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Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement is entered into as
of August 1, 2006 (the "Effective Date") by and between
the Company and Timothy Harris ("Executive").
1. Duties and Scope of
Employment .
(a)
Position and Duties . As of the Effective Date, Executive
will serve as Chief Executive Officer Elect until October 1,
2006, at which time Executive will assume the position of Chief
Executive Officer of the Company, reporting to the
Company’s Board of Directors (the "Board"). Executive will
render such business and professional services in the performance
of his duties, consistent with Executive’s position within
the Company, as shall reasonably be assigned to him by the Board.
Executive’s duties and responsibilities may be altered,
modified and changed as the Board deems appropriate.
(b)
Obligations . During the Term, Executive will perform his
duties faithfully and to the best of his ability and will devote
his full business efforts and time to the Company. For the duration
of the Term, Executive agrees not to engage in any other
employment, occupation or consulting activity for any direct or
indirect remuneration without the prior written approval of the
Board.
(c)
Conflicting Employment . Executive agrees that, while
employed by the Company, he will not engage in any other
employment, occupation, consulting or other business activity
directly related to the business in which the Company is now
involved or becomes involved during the term of Executive’s
employment, nor will Executive engage in any other activities that
conflict with Executive’s obligations to the Company.
2. Term .
Executive’s employment with the Company pursuant to this
Agreement (the "Term") will commence on the Effective Date and will
continue, unless otherwise terminated earlier as provided herein,
until the date that is twenty-four (24) months from the
Effective Date. Notwithstanding the foregoing, the parties agree
that Executive’s employment with the Company will be
"at-will" employment and may be terminated at any time with or
without cause by giving the Executive a written notice. Executive
understands and agrees that neither his job performance nor
promotions, commendations, bonuses or the like from the Company
give rise to or in any way serve as the basis for continuation,
modification, amendment, or extension, by implication or otherwise,
of his employment with the Company. However, as described in this
Agreement, Executive may be entitled to severance benefits
depending on the circumstances of Executive’s termination of
employment with the Company as expressly provided in
Sections 6 and 7 of this Agreement.
3. Compensation .
(a)
Base Salary . During the Term, the Company will pay
Executive as compensation for his services, a base salary at the
annualized rate of $525,000.00 (the "Base Salary"). The Base Salary
will be paid periodically in accordance with the Company’s
normal payroll practices and is subject to lawfully required
withholdings. Annual adjustments to the Base Salary may be made in
the Company’s sole discretion.
(b)
Target Incentive Plan . Executive will be eligible to
participate in the Company’s Target Incentive Plan, and for
such annual bonuses as are payable under the plan ("Incentive
Bonus").
4.
Employee Benefits . During the Term, Executive will continue
to be entitled to participate in the employee benefit plans
currently and hereafter maintained by the Company of general
applicability to other senior executive of the Company, including,
without limitation, the Company’s group medical, dental,
vision, disability, life insurance, vacation and flexible-spending
account plans and programs. The Company reserves the right to
cancel or change the benefit plans and programs it offers to its
employees at any time.
5.
Equity . Executive may from time to time be eligible to
receive a grant of stock options and/or restricted stock, as the
Board of Directors deems appropriate.
6.
Severance .
(a)
Involuntary Termination Without Cause Prior to a Change of
Control or More than 6 Months Following a Change of Control .
If Executive’s employment with the Company terminates other
than voluntarily or for "Cause" prior to a "Change of Control"
(both as defined herein) or more than six months following a Change
of Control, and Executive signs and does not revoke a release of
claims with the Company in the form provided by the Company, the
Company shall provide severance pay and benefits, subject to
certain conditions, as follows:
(i)
The Company shall provide monetary severance to Executive equal to
twenty-four (24) months of Base Salary. Such severance shall be
paid over a period of twenty-four (24) months following the date of
termination (the "Severance Period") through Severance Payments
made in the same installments and subject to the same deductions as
Executive’s Base Salary at the time of termination. The
Severance Payments shall be subject to offset for any amounts then
owed to the Company by Executive.
(ii)
If Executive elects to continue his/her benefits under the
Company’s Employee Benefits Plans, including life, disability
and health insurance, through COBRA, the Company shall pay the cost
of COBRA continuation coverage for Executive (and, where
applicable, Executive’s dependents) during the Severance
Period as if Executive were still employed by the Company (the
"COBRA Continuation Payments"). Executive will continue to pay the
same portion of the cost of such benefits as he/she currently pays
as of the last day of his/her employment with the Company. The
COBRA Continuation Payments will cease, and the Company will have
no further obligations with respect to the payment of any premiums
for continuation coverage to Executive, as of the earlier of
(a) Executive becoming eligible for comparable coverage (for
example, through obtaining alternative employment); (b) the
conclusion of the Severance Period; or (c) the cessation of
Executive’s COBRA eligibility.
(iii)
Any outstanding and unvested non-qualified stock options and any
restricted stock previously granted Executive shall immediately
vest and become exercisable as to the number of shares that would
have otherwise vested had Executive remained employed by the
Company through the end of the Severance Period.
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Thereafter, any such awards will remain subject to the terms of
the applicable stock plan, grant and/or agreement.
(iv)
If Executive is entitled to compensation and benefits arising from
termination of employment due to change of control pursuant to
Section 7 below, compensation and benefits under that change
of control provision shall be in lieu of and not in addition to
compensation under this Section 6.
(v)
Notwithstanding the foregoing, the Company’s obligation to
make severance payments, pay bonus payments, provide benefits and
vest stock and/or options hereunder is expressly conditioned upon
Executive’s ongoing compliance with the provisions of the
Employee Invention, Authorship, Proprietary and Confidential
Information Agreement. In the event Executive breaches the terms of
such agreement, the Company’s obligations hereunder shall
automatically terminate, without any notice to Executive, and, in
addition to any other damages to which the Company may be entitled,
the Company shall be entitled to recover from Executive any
payments already made to Executive hereunder.
(vi)
Executive agrees that severance as provided herein shall be the
sole consideration to which he is entitled in the event of the
termination of his employment without Cause, and that severance
will not be paid in the event of termination with Cause, and
Executive expressly waives and relinquishes any claim to other or
further consideration.
(vii)
Severance pay, bonus pay, benefits and/or stock/option vesting are
expressly conditioned upon Executive’s execution and delivery
of a release of all claims Executive may have against the Company
in a form provided by the Company.
(b)
Voluntary Termination; Termination for Cause . If
Executive’s employment with the Company terminates
voluntarily by Executive or for Cause by the Company, then
(i) all vesting of any restricted stock or options to purchase
shares of the Company’s common stock held by Executive will
terminate immediately and all payments of compensation by the
Company to Executive hereunder will terminate immediately (except
as to amounts already earned, including unused and accrued
vacation); and (ii) Executive shall not be eligible for
severance or other benefits, except in accordance with any
generally applicable Company plans or policies as are then in
effect.
7. Change of Control
Severance Benefits . In the event of a "Change of Control" (as
defined herein) followed by Executive’s termination other
than voluntarily or for "Cause" within six (6) months
following the consummation of a Change of Control, Executive shall
be entitled to receive benefits as set forth below, provided he
signs and does not revoke a release of claims with the Company in a
form provided by the Company. For the purpose of this
Section 7, Executive shall be deemed to have been terminated
other than for "Cause" if Executive is not provided with an offer
of employment with the Company or successor entity following the
Change of Control with comparable duties, position,
responsibilities, pay and location relative to the
Executive’s duties, position, responsibilities, pay and
location in effect immediately prior to such Change of Control and,
within thirty (30) days thereafter, Executive elects to
voluntarily terminate his employment with the Company. Executive
agrees that (1) a change in title alone shall not mean that a
position is not comparable; (2) a change in duties and
responsibilities that is
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not material shall not mean that a position is not comparable;
(3) for purposes of pay, a position shall be deemed comparable
if it involves a reduction of no more than ten percent (10%) of
Executive’s base compensation unless in connection with
similar decreases of other similarly situated employees of the
Company; and (4) for purposes of location, a position shall be
deemed comparable if it is within fifty (50) miles from
Executive’s current work location.
(a) A
lump sum payment within thirty (30) days of such termination
equal to the Severance Payment as set forth in section 6(a)(i)
above.
(b) An
additional lump sum payment within thirty (30) days of such
termination in an amount equal to the annual Inc
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