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Exhibit 10.42
EMPLOYMENT AGREEMENT
The parties to this employment agreement ("Agreement") dated
this 18 th day of
July, 2006 are Planar Systems, Inc. ("Company") and Paul Gulick
("Employee").
RECITALS
A. WHEREAS, Employee has been an employee and valued contributor
to Clarity Systems, Inc. ("Clarity");
B. WHEREAS, Company, Clarity, and other parties have entered
into that certain Agreement And Plan Of Merger And Reorganization
(the "Merger Agreement"); and
C. WHEREAS, Company wishes to obtain the services of Employee
following the closing of the transaction contemplated in the Merger
Agreement and Employee wishes to provide such services, all under
the terms and conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, for valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties agree as
follows:
ARTICLE 1
EMPLOYMENT; TERM; TERMINATION
1.1 Employment . Upon the terms and conditions set
forth in this Agreement, effective as of the Closing Date, as that
term is defined in the Merger Agreement, Company shall employ
Employee in the position of Chief Technology Officer and Employee
accepts such employment.
1.2 Term . The term of this Agreement shall begin
on the Closing Date and extend until it is terminated pursuant to
Article 3 of this Agreement; provided, however, that commencing on
the first anniversary date of this Agreement and each anniversary
date thereafter, the term of this Agreement shall automatically be
extended for one additional year unless at least 90 days prior to
such anniversary date, the Company or you shall have given notice
that this Agreement shall not be extended; provided, however, that
this Agreement shall continue in effect for a period of twenty-four
(24) months beyond the term provided herein if a Change in
Control, as defined in Section 3.2 hereto, shall have occurred
during such term (the "Term"). Notwithstanding anything in this
Section 1.2 to the contrary, this Agreement shall terminate if
you or the Company terminate your employment prior to a Change in
Control as defined in Section 3.2 hereof.
1.3 Termination . Termination of this Agreement
also terminates Employee’s employment with Company. Employee
is an "at-will" employee of the Company. Company may terminate this
Agreement and Employee’s employment at any time with or
without Cause upon written notice to Employee, subject to providing
such benefits as may be provided in Article 3. Any purported
termination by the Company or by Employee shall be communicated
Page 1 – EMPLOYMENT AGREEMENT (Paul
Gulick)
by written Notice of Termination to the other
party hereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice that shall indicate whether
termination is with or without Cause, for Disability or for Good
Reason, and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
Employee’s employment for Cause or Good Reason (as all such
capitalized terms are hereinafter defined). This Agreement shall
terminate automatically immediately upon Employee’s
death.
ARTICLE 2
COMPENSATION
2.1 Compensation . For all services rendered under
this Agreement, Company shall pay Employee a base salary at the
rate of Eighteen Thousand Three Hundred Seventy-Five Dollars
($19,166) per month (annual rate of $230,000) , payable in
accordance with Company’s usual payroll practices ("Base
Salary"). All compensation provided to Employee under this
Agreement, whether by way of Base Salary, bonus, severance or
otherwise, shall be reduced by such amounts as are required to be
withheld by law. In addition, Employee shall be eligible for the
opportunity to earn up to sixty (60%) of Employee’s
annual Base Salary pursuant to an annual performance incentive
bonus plan based upon individual and Company performance milestones
to be determined by Company. The incentive bonus is earned and paid
quarterly. Employee must be employed through the end of the quarter
in order to be eligible for a bonus for that quarter.
Employee’s bonus will be pro-rated for the quarter in which
Employee begins employment with the Company based upon the number
of days Employee is employed with Company during that quarter.
2.2 Employee Benefit Plans . Employee shall
be entitled to participate in any and all employee welfare and
health benefit plans (such as life insurance, health and medical,
dental and disability plans) and other employee benefit plans,
including but not limited to any 401(k) plans, established by the
Company from time to time for the benefit of all employees of the
Company, which plans shall include at a minimum health insurance
and a retirement plan. Employee shall be required to comply with
the conditions attendant to coverage by such plans and shall comply
with and be entitled to benefits only in accordance with the terms
and conditions of such plans as they may be amended from time to
time. Except as stated in this paragraph, nothing herein contained
shall be construed as requiring the Company to establish or
continue any particular benefit plan.
2.3 Paid Time Off . Employee shall be
entitled to paid vacation and other paid time off in accordance
with Company’s standard policies regarding accrual and use of
vacation and other paid time off.
2.4 Reimbursement of Business Expenses .
Company shall reimburse Employee’s reasonable and necessary
business expenses subject to Company’s policies regarding
accounting for and requesting such reimbursement.
2.5 Directors’ and Officers’
Insurance . Company shall maintain during the Term
directors’ and officers’ liability insurance applicable
to Employee upon his appointment as an officer of the Company. Such
coverage shall be in amounts customary for similarly situated
companies.
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Gulick)
ARTICLE 3
EFFECT OF TERMINATION
3.1 Payment Upon Termination. Upon termination of
this Agreement for any reason, Company shall pay Employee accrued
wages, including earned but unpaid Base Salary and any earned but
unpaid bonus owing to Employee through the date of termination.
Except as expressly stated in this Agreement, Employee shall not be
entitled to any bonuses or incentives which are not earned at the
time of the termination and will not be entitled to any severance
pay or benefits continuation (except as may otherwise be required
by law) or any other compensation of any kind.
3.2 Change in Control Termination . This
Section 3.2 is applicable in the event, within twenty-four
(24) months after a Change in Control, Employee is terminated
or resigns for Good Reason, unless such termination is
(A) because of Employee’s death; (B) by the Company
for Cause or Disability or (C) by Employee other than for Good
Reason (as all such capitalized terms are hereinafter defined).
3.2.1 " Change in Control" Definition . For
purposes of this Agreement, a "Change in Control" shall mean the
occurrence of any of the following events:
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(i) The approval by the Company’s shareholders of a merger
or consolidation to which the Company is a party if the individuals
and entities who were shareholders of the Company immediately prior
to the effective date of such merger or consolidation would have
beneficial ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of less than fifty percent
(50%) of the total combined voting power for election of
directors of the surviving corporation immediately following the
effective date of such merger or consolidation;
(ii) The acquisition (other than directly from the Company) by
any person or entity, or group of associated persons or entities
acting in concert of direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of
1934) of securities of the Company representing twenty-five percent
(25%) or more of the total combined voting power of the
Company’s then issued and outstanding securities;
(iii) The approval by the Company’s shareholders of the
sale of all or substantially all of the assets of the Company to
any person or entity which is not a wholly-owned subsidiary of the
Company;
(iv) The approval by the Company’s shareholders of any
plan or proposal for the liquidation of the Company; or
Page 3 – EMPLOYMENT AGREEMENT (Paul
Gulick)
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(v) A change in the Board occurring with the
result that the members of the Board on the effective date hereof
(the "Incumbent Directors") no longer constitute a majority of such
Board, provided that any person becoming a director whose election
or nomination for election was supported by a majority of the
Incumbent Directors shall be considered an Incumbent Director for
purposes hereof.
3.2.2 " Disability" Definition . Termination by
the Company of Employee’s employment based upon "Disability"
shall mean termination because of Employee’s absence from
Employee’s duties with the Company on a full-time basis for a
continuous period of five (5) months as a result of
Employee’s incapacity due to physical or mental illness,
unless within thirty (30) days after Notice of Termination (as
hereinafter defined) is given to Employee following such absence,
Employee shall have returned to the full-time performance of
Employee’s duties.
3.2.3 " Good Reason" Definition . Termination by
Employee of Employee’s employment for "Good Reason" shall
mean a good faith determination by Employee, in Employee’s
reasonable judgment, that any one or more of the following events
has occurred without Employee’s express written consent:
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(i) A change in Employee’s responsibilities, titles or
offices as in effect immediately prior to the Change in Control, or
any removal of Employee from, or any failure to re-elect Employee
to, any of such positions, which has the effect of materially
diminishing Employee’s responsibility or authority;
(ii) A reduction by Company in Employee’s Base Salary as
in effect immediately prior to the Change in Control or any failure
to pay Employee any compensation or benefits to which Employee is
entitled when due;
(iii) A requirement by Company that Employee be based anywhere
other than within 25 miles of Beaverton, Oregon;
(iv) Without replacement by Plans, programs or arrangements
which when taken as a whole provide benefits to Employee at least
reasonably comparable to those discontinued or adversely affected,
the (A) failure by Company to continue in effect (without
reduction in benefit level and/or reward opportunities), any
material compensation or employee benefit Plan, program or
arrangement in which Employee was participating immediately prior
to a Change in Control; or (B) taking of any action by Company
that would materially adversely affect Employee’s
participation or materially reduce Employee’s benefits under
any of such Plans, programs or arrangements;
(v) The failure by Company to obtain an agreement reasonably
satisfactory to Employee from any successor or assign of the
Company to assume and agree to perform this Agreement; or
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Gulick)
For purpose of this Section 3.2, "Plan" shall mean any
compensation plan such as an incentive, stock option or restricted
stock plan or any employee benefit plan such as a thrift, pension,
profit sharing, medical, disability, accident, life insurance, or
relocation plan or policy or any other plan, program or policy of
the Company intended to benefit employees.
3.2.4 Date of Termination . For purposes of this
Section 3.2, "Date of Termination" shall mean: (a) if
Employee’s employment is to be terminated for Disability,
thirty (30) days after Notice of Termination is given
(provided that Employee shall not have returned to the performance
of Employee’s duties on a full-time basis during such thirty
(30)-day period); (b) if Employee’s employment is to be
terminated by the Company for Cause, the date on which a Notice of
Termination is given; and (c) if Employee’s employment
is to be terminated by Employee or by the Company for any other
reason, the date specified in the Notice of Termination, which
shall be a date no earlier than ninety (90) days after the
date on which a Notice of Termination is given, unless an earlier
date has been agreed to by the party receiving the Notice of
Termin
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