July 9, 2008
| July 9, 2008 |
Xxxxxxx
Xxxxxx
P.O.
Box
8425
Horseshoe
Bay, TX 78657-8425
Dear
Xxxx:
Pursuant
to a resolution by the HydroGen Corporation Board of Directors adopted on
December 8, 2007, this letter (“Change of Control Amendment”) amends the
agreement between you and HydroGen, L.L.C. (the “Company”) described in the
letter to you from Xxx Xxxxxx dated April 7, 2005, as amended (the “Letter
Agreement”), as follows:
(a) If
within
six (6) months prior to (provided that there is evidence of discussions of
a
potential change of control within this six month period of time) or within
one
(1) year following a Change of Control, your employment under the Letter
Agreement is terminated without Cause or for Good Reason, the Letter Agreement
is not renewed or you receive written notice that the Letter Agreement will
not
be renewed: (i) HydroGen, LLC (the “Company”) shall, in addition to any
payments of salary or lump sum salary due under your Letter Agreement in
connection with your cessation of employment, provide you with a lump sum
payment equal to the amount of your then current annual base pay; (ii) the
Company shall, in lieu of any bonus due under your Letter Agreement in
connection with your cessation of employment, pay you an amount representing
the
annual bonus for the year of termination based on full achievement of all
personal targets, plus the actual achievement of Company targets, as well as
pay
any prior year's bonus that is earned and unpaid as of the date of termination;
and (iii) notwithstanding any provision in any applicable stock incentive
plan document or award agreement, each stock option, restricted stock or other
equity or equity-based award granted by the Company or HydroGen Corporation
(the
“Corporation”), to the extent such award is outstanding and unvested as of the
date of such Change in Control, shall automatically become fully vested as
of
such Change of Control and shall become exercisable by you in accordance with
the terms of the agreement or agreements under which such options were
granted.
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Xxxxxx
July
9, 2008
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(b) A
“Change
of Control” shall mean the occurrence of any of the following
events:
(i) any
reorganization, consolidation or merger of the Company or other similar
transaction that results in at least 50% of the combined voting power of the
outstanding securities of the continuing, surviving or other entity not directly
or indirectly owned by holders of at least 50% of the combined voting power
of
the Company’s securities outstanding immediately prior to such reorganization,
consolidation, merger or other similar transaction; provided, however, that
for
purposes of this subsection (i) a Change of Control shall not be deemed to
have
occurred if such Change of Control results from a transaction solely among
the
Corporation, Company, or any other wholly-owned subsidiary of the Corporation;
(ii) any
reorganization, consolidation or merger of the Corporation or other similar
transaction that results in at least 50% of the combined voting power of the
outstanding securities of the continuing, surviving or other entity is not
directly or indirectly owned by holders of at least 50% of the combined voting
power of the Corporation’s securities outstanding immediately prior to such
reorganization, consolidation, merger or other similar transaction;
(iii) any
sale,
lease, exchange or transfer (in one transaction or in a series of related
transactions) of all or substantially all of the assets of the Company;
(iv) approval
by the member or members of the Company of any plan or proposal for the
liquidation or dissolution of the Company, unless such plan or proposal is
abandoned within 60 days following such approval;
(v) any
“Person” (as such term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934 (the “Exchange Act”) shall become the beneficial owner
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
securities of the Corporation representing more than 50% of the combined voting
power of the Corporation’s then outstanding securities having the right to vote
in the election of directors; or
(vi) any
“Person” (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act), other than the Corporation, shall become the beneficial owner (within
the
meaning of Rule 13d-3 promulgated under the Exchange Act) of securities of
the
Company representing more than 50% of the combined voting power of the Company’s
then outstanding securities.
(c) For
purposes of determining whether a termination is for Cause or Good Reason in
the
event of a Change of Control, the definitions of these terms in the Letter
Agreement shall apply, except that the word “material” shall be removed in each
instance from the definition of Good Reason.
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July
9, 2008
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(d) If,
at
the time the Change of Control occurs, Section 280G(b) of the Internal Revenue
Code of 1986, as amended (the “Code”) is applicable to you, notwithstanding any
other provision of this Change of Control Amendment, if the aggregate present
value of the “parachute payments” to you, determined under Section 280G(b) is at
least three times the “base amount” determined under such Section 280G, then the
compensation otherwise payable under this Change of Control Amendment (and
any
other amount payable hereunder or any other agreement, plan, program, policy
or
obligation of the Company, Corporation or any other affiliate thereof) shall
be
reduced so that the aggregate present value of the parachute payments to you
determined under Section 280G, does not exceed 2.99 times the base amount.
In no
event, however, shall any benefit provided hereunder be reduced to the extent
such benefit is specifically excluded by Section 280G(b) of the Code as a
“parachute payment” or as an “excess parachute payment.” Any decisions regarding
the requirement or implementation of such reductions shall be made by the tax
counsel and accounting firm retained by the Company at the time this Change
of
Control Amendment is entered into.
* * *
If
you
agree to the terms of this Change of Control Amendment, please sign and date
this letter and return it to me.
/s/
Xxxx X.
Xxxxx
Xxxx
X.
Xxxxx
Chief
Executive Officer
HydroGen,
L.L.C.
Xxxxxx
and Accepted, This 9th day of July 2008
| /s/ Xxxx Xxxxxx |
Executive
