Unassociated Document


    EXHIBIT
      10.60

     

    EMPLOYMENT
      AGREEMENT

     

    This
      Employment Agreement (“Agreement”) made and entered into effective as of January
      12, 2006 (the
      “Effective Date”), by and between FuelCell Energy, Inc. (the “Corporation”), a
      Delaware corporation with its principal office at 3 Great Pasture Road, Danbury,
      Connecticut, 06813, and R. Daniel Brdar (“Executive”), an individual who resides
      at 109 Lake Ridge Road, Southbury, Connecticut 06488.

     

    WHEREAS,
      the Corporation desires to promote Executive to the position of President and
      Chief Executive Officer and the Executive desires to accept such promotion,
      commencing as of the Effective Date; and

     

    WHEREAS,
      the Corporation and Executive desire to enter into this Agreement to set forth
      the terms and conditions of their employment relationship; and

     

    WHEREAS,
      Executive acknowledges that by executing and delivering this Agreement, he
      will
      obtain certain rights, compensation, and benefits greater than those that he
      previously received from the Corporation and that, accordingly, such rights,
      compensation, and benefits constitute valid consideration to
      Executive.

     

    NOW,
      THEREFORE, in consideration of the mutual covenants and agreements contained
      herein, and other good and valuable consideration, the receipt and sufficiency
      of which is hereby acknowledged by the parties, the parties agree as
      follows:

     

    1. Employment.
      The
      Corporation shall employ Executive in the capacity of President and Chief
      Executive Officer (“President & CEO”) of the Corporation during the term of
      this Agreement, and Executive hereby accepts such employment on the terms and
      conditions set forth in this Agreement. Executive represents that his employment
      by the Corporation pursuant to this Agreement does not violate any other
      agreement, covenant or obligation to which he is a party or by which he is
      bound.

    


    2. Duties.
      During
      the term of this Agreement, Executive shall perform all duties, consistent
      with
      his position as President & CEO in order to advance the Corporation’s
      affairs and related business efforts, assigned or delegated to him by the Board
      of Directors of the Corporation (the
      “Board”) and normally associated with the position of President & CEO. He
      shall devote all of his full business time, attention, energies, skills, and
      efforts to the advancement of the interests and business of the Corporation.
      Following the Effective Date of this Agreement, Executive shall become a member
      of the Board and its Executive Committee.

     

    3. Term.
      The
      term of this Agreement shall begin on the Effective Date, and shall expire
      on
      December 31, 2006, unless earlier terminated as provided in this Agreement
      (the
“Initial Term”). Upon expiration of the Initial Term and any subsequent term or
      extension thereof, this Agreement shall automatically be extended for an
      additional term of one (1) year, unless Executive or the Corporation elect
      to
      terminate this Agreement in accordance with the provisions of Section 12 of
      this
      Agreement (the “Initial Term,” together with any subsequent terms or extensions,
      until termination or expiration in accordance with the provisions of this
      Agreement, shall be referred to as the “Employment Term”). 

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4. Compensation.
      As
      compensation for any and all services to be rendered by Executive to the
      Corporation pursuant to this Agreement, the Corporation shall pay Executive
      and
      provide Executive with the following compensation and benefits, which Executive
      agrees to accept in full satisfaction for his services:

     

    a. Base
      Salary.
      The
      Corporation shall pay Executive a Base Salary, payable in equal installments
      at
      such payment intervals as are the usual payroll practices of the Corporation,
      at
      an initial annual rate of $350,000, less such deductions or amounts to be
      withheld as shall be required by applicable law or as may be allowed at the
      request of Executive (the “Base Salary”). The Base Salary shall be reviewed at
      least annually by the Compensation Committee of the Board after the end of
      each
      fiscal year of the Corporation and shall be adjusted by such amount, if any,
      as
      Compensation Committee of the Board, in its sole discretion, shall determine
      and
      approve. Any such adjustment of Base Salary shall be made effective on the
      date
      set by the Compensation Committee of the Board. 

     

    b. Bonus.
      Provided Executive first meets the Corporation’s expectations for his
      performance during the Employment Term and remains employed on the date of
      payment, Executive shall be eligible for a discretionary bonus (a “Discretionary
      Bonus”) of up to fifty
      percent (50%)
      of his
      Base Salary as determined and approved by the Board in its sole discretion
      based
      upon Executive’s achievements in meeting his performance goals and those of the
      Corporation for its most recently ended fiscal year. Goals shall be established
      after the commencement of the Employment Term and then in the first quarter
      of
      any subsequent fiscal year. Any such Discretionary Bonus may be payable in
      cash,
      stock options, and/or restricted stock upon such terms and conditions as
      determined by the Board. The Corporation shall pay any such Discretionary Bonus
      by the end of the first quarter of the following fiscal year. As any bonus
      paid
      to Executive is discretionary, the payment of any bonus in a year must not
      be
      construed as requiring the payment of a bonus in any other year. 

     

    c. Benefits.

     

    (i) Executive
      shall be entitled to participate, to the extent he is eligible, in all group
      insurance programs, health, medical, dental, and disability plans (including,
      without limitations, the Corporation’s 401(k) plan), and other employee benefit
      plans which the Corporation may hereafter in its sole and absolute discretion
      make available generally to its senior executives (other than any incentive
      compensation or equity ownership plan), but the Corporation shall not be
      required to establish or maintain any such program or plan. 

     

    
      
        
        

      

      
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    (ii) Executive
      shall be entitled to four (4) weeks paid vacation during each calendar year,
      in
      accordance with the Corporation’s vacation policies. Such vacation may be taken
      at such time or times as is reasonably consistent with the Corporation’s
      vacation policies and the performance by Executive of his duties and
      responsibilities under this Agreement. Up to one week of unused vacation time
      in
      one year may be carried over and used in the subsequent year.

     

    (iii) Executive
      shall be entitled to participate
      in the
      Corporation’s Stock Option Plan (the “Plan”) and the Compensation Committee of
      the Board has previously granted Executive options to purchase 250,000 shares
      of
      the Corporation’s common stock. The Option shall not be subject to accelerated
      vesting in the event Executive is terminated for Cause pursuant to Section
      12c
      hereof. Executive understands and agrees that any stock rights granted to
      Executive shall be subject to the provisions of the Plan and any separate
      written agreements embodying the grant of the rights that are required by the
      Plan. The rights shall be set forth in a separate agreement embodying the grant
      of the rights which shall be otherwise in the form stipulated in the Plan.
      To
      the extent that there is any conflict between the vesting provisions of this
      Agreement and the provisions of the Plan, the provisions of this Agreement
      shall
      govern.

     

    d. Taxes.
      All
      compensation and benefits are subject to applicable withholding taxes, federal,
      state, and local, and any other proper deductions.

     

    e. Benefit
      Plans.
      Executive understands that the Corporation may amend, change, or cancel its
      employment policies and benefit plans at any time as allowed by law or by any
      applicable plan documents.

     

    5. Business
      Expenses.
      The
      Corporation shall pay, or reimburse Executive for, the reasonable and necessary
      business expenses of Executive incurred in the performance of his duties under
      this Agreement, provided Executive provides timely and reasonable documentation
      of those expenses in accordance with the rules and regulations of the
      Corporation.

     

    6. Compliance
      with Policies.
      Executive acknowledges and agrees that, except as set forth in this Agreement,
      compliance with the Corporation’s policies, practices and procedures is a term
      and condition of his employment under this Agreement.

     

    7. Intellectual
      Property, Inventions and Improvements.
      Executive acknowledges, covenants and agrees that the Corporation shall be
      the
      sole owner of all the fruits and proceeds of Executive’s services to the
      Corporation, including but not limited to all writings, inventions, discoveries,
      designs, systems, processes, software or other improvements relating to the
      business or products of the Corporation, whether or not patentable,
      registerable, or copyrightable, which Executive may, alone or with others,
      conceive, create, develop, produce or make during or as a result of his
      employment with the Corporation (collectively, the “Invention”), free and clear
      of any claims by Executive of any kind or character whatsoever other than
      Executive’s rights to compensation under this Agreement. Executive agrees that
      he shall disclose each of the Inventions promptly and completely to the
      Corporation, and shall, at the request of the Board, execute such assignments,
      certificates or other instruments as the Board or the Corporation from time
      to
      time deem necessary or desirable to evidence, establish, maintain, perfect,
      protect, enforce or defend the Corporation’s right, title and interest in or to
      any or all of the Inventions. Executive acknowledges that all works of
      authorship (including, without limitation, works of authorship that contain
      software program code) relating to the business of the Corporation and produced
      during Executive’s employment with the Corporation, whether they are or are not
      created on the Corporation’s premises or during regular working hours, are works
      made for hire and are the property of the Corporation, and that copyrights
      in
      those works of authorship are the property of the Corporation. If for any reason
      the Corporation is not the author of any such work of authorship for copyright
      purposes, Executive hereby expressly assigns all of his rights in and to that
      work to the Corporation and agrees to sign any instrument of specific assignment
      requested. Executive, whether or not still employed by the Corporation, agrees
      to supply evidence, give testimony, sign and execute all papers, and do all
      other legal and proper things that the Corporation may deem reasonably necessary
      for obtaining, maintaining, and enforcing patents for such Inventions and for
      vesting in the Corporation full title. If Executive is no longer employed by
      the
      Corporation at such time, then Corporation shall pay Executive his reasonable
      out-of-pocket expenses incurred in connection with his providing the services
      rendered by him in the previous sentence.

     

    
      
        
        

      

      
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    8. Non-Disclosure
      of Confidential Information.

     

    a. Executive
      acknowledges that, in and as a result of his employment by the Corporation,
      he
      will be making use of, acquiring and/or adding to the Corporation’s Confidential
      Information (as defined below). As a material inducement to the Corporation
      to
      employ Executive and to pay Executive the compensation and benefits set forth
      in
      this Agreement, Executive covenants and agrees that he shall not, at any time
      during or following the term of his employment with the Corporation, directly
      or
      indirectly divulge or disclose for any purposes whatsoever, any Confidential
      Information that has been obtained by, or disclosed to, him as a result of
      his
      employment with the Corporation. For purposes of this Agreement, “Confidential
      Information” means, collectively, all confidential matters and materials of the
      Corporation, including without limitation, (i) the Corporation’s proprietary
      information, inventions, trade secrets, knowledge, data, know-how, intellectual
      property, systems, procedures, manuals, pricing policies, operational methods
      and information relating to the Corporation’s products, processes, formulae,
      business plans, marketing plans and strategies, pricing strategies, customer
      lists, and all other subject matters pertaining to the business and/or financial
      affairs of the Corporation; (ii) the Corporation’s information regarding plans
      and strategies for research, development, new products, future business plans,
      budgets and unpublished financial statements, licenses, prices and costs; (iii)
      information regarding the skills and compensation of other employees of the
      Corporation; and (iv) information disclosed in confidence to the Corporation
      by
      a third party with a duty on the Corporation to maintain the confidentiality
      of
      such information. The term “Confidential Information” shall not include any
      information that (x) has been made available generally to the public either
      by
      the Corporation or by a third party with the Corporation’s consent, unless such
      information became available as a result of any action by Executive in violation
      of this Agreement, any other agreement, or his obligations under law, or (y)
      has
      been made available as a result of a final award, order, or ruling by an
      arbitration tribunal or a court of competent jurisdiction that has determined
      that such Confidential Information may be disclosed. 

     

    b. If
      Executive is required by a court, arbitration tribunal, or governmental agency
      (by oral questions, interrogatories, requests for information or documents,
      subpoena, civil investigation demand or similar process) to disclose any
      Confidential Information, Executive may disclose such Information to such court,
      tribunal, or agency without liability hereunder, provided, that Executive first
      provides the Corporation with notice of any such requirement(s) as promptly
      as
      practicable, but in any case with sufficient timeliness to enable the
      Corporation to seek an appropriate protective order and/or waive its compliance
      with the relevant provisions of this Agreement.

     

    
      
        
        

      

      
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    9. Covenants
      Against Competition.
      

     

    a. Non-Solicitation
      of Employees.
      While
      employed by the Corporation and for a period of one (1) year, followed by a
      second period of one (1) year, for a total period of two (2) years, from
      the
      date of termination of Executive’s Employment Term with the Corporation for any
      reason, Executive shall not directly or indirectly solicit, induce or encourage
      any of the Corporation’s employees to terminate their employment with the
      Corporation or to accept employment with any competitor, supplier, client,
      agent
      or broker of the Corporation, nor shall Executive cooperate with any others
      in
      doing or attempting to do so. As used in this paragraph, the term “solicit,
      induce or encourage” includes, but is not limited to, (i) initiating
      communications with any employee of the Corporation relating to possible
      employment or independent contractor relationship, (ii) offering bonuses or
      additional compensation to encourage any employee of the Corporation to
      terminate his or her employment with the Corporation and accept employment
      with
      a competitor, supplier, client, agent or broker of the Corporation, or (iii)
      referring any employee of the Corporation to recruiters, personnel or agents
      employed by competitors, suppliers, clients, agents or brokers of the
      Corporation. Notwithstanding the foregoing, the term "solicit, induce or
      encourage", as used in this Section 9a, specifically excludes any action by
      the
      Executive related to any of the Corporation's employees where it is in the
      Corporation's best interest to terminate any such employees as in the case
      of a
      planned reduction in force by the Corporation.

     

    b. Non-Compete.
      While
      Executive is employed by the Corporation and for a period of one (1) year,
      followed by a second period of one (1) year, for a total period of two (2)
      years, from
      the
      date of termination of Executive’s Employment Term for any reason, Executive
      shall not directly or indirectly, as a principal, agent, contractor, employee,
      employer, partner, shareholder, proprietor, investor, member, director, officer
      or consultant or in any other capacity, engage in or perform any managerial
      or
      executive services (a) for any corporation, partnership, individual or entity
      which is engaged in a business competitive with the Corporation or affiliate
      of
      the Corporation, or (b) to any customer of the Corporation or affiliate of
      the
      Corporation.

     

    c. For
      the
      purposes of this Agreement:

     

    
      
        
        

      

      
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    (i) The
      term
“engaged in a business competitive with the Corporation” means directly or
      indirectly engaging in the business of researching, developing, designing,
      manufacturing, selling or distributing fuel cells or batteries or engaging
      in
      the same or any substantially similar business as the Corporation or any of
      its
      affiliates in any manner whatsoever within any geographic area in which the
      Corporation’s products or services are offered or distributed. Executive
      understands and agrees that, because the Corporation is engaged in business
      throughout the world, the geographic area covered by this noncompete covenant
      extends throughout North America, South America, Europe, Asia and Africa;
 

     

    (ii) The
      term
“affiliate” means any legal entity that directly or indirectly through one or
      more intermediaries controls, is controlled by, or is under common control
      with
      the Corporation; and

     

    (iii) The
      term
“customer” means any business, company, person, and any other entity to whom the
      Corporation or any of its affiliates has provided any product or service,
      whether or not for compensation, within a period of two (2) years prior to
      the
      time Executive ceases to be employed by the Corporation.

     

    d. Exclusion
      for Investments.
      None of
      the provisions of this Section 9 shall prohibit Executive from investing in
      securities (i) listed on a national securities exchange or actively traded
      over-the-counter so long as such investments are not greater than five percent
      (5%) of the outstanding securities of any issuer of the same class or issue
      or
      (ii) of entities engaged in a business competitive with the Corporation so
      long
      as any such entity was not engaged in a business competitive with the
      Corporation at the time Executive made such investment. 

     

    10. Reasonableness
      of Restrictions.
      

     

    a. Executive
      has carefully read and considered the provisions of Section 8 and
      Section 9, and, having done so, agrees that:

     

    (i) The
      restrictions set forth in Section 8 and Section 9, including but not limited
      to
      the character, duration, and geographical area of restriction, are fair and
      reasonable and are reasonably required for the protection of the good will
      and
      other legitimate business interests of the Corporation and its affiliates,
      officers, directors, shareholders, and other employees;

     

    (ii) Executive
      has received, or is entitled to receive, adequate consideration for such
      obligations; and

     

    (iii) Such
      obligations do not prevent Executive from earning a livelihood.

     

    b. If,
      notwithstanding the foregoing, any of the provisions of Section 8 or Section
      9
      shall be held to be invalid or unenforceable, the remaining provisions thereof
      shall nevertheless continue to be valid and enforceable as though the invalid
      and unenforceable parts had not been included therein. If any provision of
      Section 8 or Section 9 is determined by a court of competent jurisdiction that
      the character, duration, geographical scope, or related aspects are unreasonable
      in light of the circumstances as they then exist, then it is the intention
      of
      the parties that Section 8 and/or Section 9 shall be construed by the court
      in
      such a manner as to impose only those restrictions on the conduct of Executive
      that are reasonable in light of the circumstances as they then exist and as
      are
      necessary to assure the Corporation of the intended benefit of this Agreement
      and such restrictions, as so modified, shall become and thereafter be the
      maximum restriction in such regard, and the restriction shall remain enforceable
      to the fullest extent deemed reasonable by such court.

     

    
      
        
        

      

      
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    11. Remedies
      for Breach of Executive’s Covenants of Non-Disclosure and
      Non-Competition.
      Executive recognizes and agrees that the Corporation’s remedy at law for any
      breach of Section 8 or Section 9 would be inadequate as such a breach would
      cause irreparable harm to the Corporation, and he agrees that, for any actual
      or
      threatened breach of such provisions, the Corporation shall, in addition to
      such
      other remedies as may be available to it at law or in equity, be entitled to
      injunctive relief and to enforce its rights by an action for specific
      performance. All of the Corporation’s remedies for any breach of this Agreement
      shall be cumulative and the pursuit of any one remedy shall not exclude the
      Corporation’s pursuit of any other remedies.

     

    12. Termination
      and Severance.

     

    a. Death.
      In the
      event that Executive dies during the Employment Term, this Agreement shall
      terminate automatically upon his death, upon which event Executive’s legal
      representatives shall be entitled to receive, and the Corporation shall pay
      or
      cause to be paid to Executive’s legal representatives, any Base Salary and other
      compensation or benefits accrued but as yet unpaid on the date of Executive’s
      death. 

     

    b. Incapacity
      or Disability.
      If
      during the Employment Term, Executive is prevented from performing the duties
      or
      fulfilling responsibilities of his employment under this Agreement by reason
      of
      any incapacity or disability for a continuous period of six (6) months, as
      determined by an independent qualified physician selected by the Corporation
      and
      reasonably acceptable to Executive (or his representative), then the Corporation
      may terminate Executive’s employment hereunder, but Executive shall continue to
      be eligible to receive any benefits to which he may be entitled under the terms
      of any long-term disability plan or insurance policy maintained by the
      Corporation for its employees generally or for Executive specifically. In the
      event of such incapacity or disability, the Corporation shall continue to pay
      full compensation to Executive in accordance with the terms of this Agreement
      until the date of such termination.

     

    c. By
      Corporation for Cause.
      The
      Corporation may, upon written notice to Executive, terminate Executive’s
      employment hereunder for Cause (as defined hereafter); provided that the
      Corporation shall first provide Executive with an opportunity to be heard by
      the
      Board on any proposed termination for Cause by the Board. For purposes of this
      Agreement, the term “Cause” shall mean (i) Executive’s material breach of this
      Agreement if the Corporation has notified Executive of such breach and he has
      not cured such breach within 15 days of having received such notice; (ii)
      Executive’s material failure to adhere to any policy of the Corporation
      generally applicable to employees of the Corporation if Executive has been
      given
      a reasonable opportunity to comply with such policy or cure his failure to
      comply; (iii) Executive’s appropriation (or attempted appropriation) of a
      business opportunity of the Corporation, including attempting to secure or
      securing any personal profit in connection with any transaction entered into
      on
      behalf of the Corporation; (iv) Executive’s misappropriation (or attempted
      misappropriation) of any of the Corporation’s funds or property; (v) Executive’s
      conviction of, or the entering of a guilty plea or plea of no contest with
      respect to, a felony, the equivalent thereof, or of a lesser crime having as
      its
      predicate element fraud, dishonesty or misappropriation of property of the
      Corporation; (vi) Executive’s willful misconduct or insubordination; (vii)
      Executive’s physical or mental disability or other inability to perform the
      essential functions of his position for a consecutive six (6) month period,
      with
      or without reasonable accommodation, as determined by an independent qualified
      physician selected by the Corporation and reasonably acceptable to Executive
      (or
      his representative) if Executive is not eligible for benefits under the terms
      of
      any long-term disability policy or insurance policy maintained by the
      Corporation for its employees generally or for Executive specifically; (viii)
      Executive’s engaging in bad faith or gross negligence in the performance of his
      duties under this Agreement as determined in good faith by the Board; or (ix)
      any other conduct of Executive sufficiently detrimental to the Corporation
      so as
      to warrant immediate termination of Executive’s employment with the Corporation.


     

    
      
        
        

      

      
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    In
      the
      event of termination for Cause of Executive’s employment, Executive’s right to
      receive compensation and other benefits hereunder (other than any Base Salary
      and any vacation accrued but as yet unpaid on the effective date of such
      termination) shall terminate on the effective date of such termination, and
      Executive shall not be entitled to any severance payments or other
      benefits.

     

    d. Termination
      by the Corporation without Cause.
      The
      Corporation may elect to terminate Executive’s employment at any time without
      Cause upon written notice to Executive. In the event of such termination without
      Cause, Executive shall be entitled to a
      severance
      payment
      in an amount
      equal to
      two (2) years of (i) Executive’s Base Salary as
      of the
      date of termination plus (ii) the average of the bonuses paid Employee
      since the inception of the Agreement; such payment to be made in equal
      installments over a six (6) month period on the Corporation’s usual pay
      periods
      during
      that period of time; provided, however, that in order to be eligible to receive
      such severance payment, Executive must sign a waiver of any claims against
      the
      Corporation on a waiver and release form approved by the Corporation at that
      time.
      

     

    e. Nonrenewal
      of Agreement.
      The
      Corporation may elect to not renew or extend this Agreement at any time without
      cause upon written notice to Executive not later than thirty (30) days prior
      to
      the end of any Initial Term or any extended Employment Term. In the event of
      a
      nonrenewal or non-extension pursuant to this Paragraph, Executive’s rights to
      receive compensation and other benefits (other than any Base Salary and vacation
      accrued but as yet unpaid on the effective date of such termination) shall
      terminate at the expiration of the Initial Term or Employment Term. In the
      event
      of such termination, Executive shall be entitled to a
      severance
      payment
      following the end of such Initial Term or Employment Term in
      an
      amount equal
      to
      the
      amounts specified in Section 12(d).
      

     

    
      
        
        

      

      
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    f. By
      Executive for Certain Reasons.
      Executive may, at his option, upon at least thirty (30) days written notice
      to
      the Corporation, terminate his employment hereunder, if the Corporation, without
      Executive’s express written consent, (i) removes him as an officer of the
      Corporation, (ii) demotes him from President and CEO, (iii) assigns him duties
      materially inconsistent with the position and/or duties described in Sections
      1
      or 2, (iv) materially diminishes his responsibilities and/or duties described
      in
      Sections 1 or 2, or (v) breaches any material obligations to Executive under
      this Agreement. Upon any termination by Executive under this Paragraph the
      Corporation shall be obligated to pay Executive the severance payments specified
      in Section 12(d).

     

    g. By
      Executive Following Change of Control.
      Executive may, at his option, upon thirty (30) days written notice to the
      Corporation, terminate his employment hereunder for Good Reason (as hereinafter
      defined) following a Change of Control of the Corporation. Upon any termination
      by Executive under this Paragraph, the Corporation shall be obligated to pay
      Executive the
      amounts specified in Section 12(d).
      Termination by Executive pursuant to this paragraph shall not be deemed a
      voluntary termination by Executive pursuant to Section 12k hereof. 

     

    h. Good
      Reason Defined.
      For
      purposes of this Agreement, the term “Good Reason” means, during the thirty (30)
      day period prior to or the twelve (12) month period following a Change of
      Control, without Executive’s express written consent, the occurrence of any of
      the following circumstances:

     

    
      
        	 	
                (i)

              	
                the
                  assignment to Executive of any duties inconsistent (except in the
                  nature
                  of a promotion) with the position in the Corporation that he held
                  immediately prior to the Change of Control or substantial adverse
                  alteration in the nature or status of his position or responsibilities
                  or
                  the conditions of his employment from those in effect immediately
                  prior to
                  the Change of Control;

              


      

      
        	 	 	 


      

      
        	 	
                (ii)

              	
                a
                  reduction,
                  other than a de minimis reduction, by
                  the Corporation in Executive’s annual Base Salary as in effect on the date
                  hereof, as the same may be increased from time to time;
                  

              


      

      
        	 	 	 


      

      
        	 	
                (iii)
 	
                the
                  failure by the Corporation to continue in effect any material compensation
                  or benefit plan in which Executive participates immediately prior
                  to the
                  Change of Control unless an equitable arrangement (embodied in
                  an ongoing
                  substitute or alternative plan) has been made with respect to such
                  plan,
                  or the failure by the Corporation to continue Executive’s participation
                  therein (or in such substitute or alternative plan) on a basis
                  not
                  materially less favorable, both in terms of the amount of benefits
                  provided and the level of his participation relative to other
                  participants, than existed immediately prior to the Change of
                  Control;
                  or

              


      

      
        	 	 	 


      

      
        	 	
                (iv)

              	
                the
                  failure by the Corporation or its successor or any surviving entity
                  to
                  maintain Executive as the President and CEO of the top level operating
                  company affiliated with the Corporation or its successor or surviving
                  entity. 

              


      

    

     

    
      
        
        

      

      
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    i. Change
      of Control Defined.
      For
      purposes of this Agreement, a “Change of Control” shall be deemed to have
      occurred if the transaction is of a nature that would be required to be reported
      in response to Item l(a) of the Current Report on Form 8-K, as in effect on
      January 1, 2003, pursuant to Section 13 or 15(d) of the Securities Exchange
      Act
      of 1934 (the “Exchange Act”); provided that, without limitation, such a “Change
      of Control” shall be deemed to have occurred if: (i) a third Person, including a
“group” as such term is used in Section 13(d)(3) of the Exchange Act, other than
      the trustee of any employee benefit plan of the Corporation, becomes the
      beneficial owner, directly or indirectly, of 35% or more of the combined voting
      power of the Corporation’s outstanding voting securities ordinarily having the
      right to vote for the election of directors of the Corporation; (ii) during
      any
      period of twenty-four (24) consecutive months individuals who, at the beginning
      of such consecutive twenty-four (24) month period, constitute the Board of
      Directors of the Corporation (the “Board”) cease for any reason (other than
      retirement upon reaching normal retirement age, disability, or death) to
      constitute at least a majority of the Board; provided that any person becoming
      a
      director subsequent to the date hereof whose election, or nomination for
      election by the Corporation’s shareholders, was approved by a vote of at least
      three quarters of the directors comprising the Incumbent Board shall be, for
      purposes of this Agreement, considered as though such person were a member
      of
      the Incumbent Board; or (iii) the Corporation shall cease to be a publicly
      owned
      corporation having its outstanding Common Stock listed on the New York Stock
      Exchange or quoted in the NASDAQ National or
      Small
      Cap Market
      System, except where the delisting is related to a private purchase of the
      Corporation’s stock by a group consisting of the Corporation’s current officers.


     

    For
      these
      purposes, a “Change of Control” also shall not be deemed to have occurred where,
      with respect to any transaction otherwise constituting a “Change of Control,”
Executive is reasonably expected to maintain his existing position as President
      and CEO with the Corporation. 

     

    For
      these
      purposes, Incumbent Board means the Board as in existence twenty-four (24)
      months prior to the date the action is being considered. Notwithstanding the
      foregoing, if the Incumbent Board specifically determines that any transaction
      does not constitute a Change of Control for purposes of this Agreement such
      determination shall be conclusive and binding.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    j. Person
      Defined.
      For
      purposes of this Agreement, the term “Person” means any individual, corporation,
      association, partnership, limited partnership, limited liability company,
      limited liability partnership, organization, business, joint venture, sole
      proprietorship, governmental agency, entity or subdivision or other entity
      of
      any kind or nature.

     

    k. Voluntary
      Termination by Executive.
      Executive may, at his option, upon thirty (30) days prior written notice to
      the
      Corporation, terminate his employment hereunder. In the event of a voluntary
      termination of his employment by the Executive pursuant to this Paragraph,
      Executive’s rights to receive compensation and other benefits (other than any
      Base Salary and vacation accrued but as yet unpaid on the effective date of
      such
      termination) shall terminate on the effective date of such termination, and
      Executive shall not be entitled to any severance payments or other
      benefits.

     

    l. Eligibility
      for Severance; Requirement of Release.
      Except
      as provided in Sections 12d, 12e, 12f, and 12g, Executive shall not be eligible
      for or entitled to any severance payments in the event of termination of his
      employment hereunder. No severance shall be paid under this Agreement unless
      Executive first executes and agrees to be bound by a release of all claims,
      on a
      form provided by the Corporation, which releases any and all claims that
      Executive has or might have against the Corporation and which contains terms
      customary in such agreements.

     

    m. Resignation.
      In the
      event of termination of his employment other than for death, Executive shall
      be
      deemed to have resigned from all positions held in the Corporation, including
      without limitation any position as a director, officer, agent, trustee, or
      consultant of the Corporation or any affiliate of the Corporation. Upon request
      of the Corporation, Executive shall promptly sign and deliver to the Corporation
      any and all documents reflecting such resignations as of the date of termination
      of his employment.

     

    n. Compliance
      with Section 409A of the Code.
      Notwithstanding anything to the contrary in this Agreement, to the extent that
      the Corporation in the exercise of its reasonable judgment shall determine
      that
      Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
      applies to any amounts payable under this Section 12, then any such amounts
      shall be paid in such fashion and at such times so as to ensure that the
      Corporation and Executive are in compliance with Section 409A of the Code.
      

     

    13. Vesting
      upon Change of Control.
      Any
      stock options and restricted stock granted to Executive by the Corporation
      shall
      accelerate and immediately vest upon the occurrence of the following events:
      if
      (a) any “person,” as such term is used in Sections 13(d) and 14(e) of the
      Securities and Exchange Act of 1934, as amended (the “Exchange Act”) (other than
      the Corporation, any trustee or other fiduciary holding securities under an
      employee benefit plan of the Corporation, or any corporation owned directly
      or
      indirectly by the stockholders of the Corporation in substantially the same
      proportion as their ownership of stock in the Corporation) is or becomes the
      “Beneficial Owner” (as defined in Rule 13d-3 under the Exchange Act), directly
      or indirectly, of securities of the Corporation representing 50% or more of
      the
      combined voting power of the Corporation’s then outstanding securities (other
      than as a result of acquisitions of such securities from the Corporation);
      (b)
      individuals who, as of the date hereof, constitute the Board of Directors of
      the
      Corporation (the “Incumbent Board”) cease for any reason to constitute at least
      a majority of the Board, provided that any person becoming a director after
      the
      date hereof whose election, or nomination for election by the Corporation’s
      stockholders, was approved by a majority of the directors then comprising the
      Incumbent Board (other than an election or nomination of an individual whose
      initial assumption of office is in connection with an actual or threatened
      election contest relating to the election of the directors of the Corporation)
      shall be, for purposes of this Agreement, considered to be a member of the
      Incumbent Board; (c) the stockholders of the Corporation approve a merger or
      consolidation of the Corporation with any other corporation, other than (i)
      a
      merger or consolidation that would result in the voting securities of the
      Corporation outstanding immediately prior thereto continuing to represent
      (either by remaining outstanding or by being converted into voting securities
      of
      the surviving entity) more than 50% of the combined voting power of the voting
      securities of the Corporation or such surviving entity outstanding immediately
      after such merger or consolidation or (ii) a merger or consolidation effected
      to
      implement a recapitalization of the Corporation (or similar transaction) in
      which no “person” (as defined above, acquires more than 20% of the combined
      voting power of the Corporation’s then outstanding securities; or (d) the
      stockholders of the Corporation approve a plan of complete liquidation of the
      Corporation or an agreement for the sale or disposition of the Corporation
      of
      all or substantially all of the Corporation’s assets. To the extent permitted by
      applicable law, Executive shall be entitled to exercise, for a period of 12
      months from the effective date of termination of his employment, all of his
      stock options and restricted grants, which vest pursuant to this Section or
      were
      otherwise vested prior to the termination of his employment. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    14. Payment
      or Benefit in Connection with Change of Control.
      

     

    a.
       Notwithstanding
      any other provision of this Agreement, in the event that any payment or benefit
      received or to be received by the Executive (i) is deemed to be in connection
      with a Change of Control (whether payable pursuant to the terms of this
      Agreement or any other plan, arrangement or agreement with the Corporation,
      its
      successors, any person whose actions result in a Change of Control or any
      corporation (“Affiliates”) affiliated (or which, as a result of the completion
      of the transactions causing a Change of Control will become affiliated) with
      the
      Corporation within the meaning of Section 1504 of the Internal Revenue Code
      of
      1986, as amended (the “Code”) (collectively with the payments and benefits
      pursuant to this Agreement if deemed to be paid pursuant to a Change of Control,
      “Total Payments”) and (ii) is determined by the Corporation's independent
      certified accounting firm (the “Tax Advisor”) that such
      amount exceeds 2.99 times the base amount (as such term is defined under Section
      280G(b)(3) of the Code) but that is less than 4 times the base amount and that
      an
      excise
      tax is payable by Executive under Section 4999 of the Code, then the amount
      of
      payments to the Executive shall be reduced so that the payments do not exceed
      the limits then set forth in Section 280G of the Code.

     

    b.
       Notwithstanding
      any other provisions of this Agreement or the provisions of Section (a) above,
      in the event that the Total Payments received or to be received by Executive
      in
      connection with a Change of Control would be subject (in whole or part), to
      an
      excise tax pursuant to Section 4999 of the Code (such tax hereinafter referred
      to as the “Excise Tax”) because the amount of the Total Payments equals or
      exceeds four (4) times the base amount (as such term is defined under Section
      280G(b)(3) of the Code), then the Total Payments shall be grossed up to the
      extent necessary to reflect any Excise Taxes due by Executive and the income
      taxes attributable thereto so that the Executive will be entitled to a net
      amount equal to the Total Payments (the “Grossed-Up Payment”). For purposes of
      determining whether and the extent to which the Total Payments will be subject
      to the Excise Tax, (i) no portion of the Total Payments the receipt or enjoyment
      of which Executive shall have effectively waived in writing prior to the date
      of
      this termination of employment shall be taken into account, (ii) no portion
      of
      the Total Payments shall be taken into account which in the opinion of tax
      counsel selected by Corporation does not constitute a “parachute payment” within
      the meaning of Section 280G(b)(2) of the Code, (including by reason of Section
      280(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of
      such
      Total Payment shall be taken into account which constitutes reasonable
      compensation for services actually rendered, within the meaning of Section
      280G(b)(4)(B) of the Code, in excess of the base amount as defined in Section
      280G(b)(3) of the Code allowable to such reasonable compensation, and (iii)
      the
      value of any non-cash benefit or any deferred payment or benefit included in
      the
      Total Payments shall be determined by Corporation in accordance with the
      principles of Sections 280G(d)(3) and (4) of the Code. Prior to the thirtieth
      day following the date of Executive’s termination of employment, Corporation
      shall provide Executive with its calculation of the amounts referred to in
      this
      Section and such supporting materials as are reasonably necessary for Executive
      to evaluate Corporation’s calculations but the Corporation’s calculations shall
      be used for purposes of any payments pursuant to this Section. 

    


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    c. If
      the
      Corporation’s Tax Advisor determines that the Total
      Payments received or to be received by Executive fall under subparagraph (a)
      above and upon audit by the Internal Revenue Service the IRS determines that
      an
      Excise Tax is due and payable due to the amount of the Total Payments received
      by Executive, then the Corporation agrees to make a Grossed-Up Payment
      calculated in the same manner as provided in subparagraph (b). 

    


    d. In
      the
      event of any IRS audit concerning to the Total Payments payable or paid to
      Executive, the Corporation may in its sole discretion choose to respond to
      the
      audit. If the Corporation chooses not to respond, then it shall be the sole
      responsibility of Executive to respond to the audit.

    


    15. Waiver.
      A
      party’s failure to insist on compliance or enforcement of any provision of this
      Agreement shall not affect the validity or enforceability or constitute a waiver
      of future enforcement of that provision or of any other provision of this
      Agreement by that party or any other party.

     

    16. Governing
      Law.
      This
      Agreement shall in all respects be subject to, and governed by, the laws of
      the
      State of Connecticut without reference to its conflict of laws

     

    17. Severability.
      Subject
      to the provisions of Section 18, Executive and the Corporation agree that the
      invalidity or unenforceability of any provision in the Agreement shall not
      in
      any way affect the validity or enforceability of any other provision and this
      Agreement shall be construed in all respects as if such invalid or unenforceable
      provision had never been in the Agreement.

     

    18. Judicial
      Modification.
      If a
      court of competent jurisdiction determines that the character, duration,
      geographic scope, activity and/or subject of the provisions in Sections 8,
      9, or
      10 of this Agreement is or are unreasonable under the circumstances as they
      then
      exist, then Executive and the Corporation agree that such provisions should
      be
      limited and reduced, and request that any reviewing court limit and reduce
      such
      provisions, so as to make them enforceable under applicable law to assure the
      Corporation of the intended maximum benefit of such provisions under this
      Agreement.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    19. Notice.
      Any and
      all notices required or permitted herein shall be in writing and shall be deemed
      to have been duly given (a) when delivered if delivered personally,
      (b) on the fifth day following the date of deposit in the United States
      mail if sent first class, postage prepaid, or by certified mail, or (c) one
      day after delivery to a nationally recognized overnight courier service. The
      parties’ respective addresses for such notices shall be those set forth below,
      or such other address or addresses as either party may hereafter designate
      in
      writing to the other.

     

    
      	
            	If
              to the Corporation:	
              FuelCell
                Energy, Inc.

            


    

    3
      Great
      Pasture Road

    Danbury,
      CT 06813

    Attention:
      Chairman of the Board of Directors

    Facsimile
      No.: (203) 825-6100

     

    
      
        	
              	With
                a copy to:	
                Robinson
                  & Cole LLP

              


      
Financial
      Centre

    695
      East
      Main Street

    Stamford,
      CT 06904-2305

    Attention:
      Richard A. Krantz, Esq.

    Facsimile
      No.: (203) 462-7599

     

    
      
        	
              	If
                to Employee:	
                R.
                  Daniel Brdar

              


      

      
        	 	 	109 Lake Ridge
                Road


      

      
        	 	 	Southbury, CT
                06488


      

    

     

             20. Assignment.
      This
      Agreement shall inure to the benefit of, and shall be binding upon, the parties
      hereto and their respective successors, assigns, heirs, and legal
      representatives, including any entity with which the Corporation may merge
      or
      consolidate or to which all or substantially all of its assets may be
      transferred. The duties and covenants of Executive under this Agreement, being
      personal, may not be delegated.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    21. Amendments.
      This
      Agreement may be amended at any time by mutual consent of the parties hereto,
      with any such amendment to be invalid unless in writing and signed by the
      Corporation and Executive and expressly referring to this
      Agreement.

     

    22. Entire
      Agreement.
      This
      Agreement contains the entire agreement and understanding by and between
      Executive and the Corporation with respect to the employment of Executive and
      supersedes all existing agreements between the Corporation and Executive with
      respect to such subject matter. No representations, promises, agreements, or
      understandings, written or oral, relating to the employment of Executive by
      the
      Corporation, or any of its officers, directors, employees, or agents, not
      contained herein shall be of any force or effect, provided that, Sections 5,
      6,
      7, 8, and 9 shall be supplemental to any other agreement of Executive with
      the
      Corporation related to the matters identified therein.

     

    23. No
      Undue Influence; Construction.
      This
      Agreement is executed voluntarily and without any duress or undue influence.
      Executive acknowledges that he has read this Agreement and executed it with
      his
      full and free consent. No provision of this Agreement shall be construed against
      any party by virtue of the fact that such party or its counsel drafted such
      provision or the entirety of this Agreement.

     

    24. References
      to Gender and Number Terms.
      In
      construing this Agreement, feminine or number pronouns shall be substituted
      for
      those masculine in form and vice versa, and plural terms shall be substituted
      for singular and singular for plural in any place in which the context so
      requires.

     

    25. Counterparts;
      Headings; Sections.
      This
      Agreement may be executed in multiple counterparts, each of which shall be
      considered to have the force and effect of any original but all of which taken
      together shall constitute but one and the same instrument. The various headings
      in this Agreement are inserted for convenience only and are not part of the
      Agreement. All references to “Sections” and “Paragraphs” in this Agreement refer
      to the various corresponding sections and paragraphs of this
      Agreement.

     

    26. Survival.
      The
      covenants and agreements contained in Sections 5 through 10 shall survive any
      termination of Executive’s employment with the Corporation. 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    27. Arbitration;
      Waiver of Trial by Jury.
      Executive and the Corporation shall submit any disputes arising under this
      Agreement to an arbitration panel conducting a binding arbitration in Hartford,
      Connecticut or at such other location as may be agreeable to the parties, in
      accordance with the National Rules for the Resolution of Employment Disputes
      of
      the American Arbitration Association in effect on the date of such arbitration
      (the “Rules”), and judgment upon the award rendered by the arbitrator or
      arbitrators may be entered in any court having jurisdiction thereof; provided,
      however, that nothing herein shall impair the Corporation’s right to seek
      equitable relief in any court for any breach or threatened breach of Section
      8
      or Section 9. The award of the arbitrators shall be final and shall be the
      sole
      and exclusive remedy between the parties regarding any claims, counterclaims,
      issues or accountings presented to the arbitration panel. The parties hereto
      further agree that the arbitration panel shall consist of one (1) person
      mutually acceptable to the Corporation and Executive, provided that if the
      parties cannot agree on an arbitrator within thirty (30) days of filing a notice
      of arbitration, the arbitrator shall be selected by the manager of the principal
      office of the American Arbitration Association serving Hartford County in the
      State of Connecticut. Each party will pay for the fees and expenses of its
      own
      attorneys, experts, witnesses, and preparation and presentation of proofs and
      post-hearing briefs (unless (i) the party prevails on a claim for which
      attorney’s fees and expenses are recoverable under the Rules and those amounts
      are included as part of the award or (ii) Executive prevails on a claim for
      breach of this Agreement after the Corporation has terminated Executive pursuant
      to Section 12c hereof, in which case, the Corporation will pay for Executive's
      above-described fees and expenses related to such claim). Any action to enforce
      or vacate the arbitrator’s award shall be governed by the federal Arbitration
      Act, if applicable, and otherwise by applicable state law. If either the
      Corporation or Executive pursues any claim, dispute or controversy against
      the
      other in a proceeding other than the arbitration provided for herein, the
      responding party shall be entitled to dismissal or injunctive relief regarding
      such action and recovery of all costs, losses and attorney’s fees related to
      such action. Executive acknowledges and expressly agrees that this arbitration
      provision constitutes a knowing and voluntary waiver of trial by jury in any
      action or proceeding to which Executive and the Corporation may be parties
      arising out of or pertaining to this Agreement.

     

    


    THE
      NEXT
      PAGE IS THE SIGNATURE PAGE

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    


    


    


    IN
      WITNESS WHEREOF, the Corporation and Executive have duly executed this Agreement
      on the date set forth below.

    


    
      	CORPORATION:	 	
              WITNESS:

            
	 	 	 
	
              FUELCELL
                ENERGY, INC.

            	 	 
	 	 	 
	By: 
_______________________________________	 	 
	Name:	 	Name:
	Its: 	 	 
	 	 	 
	Date: ___________	 	 
	 	 	 
	 	 	 
	EXECUTIVE:	 	WITNESS:
	 	 	 
	 	 	 
	Name: R. Daniel Brdar	 	Name:
	 	 	 
	
              Date:
                ____________

            	 	 


    

     

     

    
      
        
        

      

      17