Exhibit 10.4
ACTIVIDENTITY CORPORATION
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT
AGREEMENT (the “ Agreement ”) is made and
entered into as of April 23, 2008 (the “ Effective
Date ”) by and between ActivIdentity Corporation, a
Delaware corporation (the “ Company ”),
and Grant Evans (the “ Employee
”).
1.
Position . You will serve as the Chairman and Chief
Executive Officer of the Company. You will be responsible for all
of the duties normally attributed to the Chief Executive Officer of
any company. Your office will be located at the Company’s
headquarters at 6623 Dumbarton Circle, Fremont, California. You
will report to the Company’s Board of Directors (the
“ Board of Directors ”) and shall perform
such duties as the Board of Directors may from time to time
require. You will be employed on an at-will basis, which means that
you may resign and the Company may terminate your employment or
change your job title and duties at any time for any reason or for
no reason.
You agree to the
best of your ability and experience that you will at all times
loyally and conscientiously perform all of the duties and
obligations required of you pursuant to the terms of this
Agreement, and will do so to the reasonable satisfaction of the
Board of Directors. During the term of your employment, you further
agree that you will devote all of your business time and attention
to the business of the Company. The Company will be entitled to all
of the benefits and profits arising from or incident to all such
work services and advice. You will not render commercial or
professional services of any nature to any person or organization,
whether or not for compensation, without the prior written consent
of the Board of Directors. You will not directly or indirectly
engage or participate in any business that is competitive in any
manner with the business of the Company. Nothing in this Agreement
will prevent you, from accepting speaking or presentation
engagements in exchange for honoraria or from serving on boards or
charitable organizations, or from owning no more than one percent
(1%) of the outstanding equity securities of a corporation whose
stock is listed on a national stock exchange.
2.
Compensation .
a.
Salary . You will be paid a monthly salary of $31,666.67,
which is equivalent to $380,000 on an annualized basis. Your salary
will be payable twice a month pursuant to the Company’s
regular payroll practices (or in the same manner as other employees
of the Company), and shall be subject to the usual, required
withholding of income and employment taxes. Your annual salary of
$380,000, together with any increases thereto, shall be referred to
as your “Base
Salary.” Base Salary will be subject to annual review
by the Compensation Committee of the Board of Directors (the
“Compensation
Committee” ).
b.
Bonus . You will be eligible for a target bonus
“ Target Bonus” ) equivalent to a
certain percentage of your Base Salary, which for fiscal 2008 has
been set
at 80% of your Base
Salary, with the potential for payment of up to two times that
amount in a given year for extraordinary performance (the actual
bonus amount for fiscal 2008 is expected to be pro rated for a
partial year). Your Target Bonus percentage, the performance goals
and objectives that your Target Bonus will be based upon and
ultimate determination of the Target Bonus payment you receive will
be determined by the Compensation Committee.
c.
Equity Awards . On the Effective Date, you will be awarded
the two stock options described below, each to purchase up to one
million shares of Company common stock each (i.e., a total of two
million shares). The options will be exercisable at a price per
share equal to the closing price of the Company’s common
stock on the grant date, as reported on the Nasdaq Global Market,
and the options will be granted outside of the Company’s
stockholder-approved equity compensation plans as an
“inducement award,” but will be subject to the terms
and conditions of the Company’s 2004 Equity Incentive Plan as
if granted thereunder.
(i)
The first option (the “ First Option ”)
will vest with respect to one-quarter of the underlying shares on
the first anniversary of the grant date and then with respect to
the remaining shares monthly thereafter over the next three years
so that it is fully vested on the fourth anniversary of the grant
date. The First Option will vest immediately if, following a Change
of Control (defined below), you are removed as either the Chairman
or Chief Executive Officer and such removal is other than for Cause
(defined below).
(ii)
The second option (the “ Second Option ”)
will vest only in the event that the Company’s average
closing price of its common stock over a 90-day period, as reported
on the Nasdaq Global Market, is equal to or greater than $4.50 per
share (the “ Stock Target” ). Once the
Stock Target has been satisfied, the Second Option will vest
immediately with respect to 500,000 shares and will then vest with
respect to the remaining shares monthly thereafter over the next 12
months, provided that you continue to provide service to the
Company during that time. If the Stock Target is not achieved by
the fourth anniversary of the grant date, then the Second Option
will be forfeited in its entirety. The Second Option will vest
immediately if, following a Change of Control (defined below), you
are removed as either the Chairman or Chief Executive Officer and
such removal is other than for Cause (defined below).
(iii)
Both options will have a seven-year term and will be treated as
non-qualified under the Internal Revenue Code.
3.
Employee Benefits . You will be eligible to participate in
the employee benefits plan currently and hereafter maintained by
the Company of general applicability to other senior executives of
the Company, including the Company group health insurance, dental
insurance and 401(k) plans. The Company reserves the right to
cancel or change the employee benefit plans and programs it offers
to its employees at any time. You will be given a copy of, and must
abide by, the Company’s employee handbook and employee
benefit plan documents which will
2
describe more fully
these and other benefits of your employment, as well as the
personal policies and procedures which apply to employment with the
Company.
4.
Expense Reimbursement . You will be entitled to
reimbursement of all reasonable and properly documented expenses
incurred by you in the performance of your duties, in accordance
with the Company’s policies and procedures.
5.
Severance . In the absence of a Change of Control, if your
employment with the Company is terminated by the Company without
“ Cause ” (as defined below) or you
resign your employment for “ Good Reason
” (as defined below), then you shall be entitled to
receive the following severance benefits:
a.
You will receive 12 months’ Base Salary, plus the Target
Bonus for that year, less applicable withholding taxes (the
“ Severance Payment ”).
b.
The same level of health (i.e. medical and dental) coverage and
benefits as in effect for you on the day immediately preceding the
day of termination of employment; provided however, that
(i) you constitute a qualified beneficiary, as defined in
Section 4980B(g)(l) of the Internal Revenue
Code of 1986, as amended (the “Code”); and
(ii) you elect continuation coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“ COBRA ”), within the time period
prescribed pursuant to COBRA. The Company shall continue to provide
you with such health coverage until the earlier of (i) the
date you are no longer eligible t
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