transaction, or to a wholly-owned subsidiary.
12. GOVERNING LAW
This Agreement shall be governed by the laws of the State of New Jersey
without reference to the principles of conflict of laws.
13. ENTIRE AGREEMENT
Except as otherwise specifically provided herein, this Agreement
contains all the legally binding understandings and representations between the
Company and Executive pertaining to the subject matter hereof and supersedes all
undertakings and agreements, if any, whether oral or in writing, previously
entered into by the Company and Executive with respect to such subject matter.
14. AMENDMENT OR MODIFICATION; WAIVER
No provision of this Agreement may be amended or waived unless such
amendment or waiver is approved by the Board and is signed by Executive and by a
duly authorized officer of the Company. Except as otherwise specifically
provided in this Agreement, no waiver by the Company or Executive of any breach
by the other of any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of a similar or dissimilar provision
or condition at the same or any prior or subsequent time.
15. NOTICES
Any notice required or permitted to be given under this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
or sent by certified or registered mail, postage prepaid, return receipt
requested, duly addressed to the party concerned at the address indicated below
or to such changed address as such party may subsequently give notice of:
If to H Power: H Power Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attn.: Secretary
With a copy to: Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
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Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
If to Executive: Xxxxxx Xxxxxx Xxxx II
0000 Xxxx Xxxx Xxxxx
Xxxxxx, XX 00000
16. SEVERABILITY
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions or portions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
17. SURVIVORSHIP
To the extent contemplated by this Agreement, the respective rights and
obligations of the Parties hereunder shall survive any termination of this
Agreement to the extent necessary to the intended preservation of such rights
and obligations.
18. REPRESENTATIONS
(a) By the Executive. Executive represents and warrants that the
performance of his duties under this Agreement will not
violate any agreement between him and any other person, firm
or organization.
(b) By the Company. The Company represents and warrants that it is
fully authorized and empowered to enter into this Agreement.
19. REFERENCES
In the event of Executive's death or a judicial determination of his
incompetence, reference in this Agreement to Executive will be deemed, where
appropriate, to refer to his legal representative or, where appropriate, to his
beneficiary or beneficiaries.
Headings to the sections in this agreement are intended solely for
convenience and no provision of this Agreement shall be construed by reference
to any heading.
20. MUTUAL INTENT
The language used in this Agreement is the language chosen by the
Parties to express their mutual intent. The Parties agree that in the event that
any language, section, clause, phrase
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or word used in this Agreement is determined to be ambiguous, no presumption
shall arise against or in favor of either party and that no rule of strict
construction shall be applied against either party.
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IN WITNESS WHEREOF, Executive and the Company have caused this
Agreement to be executed as of the day and year first above written.
EXECUTIVE H POWER CORP.
/s/ Xxxxxx Xxxxxx Xxxx II By: /s/ Xxxxxxx X. Xxxx
--------------------------------- ------------------------------------
Xxxxxx Xxxxxx Xxxx II Xxxxxxx X. Xxxx
Chief Financial Officer
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