EXECUTIVE EMPLOYMENT
AGREEMENT
This Agreement is
entered into as of August 1, 2006 (the “Effective
Date”) by and between the Company and Timothy Harris
(“Executive”).
1. Duties
and Scope of Employment .
(a)
Position and Duties . As of the Effective Date, Executive
will serve as Chief Executive Officer Elect until October 1,
2006, at which time Executive will assume the position of Chief
Executive Officer of the Company, reporting to the
Company’s Board of Directors (the “Board”).
Executive will render such business and professional services in
the performance of his duties, consistent with Executive’s
position within the Company, as shall reasonably be assigned to him
by the Board. Executive’s duties and responsibilities may be
altered, modified and changed as the Board deems
appropriate.
(b)
Obligations . During the Term, Executive will perform his
duties faithfully and to the best of his ability and will devote
his full business efforts and time to the Company. For the duration
of the Term, Executive agrees not to engage in any other
employment, occupation or consulting activity for any direct or
indirect remuneration without the prior written approval of the
Board.
(c)
Conflicting Employment . Executive agrees that, while
employed by the Company, he will not engage in any other
employment, occupation, consulting or other business activity
directly related to the business in which the Company is now
involved or becomes involved during the term of Executive’s
employment, nor will Executive engage in any other activities that
conflict with Executive’s obligations to the
Company.
2.
Term . Executive’s employment with the Company
pursuant to this Agreement (the “Term”) will commence
on the Effective Date and will continue, unless otherwise
terminated earlier as provided herein, until the date that is
twenty-four (24) months from the Effective Date.
Notwithstanding the foregoing, the parties agree that
Executive’s employment with the Company will be
“at-will” employment and may be terminated at any time
with or without cause by giving the Executive a written notice.
Executive understands and agrees that neither his job performance
nor promotions, commendations, bonuses or the like from the Company
give rise to or in any way serve as the basis for continuation,
modification, amendment, or extension, by implication or otherwise,
of his employment with the Company. However, as described in this
Agreement, Executive may be entitled to severance benefits
depending on the circumstances of Executive’s termination of
employment with the Company as expressly provided in
Sections 6 and 7 of this Agreement.
(a)
Base Salary . During the Term, the Company will pay
Executive as compensation for his services, a base salary at the
annualized rate of $525,000.00 (the “Base Salary”). The
Base Salary will be paid periodically in accordance with the
Company’s normal payroll practices and is subject to lawfully
required withholdings. Annual adjustments to the Base Salary may be
made in the Company’s sole discretion.
(b)
Target Incentive Plan . Executive will be eligible to
participate in the Company’s Target Incentive Plan, and for
such annual bonuses as are payable under the plan (“Incentive
Bonus”).
4.
Employee Benefits . During the Term, Executive will continue
to be entitled to participate in the employee benefit plans
currently and hereafter maintained by the Company of general
applicability to other senior executive of the Company, including,
without limitation, the Company’s group medical, dental,
vision, disability, life insurance, vacation and flexible-spending
account plans and programs. The Company reserves the right to
cancel or change the benefit plans and programs it offers to its
employees at any time.
5.
Equity . Executive may from time to time be eligible to
receive a grant of stock options and/or restricted stock, as the
Board of Directors deems appropriate.
(a)
Involuntary Termination Without Cause Prior to a Change of
Control or More than 6 Months Following a Change of Control .
If Executive’s employment with the Company terminates other
than voluntarily or for “Cause” prior to a
“Change of Control” (both as defined herein) or more
than six months following a Change of Control, and Executive signs
and does not revoke a release of claims with the Company in the
form provided by the Company, the Company shall provide severance
pay and benefits, subject to certain conditions, as
follows:
(i)
The Company shall provide monetary severance to Executive equal to
twenty-four (24) months of Base Salary. Such severance shall be
paid over a period of twenty-four (24) months following the date of
termination (the “Severance Period”) through Severance
Payments made in the same installments and subject to the same
deductions as Executive’s Base Salary at the time of
termination. The Severance Payments shall be subject to offset for
any amounts then owed to the Company by Executive.
(ii)
If Executive elects to continue his/her benefits under the
Company’s Employee Benefits Plans, including life, disability
and health insurance, through COBRA, the Company shall pay the cost
of COBRA continuation coverage for Executive (and, where
applicable, Executive’s dependents) during the Severance
Period as if Executive were still employed by the Company (the
“COBRA Continuation Payments”). Executive will continue
to pay the same portion of the cost of such benefits as he/she
currently pays as of the last day of his/her employment with the
Company. The COBRA Continuation Payments will cease, and the
Company will have no further obligations with respect to the
payment of any premiums for continuation coverage to Executive, as
of the earlier of (a) Executive becoming eligible for
comparable coverage (for example, through obtaining alternative
employment); (b) the conclusion of the Severance Period; or
(c) the cessation of Executive’s COBRA
eligibility.
(iii)
Any outstanding and unvested non-qualified stock options and any
restricted stock previously granted Executive shall immediately
vest and become exercisable as to the number of shares that would
have otherwise vested had Executive remained employed by the
Company through the end of the Severance Period.
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Thereafter, any
such awards will remain subject to the terms of the applicable
stock plan, grant and/or agreement.
(iv)
If Executive is entitled to compensation and benefits arising from
termination of employment due to change of control pursuant to
Section 7 below, compensation and benefits under that change
of control provision shall be in lieu of and not in addition to
compensation under this Section 6.
(v)
Notwithstanding the foregoing, the Company’s obligation to
make severance payments, pay bonus payments, provide benefits and
vest stock and/or options hereunder is expressly conditioned upon
Executive’s ongoing compliance with the provisions of the
Employee Invention, Authorship, Proprietary and Confidential
Information Agreement. In the event Executive breaches the terms of
such agreement, the Company’s obligations hereunder shall
automatically terminate, without any notice to Executive, and, in
addition to any other damages to which the Company may be entitled,
the Company shall be entitled to recover from Executive any
payments already made to Executive hereunder.
(vi)
Executive agrees that severance as provided herein shall be the
sole consideration to which he is entitled in the event of the
termination of his employment without Cause, and that severance
will not be paid in the event of termination with Cause, and
Executive expressly waives and relinquishes any claim to other or
further consideration.
(vii)
Severance pay, bonus pay, benefits and/or stock/option vesting are
expressly conditioned upon Executive’s execution and delivery
of a release of all claims Executive may have against the Company
in a form provided by the Company.
(b)
Voluntary Termination; Termination for Cause . If
Executive’s employment with the Company terminates
voluntarily by Executive or for Cause by the Company, then
(i) all vesting of any restricted stock or options to purchase
shares of the Company’s common stock held by Executive will
terminate immediately and all payments of compensation by the
Company to Executive hereunder will terminate immediately (except
as to amounts already earned, including unused and accrued
vacation); and (ii) Executive shall not be eligible for
severance or other benefits, except in accordance with any
generally applicable Company plans or policies as are then in
effect.
7. Change
of Control Severance Benefits . In the event of a “Change
of Control” (as defined herein) followed by Executive’s
termination other than voluntarily or for “Cause”
within six (6) months following the consummation of a Change
of Control, Executive shall be entitled to receive benefits as set
forth below, provided he signs and does not revoke a release of
claims with the Company in a form provided by the Company. For the
purpose of this Section 7, Executive shall be deemed to have
been terminated other than for “Cause” if Executive is
not provided with an offer of employment with the Company or
successor entity following the Change of Control with comparable
duties, position, responsibilities, pay and location relative to
the Executive’s duties, position, responsibilities, pay and
location in effect immediately prior to such Change of Control and,
within thirty (30) days thereafter, Executive elects to
voluntarily terminate his employment with the Company. Executive
agrees that (1) a change in title alone shall not mean that a
position is not comparable; (2) a change in duties and
responsibilities that is
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not material
shall not mean that a position is not comparable; (3) for
purposes of pay, a position shall be deemed comparable if it
involves a reduction of no more than ten percent (10%) of
Executive’s base compensation unless in connection with
similar decreases of other similarly situated employees of the
Company; and (4) for purposes of location, a position shall be
deemed comparable if it is within fifty (50) miles from
Executive’s current work location.
(a) A
lump sum payment within thirty (30) days of such termination
equal to the Severance Payment as set forth in section 6(a)(i)
above.
(b) An
additional lump sum payment within thirty (30) d
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