Document:

fcel-ex101_148.htm

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

This Employment Agreement ("Agreement") made and entered into effective as of February 8, 2011 (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 Arthur Bottone ("Executive"), an individual who resides at 18844 Flat Shoals Drive, Cornelius, North Carolina 28031-7627.

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.

2Duties. 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 effòrts, 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.

3.Term. The term of this Agreement shall begin on the Effective Date, and shall expire on February 8, 2012, 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 (l) 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 $340,000, 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. Should the Executive no longer be employed by the Corporation on the date such Discretionary Bonus is paid, such Discretionary Bonus shall be forfeited. 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.

(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 Equity Incentive Plan (the "Plan"). Effective upon the execution of this Agreement, the Board of Directors has approved a grant of restricted stock valued at $360,000. The number of shares will be based upon the dollar value of the award approved by the Board of Directors divided by the closing market price of the Company's common stock on the Effective Date. This grant 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.

5Business Expenses. The Corporation shall pay, or reimburse Executive fòr, 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. Any such reimbursements shall be made no later than the last day of the calendar year following the end of the calendar year in which such expense is incurred.

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.

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 fòllowing 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.

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 fòr a period of onc (l) year, followed by a second period of one (l) 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:

(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 non-compete 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 madc 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.

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 of employment.

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.

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 severance payment shall be made over the six month period beginning on the Executive's date of termination of employment, with payments made to the Executive in equal installments during each of the Corporation's usual pay periods during such six month period.

Payments under this Paragraph (d) in excess of two (2) times the lesser of

(i)the sum of the Executive's annualized compensation based upon the annual rate of pay for services provided to the Corporation for the taxable year of the Executive preceding the taxable year of the Executive in which the Executive has a separation from service with the Corporation (adjusted for any increase during that year that was expected to continue indefinitely if the Executive had not separated from service), or

(ii)the maximum amount that may be taken into account under a qualified plan pursuant to Section 401 (a)(17) of the Code for the year in which the Executive has a separation from service

shall be subject to the payment timing restrictions set forth in Section 12(n) of this Agreement.

For purposes of this Agreement, the Executive's termination of employment must constitute a separation from service under Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), and its accompanying regulations.

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).

f.By Executive for Good Reason. Executive may, at his option, upon at least thirty (30) days written notice to the Corporation, terminate his employment hereunder fòr Good Reason. The Executive shall be considered to have terminated his employment for Good Reason if the separation from service occurs during the one year period following the initial existence of one or more of the following conditions arising without the consent of the Executive:

	
 
	
(l)
	
a material diminution in the Executive's base compensation;

	
 
	
(2)
	
a material diminution in the Executive's authority, duties, or responsibilities;

	
 
	
(3)
	
a material diminution in the authority, duties, or responsibilities of the Executive such that that Executive is required to report to a corporate officer or employee instead of reporting directly to the board of directors of Corporation;

	
 
	
(4)
	
a material diminution in the budget over which the Executive retains authority;

	
 
	
(5)
	
a material change in the geographic location at which the Executive must perform the services; or

	
 
	
(6)
	
any other action or inaction that constitutes a material breach by the Corporation of this Agreement.

Upon any termination by Executive under this Paragraph (f), the Corporation shall be obligated to pay Executive the severance payments specified in Section 12(d).

For this provision to apply, the Executive must provide notice to the Corporation of the existence of the condition constituting a Good Reason within a period not to exceed ninety (90) days of the initial existence of the condition, upon the notice of which the Corporation must be provided a period of at least thirty (30) days during which it may remedy the condition and not be required to pay the amount due under this Paragraph (f).

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 defined in Section 12(f) above) following a Change of Control of the Corporation. Upon any termination by Executive under this Paragraph (g), 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 12(j) hereof.

h.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 I(a) of the Current Report on Form 8-K, as in effect on January l, 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.

i.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.

j.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 (j), 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.

k.Eligibility for Severance: Requirement of Release. Except as provided in Sections 12(d), 12(e), 12(1), and 12(g), 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. If the Corporation does not receive an executed release prior to the date occurring sixty (60) days after the date of termination of the Executive's employment with the Corporation (including within such sixty day period any applicable revocation period), the Corporation shall have no obligation to make severance payments to the Executive.

l.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.

m.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 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.

n.Six Month Delay for Specified Employee. In the event that any stock of the Corporation or any entity within the same controlled group (as defined in Section 414(b) of the Code), is publicly traded on an established securities market as defined in Section 1.409A-1(i) of the Regulations under Section 409A of the Code, distributions to the Executive will not be made until the date that is six (6) months plus one day after the Executive's date of separation from service, or, if earlier than the end of the six-month period, the date of the death of the Executive, if the Executive is a Specified Employee. Any payments delayed under this Paragraph (n) shall be paid in a single lump sum payment on such date. For purposes of this Paragraph (n), "Specified Employee" means a key employee (as defined in Code Section 416(i) without regard to paragraph (5) thereof) of the Corporation or any affiliated organization with employees in the United States. The Executive will be considered a key employee for the period commencing April 1 and ending on the March 31 thereafter if he was a key employee on the previous December 3 1 and such designation shall be effective solely for that period.

O.Compliance with Section 162(m). In no event shall any payment be made under this Agreement that shall exceed the limitations of Section 162(m) of the Code and any regulations thereunder applicable to the Corporation.

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 fòllowing 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.

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 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.

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.

e.Any payment for a gross up of taxes made under Paragraph (b) above will be made no later than by the end of the calendar year next fòllowing the calendar taxable vear in which the Executive remits the related taxes.

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.

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

	
 
	
 
	
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

	
 
	
 
	
1055 Washington Boulevard

	
 
	
 
	
Stamford, CT  06901-2305

	
 
	
 
	
Attention:  Richard A Krantz, Esq.

	
 
	
 
	
Fascimile No.:  (203) 462-7599

	
 
	
 
	
 

	
If to Employee:
	
 
	
Arthur Bottone

	
 
	
 
	
18844 Flat Shoals Drive

	
 
	
 
	
Cornelius, North Carolina  28031-7626

 

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.

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 entiretv 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.

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 (l) 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

IN WIINESS WHEREOF, the Corporation and Executive have duly executed this

 

								
	
CORPORATION:
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
FUELCELL ENERGY, INC. WITNESS:
	
 
	
WITNESS:

	
 
	
 
	
 
	
 
	
 
	
/s/ Darrell Bradford

	
 
	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ R. Daniel Brdar
	
 
	
 

	
Name:
	
 
	
R. Daniel Brdar
	
 
	
 
	
Name:
	
Darrell Bradford
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Date:
	
 
	
February 8, 2011
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
EXECUTIVE:
	
 
	
 
	
WIINESS:,

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
Date:
	
 
	
 
	
 

	
 
	
 
	
/s/ Arthur Bottone
	
 
	
 
	
/s/ Darrell Bradford

	
Name:
	
 
	
Arthur Bottone
	
 
	
 
	
Name:
	
Darrell Bradford
	
 

	
2/8/11fcel-ex102_515.htm

	
 
	

	
EXHIBIT 10.2

	
 
	
 
	
 

	
huronconsultinggroup.com    |    550 W. Van Buren St. • Chicago, IL 60607

 

June 2, 2019

 

PROPRIETARY AND CONFIDENTIAL

 

James H. England

Chairman of the Board

FuelCell Energy, Inc.

3 Great Pasture Road

Danbury, CT 06810

 

 

Dear Mr. England:

 

On behalf of Huron Consulting Services LLC (“Huron”), I am pleased to confirm our amended engagement to provide FuelCell Energy, Inc. (“you” or the “Company”) certain services related to Company's restructuring and contingency planning initiatives.

 

This letter (the “Engagement Letter’) and the attached General Business Terms (together, the “Agreement”) confirms the agreement between Huron and the Company and the terms of our engagement, including our mutual understanding and agreement regarding the services to be provided and the manner in which Huron will bill and be paid for these services. If there is any conflict between the terms of the Engagement Letter and the General Business Terms, the Engagement Letter shall control in all respects. 

 

Objectives and Scope

 

We understand the engagement objectives and scope to be to assume the roles of Chief Restructuring Officer (“CRO”) and Deputy Chief Restructuring Officer (“DCRO”), (collectively the “Executives”) reporting directly to the Board of Directors (the "Board"). This engagement letter amends and supersedes our initial engagement letter with FuelCell Energy, Inc., executed on March 15, 2019 and later amended on April 12, 2019.

 

Our Services

 

We will make available to the Company the services of the Executives whose responsibilities would include the following, as and to the extent directed by the Board:

 

	
 
	
A.
	
Managing key restructuring initiatives including:

	
 
	
1.
	
Liquidity and related activities

	
 
	
2.
	
Forecasting, and projecting financial or operational models including:

	
 
	
i.
	
Economic impacts of restructuring initiatives and events

	
 
	
ii.
	
Underlying performance of operating divisions and units

	
 
	
iii.
	
Cost saving initiatives

	
 
	
3.
	
Managing risks and opportunities of key restructuring initiatives

	
 
	
4.
	
Taking key actions required to restructure the business

	
 
	
5.
	
Assisting in negotiations with significant constituents

4846-2669-5064.1

	
 
	

	
 

	
 
	
 
	
 

	
huronconsultinggroup.com    |    550 W. Van Buren St. • Chicago, IL 60607

 

	
 
	
6.
	
Identifying and executing performance improvement initiatives including revenue enhancements, as authorized by the board 

	
 
	
7.
	
Reviewing commercial activities and related transactions as directed by the board

 

	
 
	
B.
	
Directing the Company’s management team.  The Executive will have authority:

	
 
	
1.
	
Manage and control the Company’s cash activities, including disbursements 

	
 
	
2.
	
Execute contracts, agreements or other documents in the ordinary course, with appropriate guidance from the board 

 

	
 
	
C.
	
Preparing and delivering briefings to the board

 

	
 
	
D.
	
Directing the Company's activities during a Chapter 11 proceeding (if applicable) and/or period of restructuring, by working with the Company’s attorneys and key constituents 

 

	
 
	
E.
	
Working with the Company’s investment banker to provide due diligence support for transactions being pursued and managing prospective counterparties

 

	
 
	
F.
	
Analyzing prospective sales or divestures of operations and assets including:

	
 
	
1.
	
Evaluating any offers for the Company as a whole or in part

	
 
	
2.
	
Assisting in the liquidation of assets or business units, as necessary

 

	
 
	
G.
	
Conducting contingency planning exercises intended to maximize value of the estate

 

	
 
	
H.
	
Providing bankruptcy case management activities (if applicable) including:

	
 
	
1.
	
Serving as the authorized representative of the Debtors

	
 
	
2.
	
Providing expert reports and testimony, if necessary (or managing the retention of potential 3rd party experts)

	
 
	
3.
	
Leading the preparation and review of customary financial reporting required by Debtors

	
 
	
4.
	
Managing the requests and direct inquiries of US Trustee and statutory committees

 

Huron shall cause the Executives to perform their respective duties and responsibilities in a diligent, efficient, and faithful manner and to the best of their respective abilities.  The Executives shall take responsibility for leading the implementation of Board-approved operational and financial restructuring initiatives, in accordance with the Company’s by-laws and in compliance with applicable provisions of state and federal law. 

 

The Executives will report to the Board and/or a restructuring committee comprised of board members if such a committee is appointed by the Board during the term of this Agreement. The Executives will not attest to financial events, reports, or other facts which precede their appointment in that capacity. 

 

 

	
 
	

	
 

	
 
	
 
	
 

	
huronconsultinggroup.com    |    550 W. Van Buren St. • Chicago, IL 60607

 

Huron may provide additional resources or services to you beyond those described herein, if agreed upon by Huron and the Board or its designated committee. You agree to pay for such additional work at Huron's standard rates. The Executives cannot make any decision to use Huron for additional services without the Board’s and/or a restructuring committee's approval.

 

This engagement will begin on June 2, 2019 and end upon written notice by either party. 

 

Unless the Board otherwise agrees, Huron shall cause the Executives to devote substantial efforts to the business and affairs of the Company:  provided, however, that the Executives may be available to Huron for activities relating to the normal course of its business (including marketing Huron and directing associates or affiliates of Huron who may be working on other projects on its behalf) to the extent such activities do not materially interfere with the performance of their duties to the Company hereunder.

 

Without adjustment to Huron’s compensation hereunder, each of the Executives shall be entitled to the same time off as he or she would otherwise receive in the form of vacation, sick time, personal days and holidays in his position if he were an employee of the Company (without requirement of vesting or accrual); provided, however, that no period of absence from the Company by any Executive for sick time or personal days may exceed two (2) consecutive weeks without the prior approval of the Board.

 

Any financial or other model that we create as part of our Services will be unique to this engagement, based on specific circumstances and assumptions, and may not be appropriate for use when those circumstances and assumptions change. Deliverables may not be shared with any third party without Huron’s prior written consent. Use and dissemination of deliverables is addressed in further detail in the accompanying General Business Terms.

 

Huron is a management consulting firm and not a CPA firm. Huron does not provide attest services, audits, or other engagements in accordance with standards established by the American Institute of Certified Public Accountants (“AICPA “) or promulgated by the Public Company Accounting Oversight Board (“PCAOB”).  The procedures Huron will perform are for the purposes of responding to the services outlined in this Engagement Letter and will not include independent verification of information provided by management, financial statement balances or internal controls, the performance of which might reveal additional information that could affect the findings of our work. Accordingly, we will express no opinion or other form of assurance on any financial statements, management representations of other Company-derived data accompanying or included in our work. 

 

Approach

 

Laura Marcero, Managing Director at Huron, will serve as the Company's CRO. Lee Sweigart, Senior Director at Huron, will serve as DCRO. Huron may also provide financial advisory services and other resources as required to execute activities described in the scope herein. While we will attempt to comply with your requests for specific individuals, we retain the right to assign and reassign our personnel, as appropriate, to perform the services. If any factors arise that are beyond our control that would affect the availability of our staff, such as death, illness, disability, or a career change, we will notify you immediately, and subject to your approval, provided such approval shall not be unreasonably withheld, we will assign a replacement executive with substantially equivalent skills experience and expertise.

 

	
 
	

	
 

	
 
	
 
	
 

	
huronconsultinggroup.com    |    550 W. Van Buren St. • Chicago, IL 60607

 

 

Your Responsibilities

 

You agree to provide all Huron personnel acting as officers of the Company the most favorable indemnities provided by the Company to its officers and directors, whether under the Company’s by-laws, partnership agreement, by contract or otherwise.  This indemnification is in addition to the indemnification afforded Huron under the accompanying General Business Terms.  You shall provide Huron with an executed copy of the resolution of your governing body appointing the Huron resource(s) to the offices in question.  Until Huron receives such a resolution, the Huron personnel will assist the Company as advisors, and not act as its officers. The Company shall also provide such Huron personnel full coverage under applicable Company insurance policies that protect officers and directors from liability.  A copy of each applicable policy, including endorsements, shall be furnished to Huron subsequent to the execution of this Engagement Letter. Certificates of insurance evidencing the coverage contemplated by the foregoing shall also be furnished to Huron

 

Except as stated in this Engagement Letter, the risk of loss with respect to the Company’s operations and assets shall be borne by the Company.  Huron shall not be deemed to have assumed or be liable for any claim, liability, or obligation of the Company whether known or unknown, fixed or contingent accrued or un-accrued.  Except as otherwise required by applicable law, any reference to the nature or results of Huron’s work may not be communicated to the public through public relations media, news media, sales media, or any other means without the prior written consent of both parties.

 

In the event the Company files a petition for relief under Chapter 11 of the Bankruptcy Code, (a) the Company agrees to file an appropriate motion prepared in consultation with Huron as to matters relating to our retention by the Company and provision of Services as contemplated hereunder, on the first day of the bankruptcy case, which seeks the approval of the immediate assumption of this Agreement by the Company, and (b) this Agreement shall be subject to the entry of a final order of the Court approving the assumption of this Agreement, and (c) Huron shall not be required to perform any additional services under this Agreement until the entry of the Court’s order approving the assumption of the Agreement or, if this Agreement is deemed not to be an executory contract, an order authorizing the employment of Huron under the terms of this Agreement.  The order approving the Company’s assumption of this Agreement or, if this Agreement is deemed not to be an executory contract, the order authorizing the engagement of Huron must be acceptable to Huron in its sole discretion.

 

Our services are based on assumptions, representations and information supplied by you.

 

The successful delivery of our services, and the fees charged, are dependent on (i) your timely and effective completion of your responsibilities, (ii) the accuracy and completeness of any assumptions, and (iii) timely decisions and approvals by your management. You will be responsible for any delays, additional costs, or other liabilities caused by any deficiencies in the assumptions or in carrying out your responsibilities.

 

 

	
 
	

	
 

	
 
	
 
	
 

	
huronconsultinggroup.com    |    550 W. Van Buren St. • Chicago, IL 60607

 

Fees and Expenses

 

We will bill on an hourly basis based on the actual hours worked and the following range of standard hourly billing rates (which may be subject to adjustment from time to time):

 

			
	
Title
	
 
	
Rate Range

	
Managing Director
	
 
	
$750 – $1025

	
Senior Director
	
 
	
$685 – $790

	
Director
	
 
	
$550 – $675

	
Manager
	
 
	
$425 – $525

	
Associate
	
 
	
$420

 

Out of pocket expenses (including transportation, lodging, meals, communications, supplies, copying, etc.) will be billed at the actual amounts incurred.  Out of pocket expenses also include reasonable fees and expenses of attorneys consulted or engaged by Huron to assist it with matters under this Agreement, such as retention applications, fee applications, and collection of fees and expenses.

 

Travel time during which no work is performed shall be itemized separately and billed at fifty percent (50%) of regular hourly rates.

 

The Company shall pay Huron a success fee of $500,000 based upon a successful restructuring, including but not limited to a resolution involving right sizing or extension of the business, and/or asset sales, and/or an extension of refinancing of the Company’s credit facility, or other events that the Board deems worthy of a success fee. 

 

We will bill on a weekly basis.  Our invoices are due upon presentation.  Amounts remaining outstanding for more than 20 days (past due) will be subject to an interest charge of 1.5% per month from the date of invoice.  We reserve the right to suspend further services until payment is received on past due invoices, in which event we will not be liable for any resulting loss, damage or expense connected with such suspension.  We understand that our bills should be sent to:

 

Michael Bishop

Chief Financial Officer

FuelCell Energy, Inc.

3 Great Pasture Road

Danbury, CT 06810

(with Mr. England to be copied on such transmissions)

Retainer 

 

We will require an additional retainer of $200,000 for a total retainer balance of $400,000 before we can commence work.  The retainer will be applied as follows: 

 

(1) In the case of a bankruptcy, immediately prior to the filing of bankruptcy petitions by the Company and its domestic subsidiaries, we will apply the retainer to all amounts due to us.  The amount drawn against the retainer may include an estimate for fees and expenses incurred by 

 

	
 
	

	
 

	
 
	
 
	
 

	
huronconsultinggroup.com    |    550 W. Van Buren St. • Chicago, IL 60607

 

us but not yet billed prior to the date you intend to file your petition for bankruptcy protection.  The precise amount due to us as of your petition date will be determined upon the final recording of all of our time and expense charges.  The excess retainer, if any, will be held by us for application to post-petition fees and expenses that are finally allowed by a bankruptcy court.  If no such fees are allowed on a final basis by a bankruptcy court the excess retainer will be refunded to you at the conclusion of the engagement; or 

 

(2) if you do not file a bankruptcy petition, the retainer will either be applied to our final invoice to you or will be refunded to you at the conclusion of the engagement.

 

Business Terms

 

The attached General Business Terms apply to this engagement.

 

*    *    *    *    *    *

 

Please indicate your agreement with these terms by signing and returning to me the enclosed copy of this letter.  This engagement and the enclosed terms will become effective upon our receipt of your signed copy.  We appreciate the opportunity to be of service to you and look forward to working with you on this engagement.

 

 

	
 
	

	
 

	
 
	
 
	
 

	
huronconsultinggroup.com    |    550 W. Van Buren St. • Chicago, IL 60607

 

 

Sincerely,

 

HURON CONSULTING SERVICES LLC

 

 

Laura Marcero

Managing Director

 

Attachments:General Business Terms

 

 

Acknowledged and Accepted:

 

FuelCell Energy, Inc.

 

	
By:
	
 
	
/s/ Laura Marcero

	
 
	
 
	
 

	
Title:
	
 
	
Managing Director

	
 
	
 
	
 

	
Date:
	
 
	
June 2, 2019

 

 

	
 
	

	
 

	
 
	
 
	
 

	
huronconsultinggroup.com    |    550 W. Van Buren St. • Chicago, IL 60607

 

Attachment to Engagement Letter dated June 2, 2019 between

Huron Consulting Services LLC and FuelCell Energy, Inc.

 

 

GENERAL BUSINESS TERMS

 

These General Business Terms, together with the Engagement Letter (including any and all attachments, exhibits and schedules) constitute the entire understanding and agreement (the “Agreement”) between us with respect to the services and deliverables described in the Engagement Letter.  If there is a conflict between these General Business Terms and the terms of the Engagement Letter, these General Business Terms will govern, except to the extent the Engagement Letter explicitly refers to the conflicting term herein. Our Services and Deliverables We will provide the services and furnish the deliverables (the “Services”) as described in our Engagement Letter and any attachments thereto, as may be modified from time to time by mutual consent.

 

1. Independent Contractor We are an independent contractor and not your employee, agent, joint venturer or partner, and will determine the method, details and means of performing our Services. We assume full and sole responsibility for the payment of all compensation and expenses of our employees and for all of their state and federal income tax, unemployment insurance, Social Security, payroll and other applicable employee withholdings. 

2. Fees and Expenses (a) Our fees and payment terms are set out in our Engagement Letter. Those fees do not include taxes and other governmental charges (which will be separately identified in our invoices.) In the event you request that we perform some or all of the Services outside of the United States, we may issue the resulting invoice from a Huron affiliate located in the country where such Services are performed.

(b) You acknowledge that where out-of-town personnel are assigned to any project on a long-term basis (as defined from time to time in the applicable provisions of the Internal Revenue Code and related IRS regulations, and currently defined, under IRC Section 162, as a period of time reasonably expected to be greater than one year), the associated compensatory tax costs applied to out-of-town travel and living expenses also shall be calculated on an individual basis, summarized, and assessed to such personnel. In such cases, the expenses for which you shall reimburse us hereunder shall be deemed to include the estimated incremental compensatory tax costs associated with the out-of-town travel and living expenses of our personnel, including tax gross-ups. We shall use reasonable efforts to limit such expenses.

(c) We reserve the right to suspend Services if invoices are not timely paid, in which event we will not be liable for any resulting loss, damage or expense connected with such suspension.

4. Taxes (a) You will be responsible for and pay all applicable sales, use, excise, value added, services, consumption and other taxes and duties associated with our performance or your receipt of our Services, excluding taxes on our income generally.  You will provide us with a copy of your certificate of tax-exemption, if applicable.

 

	
 
	

	
 

	
 
	
 
	
 

	
huronconsultinggroup.com    |    550 W. Van Buren St. • Chicago, IL 60607

 

(b) If you are required by the laws of any foreign tax jurisdiction to withhold income or profits taxes from our payment, then the amount payable by you upon which the withholding is based shall be paid to us net of such withholding.  You shall pay any such withholding to the applicable tax authority.  However, if after 120 days of the withholding, you do not provide us with official tax certificates documenting remittance of the taxes, you shall pay to us an amount equal to such withholding.  The tax certificates shall be in a form sufficient to document qualification of the taxes for the foreign tax credit allowable against our corporation income tax.

5. Confidentiality and Privacy (a) With respect to any information supplied in connection with this engagement and designated by either of us as confidential, or which the other should reasonably believe is confidential based on its subject matter or the circumstances of its disclosure (“Confidential Information”), the other agrees to protect the confidential information in a reasonable and appropriate manner, and use confidential information only to perform its obligations under this engagement and for no other purpose. This will not apply to information which is: (i) publicly known, (ii) already known to the recipient, (iii) lawfully disclosed by a third party, (iv) independently developed, (v) disclosed pursuant to legal requirement or order, or (vi) disclosed to taxing authorities or to representatives and advisors in connection with tax filings, reports, claims, audits and litigation. 

(b) Confidential Information made available hereunder, including copies thereof, shall be returned or destroyed upon request by the disclosing party; provided that the receiving party may retain other archival copies for recordkeeping or quality assurance purposes and receiving party shall make no unauthorized use of such copies.

(c) We agree to use any personally identifiable information and data you provide us only for the purposes of this engagement and as you direct, and we will not be liable for any third-party claims related to such use.  You agree to take necessary actions to ensure that you comply with applicable laws relating to privacy and/or data protection, and acknowledge that we are not providing legal advice on compliance with the privacy and/or data protection laws of any country or jurisdiction. 

(d) At the conclusion of the engagement, we have the right to use your name, logo and a general description of the engagement in our marketing materials and traditional tombstone advertising.  

6. Our Deliverables and Your License Upon full and final payment of all amounts due us in connection with this engagement, all right, title and interest in the deliverables set out in our Engagement Letter will become your sole and exclusive property, except as set forth below.  We will retain sole and exclusive ownership of all right, title and interest in our work papers, proprietary information, processes, methodologies, know-how and software (“Huron Property”), including such information as existed prior to the delivery of our Services and, to the extent such information is of general application, anything which we may discover, create or develop during our provision of Services for you. To the extent our deliverables to you contain Huron Property, upon full and final payment of all amounts due us in connection with this engagement, we grant you a non-exclusive, non-assignable, royalty-free, perpetual license to use it in connection with the deliverables and the subject of the engagement and for no other or further use without our express, prior written consent.  If our deliverables are subject to any third party rights in software or intellectual property, we will notify you of such rights. Our deliverables are to be used solely for the purposes intended by this engagement and may not be disclosed, published or used in whole or in part for any other purpose.

 

	
 
	

	
 

	
 
	
 
	
 

	
huronconsultinggroup.com    |    550 W. Van Buren St. • Chicago, IL 60607

 

7. Your Responsibilities. To the extent applicable, you will cooperate in providing us with office space, equipment, data and access to your personnel as necessary to perform the Services. You shall provide reliable, accurate and complete information necessary for us to adequately perform the Services and will promptly notify us of any material changes in any information previously provided.  You acknowledge that we are not responsible for independently verifying the truth or accuracy of any information supplied to us by or on behalf of you.

 8. Our Warranty We warrant that our Services will be performed with reasonable care in a diligent and competent manner. Our sole obligation will be to correct any non-conformance with this warranty, provided that you give us written notice within 10 days after the Services are performed or delivered. The notice will specify and detail the non-conformance and we will have a reasonable amount of time, based on its severity and complexity, to correct the non-conformance.

We do not warrant and are not responsible for any third party products or services. Your sole and exclusive rights and remedies with respect to any third party products or services are against the third party vendor and not against us.

THIS WARRANTY IS OUR ONLY WARRANTY CONCERNING THE SERVICES AND ANY DELIVERABLE, AND IS MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES AND REPRESENTATIONS, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, OR OTHERWISE, ALL OF WHICH ARE HEREBY DISCLAIMED.

9. Liability and Indemnification (a) This engagement is not intended to shift risk normally borne by you to us. To the fullest extent permitted under applicable law, you agree to indemnify and hold us and our personnel, agents and contractors harmless against all costs, fees, expenses, damages, and liabilities (including reasonable defense costs and legal fees), associated with any legal proceeding or other claim brought against us by a third party, including a subpoena or court order, arising from or relating to any Services that you use or disclose, or this engagement generally. This indemnity shall not apply to the extent a claim arises out of our gross negligence or willful misconduct, as finally adjudicated by a finder of fact.

(b) We will not be liable for any special, consequential, incidental, indirect or exemplary damages or loss (nor any lost profits, savings or business opportunity). Further, our liability relating to this engagement will in no event exceed an amount equal to the fees (excluding taxes and expenses) we receive from you for the portion of the engagement giving rise to such liability.

(c) Neither of us will be liable for any delays or failures in performance due to circumstances beyond our reasonable control. 

10. Non-Solicitation During the term of this engagement, and for a period of one year following its expiration or termination, you will not directly or indirectly solicit, employ or otherwise engage any of our employees (including former employees) or contractors who were involved in the engagement.

 

	
 
	

	
 

	
 
	
 
	
 

	
huronconsultinggroup.com    |    550 W. Van Buren St. • Chicago, IL 60607

 

11. Termination 

(a) Termination for Convenience. Either party may terminate this Agreement for convenience at any time on 30 days’ prior written notice to the other. 

(b) Termination for Breach. Either party may terminate this Agreement for breach if, within 15 days’ notice, the breaching party fails to cure a material breach of this Agreement. 

(c) To the extent you terminate this Agreement for convenience, you will pay us for all Services rendered, effort expended, expenses incurred, contingent fees (if any), or commitments made by us to the effective date of termination. To the extent you terminate this Agreement for breach, you will pay us for all conforming Services rendered and reasonable expenses incurred by us to the effective date of the termination. 

(d) Further, we reserve the right to terminate this Agreement at any time, upon providing written notice to you, if conflicts of interest arise or become known to us that, in our sole judgment, would impair our ability to perform the Services objectively.

(e) The terms of this Agreement which relate to confidentiality, ownership and use, limitations of liability and indemnification, non-solicitation and payment obligations shall survive its expiration or termination.

12. General (a) This Agreement supersedes all prior oral and written communications between us, and may be amended, modified or changed only in a writing when signed by both parties. 

(b) No term of this Agreement will be deemed waived, and no breach of this agreement excused, unless the waiver or consent is in writing signed by the party granting such waiver or consent.

(c) We each acknowledge that we may correspond or convey documentation via Internet e-mail and that neither party has control over the performance, reliability, availability, or security of Internet e-mail. Therefore, neither party will be liable for any loss, damage, expense, harm or inconvenience resulting from the loss, delay, interception, corruption, or alteration of any Internet e-mail due to any reason beyond our reasonable control.

(d) This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois without giving effect to conflict of law rules.  The parties hereto agree that any and all disputes or claims arising hereunder shall be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association.  Any arbitration will be conducted in Chicago, Illinois.  Any arbitration award may be entered in and enforced by any court having jurisdiction thereof, and the parties consent and commit themselves to the jurisdiction of the courts of the State of Illinois for purposes of any enforcement of any arbitration award.  Except as may be required by law, neither a party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both parties.

 

	
 
	

	
 

	
 
	
 
	
 

	
huronconsultinggroup.com    |    550 W. Van Buren St. • Chicago, IL 60607

 

(e) If any portion of this Agreement is found invalid, such finding shall not affect the enforceability of the remainder hereof, and such portion shall be revised to reflect our mutual intention.

(f) This Agreement shall not provide third parties with any remedy, cause, liability, reimbursement, claim of action or other right in law or in equity for any matter governed by or subject to the provisions of this Agreement

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