EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made and entered into as of the 23 day of March, 1999
between EVERCEL, INC., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, an individual with a current mailing address at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (the "the Employee"). Unless the context
otherwise requires, the term "Company", shall include the Company and each of
its subsidiaries.
W I T N E S E T H
WHEREAS, the Company desires to employ the Employee as its President
and Chief Executive Officer and the Employee desires to be employed in such
capacities in accordance with the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the covenants, conditions,
undertakings and premises contained herein, the sufficiency which is hereby
acknowledged, the Company and the Employee agree follows:
ARTICLE 1
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EMPLOYMENT AND DUTIES
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1.1 EMPLOYMENT; DUTIES
Subject to the terms and conditions set forth herein, commencing April 19, 1999
(the "Commencement Date") the Company agrees to employ the Employee and the
Employee agrees to be employed as President and Chief Executive Officer of the
Company. In such position, the Employee shall perform such duties as are or may
be assigned to the Employee by the Board of Directors of the Company (the "Board
of Directors") from time to time. In connection therewith, the Employee shall
report to and be subject to the supervision of the Executive Committee of the
Board of Directors.
1.2 FULL TIME
The Employee shall devote his full working time, attention, energies, skills and
best efforts exclusively to the performance of his duties hereunder. The
Employee shall not during the term of this Agreement engage in any other
business activity whether or not such activity is pursued for gain, profit or
other pecuniary advantage, except that the Employee, on his own time, (a) may
manage his own investments, and those of his immediate family, and (b) may serve
as a member of the board of directors of other corporations subject to the
restrictions set forth in Section 5.1, so long as such activity (as described in
either clause (a) or (b) above), does not, in the reasonable judgment of the
Company's Board of Directors, adversely affect the performance of his duties
hereunder.
1.3 BOARD MEMBERSHIP
The Employee, effective upon the Commencement Date, shall become a member of the
Board of Directors and its Executive Committee. Thereafter, for so long as the
Employee is serving as Chief Executive Officer of the Company, the Company will
nominate the Employee for re-election as a management nominee of the Board of
Directors and use its reasonable best efforts to cause the Employee to be so
re-elected and, if so elected, to appoint the Employee as a member of the
Executive Committee of the Board of Directors. If at any time the Employee
ceases to serve as President and Chief Executive Officer of the Company, if the
Board of Directors so requests, the Employee shall immediately tender his
resignation from the Board of Directors and shall automatically be deemed to
have so resigned whether or not such resignation is tendered.
ARTICLE 2
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2.1 TERM
The term of the Employee's employment by the Company hereunder shall commence on
the Commencement Date and, except as otherwise provided in this Agreement with
respect to earlier termination, shall continue until terminated by either party
pursuant to Article 7.
ARTICLE 3
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COMPENSATION
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3.1 BASE SALARY
For all service to be rendered by the Employee under this Agreement, including
services as an officer, director and member of any committee, and such other
duties as the Board of Directors or the Executive Committee may assign to him in
accordance with Section 1.1 hereof, the Company agrees to pay the Employee a
base salary of $250,000 per annum. The Employee's base salary shall be subject
to periodic review and adjustment by the Board of Directors in its sole
discretion,provided that the base salary may not be reduced below $250,000 per
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year. The base salary shall be payable at such times as is customary for
employees of the Company and in accordance with the normal payroll practices of
the Company.
3.2 INCENTIVE COMPENSATION
The Employee shall be a participant in the Company's incentive compensation plan
generally made available to executive officers as it may be in effect and
revised from time to time. Employee's target bonus under such plan will be forty
percent (40%) of his base salary (prorata for part of the fiscal year). The
Employee understands and agrees that the implementation of an incentive
compensation plan for the Employee and other executive officers will be subject
to the review and approval of the Compensation Committee of the Board of
Directors.
3.3 EXPENSES
(a) GENERAL. In addition to base salary and incentive
compensation, the Company shall reimburse the Employee for all
reasonable and necessary business expenses actually incurred
by him in the performance of his duties, including, without
limitation, expenses for travel, meals, entertainment and
other miscellaneous business expenses, in accordance with the
Company's policies and practices as may be in effect from time
to time.
(b) RELOCATION. It is understood that no relocation by Employee is
required or offered.
(c) SIGNING BONUS. To assist employee in covering expenses
relating to his employment (e.g., an automobile), the Company
will provide employee with a one-time payment of $20,000, half
payable on his first day of employment at the Company and half
30 days later.
ARTICLE 4
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COMPANY BENEFITS
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4.1 VACATION
The Employee shall be entitled to receive four weeks of paid vacation per
calendar year (pro rated for any partial year), which shall be taken at such
time or times as will not unreasonably hinder or interfere with the Company's
business or operations.
4.2 SEVERANCE BENEFIT
If during the Employee's employment pursuant to this Agreement, the Employee
ceases to be employed by the Company as a result of the Company's termination of
the Employee without cause pursuant to Section 7.4 (which shall not include any
termination that is otherwise within Article 6) or the Employee's termination of
his employment for good reason pursuant to Section 7.1, the Company shall pay
the Employee as a severance benefit, (a) his then base salary plus (b) an amount
equal to the Employee's bonus from the Company, if any, for the immediately
preceding year. This severance benefit shall be payable by the Company through
(i) the continuation of the Employee's base salary for a period of one year and
(ii) the payment of the balance in four equal quarterly installments, with the
first such payment due three months after the termination and the final payment
due one year after the termination. The severance obligation set forth in this
Section 4.2 shall be in lieu of and not in addition to any other severance
benefits made available to other employees of the Company.
4.3 STOCK OPTIONS
Effective on the execution of this Agreement, the Company shall issue to the
Employee an option to purchase 100,000 shares of the Company's Common Stock with
an exercise price equal to $6.00, pursuant to the Company's standard form of
Option Agreement, subject to the following provisions. The option shall vest
over a four year period at 25% per year (25,000 shares) on each anniversary date
of the Commencement Date; provided however, if the Employee's employment
hereunder is terminated without cause by the Company or for good reason by the
Employee prior to the first anniversary date of the Commencement Date, the
options to purchase the first 25,000 shares of the Company's Common Stock will
automatically vest. The options will also fully vest upon a change of control of
the Company.
4.4 OTHER BENEFIT PLANS
The Employee shall further be entitled to participate in and receive benefits
under any retirement, life insurance, accident, disability, health and dental
insurance, profit sharing, or similar plans generally made available to its
employees.
4.5 INDEMNIFICATION
The Company agrees to defend and shall indemnify and hold the Employee harmless
to the fullest extent permitted by law from any and all liability, costs, and
expenses which may be assessed against the Employee by reason of the performance
of his responsibilities and duties under the terms of this Agreement, provided
such liability does not result from willful misconduct or gross negligence of
the Employee.
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ARTICLE 5
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RESTRICTIONS
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5.1 NON-COMPETITION
(a) So long as the Employee is employed by the Company, serving as a
Director or is receiving payments hereunder (whether in connection with the
Employee's employment or as a result of the termination of the Employee's
employment hereunder) and for a period of two years thereafter (the
"Noncompetition Period"), the Employee shall not, directly or indirectly,
whether as owner, partner, shareholder, director, consultant, agent, employee,
guarantor, surety or otherwise, or through any person, consult with or in any
way aid or assist any competitor of the Company or engage or attempt to engage
in any employment, consulting or other activity which directly or indirectly
competes with the Business of the Company. For purposes of this Agreement, the
term "employment" shall include the performance of services by Employee as an
employee, consultant, agent, independent contractor or otherwise and the term
"Business" shall mean the research, development, manufacture, sale or
distribution of fuel cells, batteries or related products and any other business
engaged in, planned or under development by the Company with respect to which
the Employee has had access to Company confidential information during the
Noncompetition Period. The Employee acknowledges that his participation in the
conduct of any such Business alone or with any person other than the Company
will materially impair the Business and prospects of the Company.
(b) In addition to and without limiting the foregoing, during the
Noncompetition Period, Employee shall not knowingly do, attempt to or assist any
other person in doing or attempting to do any of the following: (i) hire any
director, officer, employee, or agent of the Company (a "Company Employee") or
encourage any such person to terminate such relationship with the Company, as
the case may be (for purposes hereof, the Employee shall be deemed to have so
encouraged a Company Employee to terminate such relationship with the Company if
the Employee hires or otherwise assists any person in hiring any such Company
Employee within six months after the Company Employee terminates his or her
relationship with the Company), (ii) encourage any customer, client, supplier or
other business relationship of the Company to terminate or alter such
relationship, whether contractual or otherwise, to the disadvantage of the
Company; (iii) encourage any prospective customer or supplier not to enter into
a business relationship with the Company; (iv) impair or attempt to impair any
relationship, contractual or otherwise, written or oral, between the Company and
any customer, supplier or other business relationship of the Company; or (v)
sell or offer to sell or assist in or in connection with the sale to any
customer or prospective customer of the Company any products of the type sold or
rendered by the Company.
(c) Nothing in this Agreement shall preclude Employee from making
passive investments of not more than 2% of a class of securities of any business
enterprise registered under the Securities Exchange Act of 1934.
5.2 INTELLECTUAL PROPERTY
Upon execution of this Agreement, the Employee shall execute the Evercel, Inc.
Agreement for Assignment, Confidentiality and Nonsolicitation, which agreement
is hereby incorporated herein by reference.
5.3 INJUNCTIVE RELIEF
The Employee acknowledges that the restrictions contained in this Article are
reasonable in view of the nature of the business in which the Company is engaged
and his position with the Company which will provide him with extensive
knowledge of the business.
The Company and the Employee mutually agree that the Employee's obligations
under this Article are of a special and unique character which gives them a
peculiar value, and the Company cannot be reasonably or adequately be
compensated in damages in an action at law in the event the Employee breaches
such obligations. The Employee 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
Article by the Employee, including a temporary restraining order or temporary
injunction from any court of competent jurisdiction restraining any threatened
or actual violation, and each party hereby consents to the entry of such order
and injunctive relief and waives the making of a bond as a condition for
obtaining such relief. Such rights shall be cumulative and in addition to any
other legal or equitable rights and remedies the Company may have.
5.4 SURVIVAL ENFORCEABILITY
It is expressly agreed by the parties hereto that the provisions of this Article
shall survive the termination of this Agreement. If any one or more of the
provisions contained in this Article shall for any reason in any jurisdiction be
held to be excessively broad as to the time, duration, geographical scope,
activity or subject, it shall be construed with respect to such jurisdiction, by
limiting or reducing it, so as to be enforceable to the extent compatible with
the applicable law of such jurisdiction as it shall then appear.
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ARTICLE 6
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DEATH; DISABILITY
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6.1 DEATH
If the Employee dies while employed under this Agreement, this Agreement shall
terminate immediately. The Company will pay to the Employee's estate his base
salary under Section 3.1 through the last day of the calendar month in which he
dies, plus any incentive compensation awarded to the Employee under the
Incentive Compensation Plan, but not yet paid, and such death benefits as may be
provided pursuant to Section 4.4.
6.2 DISABILITY
If the Employee fails to perform his duties under this Agreement due to
"Disability", as defined below, the Company may terminate this Agreement upon 30
days written notice to him. In that event, the Company shall pay the Employee
his base salary under Section 3.1 through the date of termination; PROVIDED,
HOWEVER, that to the extent the Employee is receiving disability benefits
pursuant to the Company's disability insurance policy, the amount of such
benefits shall be credited against the Employee's base salary during the period
prior to the date of termination. In addition, upon any termination based upon
Disability, the Company shall pay to the Employee any incentive compensation
awarded to the Employee under the Incentive Compensation Plan but not yet paid.
The term "Disability" shall mean the inability of the Employee to perform for
the Company the duties specified in Section 1.1 by reason of any medically
determinable physical or mental impairment for (i) a period of four consecutive
months, (ii) for shorter periods aggregating five months in any 12-month period
or (iii) if the Board of Directors determines that it is probable that the
Disability will continue for a length of time so as to constitute a Disability
under clauses (i) or (ii) above. The determination of whether the Employee is
Disabled shall be made by the Board of Directors on the basis of written medical
evidence reasonably satisfactory to it. Notwithstanding anything to the contrary
in the foregoing, in the event of a termination of the Employee pursuant to
clause (iii), the Company will pay the Employee a minimum of four months base
salary following such termination; PROVIDED, HOWEVER, that to the extent the
Employee is receiving disability benefits pursuant to the Company's disability
insurance policy, the amount of such benefits shall be credited against the
Employee's base salary.
ARTICLE 7
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TERMINATION
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7.1 TERMINATION BY THE EMPLOYEE FOR GOOD REASON
The Employee may terminate this Agreement for good reason upon ninety (90) days
written notice to the Company setting forth with specificity the grounds for
termination upon the occurrence of any of the following: (a) the failure of the
Company to observe or comply with any of its material obligations under this
Agreement, if such failure has not been cured within 30 days after written
notice thereof has been given by the Employee to the Company; (b) the
dissolution of the Company; or (c) any merger in which the Company is not the
surviving corporation and in which the stockholders of the Company own less than
50% of the voting securities of the merged entity upon the effectiveness of the
merger, or any consolidation, sale of substantially all of the assets of the
Company or change of control of the Company, provided the Employee has not
approved the transaction by voting for it either as a director or shareholder.
For purposes of clause (a) a material breach by the Company shall include a
material change in the reporting responsibilities of the Employee such that the
Employee is no longer effectively serving as the President and Chief Executive
Officer of the Company, a material reduction in benefits or other perquisites of
office such that the Employee is not receiving the benefits set forth herein or
the benefits and other perquisites generally granted for executive positions
within the Company. For purposes of clause (c) above, a "change of control"
shall be presumed to have occurred if within any 12-month period a single person
or entity, or related group of persons or entities, acquires 50% or more of the
outstanding voting stock of the Company. In the event of a termination for good
reason under this Section, the Company shall pay the Employee (i) his base
salary as then in effect under Section 3.1 through the date of termination, (ii)
any incentive compensation awarded to the Employee under the Incentive
Compensation Plan, but not yet paid, and (iii) the severance benefit set forth
in Section 4.2.
7.2 TERMINATION BY THE COMPANY FOR CAUSE
The Company may terminate this Agreement for cause in the manner set forth
below. For purposes of this Section, "cause" shall mean (a) a material breach by
the Employee of the terms of this Agreement, including without limitation
failure by the Employee to perform a material portion of his duties hereunder
(not otherwise excused by the disability of the Employee) (b) criminal
misconduct or unethical conduct, whether or not in relation to the Company's
affairs or business, which reflects adversely upon Employee's honesty or
integrity in the performance of his duties as an employee of the Company, or
which otherwise is materially detrimental to the interests of the Company; (c)
if the Employee is found guilty or pleads nolo contendere to the commission of a
crime classified as a felony under any Federal, state or local law; and (d)
commission by the Employee of an act of gross incompetence in the course of his
employment hereunder. The term "cause" as used in the preceding sentence does
not include the Employee's erroneous judgment or judgments of a technical,
scientific, financial, legal and/or environmental nature which were, although
erroneous, nevertheless reasonable at the time and under the circumstances in
which they were made. In the event of termination under this Section, the
Company shall pay to the Employee his base salary under Section 3.1 through the
date of termination stated in the notice plus any incentive compensation awarded
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to the Employee under the Incentive Compensation Plan but not yet paid, and the
Employee shall, if so requested by the Board of Directors, perform his duties
under Article 1 through the date of termination stated in the notice.
7.3 TERMINATION BY THE COMPANY FOR CAUSE-PROCEDURE
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH HEREIN, THE EMPLOYEE SHALL
NOT BE DEEMED TO HAVE BEEN TERMINATED FOR CAUSE WITHOUT (I) DELIVERY TO THE
EMPLOYEE OF WRITTEN NOTICE SETTING FORTH THE REASONS FOR THE COMPANY'S INTENTION
TO TERMINATE FOR CAUSE, (II) AN OPPORTUNITY FOR THE EMPLOYEE, TOGETHER WITH HIS
COUNSEL, TO BE HEARD BEFORE THE BOARD OF DIRECTORS AND (III) DELIVERY TO THE
EMPLOYEE OF A NOTICE OF TERMINATION FROM THE BOARD OF DIRECTORS STATING THAT A
MAJORITY OF THE MEMBERS OF THE BOARD HAVE DETERMINED IN GOOD FAITH THAT THE
EMPLOYEE WAS GUILTY OF CONDUCT THAT SUPPORTS THE TERMINATION FOR CAUSE,
SPECIFYING THE CONDUCT WHICH GAVE RISE TO SUCH TERMINATION.
7.4 TERMINATION BY THE COMPANY OR THE EMPLOYEE WITHOUT CAUSE
Either the Company or the Employee may terminate this Agreement for reasons
other than as set forth above in Section 7.1 or Section 7.2 and which are not
otherwise within Article 6 upon 30 days written notice by the Company or 90 days
written notice by the Employee. Upon such termination, the Company shall pay the
Employee his base salary under Section 3.1 through the date of termination
(provided, however, that the Employee continues to be available to perform the
services required under Section 1.1 through the date of termination), plus any
incentive compensation awarded to the Employee under the Incentive Compensation
Plan, but not yet paid, and any accrued vacation. In addition, upon the
Company's termination of the Employee without cause, the Company shall be
required to pay the Employee the severance benefit set forth in Section 4.2.
Nothing herein shall prohibit the Company from relieving the Employee of any or
all of his duties hereunder pending the expiration of the 30-day notice period.
7.5 TERMINATION OF DUTIES
Notwithstanding anything to the contrary set forth herein, at any time on or
after delivery of written notice to the Employee, the Company may relieve the
Employee of all of his duties and responsibilities hereunder and may relieve the
Employee of authority to act on behalf of, or legally bind, the Company;
provided, however, that any such action by the Company shall not relieve the
Company of its obligation to pay to the Employee all compensation and benefits
otherwise provided for in this Agreement.
ARTICLE 8
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MISCELLANEOUS
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8.1 NO CONFLICTING AGREEMENTS.
The Employee represents and warrants to the Company, that the Employee is not
under any obligation to any person or entity which is inconsistent with or in
conflict with any of the terms of this Agreement or which would prevent, limit
or impair in any way the Employee's performance of all the terms of this
Agreement and the Employee agrees not to enter into any agreement, either
written or oral, in conflict herewith.
8.2 ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement between the
Company and the Employee and cannot be amended, modified, or supplemented in any
respect except by subsequent written agreement entered into by both parties.
8.3 SUCCESSORS OF THE COMPANY
This Agreement shall inure to the benefit of and be binding upon the Company,
its successors and assigns, including, without limitation, any person, firm,
corporation or other entity which may acquire all or substantially all of the
Company's assets and business, or with or into which the Company may be
consolidated or merged, and this provision shall apply in the event of any
subsequent merger, consolidation or transfer. In every respect, this Agreement
shall inure to the benefit of and be binding upon the Employee, his heirs,
executors and personal representatives and, being personal in nature, shall not
be assignable by the Employee.
8.4 EFFECT OF WAIVER
The waiver by either party of a breach of any provision of this Agreement shall
not operate as or be construed as a waiver of any subsequent breach.
8.5 NOTICES
Any notice, request, demand or other communication in connection with this
Agreement must be in writing and shall be deemed to have been given and received
three days after a certified or registered letter containing such notice,
properly addressed, with postage prepaid, is deposited in the United States
mail; and, if given otherwise than by registered or certified mail, it shall not
be deemed to have been given until actually delivered to and received by the
party to whom it is addressed.
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Notice to the Company shall be given at its principal mailing address, which at
the time of execution of this Agreement is ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: Chairman of the Board of Directors, or at such
other address as it may designate.
Notice to the Employee shall be given at his home address, which at the time of
execution of this Agreement is the address set forth in the heading of this
Agreement, or at such other address as he may designate.
8.6 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
8.7 SEVERABILITY
If, in any jurisdiction, any provision of this Agreement or its application to
any party or circumstances is restricted, prohibited or unenforceable, such
provision shall, as to such jurisdiction, be ineffective only to the extent of
such restriction, prohibition or unenforceability without invalidating the
remaining provisions hereof and without affecting the validity or enforceability
of such provision in any other jurisdiction or its application to other parties
or circumstances.
8.8 SURVIVAL
Each of the terms and provision of this Agreement which are expressly or
impliedly so intended shall survive the termination of this Agreement.
8.9 APPLICABLE LAW
This Agreement shall be governed by and construed according to the laws of the
State of Connecticut.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first stated above.
EVERCEL, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇
Chairman of the Board
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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