Exhibit 10.3
EXECUTIVE EMPLOYMENT
AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT
(“Agreement”) is made and entered into by and between
Document Sciences Corporation (“Company”) and Nasser
Barghouti (“Executive”). Once signed by both of the
parties, this Agreement will be deemed effective as of
October 1, 2005 (“Effective Date”). This Agreement
supersedes all previous agreements, promises, representations,
understandings and negotiations between the parties, whether
written or oral, with respect to the subject matter hereof, except
as expressly provided herein.
1. Employment. The Company hereby employs
Executive as Chief Technology Officer of the Company. Executive
accepts such employment, reporting directly to the Chief Executive
Officer of the Company.
2. Term. This Agreement and
Executive’s employment pursuant to this Agreement shall
commence on the Effective Date and end on the date that
Executive’s employment may be terminated as provided in
Section 6 below. Executive shall be an at-will employee whose
employment may be terminated by either Executive or the Company at
any time, for any reason, with or without cause.
3. Place of Performance. Executive shall be
based at the Company’s office located in Carlsbad,
California, but Executive from time-to time may be required to
travel to other geographic locations in connection with the
performance of his duties.
4. Duties and
Responsibilities.
4.1 Service with the Company. Executive shall
work exclusively for the Company and shall have all the customary
powers and duties associated with his position as set forth in
Section 1 above. Executive shall devote his full business time
and effort to the performance of his duties for the Company, which
he shall perform faithfully and to the best of his ability.
Executive shall be subject to the Company’s policies,
procedures and approval practices, as generally in effect from
time-to-time.
4.2 No Conflicting Duties. During the term
hereof, Executive shall not serve as an officer, director,
employee, consultant or advisor to any other competing business or
as an officer, employee or consultant to any other business, unless
such other service is approved by the Company’s Board of
Directors. Executive hereby confirms that he is under no
contractual commitments inconsistent with his obligations set forth
in this Agreement, and agrees that during the term of this
Agreement he will not render or perform services, or enter into any
contract to do so, for any other corporation, firm, entity or
person which are inconsistent with the provisions of this
Agreement.
5. Compensation.
5.1 Annual Base Salary. As compensation for
all services to be rendered by Executive under this Agreement, the
Company shall pay to Executive a base annual salary of Two Hundred
Thousand Dollars ($200,000) (“Annual Base Salary”),
which salary shall be paid
in conformity with the
Company’s pay practices generally applicable to Company
executives. Executive will be eligible for annual pay increases as
determined by the Board.
5.2 Bonus.
Executive will be eligible for
targeted annual bonus compensation of 50 percent of his Annual Base
Salary, with maximum potential for 100% of Annual Base Salary on
above-target performance. Bonus criteria and bonus payments will be
determined by the Compensation Committee of the Company’s
Board of Directors in its sole and absolute discretion. The
Compensation Committee shall have the right to modify the
percentage of Executive’s targeted annual bonus.
5.3 Standard Benefits.
During the term of this Agreement,
Executive shall be entitled to participate in all employee benefit
plans and programs, including paid vacations, to the same extent
generally available to Company executives in accordance with the
terms of those plans and programs. The Company shall have the right
to terminate or change any such plan or program at any
time.
5.4 Expense
Reimbursement. Executive
shall be entitled to receive prompt reimbursement for all
reasonable and customary travel and business expenses he incurs in
connection with his employment, but must incur and account for
those expenses in accordance with the policies and procedures
established by the Company.
5.5 Sarbanes-Oxley Act Loan
Prohibition. To the
extent that any Company benefit, program, practice, arrangement or
this Agreement would or might otherwise result in Executive’s
receipt of an illegal loan (“Loan”), the Company shall
use reasonable efforts to provide Executive with a substitute for
the Loan that is lawful and of at least equal value to Executive.
If this cannot be done, or if doing so would be significantly more
expensive to the Company than making the Loan, the Company need not
make the Loan to Executive or provide him a substitute for
it.
6. Termination.
6.1 Termination by the Company
Without Cause. The
Company may terminate Executive’s employment pursuant to this
Agreement without Cause (defined below) by giving written notice to
Executive.
6.2 Termination by the Company
for Cause. The Company
may terminate Executive’s employment and this Agreement for
Cause. As used herein, “Cause” shall mean:
(a) An act of willful dishonesty taken in connection
with Executive’s responsibilities as an employee and causing
damage the Company;
(b) Executive’s commission of, or plea of nolo
contendere to, a felony;
(c) Executive’s insubordination or willful
refusal to follow reasonable directives of the Board of Directors
and/or officers of the Company;
(d) Executive’s violation of the
Confidentiality Agreement or Non-Competition Agreement between
himself and the Company; and
-2-
(e) Executive’s gross negligence or willful
misconduct in the performance of his duties as an employee of the
Company.
6.3 Termination by Company for
Death or Permanent Disability. Executive’s employment pursuant to this
Agreement shall be immediately terminated (i) upon the death
of the Executive, or (ii) upon the Executive becoming
permanently disabled. For purposes of this Agreement, the term
“permanently disabled” means an inability of Executive,
due to a physical or mental illness, injury or impairment, to
perform a substantial portion of his duties for a period of one
hundred eighty (180) or more consecutive days, as determined
by the Company’s Board of Directors.
6.4 Termination by Executive
Without Good Reason. Executive may terminate his employment pursuant
to this Agreement without any reason by giving thirty
(30) days written notice to the Company.
6.5 Termination by Executive for
Good Reason. Executive’s employment pursuant to this
Agreement may be terminated by Executive for “Good
Reason” upon his giving 30 days written notice to the Company
and specifying therein that he is voluntarily terminating his
employment as a result of any of the following:
(a) Without Executive’s prior written consent,
a reduction in his then current Annual Base Salary, other than as
part of across-the-board salary reductions affecting all similar
executives of the Company;
(b) The taking of any action by the Company that
would diminish the aggregate value of the benefits provided to the
Executive under the Executive’s medical, health, accident,
disability insurance, life insurance and retirement plans in which
he was participating on the date of this Agreement, other than any
such reduction which is (i) required by law,
(ii) implemented in connection with a general arrangement
affecting all employees or affecting the group of employees (senior
management) of which the Executive is a member, or
(iii) generally applicable to all beneficiaries of such
plans;
(c) A reduction in duties and
responsibilities;
(d) A relocation of Executive’s principal
place of business by more than 20 miles, unless Executive consents
to such relocation; or
(e) The Company materially breaches any provision of
this Agreement.
An event that is or would constitute
Good Reason shall cease to be Good Reason if: (x) Executive
does not terminate his employment within 90 days after the event
occurs; or (y) the Company reverses the action or cures the
default that constitutes Good Reason within 10 business days after
Executive notifies the Company in writing that Good Reason
exists.
-3-
6.6 Payments Upon
Termination.
(a) If, during the term of this Agreement,
Executive’s employment is terminated for any reason,
Executive shall receive the following compensation:
(i) the portion of his then current
Annual Base Salary which has accrued through his date of
termination;
(ii) any vested bonus payments,
stock options or restricted stock to which Executive is entitled as
of the date of termination pursuant to this Agreement or any plan
in which he is then participating, provided the payment thereof is
not contingent or conditional on Executive’s continued
employment with the Company or the satisfaction of any other
condition which has not been satisfied; and
(iii) any payments for unused
vacation and reimbursement of expenses, which are due, accrued or
payable as of the date of Executive’s termination.
(b) If Executive’s employment is terminated by
the Company wit
