Exhibit 10.6
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[Environmental
Power Corporation Logo]
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Environmental Power Corporation
One Cate Street, 4th Floor
Portsmouth, New Hampshire 03801
Tel. (603) 431-1780
Fax (603) 431-2650
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July 13, 2005
Mr. Donald A. Livingston
c/o Environmental Power Corporation
One Cate Street, 4 th Floor
Portsmouth, NH 03801
Dear Andy:
The purpose of this letter is to set forth our
understanding regarding certain matters related to your continued
employment with, and transition and retirement from your employment
with, Environmental Power Corporation (the
“Corporation”).
1. You will continue to serve in your current
position as an employee of the Corporation until December 31, 2005
or such later date as the Board of Directors of the Corporation
(the “Board”) may determine, so long as all options
referred to in paragraph 8, below, have been fully vested (the
“Retirement Date”), provided that in no event may the
Retirement Date be extended beyond June 30, 2006 without your
consent. The period from the date of this letter to the Retirement
Date is referred to as the “Transition
Period.”
2. Provided that you continue to provide
services satisfactory to the Board through the Retirement Date,
your current salary and benefits will continue for a period of one
year after the Retirement Date. Thereafter, the Corporation will
provide family medical insurance, comparable to that provided to
the Corporation’s Chief Executive Officer, until such time as
you become eligible for Medicare.
3. During the Transition Period, you
will:
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(a)
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Mentor the new
President of the Corporation’s subsidiary, Microgy, Inc.
(“Microgy”);
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(b)
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Mentor such
other employees of the Corporation or Microgy as the Corporation
may reasonably request; and
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(c)
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Provide such
other support for the business development efforts of Microgy and
the Corporation as the Corporation may reasonably request,
consistent with the historical position, responsibilities and
activities of the executive, including pursuit of Microgy’s
business development efforts in the Southwestern United
States.
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4. You will execute and deliver to the
Corporation its standard form of Employee Proprietary Information
and Inventions Agreement, which will include a non-disclosure and
non-competition covenant with a term of five years beginning on the
Retirement Date.
Mr. Donald A. Livingston
July 13, 2005
Page 2
5. The Corporation will provide adequate office
facilities and support for the performance of the executive’s
duties during the Transition Period. The location of such office
and support services will be at the election of the Corporation so
long as they are reasonably convenient to your principal
residence.
6. You and the Corporation may mutually agree to
additional duties to be performed by you after the Retirement Date,
for such compensation as you and the Corporation may mutually
agree.
7. In the event that you are terminated by the
Board without cause prior to the Retirement Date, you will be
entitled to severance equal to 12 months’ of your current
base salary, paid in
