EXHIBIT 10.36
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EMPLOYMENT AGREEMENT
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 Tadas A. Eikinas (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 Chief Operating Officer of
the Company 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 $175,000. 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.
(a) Upon the
satisfactory delivery
to a customer of a speed on green
product (other than to test sites in
Cranston, RI or the State of Delaware), as
reasonably determined by the Compensation
Committee,
the Company shall pay
the
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Employee a bonus of $12,5000; provided that such implementation
is completed on
or before October 31, 2005.
(b) Upon the
satisfactory delivery
to a customer of a
mobile speed
product (other than to test sites in
Cranston, RI or the State of Delaware), as
reasonably determined by the Compensation
Committee,
the Company shall pay
the
Employee a bonus of $12,5000; provided that such implementation
is completed on
or before October 31, 2005.
(c) The Compensation Committee, in its sole discretion,
may award the
Employee other bonus or bonuses during the
term hereof.
3.3 EQUITY INCENTIVE.
(a) The Company
shall, upon the execution hereof, grant to the
Employee an option to purchase 30,000 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
10,000
On the first anniversary hereof
10,000
On the second 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).
(b) Upon the
satisfactory delivery
to a customer of a speed on green
product (other than to test sites in
Cranston, RI or the State of Delaware), as
reasonably determined by the Compensation
Committee, the Company shall grant the
Employee an option to purchase 25,000 shares of the common stock
of the Company
("Common Stock"); provided that such implementation is completed on or
before
October 31, 2005. 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.
(c) Upon the
satisfactory delivery
to a customer of mobile peed
product (other than to test sites in
Cranston, RI or the State of Delaware), as
reasonably determined by the Compensation
Committee, the Company shall grant the
Employee an option to purchase 25,000 shares of the common stock
of the Company
("Common Stock"); provided that such implementation is completed on or
before
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October 31, 2005. 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.
(d) Upon the
successful development
and testing of a
CrossingGuard
system that uses all digital imaging, as reasonably determined by the
Compensation Committee, the Company shall grant the Employee an option to
purchase 25,000 shares of the common stock of the Company ("Common Stock");
provided that such implementation is completed on or before December
31, 2005.
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.
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:
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 or (ii) a material breach by the
Company of the terms of this Agreement, which breach is not remedied by the
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Company within 10 days following written
notice from the Employee to the Company
notifying it of such breach.
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
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 one year
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
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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 p
