Exhibit 10.14
ALIEN TECHNOLOGY
CORPORATION
EMPLOYMENT
AGREEMENT
This Agreement is entered into as of
February 13, 2006 by and between Alien Technology Corporation (the
“Company”) and Ronald Shelton
(“Employee”).
1. Positions and Duties .
Employee is currently employed as the Company’s Chief
Financial Officer (“CFO”). It is currently contemplated
that a successor CFO will be hired in the near future and that
Employee will become a non-executive officer at that time. Employee
agrees to perform his responsibilities to the reasonable
satisfaction of the Company during the remainder of his employment,
including assisting in the transition to the new CFO and timely and
effectively performing all services assigned to him relating to the
Company’s initial public offering. Employee further agrees
that he shall not accept or perform any other employment or
consulting services for any other person or entity during his
employment with the Company. During his employment with the
Company, Employee will devote his full business efforts and time to
the Company.
2. At-Will Employment .
Employee acknowledges and agrees that this Agreement does not
affect his status as an at-will employee. Accordingly, the Company
can terminate Employee’s employment at any time, with or
without cause or notice. Unless terminated sooner, Employee further
acknowledges and agrees that his employment with the Company will
terminate on August 15, 2006 or such later time as mutually
agreed between Employee and the Board of Directors or the successor
CFO at the time (such date to be referenced herein as the
“Termination Date”).
3. Compensation .
(a) Base Salary . The
Employee will be paid an annualized base salary of $200,000 (the
“Base Salary”), and shall remain eligible to receive an
annual performance-based bonus, on a pro-rata basis. The Base
Salary and any bonus that Employee may earn will be paid
periodically in accordance with the Company’s normal payroll
practices and will be subject to the usual, required
withholdings.
(b) S-1 Completion Bonus .
Employee shall prepare the Company’s Form S-1 for filing with
the Securities and Exchange Commission. If Employee prepares the
Company’s Form S-1, to the reasonable satisfaction of the
Company, by March 15, 2006, Employee will be entitled to a
bonus payment of $75,000. The Company shall be under no obligation
to file a Form S-1, and may elect to do so at the Company’s
sole discretion.
(c) Stock Options . During
Employee’s employment with the Company, his stock options
will continue to vest in accordance with the current vesting
schedules in Employee’s Senior Executive Stock Option
Agreements, both dated January 5, 2005 (the “Stock
Option Agreements”). In addition, if there is a Change of
Control transaction during Employee’s
employment (as defined in the Stock
Option Agreements), then provided that Employee and the Company
execute and do not revoke a Supplemental Release Agreement similar
to the Release Agreement attached hereto as Exhibit A, Employee
shall be entitled to receive the vesting acceleration benefits set
forth in the Stock Option Agreements, subject to any and all
conditions required for acceleration and except as provided in
Sections 7(c) and (d) below.
4. Employee Benefits .
Employee will be eligible to participate in all Company employee
benefit plans, policies, and arrangements that are applicable to
other employees of the Company, in accordance with the terms of
such plans, policies and arrangements, as such plans, policies, and
arrangements may exist from time to time.
5. Expenses . The Company
will reimburse Employee for all reasonable travel, entertainment,
and other expenses incurred by Employee in the furtherance of the
performance of Employee’s duties hereunder, in accordance
with the Company’s expense reimbursement policy as in effect
from time to time, provided that travel will be first
class.
6. Termination of Employment
. In the event that Employee’s employment with the Company
terminates for any reason, Employee shall be entitled to:
(a) all Base Salary accrued up to the effective date of
termination, (b) all pay for accrued, unused vacation, if any,
(c) exercise his vested stock options in accordance with the
terms of the agreements governing such equity awards, and (d) all
business expenses required to be reimbursed under the
Company’s expense reimbursement policy. In addition, under
certain circumstances as described in Section 7 below,
Employee shall be entitled to the severance specified in
Section 7; provided , however , that the
severance specified in Section 7 will be reduced by any
amounts, vesting, benefits and other consideration that Employee
may be eligible to receive as severance or otherwise under any
other agreement, plan or policy.
7. Severance .
(a) Termination at Termination
Date . In the event that Employee’s employment with the
Company terminates on the Termination Date, and conditioned upon
Employee and the Company executing and not revoking a Supplemental
Release Agreement similar to the Release Agreement attached hereto
as Exhibit A within 21 days after the Termination Date, Employee
shall receive: (i) a lump sum payment of one year of
Employee’s annual Base Salary and the pro rata share of his
annual bonus, and (ii) fifty percent (50%) acceleration
of all unvested stock options granted pursuant to the Stock Option
Agreements. The exercise of Employee’s vested shares shall
continue to be governed by the terms and conditions of the Stock
Option Agreements and the Company’s 1997 Stock Plan, except
that all of Employee’s vested shares, including those that
are vested by virtue of this Agreement, shall remain exercisable
through December 31, 2006 or, if later, the fifteenth
(15 th ) day of the third
(3rd) month following the Termination Date.
(b) Termination Without Cause or
Resignation for Good Reason . In the event that the Company
terminates Employee’s employment without Cause or Employee
resigns for Good Reason (as such terms are defined in
Section 9 below) prior to the Termination Date, and subject to
Employee and the Company executing and not revoking the
Supplemental Release Agreement described in Section 7(a) above
within 21 days after the last day of Employee’s employment,
Employee shall receive: (i) a lump sum payment of one year of
Employee’s annual
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Base Salary plus any additional
salary that Employee would have earned had his employment continued
through August 15, 2006; (ii) the pro rata share of his
annual bonus through August 15, 2006, and
(iii) acceleration of the unvested stock options granted
pursuant to the Stock Option Agreements in an amount equal to what
would have vested had Employee’s employment with the Company
continued through the August 15, 2006 plus fifty percent
(50%) of all remaining unvested shares subject to such award.
The exercise of Employee’s vested shares shall continue to be
governed by the terms and conditions of the Stock Option Agreements
and the Company’s 1997 Stock Plan, except that all of
Employee’s vested shares, including those that are vested by
virtue of this Agreement, shall remain exercisable through
December 31, 2006.
(c) Termination for Cause or
Resignation without Good Reason . If Employee’s
employment with the Company is terminated by the Company for Cause,
or Employee resigns without Good Reason, then: (i) all further
vesting of Employee’s outstanding equity awards will
terminate immediately, (ii) all payments of compensation by
the Company to Employee hereunder will terminate immediately, and
(iii) Employee will not be eligible for any severance or
Change of Control benefits or any portion of his annual
bonus.
(d) Termination due to Death or
Disability . If Employee’s employment terminates by
reason of death or because he is unable to perform the essential
functions of his position with or without reasonable accommodation,
then Employee shall not be entitled to any severance or Change of
Control benefits or any portion of his annual bonus.
(e) Benefits .
Employee’s health insurance benefits will cease on the last
day of the month in which his employment with the Company ends,
subject to Employee’s right to continue his health insurance
under COBRA. Except as provided above, Employee’s
participation in all other benefits and incidents of employment,
including, but not limited to, the accrual of vacation and paid
time off, and the vesting of stock options, shall cease on the last
day of his employment with the Company.
(f) 409A Compliance .
Notwithstanding subsections 7(a) and (b), to comply with Internal
Revenue Code Section 409A and only if the Company goes public
prior to Employee’s termination, during the first six months
after termination, Employee’s severance benefits will accrue,
payable in a lump sum payment on the second day of the seventh
month after termination.
8. Conditions to Acceptance of
Agreement .
(a) Release Agreement .
Employee acknowledges and agrees that this Agreement is conditioned
on Employee timely signing and not revoking the Release Agreement
attached as Exhibit A. This Agreement shall become void if Employee
fails to timely sign or revokes the Release Agreement.
(b) Supplemental Release
Agreement . In addition, Employee agrees to execute a
Supplemental Release Agreement similar to the release contained in
Exhibit A, covering the time period through the last date of
employment under this Agreement; provided , however ,
that the Parties agree to modify the Supplemental Release Agreement
to comply with any new laws which may become applicable. Employee
shall not be entitled to receive any of the consideration set forth
in Section 7 above is he fails to timely sign or revokes the
Supplemental Release Agreement.
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9. Definitions .
(a) Cause . For purposes of
this Agreement, “Cause” means: (i) Employee’s
willful or grossly negligent failure to perform his assigned duties
or responsibilities after at least 30 days’ notice from the
Company describing his failure to perform such duties or
responsibilities and a subsequent failure by Employee to cure the
alleged performance issue(s), (ii) Employee engages in any act
of dishonesty, fraud or misrepresentation which has an adverse
effect on the Company, (iii) Employee violates any federal or
state law or regulation applicable to the Company’s business,
(iv) Employee breaches the Employment, Confidential
Information, Invention Assignment and Arbitration Agreement that he
signed with the Company, (v) Employee is convicted of a crime,
admits or acknowledges guilt for any crime in any context,
including in the context of a settlement or a “no
contest” plea, or receives a Wells notice from the Staff of
the Securities and Exchange Commission that the Staff intends to
recommend that the Commission file an enforcement proceeding
against Employee for violation of the federal securities laws; or
(vi) Employee commits any act of moral turpitude. The Parties
agree and acknowledge that none of the information known to the
Company as of the date of this Agreement related to Alliance
Semiconductor or the investigation by the SEC related in any manner
to Alliance Semiconductor shall meet the definition of Cause under
subsections (i), (ii), (iii), (iv) or (vi) of this
provision.
(b) Good Reason . For
purposes of the Agreement, “Good Reason” means the
occurrence of any of the following events, without Employee’s
consent: (i) a reduction in Employee’s Base Salary;
(ii) failure to pay Employee the bonus provided for in
Section 3(b) of this Agreement or any other bonus for which he
is eligible; (iii) a reduction in Employee’s duties or
responsibilities outside the context of Paragraph 1 of this
Agreement; or (iv) the Company relocating Employee’s
office, or the Company relocating its headquarters, in either case
to a facility or location outside of a seventy five (75) mile
radius of 18220 Butterfield Blvd., Morgan Hill, CA 95037;
provided , however , that Employee only will have
Good Reason if the event or circumstance constituting Good Reason
specified above is not cured within thirty (30) days after
Employee gives written notice to the Board.
10. Indemnification . The
Indemnification Agreement dated January 5, 2005 between
Employee and the Company (the “Indemnification
Agreement”) shall remain in full force and effect. The
Company agrees to reimburse Employee the portion of reasonable
attorneys’ fees and costs required to have Matthew Jacobs and
Brad Newman represent Employee in the Securities and Exchange
Commission investigation entitled “Re the Matter of Alliance
Semiconductor” and to advance Employee such fees and costs,
subject to the Undertaking that Employee signed on November 2,
2005 (the “Undertaking”).
11. Confidential Information
. The Employment, Confidential Information, Invention Assignment
and Arbitration Agreement dated January 20, 2005 between
Employee and the Company (“Confidentiality Agreement”)
shall remain in full force and effect.
12. Notices . All notices,
requests, demands, and other communications called for hereunder
will be in writing and will be deemed given (a) on the date of
delivery if delivered
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personally, (b) one day after being sent
overnight by a well established commercial overnight service, or
(c) four days after being mailed by registered or certified
mail, return receipt requested, prepaid and addressed to the
parties or their successors at the following addresses, or at such
other addresses as the parties may later designate in
writing:
If to the Company:
Attn : General Counsel
Alien Technology
Corporation
18220 Butterfield Blvd.
Morgan Hill, CA 95037
If to Employee:
at the last residential address
known by the Company.
13. Severability . If any
provision hereof becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable, or void, this Agreement
will continue in full force and effect without said
provision.
14. Arbitration . The Parties
agree that any and all disputes arising out of the terms of this
Agreement or their interpretation, Employee’s employment by
the Company, Employee’s prior service as an officer or
director of the Company, or Employee’s compensation and
benefits, shall be subject to binding arbitration in Santa Clara
County, California before the American Arbitration Association
under its National Rules for the Resolution of Employment Disputes,
supplemented by the California Rules of Civil Procedure. The
Parties agree that the prevailing party in any arbitration will be
entitled to injunctive relief in
