Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
This
Executive Employment
Agreement (the
"Agreement") is made
as of the
1st day of April, 2008, by and between GoAmerica, Inc., a Delaware corporation
(the "Company"), and John Ferron (the "Executive").
1. Duties
and Scope of Employment.
(a) Positions; Duties.
(i) During the Employment Term (as defined in Section 2),
the
Company shall employ Executive as the Chief Operating Officer of
the Company. In
his capacity as Chief Operating Officer, Executive shall report directly to
the
Chief Executive Officer of the Company.
(ii) Beginning at the
conclusion of the Part-Time Period (as
defined below) and continuing for so much of the Employment Term as
the Board of
Directors of the Company (the "Board") shall decide, Executive shall also hold
the position of Chief Financial Officer of the Company. In his
capacity as Chief
Financial Officer,
Executive shall report directly to the Chief Executive
Officer of the Company.
(iii) The Board may remove Executive from either of the
positions set forth in
Sections 1(a)(i)
and 1(a)(ii) at any time and for
any
reason; provided,
however, that at such time as the Board
decides to remove
Executive from either position, Executive shall relinquish such
position without
such relinquishment
constituting
a material breach of this Agreement, and
provided further, that
no such removal and/or
relinquishment shall
constitute
termination of
Executive's employment
as long as Executive
retains one of the
positions set forth in Sections 1(a)(i) or 1(a)(ii).
(b) Employment Schedule. From the Employment Commencement Date (as
defined below) until
June 2, 2008,
Executive shall be
employed on a part-time
basis (such period of
part-time work, the "Part-Time Period"). During the
Part-Time Period,
Executive shall hold only the position of Chief Operating
Officer and shall receive fifty percent (50%) of any cash
compensation to
which
he would otherwise be
entitled under Section
3(a). At the conclusion of the
Part-Time Period,
Executive shall be
employed on a full-time basis as both the
Chief Operating
Officer and the Chief
Financial Officer (subject to Section
1(a)(iii)) and he shall begin to receive one hundred percent (100%) of any cash
compensation to which he is entitled under Section 3(a); provided,
however, that
the transition to full-time cash compensation shall not be applied
retroactively
to the Employment Commencement Date.
(c) Obligations.
During the Employment Term, Executive shall devote
substantially all of
his business efforts
and time to the
Company. Executive
agrees, during
the Employment Term, not to actively engage in any other
employment, occupation
or consulting activity for any direct or indirect
remuneration without the prior approval of the Board; provided, however, that
Executive may (i)
serve in any capacity with any professional, community,
industry, civic, educational or charitable organization,
(ii) serve as a
member
of corporate boards of
directors on which Executive currently serves and, with
the consent of the Board (which
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consent shall not be unreasonably withheld or delayed), other corporate boards
of directors, and
(iii) manage his and his family's personal investments and
legal affairs; provided, however, that in each instance,
such activities do not
materially interfere with the discharge of Executive's duties.
2.
Employment
Term. The Company hereby agrees to employ
Executive and
Executive hereby
accepts such
employment (the period of such employment, the
"Employment Term"),
in accordance with the terms and conditions set forth
herein, commencing
on April 1,
2008 (the "Employment Commencement Date").
Executive and the Company understand and acknowledge that
Executive's employment
with the Company
constitutes "at-will"
employment.
Subject to the
Company's
obligation to provide severance benefits as specified herein,
Executive and the
Company acknowledge
that this employment
relationship may be terminated at any
time, upon
written notice to the other party,
with or without
Cause or Good
Reason (as defined in
Section 4(b) and 4(c),
respectively)
and for any or no
cause or reason, at the option of either the Company or
Executive.
3.
Compensation/Benefits. On the Employment Commencement Date, the
Company
shall make a one-time
lump-sum payment of forty thousand dollars ($40,000) to
Executive as consideration for Executive executing this Agreement.
In addition,
during the Employment
Term, the Company
shall pay and provide to Executive the
following:
(a) Cash Compensation.
As compensation for his services to the
Company, Executive
shall receive a base salary and shall be eligible to receive
additional variable
compensation. During
the Employment Term, the Board or its
Compensation Committee
(the "Compensation
Committee") shall review Executive's
Base Salary (as
defined below) and
Bonus (as defined
below) then in effect at
least annually and may increase (but not decrease, except as
provided in Section
1(b)) such Base Salary
as the Compensation
Committee may approve. The Base
Salary shall be
payable in accordance with the Company's normal payroll
practices in effect
from time to time,
but in no event less
frequently
than
monthly and,
in the case of Bonus, as soon as practical during the year
following the year with respect to which such Bonus is payable,
but in no event
later than March 15 of such following year. No increase in Base Salary
shall be
used to offset or otherwise reduce any obligations of the Company to
Executive
hereunder or otherwise.
(i) Annual Base
Salary. As of the Employment Commencement
Date, Executive's annual Base Salary shall be two hundred sixty
thousand dollars
($260,000) ("Base
Salary"); provide,
however, that such Base Salary shall be
subject to the reduction contemplated in Section 1(b).
(ii) Discretionary Bonus. Executive shall also be eligible
to
earn annual
variable compensation, the amount of which shall range
from zero
percent (0%) to one hundred percent (100%) of the Base Salary
(such variable
compensation, the
"Bonus," which, together with the Base Salary, shall be
referred to herein as "Target Pay"). The Bonus for any calendar
year shall be
awarded at the sole
discretion of the
Compensation
Committee based upon the
Company's achievement of stated financial and strategic goals, as
established by
the Compensation Committee.
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(b) Equity Compensation.
(i) Initial Stock Option Grant. Upon or promptly following the
Employment
Commencement Date,
pending approval by the Board, the Company shall
grant Executive
an option (the "Initial Option") to purchase two hundred
thousand (200,000)
shares of the common
stock of Company (the "Initial Option
Shares") under the
Company's 2005 Equity
Compensation Plan, as
amended and in
effect on the date of such grant (the "Stock Plan"), at a per share exercise
price equal to the fair market value of the common stock of the Company on the
date on which the Initial Option is granted, as determined by the Compensation
Committee, in
accordance
with the Stock Plan.
Such Initial Option shall be
substantially in the
form attached
hereto as Exhibit A (the "Stock Option
Agreement").
(ii) Supplemental Stock Option Grant. Pending approval by the
Board, and subject to,
but in no event more than three (3) business days after,
receipt by the Company of stockholder approval of the first amendment to the
Stock Plan to occur after the Employment Commencement Date, the Company shall
grant Executive
an additional option (the "Second Option") to purchase
seventy-five thousand
(75,000) shares of the common stock of the
Company (the
"Second Option
Shares," and together with the First Option Shares, the "Option
Shares") under the
Stock Plan, at a per share exercise price equal to the
fair
market value of the
common stock of the Company on the date on which the Second
Option is granted, as
determined by the Compensation Committee, in accordance
with the Stock Plan.
Such Second Option shall be substantially in the form of
the Stock Option Agreement.
(iii) Ongoing
Awards.
Executive
shall
be eligible to
participate fully in
annual stock option grants and any other long-term equity
incentive program at
levels commensurate
with his positions as Chief Operating
Officer and
Chief Financial Officer of the Company (subject to Section
1(a)(iii)).
(c) Employee Benefits.
Executive shall, to the extent eligible, be
entitled to
participate at a level
commensurate
with his positions as Chief
Operating Officer and Chief Financial Officer of the Company
(subject to Section
1(a)(iii)) in all employee benefit, welfare and retirement plans and
programs,
as well as equity
plans, provided by the
Company to its senior
executives in
accordance with
the terms thereof as in effect from time to time.
Notwithstanding the
foregoing, at all
times, the Company reserves the right to
amend, modify, or terminate any such plan or program.
(i) The Company will provide to Executive, at its expense, a
parking place, executive office, secretarial assistance,
facilities,
supplies
and equipment
appropriate to his positions as Chief Operating Officer and
Chief
Financial Officer of the Company (subject to Section 1(a)(iii)). In
addition, if
Executive relocates
his residence for the purpose of being closer to the
Company's executive
offices in
California,
the Company and Executive will
discuss and mutually
agree upon the
reimbursement of
Executive's
reasonable
relocation expenses
actually incurred
(including real estate
brokerage fees);
provided, however,
that any such
reimbursement
will be made
within ten (10)
business days
of Executive submitting receipts for qualifying relocation
expenses, and provided
further, that such
reimbursement shall be made no later
than March
15 of the year following the year in which such expenses are
incurred.
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(d) Additional
Benefits. During the
Employment
Term, the Company
shall provide Executive with the following additional benefits:
(i) Reimbursement of up to three thousand dollars ($3,000) per
month for one or more of the following direct, incurred expenses, in the
Executive's sole
discretion:
(A) corporate
housing (furnished apartment or
hotel) reasonably near the Company's executive offices in
California; (B) office
space in Los Gatos,
California; and/or (C)
use of a car service,
with driver,
solely for Executive's
business purposes
(including travel between his home or
Los Gatos office and the Company's executive offices in California);
provided,
however, that this
benefit shall
terminate upon the
earliest of (X) three (3)
years from the Employment Commencement Date, (Y) the
Company's establishment of
an office within
forty-five (45) miles of Executive's home, and (Z) relocation
of Executive's
residence to be within
forty-five
(45) miles of the
Company's
executive offices in
California.
Any reimbursement made under this Section
3(d)(i) will be made
within ten (10)
business days of Executive submitting
receipts for qualifying relocation expenses, and provided further, that such
reimbursement shall be
made no later than
March 15 of the year
following the
year in which such expenses are incurred.
(ii) Subject to and in accordance with the Company's policies
and procedures and in
accordance with the
Company's payroll
practices but no
less frequently
than monthly, the Company shall provide to Executive a
non-accountable,
discretionary expense
allowance of one thousand dollars
($1,000) per
month to be used by Executive for all of his own automobile
expenses (including, without limitation, his automobile lease or
similar finance
payments, insurance,
and all gas mileage (whether travel is personal or related
to his employment by the Company)), club and organization dues or memberships,
travel upgrades,
technology
devices, and similar executive perquisites and
related taxes.
(e) Business
and Entertainment Expenses. Upon submission of
appropriate documentation by Executive in accordance with the
Company's policies
in effect from time to time, the Company shall pay or reimburse
Executive for
all business expenses
that Executive incurs in performing his duties under this
Agreement, including,
but not limited to,
travel (excluding gas mileage, which
is covered by
Section 3(d)(ii)), entertainment, and professional dues and
subscriptions, in
accordance with the Company's policies in effect from time to
time. The Company
shall not be obligated
to reimburse Executive
for personal
legal fees or taxes incurred for any reason.
(f) Vacation, Holidays
and Sick Leave.
Executive shall be entitled
to vacations
of no less
than five (5) weeks per calendar year; provided,
however, that
Executive shall be limited to future accruals of no more than
six
(6) weeks of paid vacation. Executive shall also be entitled to
absences because
of illness or other
incapacity, and such
other absences,
whether for holiday,
personal time,
or for any other purpose, as set forth in the Company's
employment manual or current procedures and policies, as the case
may be, as the
same may be amended from time to time.
4.
Termination of Employment.
(a) Death or
Disability. The
Company may terminate Executive's
employment for disability in the event Executive has been unable to
perform his
material duties
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hereunder for
six (6) consecutive months because of physical or mental
incapacity by giving Executive notice of such termination
while such
continuing
incapacity continues (a "Disability Termination"). Executive's employment shall
automatically
terminate on
Executive's
death.
In the event Executive's
employment with the Company terminates during the Employment Term by
reason of
Executive's death
or a Disability Termination, then upon the date of such
termination:
(i) any Option Shares that would have vested solely due to the
passage of time during the twelve (12) month period beginning on the date of
Executive's death or Disability Termination shall immediately
vest;
(ii) the Company
shall, within
thirty (30) days of
the date
Executive's employment is terminated, pay and provide Executive (or
in the event
of Executive's death, Executive's estate) (A) any unpaid Base
Salary through the
date of termination and any accrued vacation, (B) reimbursement for any
unreimbursed expenses
incurred through the date of termination, and (C) all
other payments,
benefits or fringe
benefits to which Executive may be entitled
subject to and in
accordance with,
the terms of any
applicable
compensation
arrangement or
benefit, equity or
fringe benefit plan or
program or grant and
amounts that may become due under Sections 5 and 9 hereof
(collectively,
items
under this clause (i) are referred to as "Accrued Benefits");
and
(iii) the Company
shall pay to
Executive at the time other
senior executives are paid under any cash bonus or long-term
incentive plan, but
in no event
later than March 15 of the year following the year in which
Executive's employment
is terminated, a pro-rata bonus equal to the amount
Executive would have received if Executive's employment had continued
(without
any discretionary
cutback) multiplied by
a fraction where the numerator is the
number of days in each respective bonus period prior to Executive's
termination
and the denominator
is the number of days
in the bonus period
(the "Prorated
Bonus"); provided, however, that at the time of death or Disability
Termination,
Executive is on pace
to achieve the
performance
milestones
necessary to be
eligible for such bonus.
(b) Termination
for Cause.
The Company may
terminate
Executive's
employment for
Cause (as defined below). In the event that Executive's
employment with the
Company is terminated
during the
Employment
Term by the
Company for Cause, Executive shall not be entitled to any
additional payments or
benefits hereunder,
other than Accrued Benefits (including, but not limited to,
any then-vested Option
Shares and other equity awards), to be paid or provided
within thirty (30) days of the date Executive's employment is
terminated.
(i) For the purposes of this Agreement, "Cause" shall mean:
(A) material breach of
any provision of this
Agreement
by Executive;
(B) the willful
failure by
Executive to perform his
duties with
the Company (other than any such failure resulting from his
incapacity due to
physical or mental
impairment), unless
any such failure
is
corrected within
thirty (30) days
following written
notice by the Board
that
specifically identifies the manner in which the Board believes
Executive has
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not materially performed his duties; provided, however, that no act, or
failure
to act, by Executive shall be "willful" unless committed
without good faith
and
without a reasonable belief that the act or omission was in the
best interest of
the Company; or
(C) an act of gross
misconduct by Executive with regard
to the Company that is materially injurious to the Company.
(c) Termination by the Company Other Than for Cause; Termination by
Executive With Good
Reason. Any payments
to be made or benefits to be provided
under this Section
4(c) are conditioned on (x) Executive's execution of a
general release and/or termination agreement satisfactory to the Company,
and
(y) such general release and/or termination agreement becoming
effective.
(i) If Executive's employment with the Company is
involuntarily
terminated by the Company other than for Cause (for avoidance of
doubt, removal of
Executive from either
of his positions under
this Agreement
shall not constitute
termination of his employment as long as Executive retains
one such position) or if Executive voluntarily terminates his employment
with
the Company for Good Reason (as defined below), then the Company shall pay or
provide Executive with the following as of the date of
termination:
(A) any Accrued Benefits, to be paid or provided within
thirty (30) days of the date Executive's employment is
terminated;
(B) the Prorated Bonus; provided, however, that at the
time of the
termination of
Executive's
employment,
Executive is on pace to
achieve the performance milestones necessary to be eligible for such
bonus and
provided further that
such Prorated Bonus is paid no later than March 15 of the
year following the year in which Executive's employment is
terminated;
(C) a severance amount equal to the Executive's
then-current annual
Base Salary, payable
in a lump sum within thirty (30) days
of the date Executive's employment is terminated; provided,
however, that if the
termination occurs during the Part-Time Period, the severance
amount shall equal
fifty percent (50%) of Executive's then-current Base Salary;
(D) the right
to continue his participation in the
Company's health
benefit plans to the extent that he is then a participant
therein, at no additional cost to Executive other than he would
have incurred as
an employee, for a period of twelve (12) months starting with the
first calendar
month after such date of termination; provided, however, that Company
shall pay
the full premium for
COBRA continuation
coverage under its health plans for
Executive (and, if applicable, his dependents enrolled as participants in
such
health plans as of the date of termination) for such twelve-month
period. In the
event Executive obtains other employment during the twelve-month
period in this
clause (D), pursuant
to which he becomes covered for substantially similar or
improved benefits,
the right to continue
to participate in any
health benefit
plan, at the
Company's expens