Exhibit 10.3
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
Between
Daystar Technologies, Inc.
and
Robert Weiss
This AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (“Agreement”), executed as of
December 4, 2008 (“Effective Date”) between Robert
Weiss (“Executive”), an individual currently residing
in California, and DayStar Technologies, Inc., a Delaware
corporation (the “Company”), having its principal
office at 2972 Stender Way, Santa Clara, CA 95054.
WHEREAS, the Company and Executive
wish to amend and restate their existing employment agreement dated
April 1, 2006 (the “Prior Agreement”) to clarify
certain existing provisions in light of the final regulations
issued under Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”),
NOW, THEREFORE, in consideration of
the agreements and covenants contained herein, the Executive and
the Company hereby agree as follows:
ARTICLE I Employment and
Term
Section 1.01 Position;
Responsibilities.
(a) The Company hereby employs
Executive as its Chief Technology Officer upon the terms and
conditions hereinafter set forth.
(b) Executive shall at all times
hold the position described above or other senior management level
positions as determined by the Board of Directors of the Company
(the “Board”) or its designee, and perform the duties,
responsibilities and authorities customarily associated with such
positions or such other senior management level duties as
determined by the Board or its designee, so long as such other
duties are consistent with the Executive’s skills. Executive
shall report directly and solely to the Board or the
CEO.
Section 1.02 Performance of
Duties/Other Commitments and Activities.
(a) Executive shall at all times
endeavor to perform duly and faithfully all of his duties hereunder
to the best of his abilities.
(b) Executive shall devote his full
business time, best efforts and business judgment, skill and
knowledge to the advancement of the Company’s interests and
to the discharge of his duties and responsibilities hereunder;
provided, however, that nothing herein shall be construed as
preventing Executive from engaging in any of the activities
described in clauses (i), (ii), (iii) and/or (iv) below
so long as such activities do not impair his ability to fulfill his
duties and responsibilities under this Agreement or violate any
other agreements between Executive and the Company:
(i) investing his assets in such
form or manner as shall not require any material services on his
part in the operations or affairs of the companies or the other
entities in which such investments are made;
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(ii) serving on the board of
directors of any company; provided that he obtains the prior
written approval of a majority of the Board of Directors and shall
not be required to render any material services with respect to the
operations or affairs of any such company;
(iii) engaging in religious,
charitable, educational or other community or nonprofit activities;
or
(iv) serving in such capacities as
may be reasonably necessary for Executive to maintain his active
professional licensing as a member of any professional organization
that reasonably relates to his employment with and the business of
the Company.
(c) Executive’s base of
operations under this Agreement is the Company’s headquarters
offices which is currently located in the San Francisco, California
bay area.
Section 1.03
Term. Executive’s
term of employment under this Agreement (the “Term”)
shall commence on the Effective Date and shall expire on
April 1, 2009 (that is, the third anniversary of the entry
into the Prior Agreement); provided, however, that the Term shall
be automatically extended for additional one (1) year period
such date, and annually thereafter (each such anniversary,
commencing with April 1, 2009, the “Anniversary
Date”), unless the Executive or the Company has received a
written Notice of Non-Renewal delivered no later than thirty
(30) days prior to the Anniversary Date, pursuant to
Section 6.01 below. Executive’s rights to compensation
upon his separation from service with the Company, including but
not limited to upon the non-renewal of this Agreement, are as set
forth in Article 3 below.
Section 1.04 Representations
and Warranty of Executive. Executive hereby represents and warrants to the
Company that he is not aware of any presently existing fact,
circumstance or event (including, but without limitation, any
health condition or legal constraint) which would preclude or
restrict him from providing to the Company the services
contemplated by this Agreement, or which would give rise to any
breach of any term or provision hereof, or which could otherwise
result in the termination of his employment hereunder for Cause or
Good Reason (as such terms are defined in Article 3). Any and all
agreements between Executive and any prior employer as well as any
agreements to which Executive is a party containing any restriction
upon Executive’s ability to use or disclose confidential
information or engages in any business activity are listed in
Appendix “A” and shall be promptly made available to
the Company upon request.
Section 1.05 Representations
and Warranty of Company. The Company hereby represents and warrants to
Executive that it has received all authorizations and has taken all
actions, necessary or appropriate for the due execution, delivery
and performance of this Agreement.
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ARTICLE II
Compensation
Section 2.01
General. The Company
shall compensate Executive for all of his services under this
Agreement, as set forth herein.
Section 2.02 Basic
Compensation. Executive’s salary (“Base
Salary”) when annualized shall be at the rate of $285,000 and
shall be payable in bi-weekly or other installments in accordance
with the Company’s normal payment schedule for senior
management (but not less frequently than monthly).
Section 2.03 Incentive
Compensation. Executive
shall be eligible to participate in an annual Management Incentive
Program for senior management of the Company currently offered or
as subsequently modified by the Board from time to time in its
discretion (“Management Incentive Program”). The
Executive and the Company agree that Executive’s performance
goals pursuant to the Management Incentive Program shall consist of
the Company’s annual performance goals and other specific
performance goals for the Executive, as determined by the Board (or
a duly authorized committee thereof) in its discretion. The target
incentive compensation payment (the “Incentive
Payment”) for meeting all such goals shall be a percentage of
the Base Salary, as deemed appropriate by the Board (or a duly
authorized committee thereof).
Section 2.04 Other
Benefits.
(a) During the Term, Executive shall
be entitled to participate in all employee benefit plans, including
retirement programs, if any, group health care plans, and all
fringe benefit plans, of the Company, subject to the terms and
conditions of such plans. Such plans shall at all times be
comparable to those made available to the senior-most management of
the Company.
(b) In addition, the Company shall
provide Executive with the following benefits during the Term:
(i) Reimbursement for Company business travel (including
overnight accommodations as reasonably deemed necessary by
Executive); (ii) Company paid cell phone and home office
communication equipment (fax, internet access, etc. without any
requirement to maintain records of specific use); and
(iii) Reimbursement for reasonable out-of-pocket home office
expenses.
(c) During the Term, Executive shall
be entitled to paid vacation in accordance with the Company’s
Vacation Policy and calculations as set forth in the Company
Employee Handbook.
(d) Executive shall also be entitled
to such paid holidays and paid sick leave as shall be authorized by
the Company for its senior-most officers pursuant to its written
policies, as determined from time to time.
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Section 2.05 Expense
Reimbursements. The
Company shall reimburse Executive for all proper expenses incurred
by him in the performance of his duties hereunder in accordance
with the policies and procedures of the Company as in effect from
time to time.
Section 2.06 Excise
Tax. Notwithstanding any
other provision of this Agreement, if the aggregate present value
of the “parachute payments” to the Executive,
determined under Section 280G(b) of the Code would be, but for
this Section 2.06, at least three times the “base
amount” determined under such Section 280G, then the
parachute payments otherwise payable under this Agreement (and any
other amount payable hereunder or any other severance plan,
program, policy or obligation of the Company) shall be reduced so
that the aggregate present value of the parachute payments to the
Executive determined under Section 280G, does not exceed 2.99
times the base amount. In no event, however, shall any benefit
provided hereunder be reduced to the extent such benefit is
specifically excluded from treatment under Section 280G of the
Code as a “parachute payment” or as an “excess
parachute payment”. Any decisions regarding the requirement
or implementation of such reductions shall be made by the tax
counsel and accounting firm retained by the Company. If a reduced
amount is to be paid, (i) Executive shall have no rights to
any additional payments and/or benefits constituting the payments,
and (ii) reduction in payments and/or benefits shall occur in
the following order: (1) reduction of cash payments;
(2) cancellation of accelerated vesting of stock awards other
than stock options; (3) cancellation of accelerated vesting of
stock options; and (4) reduction of other benefits (if any)
paid to Executive. In the event that acceleration of compensation
from Executive’s stock awards is to be reduced, such
acceleration of vesting shall be canceled in the reverse order of
the date of grant.
Section 2.07
Withholding. The Base
Salary and all other payments and benefits provided to Executive in
connection with his services to the Company shall be subject to all
withholding and deductions required by federal, state or other law
(including those authorized by Executive but not otherwise required
by law), including but not limited to state, federal and local
income taxes, unemployment tax, Medicare and FICA, together with
such deductions as Executive may from time to time specifically
authorize under any employee benefit program which may be adopted
by the Company for the benefit of its senior executives or
Executive.
ARTICLE III Termination of
Employment
Section 3.01 Right to
Terminate. Executive’s employment hereunder is
“at will” and shall be terminable by either party at
any time with or without Cause or Good Reason and any such
termination shall not constitute a breach of this Agreement,
provided the notice or payment in lieu of notice set forth in
subsection 3.02 is provided. Upon any termination of
Executive’s employment, Executive will have no rights to
receive any compensation from the Company except as set forth in
this Article III.
Section 3.02
Notice. Executive shall
give the Company at least sixty (60) days’ advance
written notice prior to any termination by Executive.
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Section 3.03 Termination for
Good Reason. The
Executive may terminate employment for Good Reason or without Good
Reason. “Good Reason” means, without the consent of the
Executive:
(i) any material reduction in
Executive’s base pay and bonus target amount that is not
remedied by the Company within sixty (60) days after receipt
of written notice thereof from the Executive;
(ii) the assignment to the Executive
of any duties or any other action by the Company that results in a
material diminution in the Executive’s authority, duties, or
responsibilities described in Section 1.01(b) of this
Agreement that is not remedied by the Company within sixty
(60) days after receipt of written notice thereof from the
Executive;
(iii) any material breach by the
Company of this Agreement that is not remedied by the Company
within sixty (60) days after receipt of written notice thereof
from the Executive; or
(iv) any failure of the Company
under Section 6.10 below to use its best efforts to maintain
directors’ and officers’ liability insurance coverage
for Executive that is not remedied by the Company within sixty
(60) days after receipt of written notice thereof from the
Executive.
Notwithstanding the foregoing, Good
Reason shall not exist unless the Executive provides notice of any
condition described in (i)-(iv) above within ninety
(90) days of the initial existence of the condition and the
effective date of Executive’s termination, following the
Company’s failure to reasonably cure such condition, is not
later than the one hundred and twentieth (120th) day after the
Company received notice of the condition.
Section 3.04
Procedure for Termination for Good Reason. A termination of employment by
the Executive for Good Reason shall be effectuated by giving the
Company written notice (“Notice of Termination for Good
Reason”) of the termination, setting forth in reasonable
detail the specific conduct of the Company that constitutes Good
Reason and the specific provision(s) of this Agreement on which the
Executive relies. A termination of employment by the Executive for
Good Reason shall be effective on the sixtieth (60
th
) day following
the date when the Notice of Termination for Good Reason is received
by the Company, unless the act or admission that constitutes the
Good Reason is cured prior to the expiration of said period and the
Executive is given written notice thereof, the Notice of
Termination for Good Reason sets forth a later date (as provided in
Section 3.03 above) for the effectiveness of the termination
or the Company accepts the Executive’s termination for Good
Reason on an earlier date.
Section 3.05 Termination for
Cause. The Company shall
have the right to terminate Executive’s employment hereunder
for Cause. For purposes hereof, “Cause” shall be
defined as the Board’s good faith determination that the
Executive has: (i) been convicted of or entered a plea of nolo
contendere with respect to a criminal offense
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constituting a felony; (ii) committed one
or more acts or omissions constituting fraud, embezzlement or
breach of a fiduciary duty to the Company; (iii) committed one
or more acts constituting gross negligence or willful misconduct;
(iv) habitually abused alcohol or any controlled substance or
reported to work under the influence of alcohol or any controlled
substance (other than a controlled substance which Executive is
properly taking under a current prescription), (v) engaged in
harassment of any employee or customer of the Company in violation
of Company policy; (vii) committed a material violation of any
Company policy; (viii) been insubordinate or dishonest;
(ix) engaged in self-dealing or in any act constituting a
conflict of interest; (ix) exposed the Company to criminal
liability through negligence or wrongdoing of any kind;
(x) disclosed the Company’s confidential information in
violation of his obligations under this Agreement; or
(xi) failed, after written warning specifying in reasonable
detail the breach(es) complained of, to substantially perform his
duties under this Agreement.
Notwithstanding the foregoing in the
event of a Change of Control, a termination by the Company of the
Executive for any reason during the twelve (12) month period
immediately following the Change of Control, other than an
intentional and malicious act or omission that is reasonably likely
to result in material injury to the business or reputation of the
Company, shall be deemed to be a termination without Cause for all
purposes under this Agreement.
Section 3.06 Procedure for
Termination for Cause. A
termination of the Executive’s employment for Cause shall be
effected in accordance with the following procedures. The Company
shall give the Executive written notice (“Notice of
Termination for Cause”) of its intention to terminate the
Executive’s employment for Cause, setting forth in reasonable
detail the specific conduct of the Executive that it considers to
constitute Cause and the specific provision(s) of this Agreement on
which it relies and stating the date, time and place of the Special
Board Meeting. The “Special Board Meeting” means a
meeting of the Board called and held specifically for the purpose
of considering the Executive’s termination for Cause that
takes place not less than thirty (30) and not more than sixty
(60) days after the Executive receives the Notice of
Termination for Cause. The Executive shall be given an opportunity,
together with counsel, to be heard at the Special Board Meeting.
The Executive’s termination for Cause shall be effective when
and if a resolution is duly adopted at the Special Board Meeting,
stating that, in the good faith opinion of the Board, the Executive
is guilty of the conduct described in the Notice of Termination for
Cause, such conduct constitutes Cause under this Agreement and in
the case of a termination for Cause as defined in subsection
3.05(xi), such conduct has not ceased or been cured between the
date the Executive received the Notice of Termination for Cause and
the date of the meeting.
Section 3.07
Death. In the event that
the Executive dies while employed under this Agreement, the
Company’s obligations to Executive under this Agreement shall
immediately cease and Executive shall have no rights to receive the
severance package set forth in Section 3.09 below. All
benefits accrued to the date of death, including vested securities,
health and disability benefits shall inure to the benefit of
Executive’s heirs and assigns.
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Section 3.08
Disability. In the event
that the Board determines in its sole discretion that Executive has
been disabled from substantially performing his duties for any one
hundred and twenty (120) days within any twelve
(12) month period while employed under this Agreement, the
Company may terminate Executive’s employment for Cause
(including in any period following a Change of Control) and
Executive shall have no rights to receive the severance package set
forth in Section 3.09 below.
Section 3.09 Severance
Package.
(a) Change of Control Severance
Package. In the event Executive’s employment is
terminated during the Term in a manner that constitutes a
“separation from service” (as such term is defined in
Treasury Regulation Section 1.409A-1(h)) on or after a Change
of Control (as defined below) and prior to the date that is thirty
(30) days immediately following the first anniversary of the
Change of Control, by the Company other than for Cause or by
Executive for Good Reason, and other than as a result of a timely
Notice of Non-Renewal or Executive’s death or disability (as
determined under Section 3.08), then, subject to the
satisfaction of the conditions set forth in Section 3.09(d)
below, Executive’s change of control severance package
(“Change of Control Severance Package”) shall be as
follows:
(i) Executive shall receive two
hundred percent (200%) of the aggregate of
(x) Executive’s annual Base Salary for the year in which
such termination occurs, and (y) the target (i.e., at 100%
goal attainment) amount of any Incentive Payment payable to
Executive for the year in which such termination occurs under the
Management Incentive Program applicable to Executive. Such amount
shall be paid ratably in accordance with the Company’s normal
salary payment schedule for senior management over the eighteen
(18) month period following the date of the Executive’s
separation from service (except as set forth in
Section 3.09(d) and (g) below). The foregoing payment is
referred to herein as the “Change of Control Severance
Pay”;
(ii) During the eighteen
(18) month period immediately following the termination of
employment, the Company shall pay the premium for continued medical
and any other applicable health insurance coverage under COBRA for
Executive (and if applicable, his family) subject to
Executive’s timely election of such COBRA coverage, the
continued eligibility for participation by Executive and his
family, and subject to COBRA’s terms, conditions and
restrictions; and
(iii) All unvested compensatory
equity awards (including any stock options and restricted stock
awards) then held by Executive, if any, shall vest automatically
effective as of immediately prior to the termination of
Executive’s employment.
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(b) Definition of Change in
Control.
“Change in Control”
shall mean the occurrence of any of the following events:
(A) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or which
contemplates that all or substantially all of the business and/or
assets of the Company shall be controlled by another corporation,
in either case where the continuing, surviving or other corporation
both (i) is not directly or indirectly owned by holders of at
least 50% of the combined voting power of the Company’s
securities outstanding immediately prior to such consolidation or
merger and (ii) does not have a board of directors approved by
or consisting of more than one-half of the Company’s Board
members as the Board was constituted immediately prior to the
transaction, (B) a recapitalization (including an exchange of
Company equity securities by the holders thereof), in either case,
in which any “Person” (as such term is used in Sections
13(d) and 14(d)(2) of the Exchange Act) becomes the beneficial
owner (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of securities of the Company representing more than
fifty percent (50%) of the combined voting power of the
Company’s then outstanding securities having the right to
vote in the election of directors and the Company does not have a
board of directors approved by or consisting of more than one-half
of the Company’s Board members as the Board was constituted
immediately prior to the transaction; (C) any sale, lease,
exchange or transfer (in one transaction or in a series of related
transactions) of all or substantially all of the assets of the
Company and its subsidiaries; (D) approval by the shareholders
of the Company of any plan or proposal for the liquidation or
dissolution of the Company, unless such plan or proposal is
abandoned within 60 days following such approval; or (E) any
“Person” (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) shall become the beneficial owner
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of securities of the Company representing more than 50% of the
combined voting power of the Company’s then outstanding
securities having the right to vote in the election of
directors.
(c) Regular Severance
Package. In the event Executive’s employment is
terminated during the Term in a manner that constitutes a
“separation from service” by the Company other than for
Cause, or by Executive for Good Reason, in either such case other
than on or within the period ending on the 30th day following the
first anniversary of a Change of Control, and in all cases other
than as a result of a timely Non-Renewal or Executive’s death
or disability (as determined under Section 3.08), then,
subject to the satisfaction of the conditions set forth in
subsection 3.09(d) below, Executive’s regular severance
package (“Regular Severance Package”) shall be as
follows:
(i) Executive shall receive one
hundred percent (100%) of the aggregate of
(x) Executive’s annual Base Salary for the year in which
such termination occurs, and (y) the amount of any Incentive
Payment paid to Executive for the prior year under the Management
Incentive Program applicable to Executive. Such amount shall be
paid ratably in accordance with the Company’s normal salary
payment schedule for senior management (but not less frequently
than monthly) over eighteen (18) months immediately following
the date of the Executive’s separation from service (except
as set forth in Section 3.09(d) and (g) below). The
foregoing payment is referred to herein as the “Regular
Severance Pay”;
(ii) During the 18 month period
immediately following the termination of employment, the Company
shall also pay the premium for continued medical and any other
applicable health insurance coverage under COBRA for Executive (and
if applicable, his family) subject to Executive’s
timely
