Exhibit 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement
(“Agreement”) is entered into by and between NovaRay
Inc., a Delaware corporation with its principal place of business
at 1850 Embarcadero Road, Palo Alto CA 94303
(“Company”) and Edward Solomon, who resides at 1110
Orange Ave., Menlo Park, California, 94025
(“Executive”) (collectively, the
“parties”).
RECITALS
WHEREAS , Vision Acquisition
I, Inc., a Delaware Corporation (“Parent”), Vision
Acquisition Subsidiary, Inc. a Delaware Corporation and a
wholly-owned subsidiary of Parent (“Merger Sub”) and
Company are in the process of negotiating a merger agreement (the
“Merger Agreement”), pursuant to which Merger Sub would
merge with and into Company, with Company remaining as the
surviving entity after the merger (the “Merger”)
whereby the stockholders of Company would receive common stock of
Parent in exchange for their capital stock of Company;
WHEREAS , concurrently with
or immediately following the consummation of the Merger, Vision
Capital and its affiliates and certain other investors (the
“Financing Investors”) and Parent will complete a
private placement financing whereby Parent will issue and sell its
securities to the Financing Investors for aggregate gross proceeds
to the Company of not less than $10,000,000.00 (not including
conversion of any Company indebtedness) (the “Qualified
Financing,” and with the Merger, collectively the
“Proposed Transaction”);
WHEREAS , the parties wish to
provide for Executive’s employment with Company following the
Proposed Transaction; and
WHEREAS , this Agreement
shall become effective upon the date of the Proposed Transaction
(the “Effective Date”).
NOW, THEREFORE , in
consideration of the covenants, promises and representations set
forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Employment . As of
the Effective Date, Company shall employ Executive, and Executive
hereby accepts such employment, upon the terms and conditions set
forth herein.
2. Duties .
2.1.
Position . Executive shall be employed in the position of
Chief Technical Officer reporting to the Company’s Chief
Executive Officer. Executive is responsible for setting and
ensuring that the scientific and development direction of Company
is achieved; and overseeing all intellectual property and science
and development related concerns of Company. Executive shall
perform faithfully and diligently such duties, as well as such
other duties as Company shall reasonably assign from time to time.
Executive also agrees to serve as an officer or director of Company
or Parent upon request, without further compensation. Company
reserves the right to reasonably modify Executive’s position
and duties at any time in its sole and absolute discretion.
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2.2.
Best Efforts/Full-time . Executive will expend
Executive’s best efforts on behalf of Company, and will abide
by all policies and decisions made by Company, as well as all
applicable federal, state and local laws, regulations or
ordinances. Executive will act in the best interest of Company at
all times. Executive shall devote Executive’s full business
time and efforts to the performance of Executive’s assigned
duties, unless Executive notifies Company in advance of
Executive’s desire to engage in other work or business
activities and receives Company’s express written consent to
do so. Company acknowledges that Executive is a Director and major
shareholder of Triple Ring Technologies, and agrees that Executive
may continue in these capacities provided that they do not give
rise to a conflict of interest with Company. In no event shall
Executive engage in any activity, paid or unpaid, that creates an
actual or potential conflict of interest with Company (including
but not limited to any work or business activity that is or might
be competitive with, or that might place Executive in a competing
position to that of Company).
2.3.
Work Location . Executive’s principal place of work
shall be located in Palo Alto, at Company’s offices.
3. Term . The employment
relationship pursuant to this Agreement shall be for an initial
term commencing on the Effective Date set forth above and
continuing until terminated in accordance with Section 7
below.
4. Compensation .
4.1.
Salary . As compensation for the proper and satisfactory
performance of all duties to be performed by Executive hereunder,
Company shall pay to Executive a Base Salary of $285,000.00 per
year, less applicable withholdings, payable in accordance with the
normal payroll practices of Company. In the event Executive’s
employment under this Agreement is terminated by either party, for
any reason, Executive will be entitled to receive his Base Salary
earned through the date of such termination.
4.2.
Incentive Compensation . Executive may be granted incentive
compensation in the Company’s discretion. If Company, in its
sole and absolute discretion, grants Executive incentive
compensation, the terms, amount and payment of such incentive
compensation will be determined solely by Company.
4.3.
Stock Options . Executive may be granted stock options from
time to time in the discretion of Company subject to the terms and
conditions of a Company approved stock option plan and pursuant to
the stock option agreement under which such options are
granted.
4.4.
Performance and Salary Review . Company will periodically
review Executive’s performance on no less than an annual
basis. Executive’s salary or other compensation may be
adjusted from time to time in Company’s sole and absolute
discretion.
5. Customary Fringe
Benefits . Executive will be eligible for all customary and
usual fringe benefits generally available to executives of Company
subject to the terms and conditions
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of
Company’s benefit plan documents. Company reserves the right
to modify or eliminate the fringe benefits on a prospective basis,
at any time, effective upon notice to Executive.
6. Business Expenses .
Executive will be reimbursed for all out-of-pocket business
expenses reasonably 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.
7. Termination of
Employment .
7.1.
Termination for Cause by Company . Company may terminate
Executive’s employment immediately at any time for Cause if:
(a) Executive engages in any acts or omissions constituting
gross negligence, recklessness, willful misconduct or dishonesty on
the part of Executive with respect to Executive’s obligations
or otherwise relating to the business of Company;
(b) Executive breaches a material term of this Agreement;
(c) Executive is convicted of or enters a plea of nolo
contendere for fraud, misappropriation or embezzlement, or of
any crime or engaging in any conduct which Company, in its
discretion, determines has or may adversely impact Company;
(d) Executive breaches his fiduciary duties toward Company;
(e) Executive breaches or violates his obligations under the
Confidential Information and Invention Assignment Agreement
referenced in Section 9 below; (f) Executive persistently
fails to satisfactorily perform his duties and responsibilities;
(g) Executive refuses to follow a specific, lawful direction
or order of the Company or its Board of Directors; and
(h) Executive dies or becomes mentally or physically
incapacitated and cannot perform the essential functions and duties
of his position. In the event Executive’s employment is
terminated in accordance with this subparagraph 7.1, Executive
shall be entitled to receive only (x) his Base Salary then in
effect, earned through the date of such termination,
(y) benefits coverage through the date of such termination,
and (z) reimbursement of business expenses properly incurred
prior to the date of such termination and submitted in accordance
with the Company’s policies (collectively referred to as
“Standard Entitlements”). All benefits and perquisites
of employment shall cease as of the date of termination, and all
other Company obligations to Executive pursuant to this Agreement
will become automatically terminated and completely extinguished on
the date of termination. Without limiting the foregoing, in the
event of a termination for Cause, Executive will not be eligible to
receive the Severance Benefits or any part thereof described in
subparagraph 7.2 below.
7.2.
Termination Without Cause By Company/Severance. Company may
terminate Executive’s employment under this Agreement without
Cause at any time. In the event of such termination, Executive will
receive the Standard Entitlements plus the following Severance
Benefits: (a) twelve (12) months of Executive’s
Base Salary then in effect on the date of termination, payable in
the form of salary continuation (the “Severance Pay”),
and (b) the vesting of any stock options held by Executive at
the time of such termination will accelerate as to the number of
shares that otherwise would have vested and been exercisable as of
the date that is twenty-four (24) months from the date of
termination. The Severance Pay will be payable in accordance with
Company’s regular payroll cycle. Executive’s receipt of
the Severance Benefits will be contingent upon:
(x) Executive’s compliance with all surviving provisions
of this Agreement as specified in subparagraph 15.7 below;
(y) Executive’s execution of a full general release in a
form provided by the Company, releasing all claims, known or
unknown, that
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Executive may have against Company arising out of or any way
related to Executive’s employment or termination of
employment with Company; and (z) Executive’s agreement
to act as a consultant for Company for up to a maximum of sixty
(60) calendar days immediately following the date of
termination, without additional compensation, if requested to do so
by Company. All other Company obligations to Executive pursuant to
this Agreement will become automatically term
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