EMPLOYMENT
AGREEMENT
This Employment Agreement (the
“Agreement”) is made and entered into between Cyalume
Technologies, Inc., a Delaware Corporation (the
“Company”), and Derek Dunaway, (the
“Employee”).
WHEREAS, the Company desires to
employ Employee as Chief Executive Officer of the Company, and
Employee desires to accept such employment upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of
the premises and the mutual covenants contained herein, the parties
hereto agree as follows:
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1.
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TERM . This Agreement shall be for an
initial term of three years, beginning on May 15, 2009. The
Agreement shall continue for successive one-year periods thereafter
unless and until terminated by either party upon thirty days’
written notice prior to the Agreement’s
anniversary/expiration date, or until terminated pursuant to
Section 8 of this Agreement.
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(a)
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Duties . Employee shall be employed as Chief Executive
Officer. Employee’s duties shall be such
executive, managerial, administrative, and professional duties as
are commensurate with the position of Chief Executive Officer, and
as shall be assigned by the Board of Directors of the Company, or
by their authorized designees. The Employee may delegate duties to
other employees of the Company as he reasonably determines is in
the best interest of the Company, consistent with the general
authority and power given to him hereunder. The
principal place of employment of Employee shall be at the
Company’s executive offices in West Springfield,
Massachusetts.
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(b)
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Exclusive Employment . Employee shall devote the whole of his
business time, attention and abilities to carrying out his duties
hereunder.
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(c)
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Loyal and Conscientious Performance
. Employee agrees that to the best
of his ability and experience, and in compliance with all
applicable laws and the Company’s policies, Certificate of
Incorporation and Bylaws, as they may be amended from time to time,
he will at all times loyally and conscientiously perform all the
duties and obligations required of him by the terms of this
Agreement. Employee further agrees he shall use his best efforts to
promote the interests and reputation of the Company and its
affiliates and not do anything which is to the detriment of the
Company or its affiliates.
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COMPENSATION
AND BENEFITS .
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(a)
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Salary . For all the services to be rendered by
Employee in any capacity hereunder, the Company shall pay Employee,
in equal installments consistent with the Company’s practices
for its employees, salary and compensation as set forth in
Schedule 1 attached to this Agreement and incorporated
herein. The Company shall have the ability to withhold from the
compensation otherwise due to Employee under this Agreement any
amounts required to be withheld from compensation from time to time
under applicable law.
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In the event Employee’s employment with
the Company is terminated by the Company other than as a result of
death, disability (as defined in Section 8(a)(ii)), retirement or
for “cause” (as defined in Section 8(a)(iii)), or if
Employee’s employment with the Company is terminated by
Employee for the reason set forth in Section 8(d), and upon
execution by Employee of a separation agreement prepared by the
Company, the Company will pay Employee, at normal payroll intervals
for twelve (12) months, a sum equal to the Employee’s annual
Base Salary in effect at the time of termination hereunder, less
applicable deductions and withholdings.
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If, upon a Change of Control, or as a
consequence of the Change of Control prior to the Change of
Control, or within twelve (12) months following a Change of
Control, the Employee’s employment is terminated without
“cause” or if the Employee terminates his employment
for Good Reason, and upon execution by Employee of a separation
agreement prepared by the Company, the Employee will be entitled to
receive, in addition to the severance benefit set forth in Section
3(b)(i), a severance benefit equal to twelve (12) months of his
Base Salary, less applicable deductions and withholdings, payable
in full on the date of Employee’s termination. For
purposes of this provision, the following definitions will
apply:
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A “Change of Control shall mean (1) any
consolidation, merger or amalgamation of the Company with or into
any other corporation whereby the voting shareholders of the
Company immediately prior to such event receive less than fifty
percent (50%) of the voting shares of the consolidated, merged or
amalgamated corporation; (2) a sale by the Company of all or
substantially all of the Company’s assets; or (3) any
transaction or series of transactions having, directly or
indirectly, the same effect as any of the foregoing; (4) any
transaction or series of transactions that result in a material
diminution in the Employee’s title or duties.
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A termination for “cause” shall mean
those reasons defined in Sections 8(a)(i), 8(a)(ii) and
8(a)(iii).
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A termination for “Good Reason”
shall mean (1) a material diminution in the Employee’s title
or duties or assignment to the Employee of materially inconsistent
duties; (2) a reduction in the Employee’s Base Salary except
for reductions applicable to all management; or (3) a relocation of
Employee’s principal place of employment of a distance in
excess of fifty (50) miles unless such relocation is effected at
the request of Employee or with the Employee’s
approval. There shall be no termination for Good Reason
without written notice from the Employee describing the basis for
the termination and the Company (or a successor) having a
reasonable period to cure.
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In the event that Employee elects to terminate
this Agreement for any reason other than that set forth in Sections
3(b)(ii)(C) or 8(d), or in the event that this Agreement
is terminated due to Employee’s death or disability, the
Company shall not be obligated to pay to Employee any severance
payments whatsoever and Employee shall be entitled only to that
Base Salary and those benefits which he has earned through the date
of such termination.
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(c)
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Fringe Benefits . So long as Employee remains in the employ of
the Company, Employee shall be provided those benefits set forth in
Schedule 1 to this Agreement. Employee shall also receive
such additional benefits as may be authorized from time to time by
the Company’s Board of Directors.
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NONCOMPETITION BY EMPLOYEE
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During the term of this Agreement and for a
period of two (2) years after Employee has ceased to be employed by
Company for any reason, Employee shall not, without the prior
written consent of a duly authorized officer of Company, directly
or indirectly (i) engage in the business of, or (ii) assist or have
an interest in (whether as proprietor, partner, investor,
stockholders, officer, director or any type of principal
whatsoever), or (iii) enter the employment of or act as an agent,
advisor, or consultant to any person, firm, partnership,
association, corporation, business organization, entity or
enterprise that is, or is to become, directly or indirectly,
engaged in any business actually or potentially competitive with
that of Company in any area or territory in which Company offers
its services or products.
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During the term of this Agreement, and for a
period of two (2) years after Employee has ceased to be employed by
Company for any reason, Employee shall not, without the prior
written consent of a duly authorized officer of Company, solicit
from any person, company, firm or organization, or any affiliate of
the foregoing, which was or is a client or associated firm of
Company or which Company was soliciting as a client or associated
firm of Company during any of the twelve (12) months immediately
preceding the termination or expiration of the Agreement, any
business substantially similar to that done by Company, including
but not limited to any business Employee was soliciting or on which
he worked while employed by Company.
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5.
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CONFIDENTIALITY . Employee acknowledges, understands and agrees
that all trade secrets and information relating to the business of
the Company and/or its affiliates, including without limitation,
procedures, product information, manufacturing techniques or
processes, expertise, records, customer or prospect lists and
information, vendor lists and information, supplier lists and
information, internal operating forms, financial information or
accounting methods, systems, books, manuals, employee information,
any confidential information concerning the business, the Company,
its affiliates, or the business, policies or operations of the
business, the Company or its affiliates which Employee may have
learned, possessed or controlled on or prior to the date hereof or
which Employee may learn, possess or control during the term of
Employee’s continued employment by the Company or any of its
affiliates (as an employee, consultant, agent or otherwise)
(collectively, “Trade Secrets”) are confidential and
shall remain the sole and exclusive property of the Company and its
affiliates. Trade Secrets include both written information and
information not reduced to writing. Except as may be required
pursuant to any law or the order of a court, or except as may be
public knowledge (which shall not have become public knowledge as a
result of any action of Employee), Employee shall not, at any time,
retain, duplicate, remove from the business premises of Company or
any of its affiliates, make use of, other than in the ordinary
course of fulfilling his duties as an employee of the Company,
divulge or otherwise disclose, directly or indirectly, any Trade
Secrets. Employee shall not publish or disclose, and shall exercise
his best efforts to prevent others from publishing or disclosing,
any Trade Secrets and he shall not use or attempt to use any such
knowledge or information which he may have or acquire in any manner
which may injure or cause loss, whether directly or indirectly, to
the Company or its affiliates or use his personal knowledge or
influence over any customers, clients, suppliers or contractors of
the Company or its affiliates so as to take advantage of the
Company’s or its affiliate’s trade or business
connections or utilize information confidentially obtained by
him.
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6.
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NON-SOLICITATION . Employee hereby covenants and agrees that, at
all times during his employment with the Company and for a period
of two (2) years immediately following his termination for any
reason, Employee shall not employ or seek to employ any person
employed at the time by the Compa
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