Exhibit
10.11
EXECUTIVE EMPLOYMENT
AGREEMENT
This Executive Employment Agreement
(“Agreement”) is made effective as of November 10,
2006 (“Effective Date”), by and between PureDepth,
Inc., a Delaware corporation (“Company”), and Fred
Angelopoulos (“Executive”) to establish the terms and
conditions of employment.
The parties agree as follows:
1. Employment . Company hereby employs Executive, and
Executive hereby accepts such employment, upon the terms and
conditions set forth herein.
2. Duties .
2.1 Position . Executive is hereby employed on a full-time
basis as Chief Executive Officer and shall report directly to the
Board of Directors of the Company (“Board of Directors”
or “Board”), and shall have the duties and
responsibilities reasonably and in good faith assigned by the
Board, including all duties attendant to the position of Chief
Executive Officer.
2.2 Best Efforts . Executive shall expend Executive’s best
efforts on behalf of Company, and shall abide by all policies and
decisions made by Company, as well as all applicable federal, state
and local laws, regulations and ordinances. Executive shall act in
the best interests of Company at all times. Except for vacation and
illness periods, Executive shall devote the necessary time and
effort to the performance of Executive’s assigned duties for
Company. Executive may, without seeking or obtaining approval by
the Board (so long as the following do not materially interfere
with the performance of the Executive’s duties hereunder),
(i) make and manage personal business investments of his choice and
(ii) serve in any capacity with any civic, educational, religious
or charitable organization.
3. Nature of Employment . The nature of Executive’s employment
with Company under this Agreement shall be on an
“at-will” basis. As used herein, “Term of
Employment” shall commence on the Effective Date and shall
end upon any termination of Executive’s employment with
Company.
4. Compensation .
4.1 Base Salary . As compensation for Executive’s
performance of Executive’s duties as set forth herein,
Company shall pay to Executive a base salary of $250,000 per year
(“Base Salary”), payable in accordance with the normal
payroll practices of Company, less all legally required or
authorized payroll deductions and tax withholdings. Base Salary
shall be reviewed annually, and may be adjusted, at the
Board’s discretion, in light of the Executive’s
performance and the Company’s financial performance and other
economic conditions and relevant factors.
4.2 Bonus. Executive shall be eligible to participate in
any applicable bonus plan that the Company, at is sole discretion,
may provide to Executive. The Company expects for fiscal year 2007
to make available a bonus arrangement that establishes objective
and subjective performance criteria and that establishes a maximum
annual bonus potential equal to fifty percent (50%) of
Executive’s Base Salary. For fiscal year 2007, in the event
Executive completes a deal with IGT, Executive shall receive the
bonus he would have received under the existing bonus plan
(“IGT Bonus”). Any IGT Bonus paid shall reduce dollar
for dollar any other bonus payable for fiscal year 2007.
4.3 New Options . Subject to approval of the Board, after the
Effective Date the Company may in its discretion grant Executive
stock options to purchase shares of the Company’s common
stock at an exercise price equal to the fair market value of that
stock on the date of the grant under a stock option plan that is
adopted by the Board and approved by the Company’s
stockholders (“New Options”).
4.4 Old Options . Executive and Company acknowledge that
Executive holds stock options to purchase shares of the
Company’s common stock that were granted prior to the
Effective Date (“Old Options”).
(a) Fixed Exercise Schedule . Executive and Company agree that,
notwithstanding any existing agreement to the contrary, the Old
Options shall be mandatorily exercised solely in accordance with
the fixed schedule indicated on Exhibit A hereto.
Exercise outside this schedule shall not be permitted. Executive
and Company agree to cooperate to amend Executive’s Old
Option agreements to so provide.
(b) Methods of Exercise . Company may in its discretion make available
to Executive certain methods by which the Old Options may be
exercised. Such methods shall include a cashless exercise procedure
(“Cashless Exercise”), under which Executive shall be
required to deliver a properly executed notice together with
irrevocable instructions to a broker in a form acceptable to the
Company providing for the assignment to the Company of the proceeds
of a sale or loan with respect to some or all of the shares of
common stock acquired upon exercise of the Old Options, to the
extent such procedure is available to Executive given market
conditions. During Executive’s employment with Company,
Company shall make available a net exercise methodology (“Net
Exercise”), under which Company will, upon exercise of any of
the Old Options, provide to Executive a single payment, in either
cash or shares of common stock of the Company or a combination
thereof, equal to the value of the shares of Company common stock
being exercised, reduced by the aggregate exercise price of such
shares and all applicable tax withholdings and other lawful
deductions. The extent to which Net Exercise is available is in the
Board’s sole discretion and will be made available for
between ten percent (10%) and fifty percent (50%) of
Executive’s options exercised in a given calendar
year.
(c) Limitations on Subsequent Sale
. Subject to all applicable
securities and other laws, rules, and regulations, and the
Company’s insider trading policies, Executive shall sell no
more than the number of shares of Company common stock indicated on
Exhibit B acquired upon exercise of the Old Options per
calendar year.
(d) Share Numbers . As used in this Agreement, all references to
numbers of shares of Company common stock shall be adjusted to
account for stock splits, reverse stock splits and similar
transactions.
5. Customary Fringe Benefits
. Executive shall be eligible for
all customary and usual fringe benefits generally available to
full-time employees of Company, subject to the terms and conditions
of Company’s policies and benefit plan documents. Company
reserves the right to change or eliminate the fringe benefits on a
prospective basis, at any time, effective upon notice to
Executive.
6. Business Expenses . Executive shall be reimbursed for all
reasonable, out-of-pocket business expenses incurred in the
performance of Executive’s duties on behalf of Company. To
obtain reimbursement, expenses must be submitted promptly with
appropriate supporting documentation in accordance with
Company’s policies. All such expenses shall be reimbursed
within the same fiscal year in which they were incurred or within
two and one-half (2½) months after the end of such year.
7. Termination of Employment.
Subject to the terms and conditions
of this Section 7, either Company or Executive may terminate
Executive’s employment with Company at any time, with or
without Cause (as hereinafter defined), during the Term of
Employment. Any termination of Executive’s employment during
the Term of Employment shall be communicated by written notice of
termination from the terminating party to the other party
(“Notice of Termination”). The Notice of Termination
shall indicate the specific provision(s) of this Agreement relied
upon in effecting the termination and a written statement of the
reason(s) for the termination. In the case of a Notice of
Termination provided by Executive to Company, such Notice of
Termination shall not be effective for a period of fifteen (15)
business days after receipt of such Notice of Termination by
Company. In the case of a Notice of Termination provided by Company
to Executive, such Notice of Termination shall be effective on the
date designated by the Company in the Notice of Termination. In the
event Executive’s employment is terminated by either party,
for any reason, during the Term of Employment, Company shall pay
the prorated Base Salary earned as of the date of Executive’s
termination of employment and the accrued but unused vacation as of
the date of Executive’s termination of employment to
Executive upon Executive’s termination of employment. Except
as otherwise provided in this Section 7, Company shall have no
further obligation to make or provide to Executive, and Executive
shall have no further right to receive or obtain from Company, any
payments or benefits in respect of the termination of
Executive’s employment with Company during the Term of
Employment.
7.1 Severance Package Upon Involuntary Termination
without Cause or Voluntary Termination for Good Reason
. In the event that, during the Term
of Employment, either Company causes to occur an involuntary
termination without Cause (as hereinafter defined) of
Executive’s employment with Company or Executive voluntarily
terminates Executive’s employment with Company for Good
Reason (as hereinafter defined), and such termination qualifies as
a “Separation from Service” under Section 409A (as
hereinafter defined), Executive shall be entitled to a
“Severance Package” that consists of the following:
(a) substantially equal payments, made over a period of nine
months following the date of Executive’s termination of
employment, on the basis of Executive's annual rate of Base Salary
in effect immediately prior to Executive’s termination of
employment (or, if greater, the annual rate of $250,000) and
payable in accordance with the Company’s established payroll
schedule, (b) Company’s direct-to-insurer payment or
reimbursement of amounts documented on receipts of any group health
premiums that Executive would otherwise have been required to pay
for a period of twenty-four (24) months following the date of
Executive’s termination of employment (subject to
Executive’s eligibility for, and proper and timely election
of insured continued group health benefits under a combination of
the Consolidated Omnibus Budget and Reconciliation Act
(“COBRA”) and/or California COBRA); and (c) the
immediate vesting of any New Options to the extent that Executive
would have vested in such New Options if Executive had remained an
active employee of the Company until the one-year anniversary of
the date of his termination of employment; provided ,
however , that all of the following conditions are first
satisfied: (i) Executive reaffirms Executive’s
commitment to comply with all surviving provisions of this
Agreement, including Section 9 and Section 10 of this
Agreement; and (ii) Executive executes a Separation Agreement
that includes a general release in favor of Company and its parent,
and all subsidiary and related entities, and their officers,
directors, shareholders, employees and agents to the fullest extent
permitted by law, drafted by and in a form reasonably satisfactory
to Company, and does not revoke the general release within any
legally required revocation period, if applicable. All legally
required and authorized deductions and tax withholdings shall be
made from the severance payments, including for wage garnishments,
if applicable, to the extent required or permitted by law.
Effective immediately upon termination of employment, Executive
shall no longer be eligible to contribute to or to be an active
participant in any retirement or benefit plan covering employees of
Company. All other Company obligations to Executive shall be
automatically terminated and completely extinguished.
7.2 Section 409A Compliance. The parties intend for this Agreement either to
satisfy the requirements of Section 409A or to be exempt from the
application of Section 409A, and this Agreement shall be construed
and interpreted accordingly. If this Agreement either fails to
satisfy the requirements of Section 409A or is not exempt from the
application of Section 409A, then the parties hereby agree to amend
or to clarify this Agreement in a timely manner so that this
Agreement either satisfies the requirements of Section 409A or is
exempt from the application of Section 409A.
(a) Notwithstanding any provision in this Agreement
to the contrary, in the event that Executive is a “specified
employee” (as defined in Section 409A), any severance
payment, severance benefits or other amounts payable under this
Agreement that would be subject to the special rule regarding
payments to “specified employees” under Section
409A(a)(2)(B) of the Code (together, “Specified Employee
Payments”) shall not be paid before the expiration of a
period of six months following the date of Executive’s
termination of employment (or the date of Executive’s death,
if earlier). The Specified Employee Payments to which Executive
would otherwise have been entitled during the six-month period
following the date of Executive’s termination of employment
shall be accumulated and paid as soon as administratively
practicable following the first date payable without incurring a
penalty tax under Section 409A.
(b) To ensure satisfaction the requirements of
Section 409A(b)(3) of the Code, assets shall not be set aside,
reserved in a trust or other arrangement, or otherwise restricted
for purposes of the payment of amounts payable under this
Agreement.
(c) Company hereby informs Executive that the
federal, state, local, and/or foreign tax consequences (including
without limitation those tax consequences implicated by
Section 409A) of this Agreement are complex and subject to
change. Executive acknowledges and understands that Executive
should consult with his or her own personal tax or financial
advisor in connection with this Agreement and its tax consequences.
Executive understands and agrees that Company has no obligation and
no responsibility to provide Executive with any tax or other legal
advice in connection with this Agreement and its tax consequences.
Executive agrees that Executive shall bear sole and exclusive
responsibility for any and all adverse federal, state, local,
and/or foreign tax consequences (including without limitation any
and all tax liability under Section 409A) of this Agreement,
and fully indemnifies and holds Company harmless
therefor.
7.3 Ineligibility For Severance.
Executive shall not be entitled to
any Severance Package under this Agreement if at any time during
the Term of Employment, either (a) Executive voluntarily
resigns or otherwise terminates employment with Company for any
reason other than Good Reason, or (b) Company involuntarily
terminates Executive’s employment for any reason other than
without Cause. Effective immediately upon termination of
employment, Executive shall no longer be eligible to contribute to
or to be an active participant in any retirement or benefit plan
covering employees of Company. All other Company obligations to
Executive shall be automatically terminated and completely
extinguished.
7.4 Taxes and Withholdings. The Company may withhold from any amounts
payable under this Agreement, including any benefits or severance
payment, such federal, state or local taxes as may be required to
be withheld pursuant to applicable law or regulations, which
amounts shall be deemed to have been paid to Executive.
7.5 Definitions.
(a) “Cause” shall mean the occurrence
during the Term of Employment of any of the following:
(i) Executive’s indictment for, formal admission to
(including a plea of guilty or nolo contendere to), or
conviction of either a felony or a crime of moral turpitude,
(ii) Executive’s dishonesty, breach of trust, breach of
fiduciary duty, unethical business conduct, or commission of any
crime involving Company, (iii) gross negligence or willful
misconduct by Executive in the pe
