Exhibit 10.2
EXECUTIVE EMPLOYMENT
AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the
“Agreement” ) dated effective as of November 1,
2007 ( “Effective Date” ), is made and entered
into by and between EMRISE CORPORATION, a Delaware corporation (
“Employer” ), and GRAHAM JEFFERIES (
“Executive” ).
R E C I T A L S
Employer desires that the Executive enter into
an employment relationship with Employer in order to provide the
necessary leadership and senior management skills that are
important to the success of Employer. Employer believes that
obtaining the Executive’s services as an employee of Employer
and the benefits of his business experience are of material
importance to Employer and Employer’s
stockholders.
NOW, THEREFORE, in consideration of
Executive’s employment by Employer and the mutual promises
and covenants contained herein, the receipt and sufficiency of
which is hereby acknowledged, Employer and Executive intend by this
Agreement to specify the terms and conditions of Executive’s
employment relationship with Employer.
1.
General Duties of Employer and
Executive .
(a)
Employer agrees to employ Executive and Executive agrees to accept
employment by Employer and to serve Employer in an executive
capacity upon the terms and conditions set forth herein. Employer
hereby employs Executive as Executive Vice President and Chief
Operating Officer of Employer as of the Effective Date, reporting
to the President and Chief Executive Officer of Employer (the
“CEO” ). Executive’s duties and
responsibilities shall be those normally assumed by the Executive
Vice President and Chief Operating Officer of a publicly-owned
company similarly situated to Employer, as well as such other or
additional duties, as may from time-to-time be assigned to
Executive by the CEO. Such other or additional duties shall be
consistent with the senior executive functions set forth
above.
(b)
While employed hereunder, Executive shall use his reasonable
endeavors to obey the lawful directions of the CEO. Executive shall
also use his reasonable endeavors to promote the interests of
Employer and to maintain and to promote the reputation of Employer.
While employed hereunder, Executive shall devote his full business
time, efforts, skills and attention to the affairs of Employer and
faithfully perform his duties and responsibilities hereunder.
(c)
While this Agreement is in effect, Executive may from time to time
engage in any activities that do not compete directly with
Employer, provided that such activities do not interfere with his
performance of his duties. Executive shall be permitted to (i)
invest his personal assets as a passive investor in such form or
manner as Executive may choose in his discretion, (ii) participate
in various charitable efforts, and (iii) serve as a member of the
Board of Directors of other corporations which are not competitors
of Employer.
2.
Compensation and Benefits
.
(a)
As compensation for his services to Employer, Employer, through its
wholly-owned subsidiary, Emrise Electronics, Ltd. (
“Emrise Electronics” ), shall pay to Executive
an annual base salary of £152,800, payable in equal
semimonthly payments in accordance with the Employer’s
regular payroll policy for salaried employees (the
“Salary” ). The Compensation Committee (the
“Compensation Committee” ) of the Board of
Directors of Employer (the “Board” ) shall
perform an annual review of Executive’s Salary based on a
review of Executive’s performance of his duties prepared by
Employer’s President and CEO and Employer’s other
compensation policies. The Compensation Committee may, at its sole
discretion, increase (but not decrease) the Salary at any time, and
from time to time.
(b)
In addition to the foregoing Salary, Executive shall be eligible
for an annual incentive bonus ( “Incentive
Bonus” ) based on criteria determined by the Compensation
Committee, at its sole discretion. The Incentive Bonus shall be
payable annually in cash, following the date on which
Employer’s Form 10-K for the previous fiscal year is filed
with the Securities and Exchange Commission.
(c)
Upon Executive’s furnishing to Employer customary and
reasonable documentary support (such as receipts or paid bills)
evidencing costs and expenses incurred by him in the performance of
his services and duties hereunder (including, without limitation,
travel and entertainment and cellular telephone expenses) and
containing sufficient information to establish the amount, date,
place and essential character of the expenditure, Executive shall
be reimbursed for such costs and expenses in accordance with
Employer’s normal expense reimbursement policy.
(d)
Executive shall be entitled to participate in the medical
(including hospitalization), dental, life and disability insurance
plans, to the extent offered by Employer, and in amounts consistent
with the Employer’s policy, for other senior executive
officers of Employer, with premiums for all such insurance for
Executive and his dependents to be paid by Employer, subject to
customary employee contributions.
(e)
Executive shall have the right to participate in any additional
compensation, benefit, pension, stock option, stock purchase,
401(k) or other plan or arrangement of Employer now or hereafter
existing for the benefit of other senior executive officers of
Employer, to the extent offered by Employer, and in amounts
consistent with Employer’s policy in the U.K.
(f)
Executive shall be entitled to twenty-five (25) working days’
paid vacation in each calendar year in addition to public holidays
in the United Kingdom. Executive shall also be entitled to other
paid or unpaid leaves of absence consistent with Employer’s
normal policies for other senior executive officers of Employer or
as otherwise approved by the Board. Executive shall be entitled to
accrue vacation time for one year. If he does not take the accrued
vacation during the next year, he shall be paid for the unused
vacation at his Salary rate then in effect.
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(g)
Executive shall be provided a monthly car allowance in the amount
of at least £460.
(h)
Employer shall purchase and maintain in effect a directors’
and officers’ liability insurance policy with a minimum limit
of liability of $10,000,000 and shall enter into an indemnification
agreement with Executive upon terms and conditions mutually
acceptable to Employer and Executive.
3.
Preservation of Business; Fiduciary
Responsibility .
Executive shall
use his reasonable endeavors to preserve the business and
organization of Employer and to preserve the business relations of
Employer. So long as the Executive is employed by Employer,
Executive shall observe and fulfill proper standards of fiduciary
responsibility attendant upon his service and office.
4.
No Specified Term; Employment at
Will .
The employment
relationship between Employer and Executive pursuant to this
Agreement is not for any specific term, but may be terminated with
or without cause, by Employer or by Executive, at any time and for
any reason, subject to the rights and obligations of Employer and
Executive as set forth in this Agreement. Any modification to the
nature of the at-will employment relationship between Employer and
Executive must be made in writing, and must be signed by Executive
and by Employer.
5.
Termination .
Employer or
Executive may terminate Executive’s employment under this
Agreement at any time, but only on the following terms:
(a)
Employer may terminate Executive’s employment under this
Agreement at any time for “Due Cause” (as
defined in Appendix I attached hereto and incorporated
herein by this reference) upon the good faith determination by the
Board that Due Cause exists for the termination of the employment
relationship.
(b)
If Executive is incapacitated by accident, sickness or otherwise so
as to render Executive mentally or physically incapable of
performing the services required under Section 1 of
this Agreement for a period of 180 consecutive days, this Agreement
shall terminate immediately; provided , however ,
that Executive shall remain an employee of Emrise Electronics Ltd.
and shall be entitled to remuneration in an amount equal to the
amount paid under Emrise Electronics Ltd.’s permanent health
scheme, subject to the provisions of Section 6(b)
.
(c)
This Agreement shall terminate immediately upon Executive’s
death, subject to the provisions of Section 6(b) .
(d)
Subject to the provisions of Section 6(c) , Employer
may terminate Executive’s employment under this Agreement at
any time for any reason whatsoever, even without Due Cause, by
giving a written notice of termination to Executive, in which case
the employment relationship shall terminate immediately upon the
giving of the notice. If Employer
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terminates the employment of Executive other
than (i) pursuant to Section 5(a) for Due Cause, (ii)
due to incapacity pursuant to Section 5(b) or due to
Executive’s death pursuant to Section 5(c) , or
(iii) Executive’s retirement, then the action by Employer,
unless consented to in writing by Executive, shall be deemed to be
a constructive termination by Employer of Executive’s
employment (a “Constructive Termination” ), and,
in that event, Executive shall be entitled to receive the
compensation set forth in Section 6(c) .
(e)
Executive may terminate this Agreement at any time for
“Good Reason” (as defined in
Appendix I attached hereto and incorporated herein by
this reference) within 30 days after Executive learns of the event
or condition constituting “Good Reason” and, in that
event, shall be entitled to receive the compensation set forth in
Section 6(c) .
6.
Effect of Termination
.
(a)
If the employment relationship is terminated (i) by Employer for
Due Cause pursuant to Section 5(a) , or (ii) by
Executive breaching this Agreement by refusing to continue his
employment, or (iii) by Executive without Good Reason, then all
compensation and benefits shall cease as of the date of
termination, other than: (A) those benefits that are provided by
retirement and benefit plans and programs specifically adopted and
approved by Employer for Executive that are earned and vested by
the date of termination; (B) Executive’s pro rata annual
Salary (as in effect as of the date of termination, payable in the
manner as prescribed in the first sentence of
Section 2(a) ) through the date of termination; (C) any
stock options which have vested as of the date of termination
pursuant to the terms of the agreement granting the options; and
(D) accrued vacation as required by applicable law.
(b)
If Executive’s employment relationship is terminated due to
Executive’s incapacity pursuant to Section 5(b)
or due to Executive’s death pursuant to
Section 5(c) , Executive or Executive’s estate or
legal representative, shall be entitled to (i) those benefits that
are provided by retirement and benefits plans and programs
specifically adopted and approved by Employer for Executive that
are earned and vested at the date of termination, (ii) a prorated
Incentive Bonus, payable in the manner as prescribed in the second
sentence of Section 5(b) (to the extent Executive would
otherwise be eligible) for the fiscal year in which incapacity or
death occurs, and (iii) a lump-sum cash payment, payable within ten
(10) business days of separation from service due to death or
disability in an amount equal to one (1) year of Executive’s
then current annual Salary as set forth in Section 2(a) ,
which amount shall be net of all then applicable federal, state and
local taxes payable by Executive relating to such payment (said
payment taking into consideration the full gross-up effect of
additional taxes payable with respect to tax payments).
(c)
In the event of a termination of this Agreement as a result of
Constructive Termination, or by Executive for Good Reason, then
Employer shall:
(i)
pay to Executive on the date of termination his Salary in effect as
of the date of termination through the end of the month during
which the termination occurs plus credit for any vacation earned
but not taken;
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(ii)
pay to Executive on the first business day following the expiration
of the revocation period described in Section 6(c)(iv)
(provided Executive has not tendered his revocation) as severance
pay an amount equal to two (2) times Executive’s then current
annual Salary, which amount shall be net of all then applicable
taxes payable by Executive relating to such payment (said payment
taking into consideration the full gross-up effect of additional
taxes payable with respect to tax payments);
(iii)
pay to Executive on the date of termination the prorated Incentive
Bonus, if any, for the fiscal year during which termination occurs;
and
(iv)
maintain, at Employer’s expense, in full force and effect,
for Executive’s continued benefit, all medical and life
insurance to which Executive was entitled immediately prior to the
date of termination (or at the election of Executive in the event
of a Change in Control, immediately prior to the date of the Change
in Control) until the earliest of (i) 2 years or (ii) the date or
dates that Executive’s continued participation in
Employer’s medical and/or life insurance plans, as
applicable, is not possible under the terms of the plans (the
earliest of (i) and (ii) is referred to herein as the
“Benefits Date” ). If Employer’s medical
and/or life insurance plans do not allow Executive’s
continued participation in the plan or plans, then Employer will
pay to Executive, in monthly installments, from the date on which
Executive’s participation in the medical and/or life
insurance, as applicable, is prohibited until the date that is
twenty-four (24) months after the date of termination, the monthly
premium or premiums which had been payable by Employer with respect
to Executive for the discontinued medical and/or life insurance, as
applicable.
(d)
Executive shall be entitled to the payments and benefits described
in subsections 6(c)(ii) and (iv) only if Executive signs an
appropriate separation agreement in a form acceptable to Employer,
which includes a release of all claims against Employer to the
fullest extent permitted by law, such agreement actually enters
into effect following any revocation period required by law, and
Executive complies fully with any continuing obligations under this
Agreement.
(e)
Executive shall not be required to mitigate damages or the amount
of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation
earned by Executive as the result of employment by another Employer
after the date of termination, or otherwise.
(f)
Except as expressly provided herein, the provisions of this
Agreement, and any payment or benefit provided for hereunder, shall
not reduce any amounts otherwise payable, or in any way diminish
Executive’s existing rights, or rights which would accrue
solely as a result of the passage of time, under any Employer
Benefit Plan, employment agreement or other contract, plan or
arrangement.
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(g)
The amount of any payment provided under this Agreement shall not
be reduced by reason of any present value calculation.
(h)
Upon termination of this Agreement, compensation and benefits shall
be paid to the Executive as set forth in the applicable subsection
of this Section 6 and stock options granted to
Executive, if any, shall be governed by the provisions of all stock
option agreements between Employer and Executive. In the event of a
termination of this Agreement by Executive for Good Reason, all
other rights and benefits Executive may have under the employee
and/or executive benefit plans and arrangements of Employer
generally shall be determined in accordance with the terms and
conditions of those plans and arrangements.
7.
Payment Upon Change in
Control .
Immediately
preceding the occurrence of a “Change in
Control” (as defined in Appendix I attached
hereto and incorporated herein by this reference), Employer shall
pay to Employee, in immediately available funds, an amount equal to
two (2) times Executive’s then current annual Salary, which
amount shall be net of all then applicable federal, state and local
taxes payable by Executive relating to such payment (said payment
taking into considera
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