SECOND AMENDED AND RESTATED
OFFICER'S EMPLOYMENT AGREEMENT
This SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this
"Agreement"), effective as of August 1, 2002, between H Power Corp., a Delaware
corporation, having its principal place of business at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as the "Company"), and H.
▇▇▇▇▇ ▇▇▇▇▇▇▇, residing at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as "Executive"). (The Company and Executive are
collectively referred to as the "Parties.")
WHEREAS, Executive and the Company entered into an Officer's Employment
Agreement, dated as of October 7, 1996, and an Amended and Restated Officer's
Employment Agreement, dated as of October 1, 1999 (the "Prior Agreement"); and
WHEREAS, the Parties wish to amend and restate the provisions of the
Prior Agreement on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. TERM OF EMPLOYMENT
Subject to the provisions of this Agreement, the Company hereby agrees
to employ Executive, and Executive hereby agrees to be employed by the Company,
for a term commencing August 1, 2002 and ending July 31, 2003. This Agreement
will renew automatically in one year increments unless written notice is given
by either party of an intent to terminate the Agreement within six months of the
expiration date then in effect for the Agreement.
2. TITLES AND DUTIES
Subject at all times to the supervision and direction of the Board of
Directors of the Company (the "Board"), Executive shall be employed as Chief
Executive Officer of the Company and shall have such duties, authority, rights
and obligations as are usually inherent in such position and as the Board 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
the Company or 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 Board 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.
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3. EXCLUSIVE EMPLOYMENT
Executive shall devote substantially all his business time, ability and
attention to the business of the Company. 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
the Company, except as set forth in paragraph (d) below.
(a) Executive shall refrain from any act which involves a conflict of
interest between the exercise of his position in the Company and
his personal interest.
(b) Executive shall refrain from exploiting any business opportunity
of the Company for the achievement of an advantage for himself or
for another.
(c) Executive shall disclose to the Company any information and
deliver to it any document that pertains to its affairs and which
came into his possession by virtue of his position with the
Company.
(d) Executive is the founder and co-shareholder with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
his wife, of Gibbard Research and Development Corporation, a
Massachusetts corporation ("GRDC"), which is in the business of
developing lithium ion batteries. The Company is aware that
Executive intends to maintain his interest in GRDC and intends to
devote some minimum time to the affairs of that enterprise. The
Parties agree that, in the event the Company determines that it
would be in its best interest to acquire GRDC, the Parties will
negotiate in good faith to achieve that result.
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 of this Agreement, Executive shall
be paid an annual salary of Two Hundred and Forty Thousand
Dollars ($240,000), 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,
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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) Reimbursement of Expenses. Consistent with established policies
of the Company as in effect from time to time for senior
executives, consultants and members of the Board, the Company
shall pay to or reimburse Executive for all reasonable and actual
out-of-pocket expenses, including without limitation, travel,
hotel, automobile, telephone and cellular telephone expenses,
computer and data processing expenses and similar expenses,
incurred by Executive in performing his obligations under this
Agreement; provided that Executive timely submits reasonable
documentation with respect to such expenses.
(e) Automobile. Executive shall be entitled to an automobile
allowance of twelve thousand dollars ($12,000) per annum. The
Company will continue to pay the expenses associated with
Executive's existing automobile lease until October 1, 2002,
after which the Company will make monthly payments to Executive
in the amount of $1,000.
(f) 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.
(g) Vacation. Executive will be entitled to three weeks vacation
during the first five years of service, four weeks during the
second five years of service and five weeks vacation for service
in excess of 10 years.
(h) Travel Allowance. In the event that the primary work location at
which Executive is based is changed to a location more than 300
driving miles from his principal residence in Epping, New
Hampshire, the Company will reimburse Executive for actual
expenses incurred in non-business trips Executive makes to his
New Hampshire home, up to the amount of $10,000 per contract
year.
5. TERMINATION OF EMPLOYMENT
(a) For Cause. The Company shall have the right to terminate this
Agreement immediately after written notification to Executive
specifying the basis 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 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) the habitual or willful disregard of mandates of
the Board; or (v) the willful performance of an unauthorized act
outside the scope of his office; or (vi) an act of moral
turpitude by Executive
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which tends to reflect unfavorably on the Company. If the Company
seeks to terminate this Agreement for "cause," it must serve
written notice upon the Executive which specifically states the
grounds and facts which it claims support its termination and
provide Executive with a thirty-day period in which to
substantially cure the conduct. The thirty-day cure period need
not be provided if the "cause" event is such that it is
impossible to cure under any circumstance.
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) For Reasons Other Than Cause. The Company shall have the right to
terminate this Agreement for reasons other than cause by
providing thirty days (30) Notice to Executive. In the event the
Executive is terminated for reasons other than cause, the Company
will continue to provide benefits and pay the bi-weekly
installments of Executive's Base Salary through the end of the
term of employment.
(c) In the Event of Death. This 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. In addition, the Board of Directors may, at
its sole discretion, pay to Executive's estate a pro-rata portion
of any bonus Executive would have received pursuant to Section
4(f); it being understood that the Board shall have no obligation
to award such bonus.
(d) In the Event of Disability. The Company shall have the right to
terminate this Agreement in the event of Executive's inability to
substantially perform the essential functions of his job 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 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 terms of this Agreement. In addition, the Board of
Directors may, at its sole discretion, pay to Executive a
pro-rata portion of any bonus Executive would have received
pursuant to Section 4(f); it being understood that the Board
shall have no obligation to award such bonus.
(e) 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)
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for any reason other than cause, death or disability, or the
Company does not renew the Agreement within the one-year period
following a Change of Control, then the Company shall pay
Executive twice his annual Base Salary at his then current rate
and twice the latest annual incentive compensation payment
calculated by taking the highest of the latest two incentive
payments earned and paid multiplied by two, such payment to be
made in one lump sum payment at the time of termination, provided
that Executive has executed and provided to the Company a general
release in favor of the Company and its affiliates. Such payments
shall be in lieu of any and all other payments due and owing to
Executive under the terms of this Agreement except that the
Company shall continue to pay Executive the automobile allowance
for the balance of the term of the 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"). Executive acknowledges that the
Severance Package is specific consideration for the general
release and Executive's obligations under Section 7.
(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 change or 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.
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For purposes of this provision, a "Change in Control" shall
be deemed to have occurred if (1) 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")), excluding
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 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, 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 (2) 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; or (3) in the event of a merger
in which the Company is a party after which merger the
stockholders of the Company do not retain directly or indirectly
at least a majority of the beneficial interest in the voting
stock of the surviving company; or (4) in the event of the sale,
exchange, or transfer of all or substantially all of the
Company's assets. If the provisions of this Section are in any
way involved in litigation or arbitration and Executive incurs
legal fees and expenses or must make a contribution to a judgment
or settlement of the matter, the Company agrees to reimburse him
for any and all expenditures.
6. UNAUTHORIZED DISCLOSURE
During the period of his employment and for a period of five (5) 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).
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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 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 is 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 or will be engaged as of the 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 of his employment 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 counseling 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 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 except those inventions relating to lithium ion batteries
developed by Executive for GRDC. Inventions relating to lithium ion batteries
developed by Executive for GRDC shall be and remain the property of GRDC.
Executive hereby assigns and transfers all of his right, title and interest in
and to all such improvements, discoveries, and inventions (except as heretofore
noted) 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
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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 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 Agreement may be assigned or
transferred by Executive except:
(a) Executive's rights to compensation and benefits to be paid
hereunder in the event of death 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.
The rights and obligations of the Company under this 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, or to a wholly-owned subsidiary.
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12. GOVERNING LAW
This 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 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
including, without limitation, the Prior Agreement, which is hereby expressly
cancelled.
14. AMENDMENT OR MODIFICATION; WAIVER
No provision of this 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 Agreement, no waiver by the Company or Executive of any breach
by the other of any condition or provision of this 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 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.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Secretary
With a copy to: Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to Executive: H. ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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16. SEVERABILITY
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions or portions of this 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 Agreement, the respective rights and
obligations of the Parties hereunder shall survive any termination of this
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 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 Agreement.
19. REFERENCES
In the event of Executive's death or a judicial determination of his
incompetence, reference in this 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 Agreement shall be construed by reference
to any heading.
20. MUTUAL INTENT
The language used in this 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 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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This Agreement may be signed in any number of counterparts, each of
which taken together shall constitute but one and the same agreement.
IN WITNESS WHEREOF, Executive and the Company have caused this
Agreement to be executed as of the day and year first above written.
EXECUTIVE H POWER CORP.
/s/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------- ------------------------------
H. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Chief Financial Officer
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