EMPLOYMENT
AGREEMENT
Peerless Systems Corporation, a Delaware
Corporation, (the “ Company ”) and its
successors and assigns, and William Neil, a natural person (“
Executive ”) (collectively, the “ Parties
”), make this EMPLOYMENT AGREEMENT (“ Agreement
”) as of May 26, 2009 (“ Commencement Date
”).
RECITALS
1. WHEREAS,
Executive is currently employed by the Company as the Chief
Financial Officer and Acting Chief Executive Officer.
2. WHEREAS,
the Company wishes to employ Executive and Executive wishes to be
employed by Company in said position.
3. WHEREAS,
the Company and Executive thus enter into this Agreement to outline
the terms and conditions of Executive’s new position with
Company and except as set forth herein, simultaneously wish to
extinguish any and all obligations owed by each Party to the other
arising out of their prior employment relationship, including that
certain Employment Agreement dated June 14, 2006 between Executive
and the Company and any amendments, addendums or modifications
thereto (the “Former Employment Agreement”).
NOW, THEREFORE, in consideration of the mutual
covenants and agreements hereinafter set forth, the Company and
Executive agree as follows:
AGREEMENT
(a)
At-Will . The Term of this Agreement shall begin
on the Commencement Date and shall continue “at-will”
until either party elects to terminate this Agreement pursuant to
Paragraph 5 (the “Term”).
(b)
Duties and Responsibilities . The Executive will
report to the Board of Directors (the “Board”) or an
appointee of the Board. Executive shall be employed as
Chief Financial Officer and Acting Chief Executive Officer
and shall perform and discharge well and faithfully
the duties which may be assigned to him from time to time by the
Board in connection with the conduct of the Company’s
business as well as those duties which are normally and customarily
vested in a Chief Financial Officer and Acting Chief Executive
Officer of a corporation.
Executive’s job responsibilities shall
include, but not be limited to, anything reasonably requested or
required of Executive on behalf of the Company.
(c)
Extent of Services and Business Activities
. Executive shall devote his full-time efforts to the
business of the Company and shall not devote time to other
activities except with the prior consent of the Board of the
Company. Executive covenants and agrees that for so long
as he is employed by the Company, Executive shall not, whether as
an executive, employee, employer, consultant, agent, principal,
partner, member, stockholder, corporate officer or director, or in
any other individual or representative capacity, whether or not for
compensation, engage in or participate in or render services to any
other, provided , however , that, notwithstanding the
foregoing, Executive (a) may invest in securities of any entity,
solely for investment purposes and without participating in the
business thereof, if (x) such securities are traded on any national
securities exchange or the National Association of Securities
Dealers, Inc. Automated Quotation System, and (y) Executive does
not, directly or indirectly, own two percent (2%) or more of any
class of securities of such entity.
(d)
Location . During the Term, Executive shall
regularly perform his duties from the Company’s principal
location (the “Headquarters”). In addition
to spending time at the Headquarters, Executive may be required to
travel from time to time in order to perform his duties
hereunder.
(a)
Base Salary . Executive shall be paid an annual
base salary (“ Base Salary ”) during the Term of
two hundred and twenty-five thousand dollars
($225,000.00). Executive’s Base Salary shall be
payable in installments consistent with the payroll practices
established by the Company with respect to its senior executive
employees. Executive’s Base Salary shall be
effective retroactively from September 16,
2008. Executive shall be paid any retroactive amounts as
soon as practicable.
(b)
Retention Bonus . Executive shall be entitled to
receive a retention bonus provided Executive remains employed by
the Company in good standing as of the applicable payment
date:
|
Payment Date
|
Amount
|
|
|
|
|
February 1, 2010
|
$20,000
|
|
|
|
|
February 1, 2011
|
$20,000
|
(c)
Incentive Compensation . Executive is also
eligible to receive annual incentive payments at the sole
discretion of the Board of the Company.
(d)
Payment . Payment of all compensation to
Executive hereunder shall be made in accordance with the relevant
written Company policies in effect from time to time, including
normal payroll practices, and shall be subject to all applicable
employment and withholding taxes. This provision shall
survive the termination of Executive’s employment with the
Company, for any reason.
3.
Other Employment Benefits .
(a)
Business Expenses . Upon submission of itemized
expense statements, in the manner as shall be specified by the
Company, Executive shall be entitled to reimbursement for
reasonable business and travel expenses duly incurred by Executive
in the performance of his duties under this Agreement, pursuant to
written Company policy and any relevant written policies
established by the Board and provided to Executive. The
Company shall also be responsible for reimbursement at the rate of
$.48 per mile in travel expenses for travel between
Executive’s home and the Company’s facility in El
Segundo, California.
(b)
Benefit Plans . To the extent offered by the
Company, Executive shall be entitled to participate, on a basis
commensurate with his position, in the Company’s medical
insurance, retirement ( e.g., non-matching 401(k) plan) and
other benefit plans pursuant to their terms and conditions during
the Term of this Agreement. Nothing in this Agreement shall
preclude the Company or any affiliate of the Company from
terminating or amending any employee benefit plan or program from
time to time.
(c)
No Other Benefits . Executive understands and
acknowledges that the compensation and benefits specified in
Paragraphs 2 and 3 of this Agreement are the only compensation and
benefits he is entitled to receive under this Agreement.
4.
Confidentiality; Unfair Competition; Non-Solicitation
Agreement . Concurrent with Executive’s
execution of this Agreement, Executive shall execute and deliver to
the Company a non-disclosure and confidentiality agreement in the
form attached hereto as Exhibit A (the “
Non-Disclosure Agreement ”). The terms of
the Non-Disclosure Agreement are incorporated by this reference as
if set forth in full.
5.
Termination of Employment .
(a)
Termination of At-Will Employment . Either the
Company or Executive may terminate Executive’s employment at
any time with or without advance notice or cause. In
such an event, Executive will only be entitled to the Accrued
Obligations as set forth below.
(b)
Payments Upon Termination . If Executive’s
employment is terminated for any reason by either party, the
Company shall promptly pay or provide to the Executive, or his
estate, (i) the Executive’s earned but unpaid Base Salary
accrued through the date of termination, (ii) accrued, but unpaid,
vacation time through such date of termination, (iii) reimbursement
of any business expenses incurred by the Executive prior to the
Date of Termination that are reimbursable under Paragraph 3(a)
above, and (iv) any vested benefits and other amounts due to
Executive under any plan, program, policy of, or other agreement
with, the Company(subsections (i) to (iv), above, are referred to
together as the “ Accrued Obligations
”).
(c)
Severance Payments . In addition to the Accrued
Obligations, in the event Executive’s employment is
terminated by the Company without Cause (as Cause is defined below)
and Executive executes a general release in favor of the Company in
the form attached hereto as Exhibit “B”, Executive
shall receive (i) a lump sum payment of $25,000 and (ii) monthly
consulting payments of $2,100 less deductions required by law for a
thirty-six (36) month period.
(d)
Benefits. Executive and his covered
dependents shall also receive healthcare coverage through June 15,
2012 similar to the coverage provided to the other Company’s
employees provided that Executive elects and is eligible to
continue healthcare benefits under COBRA and/or CAL
COBRA.
(e)
Definition of Cause . For purposes of Section
5(c) only, Cause shall be defined as (i) Executive’s
conviction, pleading guilty or no contest with respect to a felony
involving dishonesty or moral turpitude, (ii) Executive’s
commission of any act of theft, fraud, dishonesty, or falsification
of any employment or Company records, (iii) Executive’s
engagement in misconduct that is detrimental to the Company’s
reputation or business, (iv) Executive’s refusal without
proper legal reason to substantially perform the duties and
responsibilities required of Executive, or (v) any breach by
Executive of any material term of this Agreement (including without
limitation the Non-Disclosure Agreement) and/or of
Executive’s fiduciary duties to the Company.
(f)
Exercise of Options . Executive shall be
entitled to exercise any vest
