EXHIBIT 10.37
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EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of this 29th day
of March 2005, is entered into by Nestor, Inc. a Delaware corporation (the
"Company"), and Benjamin M. Alexander (the
"Employee").
The Company desires to employ the Employee, and the Employee desires
to be employed by the Company. In consideration of the mutual covenants and
promises contained in this Agreement, and
other good and valuable consideration,
the receipt and sufficiency of which are hereby
acknowledged by the
parties to
this Agreement, the parties agree as
follows:
1. TERM OF EMPLOYMENT.
The Company hereby agrees to employ the
Employee, and the Employee hereby accepts
employment with the Company, upon the
terms set forth in this Agreement,
for the period
commencing on the date hereof
(the "Commencement Date") and ending on December
31, 2008 (such
period, the
"Initial Employment Period" and as it may
be extended, the "Employment Period"),
unless sooner terminated in accordance with the provisions of Section 4. On
December 31, 2008, if not previously terminated, this Agreement shall
automatically renew and the Employment Period be extended until December 31,
2009 unless the Company shall elect not to
so extend the
Employment Period
and
shall have given written notice to the Employee of such
election on or
before
October 1, 2008.
2. TITLE; CAPACITY.
The Employee
shall serve as Vice
President and
General Counsel or in such other
position as the
Company's Board of
Directors
(the "Board") or its Chief Executive Officer may determine from time to time.
The Employee shall be based at the
Company's headquarters
in Rhode Island or at
such place or places in the continental United States as the Board and the
Employee shall mutually determine. The Employee shall be subject to the
supervision of, and shall have such
authority as is delegated to the
Employee
by, the Board or the Chief Executive
Officer of the Company.
The Employee hereby
accepts such
employment and agrees
to undertake
the duties and responsibilities
inherent in such
position and such other duties
and responsibilities as the Board or the
Chief Executive Officer shall from time
to time reasonably assign to the Employee.
The Employee
agrees to devote
his
entire business time, attention and energies to the
business and interests of
the Company during the Employment
Period. The Employee agrees to abide by the
rules, regulations, instructions, personnel practices and policies of the
Company and any changes therein which may be adopted from time to time by the
Company.
3. COMPENSATION AND BENEFITS.
3.1 SALARY.
The Company shall pay the Employee, in periodic
installments in accordance with the
Company's customary
payroll practices,
an
annual base salary $165,000. Such salary shall be subject to increase but
not
decrease thereafter as determined by the Board and shall
be reviewed at least
annually by the Board..
3.2 BONUS. The
Compensation
Committee, in its sole
discretion, may
award the Employee a bonus or bonuses
during the term hereof.
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3.3 EQUITY INCENTIVE.
(a) The Company
shall, upon the execution hereof, grant to the
Employee an option to purchase 135,000
shares of the common stock of the Company
("Common Stock"). To the extent permitted by the Internal
Revenue Code, said
options shall be incentive stock options. Said options shall be granted at
the
fair market value and expire on the eighth
anniversary
of their grant. Said
options shall vest as follows:
Number of Shares
Vesting Date
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10,000
On the date of grant
15,000
On the first anniversary hereof
20,000
On the second anniversary hereof
25,000
On the third anniversary hereof
30,000
On the fourth anniversary hereof
35,000
On the fifth anniversary hereof
Such grants shall provide that after a change in control of
the Company (as
defined in SCHEDULE A hereto), all restrictions on the exercise
thereof shall
lift and such options shall vest upon (a)
the termination by the
Company of the
Employee's employment, unless such termination is for Cause (as defined in
Section 4.2) or (b) the resignation of Employee for Good Reason (as
defined in
Section 4.3).
3.4 FRINGE BENEFITS.
The Employee shall be entitled to participate in
all bonus and benefit programs that the
Company establishes
and makes available
to its employees, if any, to the extent that Employee's position, tenure,
salary, age, health and other
qualifications make him eligible to participate.
3.5 REIMBURSEMENT
OF EXPENSES. The Company shall reimburse the
Employee for all reasonable travel,
entertainment and other expenses incurred or
paid by the Employee in connection
with, or related to,
the performance of
his
duties, responsibilities or services under this Agreement,
in accordance with
policies and procedures, and subject to
limitations, adopted by the Company from
time to time.
3.6 WITHHOLDING. All
salary, bonus and
other compensation payable to
the Employee shall be subject to applicable
withholding taxes.
4. TERMINATION OF EMPLOYMENT PERIOD. The employment of the Employee
by
the Company pursuant to this Agreement
shall terminate upon the occurrence
of
any of the following:
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4.1 EXPIRATION OF THE EMPLOYMENT PERIOD;
4.2 At the election of
the Company,
for Cause (as
defined below),
immediately upon written notice by the Company to the
Employee, which notice
shall identify the Cause upon which the
termination is based.
For the purposes
of this Section 4.2, "Cause" shall mean (a) a good
faith finding by the Company
that (i) the Employee has failed in any material respect to perform his
reasonably assigned duties for the Company
and has failed to remedy such failure
within 10 days following written notice from the Company to the Employee
notifying him of such failure, or (ii) the Employee has engaged
in dishonesty,
gross negligence or misconduct with respect to the Company, or (b) the
conviction of the Employee of, or the entry of a pleading of guilty or nolo
contendere by the Employee to, any crime involving moral turpitude or any
felony;
4.3 At the election
of the Employee, for Good Reason (as defined
below), immediately upon written notice by the
Employee to the Company, which
notice shall identify the Good Reason upon
which the termination
is based. For
the purposes of this Section 4.3, "Good
Reason" for termination shall mean (i) a
material adverse change in the Employee's authority, duties or compensation
without the prior consent of the Employee,
(ii) a material breach by the Company
of the terms of this Agreement, which breach is not remedied by the Company
within 10 days following written notice from the Employee to the Company
notifying it of such breach or (iii) any
requirement
imposed by Section 307
of
the Sarbanes-Oxley Act or any rule
promulgated thereunder.
4.4 Upon the death or
disability
of the Employee. As used in this
Agreement, the term "disability" shall mean
the inability of the Employee, due
to a physical or mental disability, for a period of 90 days,
whether or not
consecutive, during any 360-day period to perform the services contemplated
under this Agreement, with or without reasonable
accommodation as that
term is
defined under state or federal law. A
determination of
disability shall be made
by a physician satisfactory to both the
Employee and the Company, PROVIDED THAT
if the Employee and the Company do not agree on a
physician,
the Employee and
the Company shall each select a physician
and these two together
shall select a
third physician, whose determination as to disability
shall be binding on all
parties;
4.5 At the election of either party, upon not less than 30 days'
prior
written notice of termination.
5. EFFECT OF TERMINATION.
5.1 AT-WILL
EMPLOYMENT. If the
Employment Period expires pursuant to
Section 1 hereof, then, unless the Company notifies the Employee to the
contrary, the Employee shall continue his employment on an at-will basis
following the expiration of the Employment Period. Such at-will employment
relationship may be terminated by either party at any time and shall not
be
governed by the terms of this
Agreement.
5.2 PAYMENTS UPON TERMINATION.
(a) In the event the Employee's employment is terminated
pursuant to
Section 4.1, Section 4.2 or by the Employee
pursuant to Section 4.5, the Company
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shall pay to the Employee the compensation
and benefits otherwise payable to him
under Section 3 through the last day of his
actual employment by the Company.
(b) In the event
the Employee's employment is terminated by the
Employee pursuant to Section 4.3 or by the
Company pursuant to Section 4.5, the
Company shall continue to pay to the
Employee his salary as in effect on the
date of termination and continue to provide to the
Employee the other benefits
owed to him under Section 3.4 (to the extent such
benefits can be provided to
non-employees, or to the extent such benefits cannot be provided to
non-employees, then the cash equivalent
thereof) until the
date one year after
the date of termination and for the purposes of the vesting of options to
purchase common stock granted to the Employee pursuant to Section 3.3, the
Employee shall be deemed to be employed by the Company until the date three
years after the date of termination.
The payment to the
Employee of the amounts
payable under this Section 5.2(b) (i) shall
be contingent upon the
execution by
the Employee of a release in a form
reasonably
acceptable
to the Company and
(ii) shall constitute the sole remedy of the Employee in the event of a
termination of the Employee's employment in the circumstances
set forth in this
Section 5.2(b).
(c) In the event the Employee's employment is terminated
pursuant to
Section 4.4, the Company shall continue to pay to the Employee
(or his estate)
his salary as in effect on the date of
termination and the
amount of the annual
bonus paid to him for the fiscal year immediately preceding the date of
termination (payable in annualized monthly installments) and, if such
termination was on account of disability, continue to provide to the
Employee
the other benefits owed to him under Section 3.4 (to the extent such
benefits
can be provided to non-employees, or to the extent such benefits cannot be
provided to non-employees, then the cash equivalent thereof)
until the date one
year after the date of termination and for the purposes of the vesting of
options to purchase common stock granted to the Employee pursuant to Section
3.3, the Employee shall be deemed to be employed by
the Company until the
date
one year after the date of termination. The amounts payable to the Employee
under this Section 5.2(c) shall be reduced by the aggregate amount of all
insurance proceeds paid to the Employee or his beneficiaries pursuant to
insurance policies paid for by the
Company.
5.3 SURVIVAL.
The provisions of Sections 5.2, 6 and
7 shall survive
the termination of this Agreement.
6. NON-COMPETITION AND NON-SOLICITATION.
6.1
RESTRICTED
ACTIVITIES.
While the Employee is employed by the
Company and for a period of one year after
the termination or
cessation of such
employment for any reason, the Employee
will not directly or indirectly:
(a) Engage in any business or enterprise (whether as owner, partner,
officer, director, employee, consultant, investor, lender or otherwise,
except
as the holder of not more than 1% of the
outstanding
stock of a
publicly-held
company) that develops, manufactures, markets, licenses, sells or
provides any
product or service that competes with any product or service developed,
manufactured, marketed, licensed, sold or
provided, or planned to be developed,
manufactured, marketed, licensed, sold or provided, by the Company while the
Employee was employed by the Company;
or
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(b) Either alone or in association with others (i) solicit,
or permit
any organization directly or indirectly
controlled by the
Employee to solicit,
any employee of the Company to leave the
employ of the Company,
or (ii) solicit
for employment or permit any organization
directly or indirectly
controlled by
the Employee to solicit for any person who was
employed by the
Company at any
time during the term the Emplo
