Exhibit 10.1
EXECUTIVE RETENTION
AGREEMENT
The parties to this Retention
Agreement (the “Agreement”) are ________________
(“Employee”) and Interlink Electronics, Inc.
(“Company”).
R E C I T A L S:
WHEREAS, the Company from time to
time will consider strategic alternatives which may include the
divestiture of one or more of the business units of the Company
;
WHEREAS, Employee has knowledge and
experience necessary for the successful operation and management of
the Company until its business units are sold;
WHEREAS, this Agreement shall
supersede all existing agreements between the Employee and Company,
either verbal or written, regarding retention compensation,
severance benefits and change of control benefits; and
WHEREAS, in the event of a
divestiture of one or more of the business units, the Company
desires to retain the services of Employee during the period of
time that Company continues its operations and for Employee to
provide services to any successor for the first nine
(9) months following a Change of Control of the
Company.;
NOW, THEREFORE, in consideration of
the mutual promises herein contained, the parties agree as
follows:
1. SERVICES AND
COMPENSATION
Employee agrees to devote
Employee’s full time, attention, and skills in the position
of ___________________ during the term of this Agreement, as
defined in Paragraph 2 below. Employee further agrees to perform
such services diligently, for the best interest of Company or any
successor owner of Interlink Electronics, Inc., and in a manner
consistent with the standards customarily applicable to persons
rendering similar services. If in the pursuit of a strategic
alternative the Company or one of both of the business unit is
sold, Employee shall receive Incentive Compensation in the form and
amount set forth in Exhibit A hereto at the closing of the sale of
the Company or at the closing of each of the transactions involving
the individual business units if he is an active employee of the
Company at the time of the closing(s). Additionally, Employee shall
receive Change of Control benefits in the form and amount set forth
in Exhibit A hereto in the event that prior to a Change of Control
event Employee is terminated by the Company for any reason other
than cause; or in the event that prior to a Change of Control event
Employee resigns for good reason; or for nine (9) months
following a Change of Control event if Employee is terminated by a
successor owner for any reason other than cause; or for nine
(9) months following a Change of Control event if Employee
resigns for good reason. As a condition to Employee’s receipt
of any Incentive Compensation or Change in Control benefits
pursuant to Exhibit A, Employee shall be required to execute a
general release
of claims relating to Employee’s
employment by the Company and any successor employer and
termination of employment at the Company or at any successor
employer, within the deadline set forth in the general release,
which shall be no sooner than twenty-one (21) days after, nor
later than forty-five (45) days after, Employee’s
separation from service within the meaning of section 409A of the
Internal Revenue Code of 1986 (the “Code”). Payment
shall be made within ten (10) days of the Employee’s
execution of the release and the expiration of any applicable
revocation period, which shall be in a form substantially similar
to the form attached hereto as Exhibit B. Company shall provide
Employee with the final form of the release within thirty
(30) days following Employee’s separation from
service.
2. TERM
This Agreement shall become
effective upon execution by all parties and shall automatically
terminate nine (9) months following the effective date of a
Change of Control as defined in Section 3 of this Agreement.
Company may also terminate this Agreement for “cause”
prior to the automatic termination, Employee may terminate this
Agreement for “good reason” prior to the automatic
termination, or this Agreement may terminate automatically due to
the resignation, death, or disability of Employee.
Termination for “cause”
by Company shall mean a termination on account of any one or more
of the following:
A. Employee commits an act of
dishonesty, fraud, deception, misrepresentation or engages in other
willful misconduct which is reasonably believed to be injurious to
the interest, property, operations, business or reputation of
Company;
B. Employee engages in willful
misconduct, gross negligence, malfeasance or misfeasance in the
course of employment;
C. Employee fails to obey a lawful
direction of Company and does not cure such failure within a
reasonable period of time, not to exceed three (3) business
days of being notified of such failure;
D. Employee breaches any material
provision of this Agreement and does not cure such breach within a
reasonable period of time, not to exceed ten
(10) days;
E. Employee is convicted of a felony
or enters a nolo contendere plea to a felony, or is convicted of a
misdemeanor involving dishonesty or moral turpitude, or enters a
nolo contendere plea to a misdemeanor that involves dishonesty or
moral turpitude; or
F. Employee engages in theft or
embezzlement, or attempted theft or embezzlement, of money or
tangible or intangible assets or property of Company.
Termination for “good reason” by
Employee shall mean a resignation by Employee on account of any one
or more of the following:
A. a material diminution of
Employee’s responsibilities from those responsibilities of
Employee in effect at the time of execution of this Agreement,
except in connection with the termination of Employee’s
employment for cause, disability or death, or voluntarily by
Employee other than for good reason;
B. a material reduction by the
Company, or any successor employer, of Employee’s rate of
base salary;
C. a material change in the
geographic location at which the Employee must perform his services
hereunder (at least fifty (50) miles) from the location
immediately prior to the Change in Control, except for reasonably
required travel on business of the Company or of any successor
employer; or
D. any other action or inaction by
the Company or any successor employer that constitutes a material
breach of this Agreement and that is not cured within ten
(10) days following written notice to the Company of such
breach.
If Employee is terminated for
“cause” or voluntarily resigns prior to the termination
of this Agreement for reasons other than “good reason”,
then Employee will not be eligible for the compensation set forth
in paragraph 1 and Exhibit A.
The failure of Company to timely
exercise its right of termination of this Agreement in the event of
the occurrence of “cause,” or failure of Employee to
timely exercise his right of termination in the event of the
occurrence of “good reason,” shall not constitute a
waiver of either party’s right to terminate this Agreement
for any subsequent occurrence of “cause” or “good
reason.”
“Disability” shall mean
the absence of Employee from Employee’s duties with the
Company or that of any successor employer on a full time basis for
one hundred eighty (180) consecutive days as a result of
Employee’s incapacity due to physical or mental illness,
unless, within thirty (30) days after a notice of termination
is given to Employee following such absence, Employee shall have
returned to the full performance of Employee’s
duties.
3. CHANGE IN
CONTROL
“Change in Control” of
the Company shall mean the occurrence of any of the following
events:
A. any consolidation, merger, plan
of share exchange, or other reorganization involving the Company (a
“Merger”) as a result of which the holders of
outstanding securities of the Company ordinarily having the right
to vote for the election of directors (“Voting
Securities”) immediately prior to the
Merger do not continue to hold at
least fifty percent (50%) of the combined voting power of the
outstanding Voting Securities of the surviving or continuing
corporation immediately after the Merger, disregarding any Voting
Securities issued or retained by such holders in respect of
securities of any other party to the Merger;
B. any sale, lease, exchange or
other transfer of all, or substantially all, the assets of the
Company, or, in the
