EXHIBIT 10.15
SIXTH AMENDED AND
RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT, entered into as of
the 31 day of March, 2006, amends and restates the Amended and
Restated Agreement, dated as of the 20th day of February, 2004, by
and between KOPIN CORPORATION, a Delaware corporation with its
principal place of business at 200 John Hancock Road, Taunton, MA
02780 (the “ Employer ”), and John C. C. Fan
, (the “ Employee ”), as first amended
and restated as of May 1, 1995.
1. Freedom to Contract . The
Employee represents that he is free to enter into this Agreement,
that he has not made and will not make any agreements in conflict
with this Agreement, and will not disclose to the Employer, or use
for the Employer’s benefit, any trade secrets or confidential
information now or hereafter in the Employee’s possession
which is the property of any other party.
2. Employment . The Employer
hereby employs the Employee, and the Employee hereby accepts his
employment by the Employer, upon the terms and conditions set forth
herein.
3. Effective Date and Term .
This Agreement shall take effect as of February 20, 2006 (the
“ Effective Date ”), and shall continue
thereafter in full force and effect through December 31, 2010,
unless terminated prior to such time in accordance with the
provisions of this Agreement (the “ Employment Term
”).
4. Title and Duties; Extent of
Services . The Employee shall promote the business and affairs
of the Employer as President and Chief Executive Officer of the
Employer, with responsibility for performing such duties consistent
with such position as the Board of Directors may from time to time
designate. As long as he is employed hereunder, the Employee shall
also continue to serve, if nominated by the Nominating Committee of
the Board of Directors and elected by the Shareholders, as a member
of the Board of Directors of the Employer.
5. Termination Rights of the
Parties . The employment of the Employee by the Employer under
this Agreement may be terminated at any time by either the Employee
or Employer upon 30 days’ prior written notice of such
termination to the other.
6. Compensation . Employee
shall be paid a salary at an initial annual rate of Four Hundred
Ninety-Five Thousand Dollars ($495,000), retroactive to
January 1, 2006, for the year ending December 31, 2006.
Subject to Section 9, the Board of Directors, in its sole
discretion, shall have the absolute right to determine the
Employee’s salary and benefits for each subsequent fiscal
year during the term hereof; provided that in no event shall such
salary or such benefits be reduced during the Employment Term
unless the Employer implements a substantially similar reduction
for all senior executive employees of the Employer. The Employer
agrees to diligently review and consider alternative means of
providing the Employee with additional tax advantaged
compensation.
7. Inventions and Proprietary Information
.
7.1 Inventions . Employee
shall inform the Employer using the established procedures promptly
and fully of all inventions, improvements, discoveries, know-how,
designs, processes, formulae and techniques, and any related
suggestions and ideas (hereinafter “ Inventions
”), whether patentable or not, which are solely or jointly
conceived or made by Employee, during the period of
Employee’s employment by the Employer, whether during or out
of Employee’s usual hours of work. The Employer shall own all
right, title and interest to those inventions (hereinafter “
Employer Inventions ”) which are: (a) within the
scope of the Employer’s business, which includes areas in
which research is being conducted and areas of technical or market
investigation; and/or (b) related to work done for the
Employer by Employee. Employee hereby assigns and agrees to assign
to the Employer Employee’s entire right, title and interest
in all Employer Inventions and any patents, design patents, and any
other forms of intellectual property resulting therefrom. Employee
shall protect the Employer’s right to patent Employee’s
Employer Inventions by keeping written records, which are witnessed
and dated, concerning dates of conception and reduction to
practice, and Employee shall not publish information concerning
Employer Inventions without prior approval from the Employer.
Employee shall also, during and after Employee’s employment,
execute such written instruments and render such other assistance
as the Employer shall reasonably request to obtain and maintain
patents, design patents, or other forms of protection on any
Employer Inventions and to vest and confirm in the Employer its
entire right, title and interest therein. In this regard, Employee
shall be reimbursed by the Employer for actual expenses incurred
and, if no longer an employee of the Employer, shall be reasonably
compensated for assistance rendered.
7.2 Proprietary Information
.
(a) Employee understands that as a
consequence of Employee’s employment by the Employer,
proprietary data and confidential information (both hereinafter
referred to as “ Information ”) relating to the
business of the Employer may be disclosed to Employee or developed
by Employee which is not generally known in the Employer’s
trade and which is of considerable value to the Employer. Such
Information includes, without limitation, information about trade
secrets, the Employer Inventions (as previously defined), patents,
licenses, research projects, costs, profits, markets, sales,
customer lists, plans for future development, and any other
information of a similar nature to the extent not generally known
in the trade. Employee acknowledges and agrees that
Employee’s relationship to the Employer with respect to such
Information shall be fiduciary in nature. Employee shall not make
any use of any such Information except in the performance of
Employee’s work for the Employer; Employee shall maintain
such Information in confidence; and Employee shall not disclose to
any person not employed by the Employer any such Information at any
time either during or after Employee’s employment or use any
such Information in connection with other employment, except as
authorized, in writing, by a duly empowered officer of the
Employer.
(b) Employee shall deliver promptly
to the Employer on termination of Employee’s employment, or
at any time the Employer so requests, all memoranda, notes,
records, reports, manuals, drawings, blueprints, plans, customer
lists, pricing and/or cost data, and all other property or
materials belonging to the Employer, including all copies thereof,
which Employee then possesses or has under Employee’s
control.
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(c) Employee covenants that there
are no Inventions and/or patents within the scope of the
Employer’s business in which Employee held an interest prior
to the date of this Agreement and which are not subject to this
Agreement.
7.3 Remedies . Employee
recognizes that irreparable injury may result to the Employer, its
business and property, in the event of a breach of any of the
agreements, assurances and understandings contained herein.
Employee further recognizes that in the event of such a breach, or
the substantial likelihood that such a breach will occur, the
Employer intends to take legal action, and to seek injunctive
relief if available, in accordance with the language and spirit of
this Agreement in order to protect fully its interests and
property.
8. Covenant Not to Compete
.
(a) The Employee recognizes that the
Employer is engaged in the development and sale of III-IV compounds
used in semiconductors and related products in Massachusetts and
throughout the United States and the world and in the development
of liquid crystal electronic imaging devices and display products
based thereon (collectively, the “ Principal Business
”). In the event of the termination of the Employee’s
employment hereunder, voluntarily or involuntarily, and so long as
the Employer is not in material breach of its obligations to the
Employee hereunder, the Employee agrees that, for a period of
twelve (12) months from the date of such termination, he will
neither (i) engage in the Principal Business directly for
himself, or in conjunction with or on behalf of any commercial
entity, or (ii) work as an employee in the Principal Business
for any commercial entity, where either (A) the
Employee’s duties in the course of any such activities would
be substantially similar to those he has performed for the Employer
hereunder or (B) the Employee’s duties in the course of
such activities would involve disclosure or use of any confidential
or proprietary information relating to the business of the Employer
which he may in any way acquire by reason of his employment by the
Employer. The Employee’s obligation under this Section 8
shall extend to all geographical areas of the United States and the
world in which the Employer, as set forth above, carries on
business, either directly or indirectly, including, but not limited
to, places where the Employer has a place of business, has
employees or representatives, or has advertised or sold any
products during the time period specified in this
section.
(b) The Employee further agrees that
for a period of twelve (12) months from the date of
termination of his employment, he will not on behalf of himself or
any commercial competitor of the Employer, compete for, or engage
in the solicitation of, with respect to the Employer’s
products or services, any commercial customer of the Employer, that
he has, during the one year immediately preceding such termination,
solicited or serviced on behalf of the Employer or that has been so
solicited or serviced, during such period, by any person under the
Employee’s supervision.
(c) The Employee further agrees that
for a period of twelve (12) months after the date of
termination of his employment, he will not, on behalf of himself or
any other commercial competitor of the Employer, solicit or attempt
to solicit for employment, recruit or hire any employee or
independent contractors of the Employer (or any person who was an
employee or independent contractor of the Employer during the six
(6) month period prior to such activity by the Employee), or
induce, attempt to induce or encourage any such person to terminate
his or her association with the Employer.
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(d) In the event of any violation of
the foregoing provisions of this Section 8, the Employer shall
be entitled, in addition to any other rights or remedies it may
have, to injunctive relief, it being agreed that the damages which
the Employer would sustain upon any such violation are difficult or
impossible to ascertain in advance and that the Employee’s
violations may cause irreparable harm to the Employer.
9. Post-Termination and Related
Matters .
9.1 Termination by Employer
without Cause; Resignation for Good Reason . If prior to the
expiration of the Employment Term the Employee is terminated by the
Employer without Cause (as defined in Section 9.2(b) below)
other than by reason of death or disability, or the Employee
resigns for Good Reason (as defined in Section 9.2(c) below)
within twelve (12) months following a Change in Control (as
defined in Section 9.2(d) below) of the Employer, Employer
shall pay the following amounts and provide the following benefits
to the Employee:
(a) an amount equal to the sum of
the Employee’s earned but unpaid base salary and pro-rated
annual bonus through the date of Employee’s termination,
which prorated annual bonus shall be calculated by reference to his
then current year’s target annual bonus, the base salary
portion of such amount shall be paid on the Employer’s next
regularly scheduled pay date following the Termination Date, and
the bonus portion of such amount shall be paid within thirty
(30) days following the Termination Date;
(b) severance pay in the amount of
$1.2 million, which amount will be paid to Employee in twenty-four
(24) equal monthly installments during the two-year period
following the Termination Date;
(c) an amount equal to the value of
Employee’s accrued but unpaid vacation days, which amount
shall be paid on the Employer’s next regularly scheduled pay
date following the Termination Date;
(d) up to a maximum of $10,000 per
year for up to ten (10) years following the Employee’s
Termination Date to enable the Employee to purchase for himself and
his spouse supplemental health insurance coverage (including
Medicare Part B, Medicare Part D, and Medigap coverage) beyond the
coverage that they may obtain from Medicare Part A; and
(e) immediately vest all options to
purchase Employer Stock, all stock appreciation rights, all
restricted stock awards, and any other compensatory equity awards,
granted by the Employer to the Employee.
Any amounts payable under this
Section 9.1 shall be subject to applicable tax withholding. In
the event and to the extent the Employer reasonably determines that
any of the severance required by this Section 9.1 constitutes
deferred compensation within the meaning of Section 409A of
the In
