EMPLOYMENT AGREEMENT
AGREEMENT, dated as of January 1, 2009, between Research
Frontiers Incorporated, a Delaware corporation with principal
executive offices at 240 Crossways Park Drive, Woodbury, New
York 11797-2033 (the "Company"), and Joseph M. Harary,
residing at [address] ("Employee").
W I T N E S S E T H
WHEREAS, the Company desires to employ Employee upon
the terms and subject to the terms and conditions set forth in
this
Agreement.
NOW, THEREFORE, in consideration of the premises, the
mutual promises, covenants, and conditions herein contained
and for other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto intending to be legally bound hereby agree as follows:
Section 1.
Employment.
The Company hereby agrees to continue to employ Employee,
and Employee hereby agrees to continue to serve the Company,
all upon the terms and subject to the conditions set forth in
this
Agreement.
Section 2. Capacity
and Duties.
(a) Employee is and shall be employed in
the capacity of
President and Chief Executive Officer of the Company and shall
have the duties, responsibilities, and authorities normally
performed by the president and chief executive officer of a
company, including responsibility for the overall and
day-to-day
operation of the Company, the hiring and termination of
employees of the Company who are not officers of the
Company, and such other duties, responsibilities, and
authorities
as are assigned to him by the Board of Directors of the
Company (the "Board") so long as such additional duties,
responsibilities, and authorities are consistent with
Employee's
position and level of authority as President and Chief
Executive
Officer of the Company. Employee shall also serve as
Treasurer, Secretary, and General Counsel of the Company (or
any combination of the foregoing) if requested to do so by the
Board. Employee in carrying out his duties under this
Agreement shall report solely to the Board.
Notwithstanding
the foregoing, after a Non-Extension Notice (as hereinafter
defined) is delivered, Employee shall (i) resign from such
offices then held by Employee with the Company or its
subsidiaries as shall be requested by the Board and shall no
longer have the duties, responsibilities, and authorities
associated with the offices from which he has resigned, (ii)
report to such person or persons as the Board may specify, and
(iii) perform such transitional duties, responsibilities, and
authorities as may be reasonably assigned to him by the
Board.
(b) Employee shall devote substantially all of
his business
time and attention to promote and advance the business of the
Company, except that Employee shall be permitted to (i) serve
on the boards of directors of other corporations not engaged in
competition with the Company and the boards of trade
associations and charitable organizations, (ii) engage in
charitable activities and community affairs, (iii) manage his
personal investments and affairs, and (iv) teach or lecture;
provided in each case that (A) such activities do not
materially
interfere with the proper performance of Employee's duties and
responsibilities as the Company's President and Chief Executive
Officer and (B) in the case of each activity described in
clauses
(i), (ii), and (iv), such activity is approved in advance by
the
Board, such approval not to be unreasonably withheld, except
that, if all of activities described in clauses (i), (ii), and
(iv)
involve in the aggregate less than ten hours per month of
Employee's time, such advance approval shall not be required
but Employee shall promptly notify the Board of the nature of
such activities.
(c) If (i) Employee is serving on the Board on
the date a
Non-Extension Notice is delivered or at a time that he is no
longer employed by the Company and (ii) (A) a Change of
Control (as hereinafter defined) has not occurred or (B)
Employee's employment has been terminated by the Company
pursuant to Section 9(c) or Employee, in breach of this
Agreement, has terminated his employment prior to the
Scheduled Date of Termination (as hereinafter defined) other
than pursuant to Section 9(d), Employee shall promptly resign
from the Board if he is requested to do so by the Board.
Section 3. Term of
Employment.
The term of employment of Employee by the Company
pursuant to this Agreement shall be for the period (the
"Employment Period") commencing as of the date hereof and
ending on December 31, 2013, unless further extended or sooner
terminated in accordance with the provisions of this Agreement.
On December 31, 2013, and on each subsequent December 31,
the Employment Period shall be automatically extended for one
additional year unless, not later than 90 days prior to such
date,
the Company shall have delivered to Employee or Employee
shall have delivered to the Company written notice (a
"Non-Extension Notice") that the Employment Period shall not
be further extended.
Section 4.
Compensation.
During the Employment Period, subject to all the terms and
conditions of this Agreement and as compensation for all
services to be rendered by Employee under this Agreement, the
Company shall pay to or provide Employee with the following:
(a) Base Salary. The Company shall pay to
Employee a base
salary at the annual rate of at least $425,000, payable at such
intervals (at least monthly) as salaries are paid generally to
other
executive officers of the Company.
(b) Bonus. Employee shall be eligible for a
potential annual
bonus in an aggregate amount of at least $150,000 upon the
achievement of realistic and achievable goals. Not later
than
April 30 of 2009, and not later than March 15 of each
subsequent year, the Board shall determine in good faith, after
consultation with Employee, the goals for that year's bonus,
which goals shall be specified in writing. The Board may, in
its
sole discretion, provide for a series of separate and
independent
goals to be met during the year, each of which is associated
with
its own potential bonus. Any bonus (including any bonus
associated with a separate and independent goal) for any year
shall be payable to Employee as soon as practicable after it is
determined whether the applicable goals have been achieved.
(c) Equity Incentive Awards. In recognition
of Employee's
assumption of the title and duties of Chief Executive Officer
and
the services performed by Employee during 2008, as of January
1, 2009, the Company granted Employee 150,000 shares (the
"Restricted Shares") of Restricted Stock under the Company's
2008 Equity Incentive Plan (the "Plan"). The Restricted
Period
(as defined in the Plan) shall lapse as to 1/36 of the
Restricted
Shares on the last day of each of the first 36 months during
the
Employment Period, subject to forfeiture of the Restricted
Shares as set forth in the Plan and the accelerated lapse of
the
Restricted Period as set forth herein. In addition to the
Restricted Shares, the committee established by the Board to
administer the Plan may grant Employee additional equity
incentive awards under the Plan or otherwise from time to time
based upon his performance. Any such additional equity
incentive awards shall be of a type and amount commensurate
with Employee's position and consistent with the type and
amount of equity incentive awards granted to the Company's
other officers, directors, and employees.
(d) Vacation. Employee shall be entitled to
annual paid
vacation of 20 business days, which shall accrue in accordance
with the policies of the Company in effect from time to time.
Vacation days not used in the year earned may be carried into
the first quarter of the subsequent year. For any vacation
day
not used prior to the end of the first quarter of the year
subsequent to the year earned, Employee shall be paid an
amount equal to his annual base salary in the year earned
divided by 260.
(e) Employee Benefit Plans. Employee shall
be entitled to
participate in all employee benefit plans maintained by the
Company for its senior executives or employees for which he is
eligible.
(f) Withholding. Employee authorizes the
Company to make
any and all applicable tax withholdings from any compensation
payable or provided to Employee hereunder.
(g) Disability Payments. Any compensation payable
or
provided to Employee hereunder shall be reduced by the sum of
the amounts, if any, payable to Employee under disability
benefit plans of the Company.
Section 5. Expenses.
The Company shall reimburse Employee for all reasonable
expenses (including, but not limited to, business travel and
entertainment expenses) incurred by him in connection with his
employment hereunder in accordance with the written policy
and guidelines established by the Company for executive
officers.
Section 6. Patents.
Any interest in patents, patent applications, inventions,
trademarks, trademark applications, copyrights, developments,
processes, or other intellectual property ("Inventions") which
Employee now or hereafter during the period he is employed by
the Company under this Agreement or otherwise may own or
develop relating to the fields in which the Company may then
be engaged shall belong to the Company; and forthwith upon
request of the Company Employee shall execute all such
assignments and other documents and take all such other action
as the Company may reasonably request in order to vest in the
Company all his right, title, and interest in and to the
Inventions
free and clear of all liens, charges, and encumbrances.
Section 7.
Non-Competition, Non-Solicitation.
Employee agrees that he will not during the period he is
employed by the Company under this Agreement or otherwise
and for a period of two years thereafter, directly or
indirectly,
(a) solicit the employment of, or, except for terminations of
employees in the ordinary course of business during the period
Employee is employed by the Company under this Agreement
or otherwise, encourage to leave the employment of the
Company or any of its subsidiaries, any person employed by the
Company or any of its subsidiaries, (b) hire any employee or
former employee of the Company or any of its subsidiaries, (c)
compete with or be engaged in the same business as the
Company or any of its subsidiaries, (d) be employed by, or act
as consultant or lender to, or be a director, officer, or
employee
of, any business or organization which, during the period
Employee is employed by the Company under this Agreement
or otherwise, directly or indirectly competes with or is
engaged
in the same business as the Company or any of its subsidiaries,
or (e) have a greater than one percent interest as owner,
member, or partner of any business or organization which,
during the period Employee is employed by the Company under
this Agreement or otherwise, directly or indirectly competes
with or is engaged in the same business as the Company or any
of its subsidiaries.
Section 8. Confidential
Information.
All confidential information which Employee may now possess,
may obtain during or after the Employment Period, or may
create prior to the end of the period he is employed by the
Company under this Agreement or otherwise relating to the
business of the Company or of any its licensees, customers, or
suppliers shall not be published, disclosed, or made accessible
by him to any other person, firm, or corporation either during
or
after the termination of his employment or used by him except
during the Employment Period in the business and for the
benefit of the Company, in each case without prior written
permission of the Company. Employee shall return all
tangible
evidence of such confidential information to the Company prior
to or at the termination of his employment.
Section 9. Early
Termination.
Employee's employment hereunder may be terminated prior to
December 31, 2013 or, if the Employment Period has been
extended to a date later than December 31, 2013, prior to such
later date (December 31, 2013 or such later date is hereinafter
referred to as the "Scheduled Date of Termination"), without
such termination constituting a breach of this Agreement only
under the following circumstances:
(a) Death. Employee's employment hereunder
shall terminate
upon his death.
(b) Disability. If, as a result of Employee's
incapacity due to
physical or mental illness, Employee shall have been absent
from his duties hereunder on a full-time basis for at least 16
consecutive weeks and does not return to the performance of his
duties on a full-time basis within ten days after receipt of
written notice from the Company, the Company may terminate
Employee's employment hereunder.
(c) Cause. The Company may terminate
Employee's
employment hereunder for Cause. For purposes of this
Agreement, "Cause" shall mean (i) gross negligence or willful
misfeasance demonstrated by Employee in the performance of
his material duties to the Company, (ii) refusal by Employee to
perform reasonable material lawful duties which are consistent
with Employee's position and role and are assigned to him by
the Board, which refusal continues uncured for 30 days after
receipt of written notice from the Company, (iii) Employee's
engaging in any act of fraud, dishonesty, or moral turpitude
that
has or is likely to have a material adverse affect on the
business
of the Company or the reputation of the Company or Employee,
(iv) Employee's breaching in any material respect any material
provision of this Agreement, the Research Frontiers
Incorporated Employee Proprietary Information & Invention
Agreement executed by Employee on or about February 20,
1998 (the "1998 Agreement"), or the employee policies and
procedures of the Company, which breach is not cured within 30
days after receipt of written notice from the Company, (v)
Employee's conviction of, or entering into a plea of guilty or
nolo contendere (or its equivalent) to, a felony, or (vi)
Employee's material violation of any federal, state, or local
law
applicable to the Company or any of its subsidiaries or their
respective businesses; provided that (A) no act, or failure to
act,
by Employee that is specifically authorized pursuant to a
resolution duly adopted by the Board shall constitute Cause and
(B) Cause will not exist unless and until the Company has
delivered to Employee a copy of a resolution duly adopted by at
least two-thirds of the Board (excluding Employee) at a meeting
of the Board called and held for such purpose (
