Exhibit
10.11
CHANGE OF CONTROL
AGREEMENT
THIS CHANGE OF CONTROL AGREEMENT
(this “Agreement”) is made and entered into this 14th
day of February, 2007, by and between LightPath Technologies, Inc.,
a Delaware corporation (the “Company”), and Kenneth
Brizel (the “Executive”).
WITNESSETH:
WHEREAS, the Company has granted and
may in the future grant to the Executive certain stock options,
restricted stock awards, or restricted stock units (the
“Executive’s Stock”) for the purpose of providing
equity compensation to the Executive and aligning his interests
with those of the stockholders of the Company (the
“Stockholders”); and
WHEREAS, the Board of Directors of
the Company (the “Board”) has determined that it is in
the best interests of the Company and the Stockholders to provide
for certain rights, including a cash payment and acceleration of
the vesting of the Executive’s Stock in the event of a Change
of Control (as defined below) in order to align further the
interests of the Executive with those of the
Stockholders.
NOW THEREFORE, for good and valuable
consideration, the adequacy of which is hereby acknowledged, the
parties hereby agree as follows:
1. Definitions . The
following terms shall have the meanings set forth below when
capitalized in this Agreement:
1.1 “ Termination without
Cause ” shall mean the termination of the
Executive’s employment by the Company for any reason that
does not constitute a Termination for Cause.
1.2 “ Termination for
Cause ” shall mean the termination of the
Executive’s employment by the Company for any of the
following reasons (each of which shall constitute
“Cause”):
|
|
(a)
|
any intentional
act by the Executive of dishonesty, moral turpitude or
misappropriation of property, which act has, in the Company’s
sole discretion, a materially adverse impact on the business or
affairs or reputation of the Company;
|
|
|
(b)
|
any intentional
act by the Executive of fraud or embezzlement;
|
|
|
(c)
|
the Executive
pleads guilty or nolo contendere to, or is convicted of, any
felony;
|
|
|
(d)
|
the failure to
carry out directives of the Board, or neglect or failure to perform
his duty to provide the Board with accurate information, provided
the Executive has not, in the sole discretion of the Board, cured
such failure or neglect within thirty (30) days of his receipt
of written notice of the Company’s intention to terminate the
Executive’s employment for Cause, together with a description
of the basis thereof;
|
|
|
(e)
|
any intentional
unauthorized use or disclosure by the Executive of proprietary or
other confidential information or trade secrets of the
Company;
|
1
|
|
(f)
|
any intentional
act that constitutes a breach of fiduciary duty or duty of loyalty
to the Company or any intentional act that, in the Company’s
sole discretion, results or intends to result, either directly or
indirectly, in the personal gain or enrichment of the Executive at
the expense of the Company;
|
|
|
(g)
|
any material
breach by the Executive of any agreement between the Company and
the Executive related to the Executive’s employment, provided
the Executive has not, in the Company’s sole discretion,
cured such breach within thirty (30) days of his receipt of
written notice of the Company’s intention to terminate the
Executive’s employment for Cause, together with a description
of the basis thereof;
|
|
|
(h)
|
any other
intentional act or misconduct by the Executive which has a
materially adverse impact on the business or affairs of the
Company, provided the Executive has not, in the Company’s
sole discretion, cured such impact within thirty (30) days of
the Executive’s receipt of written notice of the
Company’s intention to terminate the Executive’s
employment for Cause, together with a description of the basis
thereof;
|
|
|
(i)
|
any element of
the definition of “Cause” or the equivalent term in an
employment agreement by and between the Company and the
Executive.
|
The foregoing definition of
Termination for Cause shall not be deemed to be inclusive of all
the acts or omissions which the Company may have as grounds for the
Executive’s dismissal or discharge. For purposes of this
Agreement, a good faith determination and the approval or
affirmative vote of a majority of the members of the Board of a
for-Cause basis for terminating the Executive’s employment
shall be conclusive. As used in this section, the term
“Company” includes the Company and its affiliates,
successors, and assigns.
1.3 “ Termination for Good
Reason ” shall mean the Executive’s voluntary
resignation of his employment with the Company within sixty
(60) days following the occurrence of any of the following
events, unless the Executive has provided written acknowledgement
that such event shall not constitute Good Reason for purposes of
this Agreement:
|
|
(a)
|
a material and
substantial reduction in the Executive’s responsibilities,
authorities or functions as an employee of the Company following a
Change of Control (but not including merely a change in title or
reporting relationships);
|
|
|
(b)
|
a reduction of
greater than ten percent (10%) of the Executive’s
then-current level of compensation (including base salary, fringe
benefits and target bonuses under any corporate-performance based
bonus or incentive programs);
|
|
|
(c)
|
the imposition
of business travel requirements following a Change of Control which
requirements are substantially more demanding than such travel
requirements existing immediately prior to such Change of
Control;
|
|
|
(d)
|
a relocation of
the Executive’s assigned office more than fifty
(50) miles from its location prior to the Change of Control,
if the Company does not pay all relocation expenses including, but
not limited to, purchasing the Executive’s home for resale at
fair market value;
|
|
|
(e)
|
any material
breach by the Company of any agreement between the Company and the
Executive related to the Executive’s employment, provided the
Company has not cured such breach within thirty (30) days of
receipt of written notice of the Executive’s intention to
terminate the his employment with Good Reason, together with a
description of the basis thereof;
|
2
|
|
(f)
|
any failure by
the Company to obtain the assumption or substantially equivalent
replacement of any material agreement between the Executive and the
Company from any successor or assign of the Company or
substantially all of its business;
|
|
|
(g)
|
any element of
the definition of “Good Reason” or the equivalent term
in an employment agreement by and between the Company and the
Executive.
|
Notwithstanding any of the
foregoing, the Executive must provide the Company with thirty
(30) days advance written notice of his intention to terminate
his employment for Good Reason and a description of the particular
Good Reason basis for such termination. During such thirty
(30) day period, the Company may attempt to rescind or correct
the matter giving rise to the stated Good Reason. If the Company
does not rescind or correct the matter giving rise to the stated
Good Reason by the expiration of the thirty (30) day cure
period, the Executive’s employment shall terminate with Good
Reason upon the expiration of such thirty (30) day cure
period. As used in this section, the term “Company”
includes the Company and its affiliates, successors, and
assigns.
1.4 “ Change of Control
” shall mean the occurrence any of the following
events:
|
|
(a)
|
the dissolution
or liquidation of the Company;
|
|
|
(b)
|
the
stockholders of the Company approve an agreement providing for a
sale, lease or other disposition of all or substantially all of the
assets of the Company and the transactions contemplated by such
agreement are consummated;
|
|
|
(c)
|
a merger or a
consolidation in which the Company is not the surviving entity, if
the Stockholders immediately prior to such transaction shall fail
to possess direct or indirect beneficial ownership of more than
fifty percent (50%) of the voting power of the securities of
the surviving entity immediately following such transaction (or if
the surviving entity is a controlled subsidiary of another entity,
then the required beneficial ownership shall be determined with
respect to the securities of that entity which controls the
surviving corporation and is not itself a controlled subsidiary of
any other entity), or a reverse merger in which the Company is the
surviving entity and the Stockholders immediately prior to such
transaction fail to possess direct or indirect beneficial ownership
of more than fifty percent (50%) of the securities of the
Company immediately following such transaction (or if the Company
is a controlled subsidiary of another entity, then the required
beneficial ownership shall be determined with respect to the
securities of that entity which controls the Company and is not
itself a controlled subsidiary of any other entity) (any such
merger, consolidation or reverse merger transactions, a
“Merger”). For purposes of this subsection only, any
person who acquired securities of the Company prior to and in
contemplation of a Merger, and who after such Merger possesses
direct or indirect beneficial ownership of at least ten percent
(10%) of the securities of the Company or the surviving entity
immediately following the Merger (or if the Company or the
surviving entity is a controlled subsidiary, then of the
appropriate entity as determined above) shall not be included in
the definition of the term “Stockholder” as it is used
in this subsection;
|
3
