MILLENNIUM CELL INC. CHANGE-IN-CONTROL AGREEMENT
EXHIBIT
10.1
THIS
CHANGE-IN-CONTROL AGREEMENT (this “Agreement”), made and entered into as
of June 22, 2007, by and between Millennium Cell Inc., a Delaware corporation
(the “Company”), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, an individual residing at ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the “Executive”).
WHEREAS,
the Company considers it essential to its best interests to ▇▇▇▇▇▇ the continued
employment of key management personnel and recognizes the distraction and
disruption that the possibility of a Change in Control (as defined in Section
1(f) below) may raise to the detriment of the Company and its stockholders;
and
WHEREAS,
the Company has determined to take appropriate steps to reinforce and encourage
the continued attention and dedication of key management personnel to their
assigned duties in the face of a possible Change in Control.
NOW,
THEREFORE, in consideration of the
premises and the mutual covenants contained herein, the Company and the
Executive hereby agree as follows:
1. DEFINITIONS.
(a) “Affiliate”
shall mean any business entity controlling, controlled by or under common
control with the Company.
(b) “Base
Salary” shall mean the annual salary of the Executive at the time of
termination of his employment.
(c) “Beneficiary”
shall mean (i) the person or persons named by the Executive, by written notice
to the Company, to receive any compensation or benefit payable under this
Agreement or (ii) in the event of his death, if no such person is named and
survives the Executive, his estate.
(d) “Board”
shall mean the Board of Directors of the Company.
(e) “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
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; provided,
however, that this provision does 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;
(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 or (B)
constitutes gross negligence and causes or threatens to cause a material loss
to
the business of the Company or an Affiliate;
(vii) appropriation
of the business opportunities of the Company or an Affiliate 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 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;
(ix) falsification
of any information given to any director or officer of the Company or an
Affiliate; or
(x) any act by
the Executive directed against the Company or an Affiliate of bribery,
embezzlement, fraud, misappropriation of assets or the receipt of
kickbacks.
(f) “Change
in Control” shall mean the occurrence of any of the following:
(i) the
consummation of any consolidation or merger of the Company pursuant to which
less than 50% of the outstanding voting securities of the surviving or resulting
company is, directly or indirectly, beneficially owned (within the meaning
of
Rule 13d-3 promulgated under the Securities Exchange Act of 1934 (the
“Exchange Act”)) by the Company or individuals or entities which were
stockholders of the Company prior to the consolidation or merger;
(ii) the
consummation of any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially all (as determined
by a value of at least 50% of the fair market value of all of the assets of
the
Company), of the assets of the Company other than any sale, lease, exchange
or
other transfer to any company in which the Company or individuals or entities
which were stockholders of the Company, directly or indirectly, beneficially
own
within the meaning of Rule 13d-3 promulgated under the Exchange Act) more than
50% of the outstanding voting securities of such company after any such
transfer;
(iii) any
person (as such term is used in Section 13(d) of the Exchange Act, other than
the Company, a subsidiary or one or more employee benefit plans established
by
the Company for the benefit of employees of the Company or any subsidiary,
shall
become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange
Act), whether directly, indirectly, of 35% or more of the outstanding common
stock of the Company;
(iv) the
consummation by any entity, person or group (including any affiliate thereof,
other than the Company) of a tender offer or exchange offer pursuant to which
the offeror shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act), whether directly, indirectly, beneficially or of
record, of 50% or moreof the outstanding voting securities of the Company;
or
(v) a change in
composition of the Board occurring within a rolling two-year period, as a result
of which fewer than a majority of the directors are Incumbent Directors
(“Incumbent Directors” shall mean directors who either (x) are members of
the Board as of the date of this Agreement or (y) are elected, or nominated
for
election, to the Board with the affirmative votes of at least a majority of
the
Incumbent Directors at the time of such election or nomination, but shall not
include an individual not otherwise an Incumbent Director whose election or
nomination is in connection with an actual or threatened proxy contest,
including but not limited to a consent solicitation, relating to the election
of
directors to the Board).
(g) “Disability”
shall mean the illness or other mental or physical disability of the Executive,
as determined by a physician mutually acceptable to the Company and the
Executive, resulting in his inability to perform substantially all the duties
of
his position for a period of six or more consecutive months or an aggregate
of
six months in any 12-month period.
(h) “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 Base 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 which
is
more than fifty (50) miles from the current address of the Company as set forth
in Section 5.
2. TERM
OF AGREEMENT.
This
Agreement shall be effective immediately upon its execution by the Company
and
the Executive (the “Effective Date”) and shall remain in effect until
September 25, 2008, subject to the earlier termination of the Executive’s
employment with the Company for any reason; provided, however,
that this Agreement shall remain in effect for a two-year period commencing
upon
the (A) occurrence of any Change in Control during the term of this Agreement
or
(B) termination of the Executive’s employment with the Company in anticipation
of a Change in Control.
3. ENTITLEMENT
UPON TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY THE EXECUTIVE FOR GOOD
REASON FOLLOWING, OR IN ANTICIPATION OF, A CHANGE IN CONTROL.
In
the event of termination of the
Executive’s employment within two years following, or in anticipation of, a
Change in Control (a) by the Company without Cause or (b) by the Executive
for
Good Reason, he shall be entitled to the following:
(a) GENERAL
ENTITLEMENT: a prompt lump sum payment equal to:
(i) his
annual Base Salary through the date of termination;
(ii) payment
in lieu of any unused vacation, in accordance with the Company’s vacation policy
and applicable laws;
(iii) any
annual or discretionary bonus earned but not yet paid to him for any calendar
year prior to the year in which his termination occurs; and
(iv) reimbursement
of any reimbursable business expenses incurred by the Executive through the
date
of termination but not yet paid to him.
(b) CHANGE-IN-CONTROL
ENTITLEMENT:
(i) a prompt
lump sum payment equal to 2 times the sum of (A) his annual Base Salary, at
the
rate in effect immediately before such termination, and (B) the average of
his
annual bonuses (calculating, for these purposes, the value of any bonuses paid
in shares of common stock, par value $.001 per share, of the Company (the
“Common Stock”) on the basis of the closing sales price, regular way, of
the Common Stock on the National Association of Securities Dealers, Inc.,
Automated Quotation System (Nasdaq) on the date such payment is
made) payable with respect to the three calendar years prior to the year in
which termination occurs (or the average of all annual bonuses paid to the
Executive if the Executive has not been employed by the Company for each of
the
three calendar years prior to the year in which the termination
occurs);
(ii) continuing
coverage under the life, disability, accident and health insurance programs
covering senior executives of the Company generally, as from time to time in
effect, for the two-year period immediately following such termination;
and
(iii) immediate
and unconditional vesting of any unvested stock options and stock grants
previously awarded to Executive and, for the one-year period following such
termination, the right to exercise any stock options held by
Executive.
(c) GOLDEN
PARACHUTE EXCISE TAX. The Company, at its sole expense, shall cause
its independent certified public accountants (the “Accountants”) to
promptly review all payments, distributions and benefits that have been made
to
or provided to, and are to be made to or provided to, the Executive under this
Agreement and any other agreement and plan, to determine the applicability
of
Code Section 4999. If the Accountants determine that (i) any such
payments, distributions or benefits (the “Original Payment(s)”) are
subject to excise tax under Code Section 4999, and (ii) the amount of
the Original Payment(s), reduced by all federal, state and local taxes
applicable thereto, including the excise tax imposed pursuant to Code Section
4999, is less than the amount Executive would receive, after taxes, if he were
paid only three times his Base Amount (as such term is defined in Code Section
280(b)(3)) less $1.00, then the payments to be made to the Executive under
this
Agreement which are contingent on a Change of Control shall be reduced to an
amount which, when added to the aggregate of all other payments to the Executive
which are contingent on a Change of Control, will make the total amount of
such
payments equal to three times his Base Amount less $1.00 (the “Adjusted
Payment(s)”). To facilitate the calculation of the applicable
excise tax, the Executive shall provide the Accountants with copies of the
Executive’s Forms W-2 for the tax years the Accountants determine appropriate
for their use in determining the application of Code Section 4999 and
calculating any reduction under this Section 3(c). The Accountants
shall perform the calculations in conformance with the provisions of this
Section 3(c), and shall provide the Executive with a copy of their
calculations.
(d) SECTION
409A. If and to the extent necessary to avoid the imposition of
accelerated or additional taxes under Section 409A of the Code, any payments
to
Executive under this Agreement that would have to be paid during the six month
period following the date of termination shall be paid in a lump sum on the
date
that is six months following the date of termination.
4. NO
MITIGATION
The
Company agrees that if the Executive’s employment with the Company terminates,
he shall not be obligated to seek other employment or to attempt to reduce
any
amount payable to him under this Agreement. Further, no amount of any
payment hereunder shall be reduced by any compensation earned by the Executive
as the result of employment by a subsequent employer or otherwise.
5. NOTICES.
Any
notice or other communication required or permitted under this Agreement shall
be in writing and shall be deemed to have been duly given when delivered by
hand, electronic transmission (with a copy following by hand or by overnight
courier), by registered or certified mail, postage prepaid, return receipt
requested or by overnight courier addressed to the other party. All
notices shall be addressed as follows, or to such other address or addresses
as
may be substituted by notice in writing:
To
the Company:
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
To
the Executive:
At
his
residence and facsimile address most recently filed with the
Company.
6. GENERAL
PROVISIONS.
(a) AMENDMENTS. No
provision of this Agreement may be amended, modified or waived unless such
amendment, modification or waiver shall be agreed to in writing and signed
by
the Executive and by a duly authorized officer of the Company.
(b) SEVERABILITY. If
any provision of this Agreement shall be determined to be invalid or
unenforceable by a court of competent jurisdiction, the remaining provisions
of
this Agreement shall be unaffected thereby and shall remain in full force and
effect to the fullest extent permitted by law.
(c) PARTIAL
INVALIDITY. If any provision of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired
or
invalidated in any way.
(d) GOVERNING
LAW/VENUE. This Agreement shall be construed, interpreted and
governed in accordance with the laws of the State of New York, without reference
to rules relating to conflicts of law. The state and federal courts
in the State of New York shall have exclusive jurisdiction over any claims
arising under this Agreement.
(e) ENTIRE
AGREEMENT; DEEMED OPTION AGREEMENT. This Agreement contains the sole
and entire agreement between the parties relating to the subject matter
hereof. This Agreement shall be deemed an “Option Agreement” for
purposes of Section 6.5 of the Company’s Amended and Restated 2000 Stock Option
Plan.
(f) SURVIVAL. Notwithstanding
the termination of the term of this Agreement, the duties and obligations of
the
Company, if any, following the termination of the Executive’s employment
following a Change in Control shall survive indefinitely.
(g) WITHHOLDING. The
Company may deduct and withhold from any payments hereunder the amount that
the
Company, in its reasonable judgment, is required to deduct and withhold for
any
income, employment or excise taxes, whether federal, state or
local.
(h) NO
OTHER COMPENSATION; EMPLOYEE AT WILL. This Agreement shall not be
construed as creating an express or implied contract of employment and, except
as otherwise agreed in writing between the Executive and the Company, the
Executive is and shall remain an “employee at will” and shall not have any right
to be retained in the employ of the Company.
IN
WITNESS WHEREOF, the parties have
executed this Agreement as of the day and year first above written.
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By:
/s/H. ▇▇▇▇▇ ▇▇▇▇
Name: H.
▇▇▇▇▇ ▇▇▇▇
Title: Chief
Executive Officer
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/s/▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name:
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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