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Exhibit 10.10
EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (“Agreement”), effective July
1, 2007, is entered into by and between SYS Technologies, a
California corporation, with its principal office at
5050 Murphy Canyon Road, Suite 200, San Diego,
California 92123 (“Company”), and Cliff
Cooke, (“Employee”), collectively the
“Parties.” The Parties hereto desire to
enter into an employment arrangement and in order to
accomplish that purpose and in consideration of the terms,
covenants and conditions hereinafter set forth, the Parties
hereby enter into this Agreement.
SECTION 1
EMPLOYMENT; TERM; DUTIES
1.1
Employment . Upon the terms and conditions
hereinafter set forth, the Company employs Employee, and Employee
hereby accepts employment, as President and Chief Executive Officer
(“CEO”).
1.2
Term . Employee’s employment hereunder shall
be for a term (the “Term”) commencing on the date this
Agreement is effective and ending on June 30, 2009, unless the
Agreement terminates sooner pursuant to Section 4 below; provided,
however, that the Agreement shall renew automatically for
successive periods of one (1) year unless the Company or Employee
provides written notice to the other Party of a desire to change,
modify, amend or terminate the Agreement at least thirty (30) days
prior to the then-current expiration date of the
Agreement. If the Company elects not to renew this
Agreement at the conclusion of the Term, Employee will be eligible
for severance benefits pursuant to and in accordance with
subsections 4.2 or 4.4.
1.3
Duties . During the Term, Employee shall perform
such duties for the Company as are prescribed by applicable job
specifications, the Bylaws of the Company and such other or
additional duties, consistent with such Bylaws, as may be assigned
to him/her from time to time by the Board of Directors of the
Company. Employee shall devote his/her best efforts,
attention and energies to the performance of his/her duties
hereunder. This employment is full-time and
exclusive. Employee may not work for any other company
or enterprise during the Term of this Agreement such that such
employment would conflict or interfere with his/her obligations to
the Company under this Agreement. Employee must advise
the Board in writing prior to undertaking any employment in
addition to his/her employment with the Company.
SECTION 2
COMPENSATION
2.1
Base Salary . For all services rendered by Employee
hereunder and all covenants and conditions undertaken by both
Parties pursuant to this Agreement, the Company shall pay, and
Employee shall accept, as compensation, an annual base salary
(“Base Salary”) of Two Hundred Ninety One Thousand Five
Hundred and Twelve Dollars ($291,512). This Base Salary
shall be payable in accordance with the normal payroll practices of
Company, less required deductions pursuant to state and federal
law, and less any amounts to be deducted pursuant to agreement
between the Parties.
2.2
Incentive Compensation . The Employee shall also be
paid such bonuses and/or other compensation as may be determined
from time to time by the Board of Directors as they, in their sole
discretion, may determine based upon the performance of the
employee and/or of the Company.
2.3
Performance and Salary Review . Employee's performance will be
reviewed periodically, usually on an annual
basis. Adjustments to salary or other compensation, if
any, will be made by the Board of Directors.
SECTION 3
BENEFITS/BUSINESS EXPENSES
3.1
Benefits . During the Term, Employee shall be
entitled to participate in such life, health, accident, disability
and hospitalization insurance plans, pension plans and retirement
plans as the Company makes available to the employees of the
Company as a group.
3.2
Business Expenses . Employee will be reimbursed for
all reasonable, out-of-pocket business expenses incurred in the
performance of his/her duties on behalf of Company. To
obtain reimbursement, expenses must be submitted promptly with
appropriate supporting documentation in accordance with
Company’s policies and procedures.
SECTION 4
TERMINATION; RESIGNATION; CHANGE OF CONTROL; DEATH;
DISABILITY
4.1
Termination of Employment With Cause . If
(a) Employee fails to meet the performance standards
established for his/her position and does not remedy such
shortcomings within 30 days after written notice from the Company
of such failure; or (b) Employee breaches any material
provision of this Agreement; or (c) Employee has been
convicted of any felony; or (d) Employee commits any act of
fraud, misappropriation of funds or embezzlement; or
(e) Employee fails to report to work for three
(3) consecutive business days without informing his/her
superior; or (f) Employee commits any act, or fails to take
any action, the effect of which is to bring the Company into
disrepute with any of its customers, including, but not limited to
a material violation of the Company Code of Ethics, the Company
shall have the right, upon written notice to the Employee, to
immediately terminate his/her employment (“Termination With
Cause”) hereunder, without any further liability or
obligation to him/her hereunder or otherwise in respect of his/her
employment, other than its obligation to pay unpaid Base Salary and
unused personal time accrued as of the date of
termination.
4.2
Termination of Employment Without Cause
. Notwithstanding any provision to the contrary herein,
the Company may at any time, in its sole and absolute discretion
and for any or no reason, terminate the employment of the Employee
hereunder; PROVIDED, that if such termination is not a Termination
With Cause, as defined by subsection 4.1, and such termination
is not caused by the death or Disability of the Employee, the
Company shall pay and/or provide the Employee as
follows:
4.2.1
All
accrued but unpaid Base Salary.
4.2.2
Reimbursement
of normal incidental employee expenses as of the date of the
termination as and when such amount is due and payable hereunder in
accordance with subsection 3.2.
4.2.3
Company
shall pay eighteen (18) severance payments (“Severance
Payments”) payable monthly to Employee equivalent to
one-twelfth (1/12) of the Base Salary in effect as of the date of
such termination (the “Termination Date”) for a period
of eighteen months from the Date of Termination (the
“Severance Period”), provided that Employee and the
Company execute an appropriate mutual general release before
Employee has any entitlement to the Severance
Payments. Company will also pay the premiums on the
COBRA insurance coverages during the Severance Period, provided
that Employee qualifies for such coverages and timely elects COBRA
coverage. The Company may, at its option, pay for and
acquire insurance which will provide the Severance Payments and
such benefits during the Severance Period.
4.2.4
All
stock options issued to Employee or earned but not yet issued prior
to the Termination Date shall immediately become fully
vested.
4.2.5
Accrued
but unused personal leave shall be paid out in accordance with
legal requirements. No personal leave or other benefits
shall continue to accrue during the Severance Period.
4.2.6
Notwithstanding
the foregoing, if any amounts due to Employee pursuant to this
Agreement are determined to be “Parachute Payments” as
such term is defined in Section 280G of the Internal Revenue
Code of 1986, as amended (the “Code”), and the
regulations promulgated thereunder, then the total compensation
paid to Employee pursuant to this Agreement, together with any
other payment or the value of any benefit received or to be
received by Employee which is treated as a Parachute Payment shall
not exceed 2.99 times Employee’s Base Amount (as such term is
defined in Section 280G of the Code). In the event
a reduction of the payments set forth in this Agreement is required
pursuant to this Section, Employee may select the compensation
which will be reduced in order to fall within the 2.99 times Base
Amount limitation.
4.3
Resignation .
4.3.1
If
Employee resigns (except as set forth in subsections 4.3.2 or
4.4 below), this Agreement shall immediately terminate and the
Company shall have no further liability or obligation to Employee
hereunder, including any severance payments, or otherwise in
respect of his/her employment, other than its obligation to pay
unpaid Base Salary and unused personal leave accrued as of the date
of resignation.
4.3.2
Resignation with Cause . If Employee resigns his/her
employment because (a) his/her position or duties are modified
by the Company to such an extent that his/her duties are
substantially no longer consistent with the position for which
he/she was employed pursuant to this Agreement, or (b) there
has been a material breach by the Company of a material term of
this Agreement which continues uncured following fourteen (14) days
after written notice by Employee to the Company of such breach,
then Employee will be entitled to the severance benefits set forth
in subsection 4.2, consistent with the terms of said
provision.
4.4
Change In Control . In the event of a Change in
Control (as that term is defined below), Company shall immediately
take all necessary measures, consistent with the Company’s
Stock Option Plans, to accelerate the vesting of any unvested
options held by the Employee under such Plans so that such options
will be treated as vested options during the Change in
Control. In addition, employment separation, as provided
in this section, that occurs as a result of a Change in Control
shall result in Severance Payments on the same terms set forth in
subsection 4.2 above, except that the Severance Period shall be
twenty four (24) months. Such Change In Control
Severance Payments will be made in the event of:
(a) Employee’s
involuntary dismissal or discharge by the Company, other than
pursuant to subsections 4.1, 4.3.1, or 4.5, or
(b) Employee’s
voluntary resignation, other than pursuant to subsection 4.3,
following (i) a change in his/her position with the Company
(or Parent or Subsidiary employing Employee) which materially
reduces his/her duties and responsibilities or the level of
management to which he/she reports, (ii) a reduction in
Employee’s level of compensation as of the date of the
Change in Control (including base salary and fringe benefits),
or (iii) a relocation of Employee’s place of employment
by more than fifty (50) miles, provided and only if such
change, reduction, or relocation is effected by the Company
without Employee’s express consent.
4.4.1
For
purposes of this Agreement, a “Change in Control” shall
mean: (i) the acquisition, by one person or a group, of stock of
the Company that causes such person or group to own more than 50%
of the total fair market value or total voting power of the stock
of such Company; (ii) either: (1) the acquisition, by one
person or a group, of ownership of 35% or more of the total voting
power of the stock of the Company; or (2) the replacement of a
majority of the members of the Board with directors whose
appointment or election is not endorsed by the existing Board; AND
(iii) the acquisition of assets from the Company that have a total
gross fair market value of 40% or more of the total gross fair
market value of all assets of the Company prior to the
acquisition.
4.5
Termination Due to Death or Disability . This Agreement will
immediately terminate upon Employee’s death. This
Agreement will terminate upon Employee’s Disability (as
defined below), when consistent with state and federal
law. In the event of Employee’s termination due to
death or Disability, Employee, or Employee’s heirs, personal
representatives or estate, as the case may be, will be entitled to
receive only the standard entitlements and those benefits available
under any applicable Company plan or insurance policy, subject to
such plan or policy requirem
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