Exhibit 10.27
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this “Agreement”) executed
on December 18, 2007 as of December 1, 2007 (the
“Effective Date”), by and between SYNTAX -
BRILLIAN CORPORATION , a Delaware corporation (the
“Company”), and JAMES LI
(“Executive”).
RECITALS
A.
Executive is employed under an employment agreement as President
and Chief Operating Officer of the Company.
B. On
September 30, 2007, the Board of Directors appointed Executive
as Chief Executive Officer of the Company, with Executive also
retaining his role of President of the Company.
C. The
Company and Executive desire to confirm the terms and conditions
set forth in this Agreement, which on the Effective Date shall
replace any existing employment arrangements between the Company
and Executive.
AGREEMENT
NOW, THEREFORE , in consideration of the mutual promises,
terms, covenants, and conditions set forth herein and the
performance of each, it is hereby agreed as follows:
1.
Employment and Duties.
(a)
Employment . The Company hereby employs Executive, and
Executive hereby agrees to act, as the President and Chief
Executive Officer of the Company. As such, Executive shall have
responsibilities, duties, and authority reasonably accorded to,
expected of, and consistent with Executive’s position.
Executive hereby accepts this employment upon the terms and
conditions herein contained and agrees to devote Executive’s
best efforts and, subject to paragraph l(c) hereof, substantially
all of Executive’s business time and attention to promote and
further the business of the Company. Executive shall provide such
services to the Company’s subsidiaries as may be requested
from time to time by the Board of Directors without additional
compensation.
(b)
Policies . Executive shall faithfully adhere to, execute,
and fulfill all lawful policies established by the Company.
(c)
Other Activities . Executive shall not, during the term of
Executive’s employment hereunder, be engaged in any other
business activity pursued for gain, profit, or other pecuniary
advantage if such activity interferes in any material respect with
Executive’s duties and responsibilities hereunder. The
foregoing limitations shall not be construed as prohibiting
Executive from (i) making personal investments in such form or
manner as will neither require Executive’s services in the
operation or affairs of the companies or enterprises in which such
investments are made nor subject Executive to any conflict of
interest with respect to Executive’s duties to the Company;
(ii) serving on any civic or charitable boards
or
committees; (iii) delivering lectures or fulfilling speaking
engagements; or (iv) serving, on the boards of directors of
public corporations on which Executive currently serves and with
the written approval of the Board, as a director of one or more
other public corporations, in each case so long as any such new
activities do not significantly interfere with the performance of
Executive’s responsibilities under this Agreement.
(d)
Place of Performance . Executive shall not be required by
the Company or by the performance of Executive’s duties under
this Agreement either to relocate Executive’s primary
residence or to perform Executive’s principal duties at a
work location more than 25 miles from the principal office at which
Executive renders services as of the Effective Date.
2.
Compensation . For all services rendered by Executive, the
Company shall compensate Executive as follows:
(a)
Base Salary . Effective on the Effective Date, the base
salary payable to Executive shall be $340,000 per year, payable on
a regular basis in accordance with the Company’s standard
payroll procedures, but not less than monthly. On at least an
annual basis, the Board or a committee of the Board shall review
Executive’s performance and may make changes to such base
salary if, in its sole discretion, any such change is warranted. In
no event, however, shall Executive’s base salary be reduced
to a level below the base salary provided for in this
Agreement.
(b)
Bonus or other Incentive Compensation . Executive shall be
eligible to receive a bonus or other incentive compensation as may
be determined by the Board or a committee of the Board based upon
such factors as the Board or such committee, in its sole
discretion, may deem relevant, including, without limitation, the
performance of Executive and the Company; provided, however, that
the Board or a committee of the Board shall establish for each
fiscal year of the Company either (i) a bonus program in which
Executive shall be entitled to participate, which provides
Executive with a reasonable opportunity, based on the past
compensation practices of the Company and Executive’s then
base salary, to maintain or increase Executive’s total
compensation compared to the previous fiscal year or (ii) a
targeted bonus based on such factors as the Board may determine
(the “Targeted Bonus”).
(c)
Executive Perquisites, Benefits, and Other Compensation .
Executive shall be entitled to receive additional benefits and
compensation from the Company in such form and to such extent as
specified below:
(i)
Insurance Coverage . Payment of all premiums for coverage
for Executive and Executive’s dependent family members under
all health, hospitalization, disability, dental, life, and other
insurance plans that the Company may have in effect from time to
time, with the benefits provided to Executive to be on terms no
less favorable than the benefits provided to other Company
executive officers but with any generally applicable limitations,
such as co-payment provisions.
(ii)
Reimbursement for Expenses . Reimbursement for business
travel and other out-of-pocket expenses reasonably incurred by
Executive in the
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performance of Executive’s services under this Agreement. All
reimbursable expenses shall be appropriately documented in
reasonable detail by Executive upon submission of any request for
reimbursement and shall be in a format and manner consistent with
the Company’s expense reporting policy.
(iii)
Vacation . Paid vacation in accordance with the applicable
policy of the Company as in effect from time to time for senior
executives, but in no event shall Executive be entitled to less
than two weeks paid vacation per year.
(iv)
Other Executive Perquisites . The Company shall provide
Executive with other executive perquisites as may be made available
to or deemed appropriate for Executive by the Board or a committee
of the Board and participation in all other Company-wide employee
benefits as are available to the Company’s executives from
time to time, including any plans, programs, or arrangements
relating to retirement, deferred compensation, profit sharing,
401(k), and employee stock ownership. Any options granted after the
date hereof to Executive to purchase Common Stock of the Company
shall provide by their terms that such options shall vest
immediately upon, and shall be exercisable for a period of two
years after, a termination of employment of Executive by the
Company without Good Cause, by Executive with Good Reason, or as a
result of a Change in Control.
3.
Non-Competition Agreement.
(a)
Non-Competition . Notwithstanding the provisions of
California law, including, without limitation, Bus. & Prof.
Code Secs. 16600 et. seq. and 17200 et. sec., the parties agree
that, during the period of Executive’s employment by the
Company, and for a period equal to the time during or for which
severance payments are being made by the Company to Executive in
accordance with this Agreement, Executive shall not, directly or
indirectly, for himself or on behalf of or in conjunction with any
other person:
(i)
Other Activities . Engage, as an officer, director,
shareholder, owner, principal, partner, lender, joint venturer,
employee, independent contractor, consultant, advisor, or sales
representative, in any Competitive Business within the Restricted
Territory;
(ii)
Solicitation of Employees . Call upon any person who is, at
that time, within the Restricted Territory, an employee of the
Company or any of its subsidiaries, in a managerial or supervisory
capacity for the purpose or with the intent of enticing such
employee away from or out of the employ of the Company or any of
its subsidiaries;
(iii)
Solicitation of Customers . Call upon any person who is, at
that time, or who has been, within one year prior to that time, a
customer of the Company or any of its subsidiaries, within the
Restricted Territory for the purpose of soliciting or selling
products or services in direct competition with the Company or any
of its subsidiaries within the Restricted Territory;
(iv)
Solicitation of Acquisition Candidates . Call upon any
prospective acquisition candidate, on Executive’s own behalf
or on behalf of any person, which candidate was, to
Executive’s knowledge after due inquiry, either called upon
by the Company,
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or for
which the Company made an acquisition analysis, for the purpose of
acquiring such candidate.
(b)
Certain Definitions . As used in this Agreement, the
following terms shall have the meanings ascribed to them:
(i) Competitive
Business shall mean any person that engages in a business the same
as, similar to, or in direct competition with the Business;
(ii) person
shall mean any individual, corporation, limited liability company,
partnership, firm, or other business of whatever nature;
(iii) Restricted
Territory shall mean any jurisdiction in which the Company or any
subsidiary of the Company maintains any facilities, sells any
products, or provides any services; and
(iv) subsidiary
shall mean the Company’s consolidated subsidiaries, including
corporations, partnerships, limited liability companies, and any
other business organization in which the Company holds at least a
fifty percent (50%) equity interest.
(c)
Enforcement . Because of the difficulty of measuring
economic losses to the Company as a result of a breach of the
foregoing covenants in this paragraph 3, and because of the
immediate and irreparable damage that could be caused to the
Company for which it would have no other adequate remedy, Executive
agrees that the foregoing covenants may be enforced by the Company
in the event of breach by Executive, by injunctions and restraining
orders.
(d)
Reasonable Restraint . In agreeing to the period of
non-competition as set forth herein, Executive acknowledges that he
has had the opportunity to speak with counsel of his choice in
connection with the force and effect of this waiver, and that he is
aware that he is waiving rights under California law to contest the
imposition of a non-competition agreement. In agreeing to be bound
hereby, Executive is accepting the consideration extended to him in
exchange for a knowing waiver of his rights, and as full and
complete consideration for this waiver, and acknowledges the
adequacy of such consideration. Both parties agree that
Executive’s agreement to this term constitutes a substantial
and material term to the Company, without which the Company would
not enter into this Agreement or extend this offer of employment to
Executive. Executive agrees that the Company may seek and secure an
injunction against Executive in order to enforce the terms hereof
in the event that Executive breaches this provision. Executive
acknowledges that the scope of the non-competition clause is
reasonable in scope and will not preclude him from seeking gainful
employment in alternative fields. To the extent that any court of
competent jurisdiction determines that the non-competition
provisions are unreasonable, it is the intent of the parties to
enforce the terms hereof to the full extent held reasonable.
(e)
Other Activities . It is further agreed by the parties that,
in the event that Executive shall cease to be employed hereunder
and enters into a business or pursues other activities not in
competition with the Company (including the Company’s
subsidiaries), or similar activities or business in locations, the
operation of which, under such circumstances, does
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not
violate this paragraph 3, and in any event such new business,
activities, or location are not in violation of this paragraph 3 or
of Executive’s obligations under this paragraph 3, if any,
Executive shall not be chargeable with a violation of this
paragraph 3 if the Company (including the Company’s
subsidiaries) shall thereafter enter the same, similar, or a
competitive (i) business, (ii) course of activities, or
(iii) location, as applicable.
(f)
Separate Covenants . The covenants in this paragraph 3 are
severable and separate, and the unenforceability of any specific
covenant shall not affect the provisions of any other covenant.
Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time, or territorial restrictions set
forth are unreasonable, then it is the intention of the parties
that such restrictions be enforced to the fullest extent that the
court deems reasonable, and the Agreement shall thereby be
reformed.
(g)
Independent Agreement . All of the covenants in this
paragraph 3 shall be construed as an agreement independent of any
other provision in this Agreement, and the existence of any claim
or cause of action of Executive against the Company, whether
predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants. It is
specifically agreed that the period following termination of
employment stated at the beginning of this paragraph 3, during
which the agreements and covenants of Executive made in this
paragraph 3 shall be effective, shall be computed by excluding from
such computation any time during which Executive is in violation of
any provision of this paragraph 3.
4.
Term; Termination; Rights on Termination .
(a)
Term . The term of Executive’s employment under this
Agreement (the “Term”) shall be from the Effective Date
until the date that is two years from the Effective Date.
(b)
Termination . Executive’s employment under this
Agreement may be terminated in any one of the followings
ways:
(i)
Death of Executive . The employment of Executive shall
terminate immediately upon Executive’s death provided that
the Company shall, for a period of 12 months following such
death, pay to the estate of Executive an amount equal to
Executive’s base salary and continue to pay all premiums for
coverage for Executive’s dependent family members under all
health, hospitalization, disability, dental, life, and other
insurance plans that the Company maintained at the time of
Executive’s death.
(ii)
Disability of Executive . If, as a result of incapacity due
to physical or mental illness or injury, Executive shall have been
absent from Executive’s full-time duties hereunder for six
consecutive months, then 30 days after giving written notice
to Executive (which notice may occur before or after the end of
such six month-period, but which shall not be effective earlier
than the last day of such six month-period), the Company may
terminate Executive’s employment provided Executive is unable
to resume Executive’s full-time duties at the conclusion of
such notice period. Also, Executive may terminate Executive’s
employment if Executive’s health should become impaired to an
extent that makes the continued
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performance of Executive’s duties hereunder hazardous to
Executive’s physical or mental health or Executive’s
life, provided that Executive shall have furnished the Company with
a written statement from a qualified doctor to such effect and
provided, further, that, at the Company&rsqu
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