OFFICER'S EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of September 15 2001, between H Power
Corp., a Delaware corporation, having its principal place of business at 00
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter referred to as the
"Company"), and Xxxx XxXxxxx, residing at Mountain View Crossing Apt. 2301 Xxxxx
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 employment agreement, the Company
hereby agrees to employ Executive, and Executive hereby agrees to be employed by
the Company, for a term commencing September 15, 2001 and ending September 15,
2004 (the "Term"). 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 of 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
Vice President, Business Development, 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 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 CEO may determine, without
additional compensation.
Executive shall render his services at the Company's principal place of
business or at such other place or places as the Board shall designate.
3. EXCLUSIVE EMPLOYMENT
Executive shall devote substantially all his business time, ability and
attention to the business of H Power. Executive shall not directly or indirectly
render any services of a business, commercial, or professional nature to any
other person or organization, whether for compensation or otherwise, that is in
competition directly or indirectly with the business of H Power.
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, Executive shall be paid an annual
salary of $135,000.00, 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) Business Expense Reimbursement. Executive shall be entitled to
receive reimbursement from the Company for all reasonable and
actual out-of-pocket expenses incurred by him (in accordance with
the policies and procedures established by the Company) in
performing services during his employment, provided that Executive
timely submits reasonable documentation with respect to such
expenses.
(e) 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.
(f) Automobile. Executive shall be entitled to an automobile allowance
of seven thousand five hundred dollars ($7,500) per annum.
(g) Stock Options. Executive shall be granted five-year stock options
to purchase 75,000 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 September 17, 2001, pursuant to the H Power Corp.
2000 Stock Option Plan. The options may be exercised as follows:
one-third as of September 17, 2002, one-third as of September 17,
2003, and the final third as of September 17, 2004.
5. TERMINATION OF EMPLOYMENT
(a) For Cause. The Company shall have the right to terminate this
employment agreement immediately after written notification to
Executive specifying the basis
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for the termination, upon the occurrence of any one of the
following events which shall constitute "cause": (i) the willful
failure by Executive to abide by the terms of this employment
agreement; or (ii) fraud, misappropriation, embezzlement, theft,
dishonesty or similar actions by Executive; or (iii) the habitual
or willful neglect by Executive of his employment duties; or (iv)
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.
(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.
(c) In the Event of Disability. The Company shall have the right to
terminate this employment agreement in the event of Executive's
inability to substantially perform his 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 employment 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 term of this employment agreement.
(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").
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(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 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: (i) 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 (33-1/3%) or more of the combined voting power
of 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 (ii) 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 the 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, including but not limited to the development,
marketing, manufacturing, or distribution of fuel cell system, 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 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 consulting 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
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during the working hours of his employment or with the use of the Company's
facilities, 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 employment 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 employment agreement may be
assigned or transferred by Executive except:
(a) Executive's rights to compensation and benefits hereunder 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 employment
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.
12. GOVERNING LAW
This employment 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 employment
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 employment 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 employment agreement, no waiver by the Company or
Executive of any breach by the other of any condition or provision of this
employment 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 employment
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.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn.: Secretary
If to Executive: Xxxx XxXxxxx
Mountain View Crossing
Apt 2301
Xxxxx XX 00000
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16. SEVERABILITY
In the event that any provision or portion of this employment agreement
shall be determined to be invalid or unenforceable for any reason, the remaining
provisions or portions of this employment 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 employment agreement, the respective
rights and obligations of the Parties hereunder shall survive any termination of
this employment 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 employment 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 employment
agreement.
19. REFERENCES
In the event of Executive's death or a judicial determination of his
incompetence, reference in this employment 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 employment agreement shall be construed by
reference to any heading.
20. MUTUAL INTENT
The language used in this employment 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 or word used in this employment
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
employment agreement to be executed as of the day and year first above written.
EXECUTIVE H POWER CORP.
/s/ Xxxx XxXxxxx By: /s/ H. Xxxxx Xxxxxxx
-------------------------- -----------------------------
Xxxx XxXxxxx H. Xxxxx Xxxxxxx
Chief Executive Officer
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