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Exhibit 10.6
EMPLOYMENT AGREEMENT
Employment Agreement ("Agreement") made and entered into as of
____________, 2000, by and between MILLENNIUM CELL INC., a Delaware corporation
having a place of business at 0 Xxxxxxxxxx Xxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000
("Employer"), and XXXXXX X. XXXXXXXX, an individual residing at 00 Xxxxxxx
Xxxxxxx Xxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000 ("Executive").
WHEREAS, Employer has been established to engage in the business of
developing a patented alternative energy source based on boron chemistry; and
WHEREAS, Employer desires to employ Executive as its Executive Vice
President and Chief Technical Officer, and Executive is willing to be employed
in such capacity.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants contained herein, it is agreed as follows:
1. EMPLOYMENT; DUTIES.
(a) Employer hereby agrees to employ Executive, and Executive
hereby agrees to accept employment during the term hereof, as Executive Vice
President and Chief Technical Officer, and shall perform such services in
accordance with the standards observed by senior executives in comparable
businesses, subject at all times to the direction of the Board of Directors of
Employer (the "Board").
(b) Executive agrees to serve on the Board on the same terms
and conditions as the other directors serving on the Board. Absent Executive's
gross negligence or willful misconduct, Employer agrees to indemnify and hold
Executives harmless, in accordance with Employer's bylaws and on the same terms
and conditions as the other directors serving on the Board, with respect to any
claims arising out of performance of Executive's duties as a director or officer
of Employer.
2. TERM OF EMPLOYMENT. Executive's employment hereunder shall
commence on the date of this Agreement and shall continue for a period of _____
(_) years therefrom (the "Employment Term").
3. COMPENSATION.
(a) Base Salary. As consideration for all of the services
performed by Executive under this Agreement, Employer shall pay Executive, as an
annual Base Salary (defined below) payable in accordance with Employer's
ordinary payroll practices, the sum of two hundred thousand dollars ($200,000).
Executive's Base Salary shall be increased to two hundred and twenty-five
thousand dollars ($225,000) upon the earlier occurrence of (i) the closing of
the initial public offering of Employer's common stock registered with the
Securities
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and Exchange Commission (the "IPO") or (ii) January 1, 2001. (The compensation
specified in this subsection (a), together with any increases in such
compensation that the Employer may grant from time to time, are referred to in
this Agreement as "Base Salary").
(b) Bonus. Executive will be eligible to earn a year-end cash
bonus [based on the financial and operational performance of Millenium Cell,
Inc.] in an amount equal to 50% of Executive's Base Salary for that year
("Bonus"). The Bonus shall be payable in a lump sum within 90 days of the end of
the calendar year.
(c) Signing Bonus. As consideration for Executive entering
into this Agreement, Employer shall pay Executive upon the closing of the IPO
the sum of two hundred fifty thousand dollars ($250,000).
(d) Stock Options. Employer and Executive shall enter into a
Stock Option Agreement of even date herewith whereby Employer shall issue to
Executive options to purchase 1,006,643 shares of common stock of Employer with
an exercise price of $2.90 per share ("Options") pursuant to the terms of the
Millennium Cell 2000 Stock Option Plan. 241,630 of such Options shall be
exercisable immediately ("West Coast Options").
(e) Effect of Termination.
A. The Employer may terminate Executive's employment for
Cause or without Cause. "Cause" shall mean only one or more of the following
occurrences: (a) Executive's conviction of a felony by a court of competent
jurisdiction (which conviction, through lapse of time or otherwise, is not
subject to appeal); (b) Executive's commission of an act of fraud or
embezzlement upon the Employer; (c) the material breach by Executive of Section
4 hereof; or (d) in the event of the willful malfeasance or gross negligence in
the performance of Executive's duties hereunder or the willful failure of
Executive to perform his duties hereunder, which malfeasance, negligence or
failure has a material adverse effect on the business of Employer and continues
for a period of fifteen (15) days after written notice is given to Executive
specifying such malfeasance, negligence or failure.
If the Employer terminates Executive's employment without "Cause," then:
(i) Executive shall receive a severance payment equal
to Executive's Base Salary plus Bonus at the time of his termination; and
(ii) Executive's Options shall vest as if Executive
were employed throughout the year of termination. Notwithstanding the foregoing
sentence, a minimum of 50% of Employee's Options shall vest. The exercise period
for Executive's Options shall be 1 year from the date of termination without
cause.
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B. Anything to the contrary notwithstanding, this
Agreement shall terminate before the expiration of the term hereof in the event
of (i) Executive's death or (ii) at the discretion of the Employer, upon
Executive's "disability" (as defined below) for a period of 26 (twenty six)
consecutive weeks. For the purposes of this Agreement, "disability" shall mean
the incapacitation or disablement by accident, sickness or otherwise so as to
render Executive mentally or physically incapable of performing the services
required to be performed by him under this Agreement. If the Agreement is
terminated in accordance with this subsection B, the exercise period of
Executive's Options shall be 1 year from such termination.
(f) Tax Gross-Up. If any payment received by Executive under
this Agreement constitutes, in whole or in part, an "excess parachute payment"
under Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), and Executive becomes liable for excise tax imposed under Section 4999
of the Code with respect to such payment, the Company shall pay Executive as
additional compensation an amount equal to the amount necessary to put Executive
on an after-tax basis (taking into account federal, state and local income
taxes) in the same position as if the excise tax had not been imposed.
4. NON-COMPETITION.
(a) Definitions. As used herein, the term "Competitive
Activities" means any attempt by Executive, directly or indirectly, for his own
account or as an employee, officer, director, partner, joint venturer,
shareholder, investor (except that Executive may purchase up to five percent of
the outstanding capital stock of any publicly-traded corporation) or otherwise
to engage or participate in the business of developing an alternative energy
source based on boron chemistry, including hydrogen generation, for use, without
limitation, in fuel cells, batteries or automotive engines, in any area. As used
herein, the term "Client Solicitation" means any attempt by Executive, directly
or indirectly, for his own account or as an employee, officer, director,
partner, joint venturer, shareholder, investor of otherwise to interfere with,
disrupt, or attempt to disrupt, any past, present or prospective relationship,
contractual or otherwise, between Employer and any client, customer, vendor or
supplier of Employer. As used herein, the term "Employee Solicitation" means any
attempt by Executive, directly or indirectly, for his own account or as an
employee, officer, director, partner, joint venturer, shareholder, investor or
otherwise to employ or solicit the employment or engagement by others of any
employee of Employer who was an employee as of the date of the termination of
this Agreement or within six (6) months prior thereto.
(b) Non-competition. During the term of this Agreement and for
1 year following the termination of this Agreement, Executive will not engage in
any Competitive Activities, Client Solicitation or Employee Solicitation.
5. CONFIDENTIALITY. During the term of this Agreement and
thereafter, Executive agrees to hold in strictest confidence, and not to use,
except for the benefit of
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Employer, or to disclose to any person, firm or corporation, without the prior
written authorization of the Board, any trade secrets, confidential knowledge,
data or other proprietary information of Employer.
6. VACATION; BENEFITS. Executive shall be entitled to paid
vacation time at the rate of not less than _____ ( ) weeks per calendar year
during the term of his employment hereunder. In addition, Executive will be
permitted to observe religious holidays as personal days and such days off will
not be applied against Executive's vacation time. During the term of this
Agreement, Employer shall maintain medical and dental insurance plans similar in
scope and coverage to those maintained by comparable businesses and Executive
shall be entitled to participate in such plans.
7. NOTICES. All notices hereunder shall be in writing and shall
be delivered in person or given by registered or certified mail, postage
prepaid, and sent to the parties at the respective addresses above set forth.
Either party may designate any other address to which notice shall be given by
giving notice to the other of such change of address in the manner herein
provided.
8. SEVERABILITY OF PROVISIONS. If any provision of this Agreement
shall be declared by a court of competent jurisdiction to be invalid, illegal or
incapable of being enforced in whole or in part, the remaining conditions and
provisions or portions thereof shall nevertheless remain in full force and
effect and enforceable to the extent they are valid, legal and enforceable, and
no provision shall be deemed dependent upon any other covenant or provision
unless so expressed herein.
9. GOVERNING LAW. This Agreement shall be construed and governed
by the internal laws of the State of New York.
10. NON-WAIVER. The failure of either party to insist upon the
strict performance of any term or condition in this Agreement shall not be
considered a waiver or relinquishment of future compliance therewith.
11. ATTORNEY'S FEES. In the event of a dispute arising hereunder,
each party shall bear its own fees and expenses (including legal fees and
expenses).
12. ENTIRE AGREEMENT; MODIFICATION. This Agreement contains the
entire agreement between the parties relating to the subject matter hereof. No
modification of this Agreement shall be valid unless it is made in writing and
signed by the parties.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
MILLENNIUM CELL, INC.
By:____________________________________
Xxxxxxx X. Xxxx
President and Chief Executive Officer
_______________________________________
XXXXXX X. XXXXXXXX
