RETENTION AGREEMENT
Exhibit
10.3
This
Retention Agreement (this "Agreement") is dated this 28th day of September,
2007
by Millennium Cell Inc., a Delaware corporation (the "Company") and Xxxx X.
Xxxxxx (the "Executive").
WHEREAS,
the Executive is the Chief Financial Officer of the Company, which is a position
of substantial authority and responsibility;
WHEREAS,
the Executive has demonstrated extensive knowledge, skill and expertise in
the
operation of the Company's business and possesses a great deal of information
in
connection therewith;
WHEREAS,
the Company desires that Executive remain an employee of the Company;
and
WHEREAS,
the Company is willing to compensate the Executive, in addition to his normal
salary and benefits, for his agreement to remain an employee of the Company
upon
the terms and conditions hereinafter set forth.
NOW,
THEREFORE, in consideration of the compensation paid hereunder, the mutual
covenants, agreements and promises hereinafter set forth, and for other good
and
valuable consideration, the receipt and sufficiency of which are hereby agreed
and acknowledged, the parties hereto agree as follows:
1. Retention.
The
Executive hereby agrees to continue to perform his duties and responsibilities
as Chief Financial Officer of the Company in good faith and in compliance with
all applicable laws, rules and regulations.
2. Compensation.
(a) In
exchange for his agreement under paragraph 1 above, the Company will pay the
Executive a lump sum cash payment in the amount of $163,400 (the "Retention
Payment"), which shall be payable in full on the date hereof. Notwithstanding
the Retention Payment, the Executive shall continue to be entitled to any other
compensation or benefits that were previously available to him in connection
with his employment with the Company and shall be included in any future Company
executive retention programs; provided, however, that any payments hereunder
shall be credited against any future payments under any such executive retention
programs.
(b) If
at any
time on or prior to January 31, 2008: (i) the Executive voluntarily terminates
his employment with the Company other than for Good Reason (as hereinafter
defined); or (ii) the Company terminates the Executive's employment for Cause
(as hereinafter defined), the Executive shall immediately refund the entire
amount of the Retention Payment to the Company.
(c) If
at any
time on or after February 1, 2008 and on or before May 31, 2008: (i) the
Executive voluntarily terminates his employment with the Company other than
for
Good Reason; or (ii) the Company terminates the Executive's employment for
Cause, the Executive shall immediately refund fifty percent (50%) of the
Retention Payment to the Company.
(d) If
at any
time prior to June 1, 2008: (i) the Company terminates the Executive's
employment without Cause; or (ii) the Executive terminates his employment with
the Company for Good Reason, the Company will pay the Executive a lump sum
cash
payment in the amount of $80,500. The Executive's right to any payment under
this Section 2(d) shall be conditioned upon his execution of a general release
of known and unknown claims (the “Release”), in such form as shall be prescribed
by the Company, and which shall be provided to the Executive within ten (10)
business days after the date of any such termination of employment. The Release
shall also contain a release by the Company of any known claims against the
Executive. Subject to the provisions of Section 4 below, payment to the
Executive pursuant to this Section 2(d) shall be made within ten (10) business
days after the execution of the Release by the Executive. Nothing in this
Agreement shall limit the scope or time of applicability of the Release once
it
is executed and not timely revoked.
(e) For
purposes of this Agreement, "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 annual 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
(iv) the
Executive being forced to relocate to a principal place of employment that
is
more than fifty (50) miles from the current address of the Company (i.e., Xxx
Xxxxxxxxxx Xxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx).
(f) For
purposes of this Agreement, "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
thereof 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 thereof; provided,
however,
that
this provision shall 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 thereof; (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
thereof
or (B)
constitutes gross negligence and causes or threatens to cause a material loss
to
the business of the Company or an affiliate thereof; (vii)
appropriation of the business opportunities of the Company or an affiliate
thereof 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 thereof 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 thereof; (ix) falsification
of any information given to any director or officer of the Company or an
affiliate thereof; or (x)
any act
by
the
Executive directed against the Company or an affiliate thereof of bribery,
embezzlement, fraud, misappropriation of assets or the receipt of
kickbacks.
2
3. Executive's
Acknowledgement.
The
Executive acknowledges that the duties and obligations of the Company to the
Executive under this Agreement are in consideration of the Executive's past
services to the Company, the Executive's continued employment with the Company,
and the Executive's execution of the release described in Section 2(d).
4. Withholding
and Special Terms Relating to Payments and Benefits Subject to IRC Section
409A.
The
Company shall be entitled to withhold from the payments due hereunder any
required federal, state or local withholding or other taxes. To the extent
that
any amounts payable to the Executive under Section 2(d) hereof are subject
to
Section 409A(a)(2)(B) of the Internal Revenue Code of 1986, as amended, any
requirement under Section 2(d) that such amounts be paid within ten (10)
business days after the execution by the Executive of the Release shall not
apply and instead such amounts shall be paid in a lump sum as of the date that
is six (6) months after the date of a termination described in Section
2(d).
5. Employment
Status.
This
Agreement does not constitute a contract of employment or impose on the
Executive any obligation to remain as an employee, or impose on the Company
any
obligation to: (a) retain the Executive as an employee; (b) change the status
of
the Executive as an at-will employee; or (c) change the Company's policies
regarding termination of employment.
6. Invalid
or Unenforceable Provisions.
In the
event that any part of this Agreement shall be held to be unenforceable or
invalid, the remaining parts hereof shall nevertheless continue to be valid
and
enforceable as though the invalid portions were not a part hereof.
7. Notices.
Any
notices provided hereunder must be in writing and such notices or any other
written communication shall be deemed effective upon the earlier of personal
delivery (including personal delivery by facsimile) or the third day after
mailing by first class mail, to the Company at its primary office location and
to the Executive at the Executive's address as listed in the Company's payroll
records. Any payments made by the Company to the Executive under the terms
of
this Agreement shall be delivered to the Executive either in person or at such
address as listed in the Company's payroll records.
8. Miscellaneous.
(a) No
change or modification of this Agreement shall be valid unless the same is
in
writing and signed by each of the parties hereto.
(b) No
waiver
of any provision of this Agreement shall be valid unless in writing and signed
by the party against whom it is sought to be enforced. The failure of any party
at any time to insist upon strict performance of any condition, promise,
agreement or understanding set forth herein shall not be construed as a waiver
or relinquishment of the right to insist upon strict performance of the same
or
other conditions, promises, agreements or understandings at a future
time.
3
(c) This
Agreement is intended to bind and inure to the benefit of and be enforceable
by
the Executive and the Company, and their respective successors, assigns, heirs,
executors and administrators, except that the Executive may not delegate any
of
the Executive's duties hereunder and may not assign any of the Executive's
rights hereunder without the written consent of the Company. Any successor
to
the Company (whether direct or indirect and whether by purchase, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets shall assume the Company's obligations under
this Agreement in the same manner and to the same extent as the Company would
be
required to perform such obligations in the absence of a succession. For all
purposes under this Agreement, the term "Company" shall include any successor
to
the Company's business and/or assets, whether or not such successor executes
and
delivers an assumption agreement referred to in the preceding sentence or
becomes bound by the terms of this Agreement by operation of law or
otherwise.
(d) This
Agreement shall be construed and enforced in accordance with the laws of the
State of New Jersey, without regard to such its conflict of laws
principles.
(e) The
headings and other captions in this Agreement are for convenience and reference
only and shall not be used in interpreting, construing or enforcing any of
the
provisions of this Agreement.
(f) This
Agreement contains all of the promises, agreements, conditions, understandings,
warranties and representations among the parties hereto with respect to the
subject matter hereof, and there are no promises, agreements, conditions,
understandings, warranties or representations, oral or written, express or
implied, between them with respect to such matters other than as set forth
herein. Any and all prior agreements among the parties hereto with respect
to
such matters are hereby revoked and are deemed null and void. This Agreement
is,
and is intended by the parties to be, an integration of any and all prior
agreements or understandings, oral or written, with respect to the subject
matter hereof.
(g) This
Agreement may be executed in counterparts, each of which shall be deemed an
original and all of which, taken together, shall constitute one and the same
instrument. Any such counterpart may be executed by facsimile signature with
only verbal confirmation.
[Remainder
of this page left intentionally blank]
4
IN
WITNESS WHEREOF, the parties have executed this Retention Agreement as of the
day and year first written above.
| MILLENNIUM CELL INC. | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxx | |
|
Name: Xxxxxx X. Xxxxxx |
||
| Title: Vice Precedent of Administration | ||
| |
|
|
| /s/ Xxxx X. Xxxxxx | ||
|
Xxxx X. Xxxxxx |
||
5
