EMPLOYMENT
AGREEMENT (the “ Agreement ”) made as of the
29 th
day of April, 2008 by and between
Biolase Technology, Inc. (the “ Company ”) and
David M. Mulder (“ Executive ”).
WHEREAS ,
the Company and Executive wish to enter into a formal employment
contract which will govern the terms and conditions applicable to
Executive’s employment with the Company and will provide
certain severance benefits for Executive in exchange for the
Executive’s agreement to abide by the terms and conditions
set forth in this Agreement.
NOW,
THEREFORE , the parties agree as follows:
PART ONE — TERMS AND
CONDITIONS OF EMPLOYMENT
1.
Duties and Responsibilities .
A.
Executive shall serve as the Chief Financial Officer of the Company
and shall report directly to the Company’s Chief Executive
Officer and the Company’s Board of Directors (the “
Board ”). Executive shall perform the responsibilities
of a chief financial officer of a public company, including such
duties and functions as may be reasonably assigned to Executive
from time to time by the Company’s Chief Executive Officer or
the Board. Executive shall comply with all proper and reasonable
directives and instructions of the Board, any committee of the
Board and the Company’s Chief Executive Officer.
B.
Subject to the exceptions set forth in Paragraph 6, Executive
agrees to devote his full business time and attention to the
Company, to use his best efforts to advance the business and
welfare of the Company, to render his services under this Agreement
fully, faithfully, diligently, competently and to the best of his
ability, and not to engage in any other employment activities while
employed by the Company.
2.
Period of Employment . Executive’s employment
with the Company shall be governed by the provisions of this
Agreement commencing April 30, 2008 (the “ Effective
Date ”) and for the duration of Executive’s
employment with the Company. Executive’s employment shall be
“at will” and may be terminated by either the Company
or Executive in accordance with the provisions of Section 7.
The period during which Executive’s employment continues in
effect shall be referenced as the “ Employment Period
.”
A. Executive
shall be paid a base salary at the annual rate of not less than TWO
HUNDRED THIRTY-FIVE THOUSAND dollars ($235,000) per annum
(hereinafter “ Base Salary ”) during the
Employment Period. The Base Salary may be increased from time to
time in the sole and absolute discretion of the Board. The Base
Salary may be decreased only in the event of a decrease of base
compensation of all officers of the Company, and then by no
greater
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percentage as
the percentage decrease to the base compensation of all such
officers. In the event of any increase or decrease as permitted by
this Section 3.A., the Base Salary for all purposes shall be
the increased or decreased amount in effect from time to time.
Executive’s Base Salary shall be paid at periodic intervals
in accordance with the Company’s payroll practices for
salaried employees.
B. The
Company shall deduct and withhold from the compensation and
benefits payable to Executive, including but not limited to
Executive’s Base Salary, any and all applicable Federal,
State and local income and employment withholding taxes and any
other amounts required to be deducted or withheld by the Company
under applicable statutes, regulations, ordinances or orders
governing or requiring the withholding or deduction of amounts
otherwise payable as compensation or wages to employees. The
Company shall also deduct such amounts as may be authorized by
Executive from time to time.
4.
Bonus; Stock Option Grant .
A. For
each full calendar year during the Employment Period, Executive may
earn an annual Performance Bonus of up to ONE HUNDRED THOUSAND
dollars ($100,000) (the “ Performance Bonus Target
”) based on achievement of Performance Bonus criteria. Said
Performance Bonus criteria shall be determined in good faith by the
Board of Directors. For any partial year at the beginning of the
Employment Period, the Performance Bonus Target shall be prorated
based on the number of days in the calendar year during which
Executive is employed by the Company divided by three hundred
sixty-five (365). The bonus shall be paid no later than
March 15 of the year following the year for which it is
awarded. Executive must be employed by the Company as of
December 31 of the year for which the bonus is awarded in
order to earn the bonus.
B. The
Company shall grant to Executive, effective as of the Effective
Date, a nonqualified stock option to purchase TWO HUNDRED THOUSAND
(200,000) shares of the Company’s common stock at a per share
exercise price equal to the fair market value (determined based on
the closing selling price per share on the grant date, as such
price is reported by the National Association of Securities Dealers
on the Nasdaq Stock Market and published in The Wall Street
Journal) of the Company’s common stock on the grant date.
Except as otherwise provided in Section 8.C., such stock
option shall become exercisable for one-third (1/3) of the shares
upon Executive’s completion of one year of service measured
from the grant date and shall become exercisable for the balance of
the shares in a series of eight successive three-month equal
installments upon Executive’s completion of each additional
three months of service over the twenty-four (24) month period
measured from the first anniversary of the grant date. Such stock
option shall have a term of ten (10) years, shall be granted
under the Company’s equity plan and shall be subject to the
terms and conditions of the Company’s equity plan and the
notice of grant of stock option and the stock option agreement for
such stock option.
A. Executive
shall, throughout the Employment Period, be eligible to participate
in any and all group term life insurance plans, group health plans,
accidental death and dismemberment plans and short-term disability
programs and other executive perquisites which are made available
to the Company’s executives and for which Executive qualifies
under the terms of such plans, policies or programs.
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B. Executive
shall earn and accrue vacation time during the Employment Period at
a rate of four (4) weeks of vacation per year. Executive shall
not be permitted to accrue more than six (6) weeks vacation. Once
this maximum has been reached, all further accruals will cease.
Vacation accruals will recommence after Executive has taken
vacation and his accrued hours have dropped below the accrual
maximum. Executive will not earn vacation during any unpaid leaves.
If a recognized holiday falls during Executive’s vacation
period, it will not be considered as a vacation day.
C. The
Company shall reimburse Executive for any necessary and reasonable,
out-of-pocket Relocation Expenses (as defined below) that are
actually incurred by Executive. For purposes of this
Section 5.C, “ Relocation Expenses ” shall
mean (i) travel, lodging and meal expenses for Executive and
his spouse and children for house hunting trips or relocation to
Executive’s new principal residence, (ii) expenses for
moving the household goods, personal effects and automobiles of
Executive and his spouse and children from Executive’s
current principal residence to his new principal residence, and
(iii) brokerage commission expenses incurred by Executive in
connection with the sale of Executive’s current principal
residence, provided the expenses described in clause (i),
(ii) or (iii) are directly related to the relocation of
Executive’s principal residence in connection with
Executive’s commencement of employment with the Company. The
total amount of Relocation Expenses reimbursed by the Company shall
not exceed FIFTY THOUSAND dollars ($50,000), and such Relocation
Expenses shall be reimbursed only if incurred by Executive not
later than October 30, 2008. To the extent any such expense
reimbursement is includible in Executive’s gross income for
federal income tax purposes, the Company shall pay Executive an
additional cash payment equal to 67% of the amount of such taxable
expense reimbursement. The Company shall pay such reimbursements
and other payments upon presentation of an itemized account and
appropriate supporting documentation in accordance with the
Company’s expense reimbursement procedures. Executive shall
return to the Company any excess reimbursement or other payment
within a reasonable period of time.
D. During
the Employment Period, Executive shall be authorized to incur
necessary and reasonable travel, entertainment and other business
expenses in connection with his duties hereunder. The Company shall
reimburse Executive for such expenses upon presentation of an
itemized account and appropriate supporting
documentation.
E. Executive
and the Company shall enter into an Indemnification Agreement in
the form attached hereto as Exhibit D , which
Indemnification Agreement shall be effective as of the Effective
Date.
6.
Restrictive Covenants .
A.
Exclusive Service . During the Employment Period, Executive
shall devote Executive’s full business time and energy solely
and exclusively to the performance of Executive’s duties,
except during periods of illness or vacation periods. During the
Employment Period, Executive shall not directly or indirectly
provide services to or through any person or
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entity, except
the Company, unless otherwise authorized by the Board in writing.
However, Executive may continue to serve during the Employment
Period as a non-employee member of the board of directors of the
companies for which he so serves on the effective date of this
Agreement (which are listed on Exhibit A hereto) and
may join the board of directors of other companies in the future
with the Board’s prior written consent. Executive shall have
the right to perform such incidental services as are necessary in
connection with (i) Executive’s private investments, but
only if Executive is not obligated or required to (and shall not in
fact) devote any significant managerial efforts, and
(ii) Executive’s charitable or community activities, or
participation in trade or professional organizations, but only if
such incidental services do not materially interfere with the
performance of Executive’s services, or violate
Section 6.B.
B.
No Competitive Activities . During the Employment Period,
Executive shall not directly or indirectly own, manage, operate,
join, control or participate in the ownership, management,
operation or control of, provide services to, or be employed by or
connected in any manner with, any enterprise which is engaged in
the Business; provided, however, that such restriction shall not
apply to any passive investment representing an interest of less
than two percent (2%) of an outstanding class of publicly-traded
securities of any corporation or other enterprise which is not, at
the time of such investment, engaged in the Business. For purposes
of this Section 6, the “Business” shall refer to
the design and manufacture of dental lasers, ophthalmologic lasers
for Presbyopia, and such other businesses as the Company may expand
into while Executive is employed by the Company, its parents,
subsidiaries or affiliates.
C.
Confidential Information . As a condition of
Executive’s receipt of the benefits provided for in this
Agreement, Executive will execute the Company’s Confidential
Information and Assignment of Inventions Agreement, a true and
correct copy of which is attached to this Agreement as
Exhibit B. Executive’s obligations under this
Paragraph 6.C. and Exhibit B shall continue in effect
after the termination of his employment with the Company, whatever
the reason or reasons for such termination, and Executive
acknowledges and agrees that the Company shall have the right to
communicate with any future or prospective employer of Executive
concerning Executive’s continuing obligations under this
Paragraph 6.C. and Exhibit B.
D.
Non Solicitation of Employees . Executive agrees that during
his Employment Period and for a period of twenty-four
(24) months after termination of his employment with the
Company, he shall not, directly or indirectly, through any other
individual or entity, solicit any employee of the Company, to cease
his or her employment with the Company, and Executive will not
approach any such employee for any such purpose or knowingly
authorize the taking of any such action by any other individual or
entity.
E.
Non Solicitation of Customers . Executive agrees that during
his employment by the Company, and any of its parents, subsidiaries
or affiliates and for a period of twenty-four (24) months after
termination of his employment with the Company, Executive shall
not, without the prior written approval of the Company, directly
or, with knowledge, indirectly, through or on behalf or any other
individual or entity, solicit, entice or induce any business from
any of the Company’s customers (including actively sought
prospective customers) or suppliers/vendors, the identity of whom,
or information concerning, rises to the level of a “trade
secret” within the meaning of the Uniform Trade Secrets Act
(“ UTSA ”).
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F.
Injunctive Relief . Executive acknowledges that monetary
damages may not be sufficient to compensate the Company for any
economic loss which may be incurred by reason of his breach of the
foregoing restrictive covenants. Accordingly, in the event of any
such breach, the Company shall, in addition to the termination of
this Agreement and any remedies available to the Company under
other provisions of this Agreement and/or at law, be entitled to
obtain equitable relief in the form of an injunction precluding
Executive from continuing such breach.
7.
Termination of Employment .
A.
Executive’s employment may be terminated by either the
Company or Executive at any time, for any reason, with or without
Cause, upon written notice specifying the Effective Date of
Termination, and without additional compensation, except as
otherwise provided in Section 8. Except as provided in
Sections 7.B. and C., the Effective Date of Termination
specified in the written notice may be immediate.
B.
For purposes of this Agreement, termination for “
Cause ” shall mean the involuntary termination of the
Executive’s employment by the Company for any of the
following reasons:
(i)
Executive’s conviction by, or entry of a plea of guilty in, a
court of competent jurisdiction for any felony;
(ii)
A substantial and continual refusal by Executive to perform his
duties and functions hereunder in accordance with the instructions
of the Board as embodied in written resolutions of the Board and
communicated in writing to Executive (provided that such
instructions do not require Executive to take any actions that
Executive reasonably believe to be are unlawful after a reasonable
inquiry);
(iii)
the willful and material breach of this Agreement by Executive
which, if curable, Executive fails to cure within thirty
(30) business days following written notice from the
Company;
(iv)
Executive’s conviction by, or entry of a plea of guilty a
nolo contendere, in a court of competent jurisdiction, for any act
of fraud, misappropriation or embezzlement in connection with his
employment by the Company;
(v)
Executive is unable to perform the essential functions of his job
for ninety or more consecutive days in any 12 month period;
provided that such inability to perform is not due to the
Executive’s status as disabled under any short or long term
disability provisions of the Company’s Employee Benefit
Plans; or
An involuntary
termination of Executive’s employment by the Company in any
other circumstances or for any other reason will be a termination
“ Without Cause .”
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C.
For purposes of this Agreement, Executive’s resignation for
“ Good Reason ” shall mean the resignation of
employment by Executive following the occurrence of:
(i)
a material diminution in Executive’s Base Salary;
(ii)
a material diminution in Executive’s authority, duties or
responsibilities (other than a temporary suspension of authority,
duties or responsibilities due to Executive’s illness or
disability, or an investigation of misconduct), or the assignment
to Executive of any duties materially inconsistent with the
Executive’s position, authority, duties or responsibilities
without the consent of Executive;
(iii)
a material change in the geographic location of Executive’s
regular office location (for purposes of this
Section 7.C(iii), a relocation of Executive’s regular
office by more than fifty (50) miles shall be deemed to be a
material change in the geographic location); or
(iv)
The Company’s material breach of this Agreement.
In order for
Executive to resign for Good Reason, Executive must provide advance
written notice of such resignation to the Company within sixty
(60) days following the initial existence of the action or
event giving rise to Good Reason. The notice must specifying an
Effective Date of Termination that is not less than thirty
(30) days, nor more than forty-five (45) days, after the
date of the written notice, and Executive agrees that should the
Company remedy the basis for such resignation prior to the
Effective Date of Termination specified in the written notice, then
Executive may not resign for Good Reason. The Company may relieve
Executive of some or all of his duties, responsibilities and
authority during any notice period, and such relief shall not serve
as a basis for Executive to claim “Good Reason” under
Section 7.C.(ii), provided, that the Company reinstates such
duties, responsibilities and authority not later the last of such
notice period.
D.
The “ Effective Date of Termination ” shall be:
(i) in the case of termination due to death, the date of
Executive’s death, or (ii) in the case of any other
termination, the date of Executive’s separation from service,
within the meaning of Section 409A(a)(2)(A)(i) of the Internal
Revenue Code of 1986, as amended (the “ Code ”),
and the Treasury regulations thereunder, from the Company and its
subsidiaries or affiliates (the “ Separation from
Service ”) specified in the written notice required by
this Section.
E.
On the Effective Date of Termination of Executive’s
employment for any reason during the Employment Period, Executive
shall be paid all Base Salary earned through the end of the
Employment Period, any unpaid business expenses, and any unused
vacation earned through the Effective Date of Termination. Unless
Executive is entitled to severance benefits under Section 8,
he shall not be entitled to any compensation or benefits following
the Effective Date of Termination, except as required by law or as
provided under a retirement or welfare benefit plan of the
Company.
F.
Executive shall resign from Executive’s position as the Chief
Financial Officer of the Company, and shall resign from all other
positions with the Company or any of its subsidiaries, effective as
of the Effective Date of Termination.
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PART TWO — SEVERANCE
BENEFITS
A.
Executive shall be entitled to receive the severance benefits
specified in Section 8.B. or Section 8.C., as the case
may be, in the event that: (i) the Company terminates
Executive’s employment Without Cause, or (ii) Executive
resigns for Good Reason (providing the notice and allowing the
Company to cure as provided in Section 7.C.). Such severance
benefits shall be conditioned upon Executive properly executing on
or after the Effective Date of Termination, and not revoking or
attempting to revoke within the permitted timeframe, a general
release of claims against the Company, its Board, its affiliates,
and their employees and agents substantially in the form of
Exhibit C or, in the event of a change in the law that would
limit the effect of the release attached as Exhibit C, a
general release that would have the same scope and effect as the
release attached as Exhibit C (such release, the “
Release ”) and the Release becoming irrevocable within
fifty-two (52) days following the Effective Date of
Termination. Executive shall not be entitled to receive the
severance benefits specified in Section 8 in the event
Executive fails to timely execute the Release or Executive timely
revokes the Release.
All severance
payments made to Executive pursuant to Section 8 shall be
subject to all applicable withholding requirements. In no event
shall Executive be entitled to severance benefits under both
Sections 8.B and 8.C and under no circumstances shall any
severance payments or benefits be payable if Executive’s
employment is terminated for Cause or Executive resigns for other
than Good Reason (as such terms are defined in Sections 7.B.
and C., respectively). The severance benefits shall be paid to
Executive not later than the last day of Executive’s second
taxable year following Executive’s taxable year in which the
Effective Date of Termination occurs.
B.
Subject to Section 8.C., in the event Executive’s
employment terminates, and the Release becomes irrevocable, under
the conditions described in Section 8.A, Executive shall be
entitled to severance benefits of:
(i)
One year of Executive’s annual Base Salary in effect under
Section 3.A as of the Effective Date of Termination, payable
in twenty-four (24) equal semi-monthly installments, during
the twelve (12) months commencing on the first day of the
calendar month next following sixty (60) days after the
Effective Date of Termination, coinciding with the Company’s
regular payroll cycle; and
(ii)
Company paid COBRA premiums for Executive (and his eligible
dependents) under the Company’s medical and dental benefit
plans, as in effect from time to time, for the twelve
(12) month period following the Effective Date of Termination.
The benefits under such plans shall be provided through insurance
maintained by the Company.
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C.
In the event Executive’s employment terminates, and the
Release becomes irrevocable, under the conditions described in
Section 8.A, and the Effective Date of Termination is during
the twelve (12) months following a Change of Control,
Executive shall be entitled to the following severance benefits
(which shall be in lieu of the severance benefit under
Section 8.B.):
(i)
Executive’s nonqualified stock option granted pursuant to
Section 4.B. shall become fully vested and exercisable on the
first business day that is at least sixty (60) days after the
Effective Date of Termination;
(ii)
One year of Executive’s annual Base Salary in effect under
Section 3.A as of the Effective Date of Termination, payable
in a lump sum in cash. The Company shall pay such lump sum payment
on the first business day that is at least sixty (60) days
after the Effective Date of Termination ; and
(iii)
Company paid COBRA premiums for Executive (and his eligible
dependents) under the Company’s medical and dental benefit
plans, as in effect from time to time, for the twelve
(12) month period following the Effective Date of Termination.
The benefits under such plans shall be provided through insurance
maintained by the Company.
For purposes of
the this Agreement, a “ Change of Control ”
shall mean the occurrence of any of the following events following
the Effective Date: (i) an acquisition of any voting
securities of the Company by any “person” (as the term
“person” is used for purposes of Section 13(d) or
Section 14(d) of the Securities Exchange Act of 1934, as amended
(the “ 1934 Act ”)) immediately after which such
person has “beneficial ownership” (within the meaning
of Rule 13d-3 promulgated under the 1934 Act) of 50% or more
of the combined voting power of the Company’s then
outstanding voting securities; or (ii) the consummation of:
(x) a merger, consolidation, share exchange or reorganization
involving the Company, unless the stockholders of the Company,
immediately before such merger, consolidation, share exchange or
reorganization, own, directly or indirectly immediately following
such merger, consolidation, share exchange or reorganization, at
least 50% of the combined voting power of the outstanding voting
securities of the corporation that is the successor in such merger,
consolidation, share exchange or reorganization in substantially
the same proportion as their ownership of the voting securities
immediately before such merger, consolidation, share exchange or
reorganization; (y) a complete liquidation or dissolution of
the Company; or (z) the sale or other disposition of all or
substantially all of the assets of the Company; or (iii) the
majority of members of the Board are replaced during any twelve
(12) month period by directors whose appointment or election
is not endorsed by a majority of the Board prior to the date of
such appointment or election.
D.
Parachute Payment . If any payment or benefit the Executive
would receive pursuant to a Change of Control or otherwise (“
Payment ”) would (i) constitute a
“parachute payment” within the meaning of
Section 280G of the Code, and (ii) but for this sentence,
be subject to the excise tax imposed by Section 4999 of the
Code (the “ Excise Tax ”), then such Payment
shall be reduced to the Reduced Amount. The “Reduced
Amount” shall be either (x) the largest portion of the
Payment that would result in no portion of the Payment being
subject to the Excise Tax or (y) the largest portion, up to and
including the total, of the Payment, whichever amount, after taking
into account all applicable federal, state and local employment
taxes, income taxes, and the Excise Tax (all computed at the
highest applicable marginal rate), results in the Executive’s
receipt, on an after-tax basis, of the greater amount of the
Payment
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notwithstanding
that all or some portion of the Payment may be subject to the
Excise Tax. If a reduction in payments or benefits constituting
“parachute payments” is necessary so that the Payment
equals the Reduced Amount, reduction shall occur in the following
order unless the Executive elects in writing a different order
(provided, however, that such election shall be subject to Company
approval if made on or after the effective date of the event that
triggers the Payment): (1) reduction of cash payments,
(2) cancellation of accelerated vesting of equity awards, and
(3) reduction of employee benefits. In the event that
acceleration of vesting of equity award compensation is to be
reduced, such acceleration of vesting shall be cancelled in the
reverse order of the date of grant of the Executive’s equity
awards unless the Executive elects in writing a different order for
cancellation.
The accounting
firm engaged by the Company for general audit purposes as of the
day prior to the effective date of the Change of Control shall
perform the foregoing calculations. If the accounting firm so
engaged by the Company is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, or is
unwilling to perform this function, then the Company shall appoint
a nationally recognized accounting firm to make the determinations
required hereunder. The Company shall bear all expenses with
respect to the determinations by such accounting or law firm
required to be made hereunder.
The accounting
firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to
the Executive and the Company within fifteen (15) calendar
days after the date on which the Executive’s right to a
Payment is triggered (if requested at that time by the Executive or
the Company) or such other time as requested by the Executive or
the Company. If the accounting or law firm determines that no
Excise Tax is payable with respect to a Payment, either before or
after the application of the Reduced Amount, it shall furnish the
Executive and the Company with an opinion reasonably acceptable to
the Executive that no Excise Tax will be imposed with respect to
such Payment. Any good faith determinations of the accounting or
law firm made hereunder shall be final, binding and conclusive upon
the Executive and the Company.
E.
The severance benefits provided Executive under this
Paragraph 8 are the only severance benefits to which Executive
is entitled upon the termination of his employment with the
Company, and no other benefits shall be provided to Executive by
the Company pursuant to any other severance plan or program of the
Company, except as required by applicable law. Executive
acknowledges and agrees that but for his execution of this
Agreement, he would not be entitled to the severance benefits
provided under this Paragraph 8.
F.
Notwithstanding the foregoing, if the Executive is a specified
employee, as defined under Section 409A(a)(2)(B)(i) of the
Code, on the date of Executive’s Separation from Service, to
the extent that the payments or benefits under this Section 8
are subject to Section 409A of the Code and the delayed
payment or distribution of all or any portion of such amounts to
which Executive is entitled under Section 8 is required in
order to avoid a prohibited distribution under Section
409A(a)(2)(B)(i) of the Code, then such payment or portion thereof
shall be paid or distributed to Executive during the thirty
(30) day period commencing on the earlier of (a) the
expiration of the six-month period commencing on the date of
Executive’s Separation from Service or (b) the date of
Executive’s death.
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PART THREE — MISCELLANEOUS
PROVISIONS
9.
Successors and Assigns . The provisions of this
Agreement shall inure to the benefit of, and shall be binding upon,
the Company, its successors and assigns. This Agreement shall inure
to the benefit of and be enforceable by Executive’s personal
or legal representatives, executors, administrators, successors,
heirs, distributes, devisees and legatees.
10.
Creditor Status . The benefits to which Executive may
become entitled under Part Two of this Agreement shall be paid,
when due, from the Company’s general assets, and no trust
fund, escrow arrangement or other segregated account shall be
established as a funding vehicle for such payments. Executive is
not waiving any rights he may have to collect any monies due to
Executive under this Agreement in the same manner as any other
employee of the Company would have.
A.
Any and all notices, demands or other communications required or
desired to be given by any party shall be in writing and shall be
validly given or made to another party if served either personally
or if deposited in the United States mail, certified or registered,
postage prepaid, return receipt requested. If such notice, demand
or other communication shall be served personally, service shall be
conclusively deemed made at the time of such personal service. If
such notice, demand or other communication is given by overnight
delivery, it shall be conclusively deemed given the day after it
was sent addressed to the party to whom such notice, demand or
other communication is to be given. If such notice, demand or other
communication is given by mail, it shall be conclusively deemed
given two (2) days after it was deposited in the United States
mail addressed to the party to whom such notice, demand or other
communication is to be given. The address for notice for each of
the parties shall be as follows:
Biolase
Technology, Inc.
Attn: Chairman of the Board of Directors
4 Cromwell
Irvine, California 92618
To the address
listed as Executive’s principal residence in the
Company’s human resources records and to his principal place
of employment with the Company.
B.
Both parties agree that if notice is by mail, then in good faith,
the party giving notice will attempt to contact the other by their
last known phone number and email address, to ensure notice was
received.
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C.
Any party may change its address for the purpose of receiving
notices, demands and other communications by a written notice given
in the described manner to the other party.
12.
Governing Document . Except as otherwise provided or
referenced herein, this Agreement constitutes the entire agreement
and understanding of the Company and Executive with respect to the
terms and conditions of Executive’s employment with the
Company and the payment of severance benefits and supersedes all
prior and contemporaneous written or verbal agreements and
understandings between Executive and the Company relating to such
subject matter. This Agreement may only be amended by written
instrument signed by Executive and an officer of the Company
specifically authorized by the Board for such purpose. Any and all
prior agreements, understandings or representations relating to the
Executive’s employment with the Company are terminated and
cancelled in their entirety and are of no further force or
effect.
13.
Governing Law . The provisions of this Agreement will
be construed and interpreted under the laws of the State of
California applicable to agreements executed and to be wholly
performed within the State of California. If any provision of this
Agreement as applied to any party or to any circumstance should be
adjudged by a court of competent jurisdiction to be void or
unenforceable for any reason, the invalidity of that provision
shall in no way affect (to the maximum extent permissible by law)
the application of such provision under circumstances different
from those adjudicated by the court, the application of any other
provision of this Agreement, or the enforceability or invalidity of
this Agreement as a whole. Should any provision of this Agreement
become or be deemed invalid, illegal or unenforceable in any
jurisdiction by reason of the scope, extent or duration of its
coverage, then such provision shall be deemed amended to the extent
necessary to conform to applicable law so as to be valid and
enforceable or, if such provision cannot be so amended without
materially altering the intention of the parties, then such
provision will be stricken and the remainder of this Agreement
shall continue in full force and effect.
14.
Arbitration . Any controversy, claim or dispute
between the parties directly or indirectly concerning this
Agreement, or the breach or subject matter hereof, including, but
not limited to, the granting, terms, vesting or exercisability of
the Option Shares, shall be finally settled by arbitration held in
Orange County, California. The arbitration will be held under the
auspices of either the American Arbitration Association
(“AAA”) or Judicial Arbitration & Mediation
Services, Inc. (“J • A • M
• S”), with the designation of the sponsoring
organization to be made by the party who did not initiate the
claim. The arbitration shall be in accordance with the AAA’s
then-current employment arbitration procedures (if AAA is
designated) or the then-current J • A • M
• S employment arbitration rules (if J •
A • M • S is designated). The arbitrator
shall be either a retired judge, or an attorney licensed to
practice law in the state in which the arbitration is convened (the
“Arbitrator”). The Arbitrator shall have jurisdiction
to hear and rule on pre-hearing disputes and is authorized to hold
pre-hearing conferences by telephone or in person, as the
Arbitrator deems necessary. The Arbitrator shall have the authority
to entertain a motion to dismiss, demurrer, and/or a motion for
summary judgment by any party and shall apply the standards
governing such motions under the federal rules of civil procedure
applicable in the location of the arbitration. The Arbitrator shall
render a written award and opinion which reveals, however briefly,
the essential findings and conclusions on which the award is based.
The arbitration shall be final and binding upon the parties, except
as otherwise provided for by the
11
law applicable
to review of arbitration decisions/awards. Either party may bring
an action in any court of competent jurisdiction to compel
arbitration under this Agreement and/or to enforce an arbitration
award. The Company will pay the Arbitrator’s fees and any
other fees, costs or expenses unique to arbitration, including the
filing fee, the fees and costs of the Arbitrator, and rental of a
room to hold the arbitration hearing. However, if Executive is the
party initiating the claim, Executive shall be responsible for
contributing an amount equal to the filing fee to initiate a claim
in the court of general jurisdiction in the state which Executive
is (or was last) employed by the Company. The Arbitrator may award
reasonable legal fees and/or costs to the prevailing party in any
dispute subject to arbitration under this Agreement.
Notwithstanding the foregoing either party may seek temporary or
preliminary injunction relief in any court of competent
jurisdiction if such relief is unavailable or cannot be timely
obtained through Arbitration.
15.
Remedies . All rights and remedies provided pursuant
to this Agreement or by law shall be cumulative, and no
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