EXECUTIVE EMPLOYMENT AGREEMENTExecutive Employment Agreement |
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Exhibit
10.14
EXECUTIVE EMPLOYMENT AGREEMENT
This
Executive Employment Agreement (“Agreement”) is
made by and between Christopher J. Dyball (the
“Employee”) and LaserCard Corporation, a Delaware
corporation (the "Company") (collectively the
“Parties”) effective as of the later of the dates
it is signed on behalf of the Employee and the Company as
indicated under Authorized Signatures below (the
“Effective Date”) .
RECITAL
The
Employee is currently employed by the Company as its Chief
Operating Officer. The Employee and the Company
have entered into various agreements that affect the terms and
conditions of the relationship between the Parties, including
without limitation an agreement entitled Employee Agreement
dated November 29, 1995 (the “Intellectual Property
Agreement”) attached as Exhibit D and the
Company’s Employee Handbook and the policies concerning
such matters as insider trading and foreign corrupt practices.
The Employee and the Company wish to continue this
relationship subject to the terms and conditions contained in
this Agreement.
AGREEMENT
Based
upon the facts and premises contained in the above RECITAL and in
consideration of the mutual promises below, and intending to
be legally bound, the Company and the Employee agree as
follows:
1.
Employment
.
The Company shall employ the Employee, and the Employee shall serve
the Company as Chief Operating Officer.
2.
Duties
and Responsibilities .
The Employee's primary duties and responsibilities will be those
generally associated with the position of Chief Operating
Officer . The Employees shall perform such other
duties as he may be assigned from time to time by the
Company’s Chairman of the Board, Vice Chairman of the Board,
CEO, or its Board of Directors.
3.
Compensation
.
3.1.
Base
Salary .
The Employee is to receive base salary to be paid to the Employee
through the Company’s normal
payroll. Employee’s current base salary is
at the per annum rate of three hundred five thousand eleven
dollars ($305,011). The Company acting
through its Compensation Committee will evaluate the base salary of
the Employee on an annual basis and may increase or decrease the
Employee’s then current salary rate, provided that a
reduction may result in the Employee’s ability to resign for
Good Reason as defined in Exhibit A.
3.2.
Bonuses
.
At the discretion of
the Company’s board of directors, the Company may institute a
management bonus plan in which Employee will participate along with
other members of the Company’s senior
management. The amount and terms of the Employee’
or any other incentive compensation plan or program may be changed
prospectively at the sole discretion of the Company at any
time.
1
3.3.
Stock
Options and Other Equity Awards .
The Employee has been
granted multiple stock options and one restricted stock award, all
of which remain in full force and effect according to their terms,
and the Employee may in the future be issued further stock options
or shares of restricted stock or other equity awards. The Company
has adopted a policy guideline attached as Exhibit C describing how
the board of directors intends to exercise its judgment to make
arrangements as to stock options should certain mergers and
acquisitions involving the Company occur. The Company
and Employee agree, notwithstanding such policy guideline, that
unless otherwise agreed to by both the Company and
Employee:
a. In the
event that the Company is acquired (that is, there is a merger or
sale of all or substantially all of its assets such that thereafter
Company stockholders prior to such event own less than half of the
outstanding voting stock of the surviving entity by virtue of their
Company shares) then unless the Employee resigns as an
employee of the successor to the Company (whether for any or no
reason) within four (4) months after such acquisition, then all of
Employee’s unvested options or restricted stock shall vest in
full on the first to occur of the date four (4) months after such
acquisition and the date of a termination of the Employee as an
employee of the successor to the Company (for any or no
reason).
b. In the
event that the Company acquires all or substantially all of the
stock or assets of another entity (whether by merger or otherwise)
and either an employee at such other entity takes Employee’s
position within three months after such acquisition, or the Company
decides to hire a new person to fill Employee’s position
within six months after such acquisition, then all of
Employee’s unvested options or restricted stock shall vest in
full if the Employee resigns or is terminated within the following
two months for any or no reason.
Section 3.3 a pertains to an
“Acquisition of the Company” and Section 3.3b pertains
to an “Acquisition by the Company”.
4.
Benefits
and Expenses .
4.1.
Benefit and Insurance Programs .
The Employee will be
entitled to participate in all Company sponsored benefit and
insurance programs to the extent that such benefits are
offered generally to the Company’s employees in similar
positions, with similar seniority.
4.2.
Expenses .
The Company shall reimburse the Employee, in accordance with the
Company's policy, for all reasonable expenses incurred by the
Employee in connection with the performance of the Employee's
duties, upon presentation of appropriate vouchers covering such
expenses.
5.
Paid Time Off .
Employee will be
entitled to paid time off (vacation, sick time, paid holidays,
etc.) to the extent that such benefits are offered generally to the
Company's employees in similar positions, with similar
seniority.
2
6.
Term and Termination .
6.1.
Term .
The term of this
Agreement (the “Term”) begins on the Effective Date and
expires on the date two (2) years after the Effective Date;
provided, however, that:
i. if there has been an Acquisition
of or by the Company prior to the expiration of the Term, then this
Agreement shall not expire until two (2) years after such
Acquisition;
ii. if the
employment of Employee has been terminated during the Term, then
the provisions of Sections 6.3 through 6.5 and Sections 7 and 8
shall continue for two (2) years after such employment termination;
and
iii. if
neither (i) or (ii) apply, then at the request of either party, the
parties will confer during the thirty (30) days prior to the
expiration of the Term to determine if they wish to extend the Term
of this Agreement and if so the terms and conditions under which
they would agree to such an extension. Notwithstanding
the foregoing, neither party has any obligation to extend the Term
of this Agreement.
6.2.
At-will Employment .
The Employee’s
employment is “at-will.” This means that either the
employee or the Company may terminate the Employee’s
employment under this Agreement at any time, with or without cause
and with or without notice.
6.3.
Termination
as a Result of Death or Disability; Resignation without Good
Reason; or Termination for Cause .
If the Employee’s employment terminates during the Term of
this Agreement as a result of the death or disability of the
Employee 1 , the Employee resignation
w ithout Good Reason (as defined in Exhibit A) or
termination by the Company for Cause (as defined in
Exhibit A) then the Company
shall have no further
obligations to the Employee other than the payment of compensation
earned though the last day of employment.
6.4.
Termination
Without Cause or Resignation for Good Reason .
If during the Term of
this Agreement the Employee’s employment is terminated
without Cause or if the Employee resigns for Good Reason, the
Company shall pay the Employee all compensation earned though the
last day of employment (Such amounts shall be paid upon
termination) in addition to the severance benefits described
below.
1
Based on the nature of the Employee’s position, the Parties
agree that, if the Employee is unable, with reasonable
accommodation, to perform the essential functions of his position
for 60 consecutive days, continuing his employment under this
Agreement would result in undue hardship to the Company and the
Company may properly terminate his employment.
3
4
7.
Tax Provisions
The tax provisions
set forth in Exhibit E are hereby incorporated by reference as
though fully set forth.
8.
Miscellaneous .
The Employee and the
Company acknowledge and agree that the Company may require an
Employee to whom notice of termination is given to leave the
Company premises immediately, and may bar the Employee from
unescorted access to the Company premises, so as to enable the
Company to secure Company and customer records and preserve Company
and customer trade secrets and proprietary
information.
Upon
termination of the Employee’s employment for any reason,
the Employee shall be deemed to have resigned voluntarily from
all offices and other employment positions held with the
Company, and from the board of directors, if the Employee was
serving in any such capacities at the time of
termination.
The
Employee will cooperate with the Company in the winding up or
transferring to other employees of any pending work or
projects. The Employee will also cooperate with the
Company in the defense of any action brought by any third
party against the Company that relates to Employee’s
employment with the Company.
5
Payments
and benefits provided under this Agreement may taxable under
the laws of the United States and the State of California and
will be subject to all required withholdings and court ordered
wage assignments and/or garnishments.
This Agreement shall
be binding on the parties hereto and on each of their heirs,
executors, administrators, successors, and
assignees.
The
invalidity or unenforceability of any provision(s) of this
Agreement under particular facts and circumstances will not
affect the validity or enforceability either of other
provisions of this Agreement or, under other facts and
circumstances, of such provision(s). In addition,
such provision(s) will be reformed to be less restrictive if
under such facts and circumstances they would then be valid
and enforceable.
Notices
shall be given to the parties at its executive office, in the
case of the Company, and at the address in the Company’s
payroll records for the Employee. Notices shall be
in writing and deemed given when received in person or one day
after being sent by overnight or four days after being sent by
certified mail, return receipt requested. Any party
may change its address by giving notice to the other party of
a new address in accordance with the foregoing
provisions.
Nothing in this
Agreement shall limit the right of the Officers, the Board of
Directors and the shareholders of Company to manage the business
affairs of the Company, including, without limitation, matters
relating to personnel policies and procedures benefits and
conditions of work, or give to the Employee any claim against
Company with respect to any decision relating to the conduct of the
business of Company, so long as that decision is not made in breach
of any of the Company’s express or implied covenants or
obligations under this Agreement.
Previous and contemporaneous agreements between the parties that do
not conflict with the terms of this Agreement will remain valid and
binding between the Parties, including without limitation the
Arbitration Agreement attached hereto as Exhibit B and the
Int ellectual
Property Agreement. However, this Agreement contains
a complete statement of the agreements between the Parties with
respect to the matters it addresses and it supersedes and replaces
any prior understandings or agreements regarding those
matters. To the extent that the provisions of any other
agreement conflict with or are inconsistent with the provisions of
this Agreement, the terms of this Agreement shall govern. This
Agreement may be modified or amended only in writing, signed by
both Parties.
This Agreement shall be governed by and construed in accordance
with the laws of the State of California .
The Employee
expressly acknowledges and agrees that Company’s rights under
this Agreement may be transferred to or assigned by Company to a
successor employer.
In the event of any
arbitration or other legal proceeding, the prevailing party shall
recover his or its reasonable attorneys' fees, except expenses, and
costs, excluding arbitration fees.
[Remainder of Page
Left Intentionally Blank]
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The Employee hereby
authorizes the Company to disclose this Agreement and his
responsibilities hereunder to any person or entity, including,
without limitation, future employers or
clients.
AUTHORIZED SIGNATURES
In
order to bind themselves to this Executive Employment
Agreement, the Employee and a duly authorized representative
of the Company have signed their names below on the dates
indicated.
7
Exhibit
A
Definitions
GOOD REASON shall mean: (i) a material breach of the
Agreement by the Company, (ii) a material reduction of the
Employee’s Base Salary, except that neither a
reduction proportionate to reductions imposed on all
other members of the Company’s executive management as part
of a cost reduction effort nor a reduction of the Employee’s
base salary due to a change of duties as a result of disability
will be a Good Reason for termination, or (iii) the
Employee’s duties with the Company are materially reduced
(provided that if there is an Acquisition of or by the Company (as
defined in Section 3.3) and the Employee’s duties largely
continue with respect to the business of the Company prior to such
acquisition, then such acquisition shall not be deemed to be a
material reduction in Employee’s duties. The Employee shall
give notice to the Company that the Employee intends to resign for
one of the Good Reasons listed above, detailing such Good Reason
with specificity. If the Employee gives notice to the
Company, no later than ninety (90) days after the initial existence
of one or more of the conditions constituting Good Reason listed
above arising without his consent, that the Employee intends to
resign for one of the Good Reasons listed above, detailing such
Good Reason with specificity, and if the Company does not remedy
the situation so as to eliminate the Good Reason within two (2)
weeks of receiving such notice, then any resignation by the
Employee from the Company within the one (1) month period beginning
with the delivery of the notice shall be deemed a Resignation for
Good Reason.
CAUSE is defined to mean a good faith determination by the
Company that the Employee has engaged in any of the following: 1)
theft, misappropriation or embezzlement of Company property,
property of an officer, shareholder, director or employee, or
property of any customer or supplier of the Company; 2) any conduct
which constitutes unfair competition with the Company; 3) any
breach of a contractual or fiduciary duty to the Company or a
material breach of a material Company policy not cured within five
days of the Company giving the Employee notice of the breach; 4)
material dishonesty in the performance of the Employee’s
duties for the Company or fraud against the Company; 5)
materially exceeding the scope of the Employee's authority as
delegated or limited from time to time by the Company; 6)
inducement of any customer, consultant, employee or supplier of the
Company to breach any contract with the Company or cease its
business relationship with the Company; 7) refusal to
substantially follow the lawful instructions of the board of
directors, Chairman or Vice Chairman of the Board, or
CEO; 8) failure to devote full-time effort to serving
the Company which is not cured within sixty (60) days of
notice; 9) c onviction of a crime punishable
as a felony; or 10) death or disability of the
Employee. The Company’s good faith determination,
based on reasonable evaluation that “Cause” exists for
termination of the employment relationship under this provision
shall be conclusive for the purposes of this
section. Neither the later discovery of additional or
different facts tending to negate the Company’s determination
of “Cause” nor any subsequent finding by any other fact
finder that the employee did not in fact engage in conduct
identified in this definition of “Cause” shall alter
the finality of the Company’s determination for the purposes
of this section. The Company’s determination that Cause
exists shall be made by the Chairman or Vice Chairman of the Board
or the CEO, with the approval of the Board of Directors or a
committee of the independent members of the Board of
Directors.
8
Exhibit
B
Agreement
Regarding Arbitration
This
Agreement
Regarding Arbitration is executed in conjunction with
the Parties’ execution of an Executive Employment
Agreement effective as of January 4, 2008, and all terms used
herein are as defined in that Agreement. Except as
prohibited by law, Parties to this Agreement
Regarding Arbitration agrees that, any claim, controversy or
legal dispute between them or between the Employee and
any officer, director, shareholder, agent or employee of the
Company, each of whom is hereby designated a third party
beneficiary of this agreement regarding arbitration, (a
"Dispute") arising out of the
Employee's employment or termination of such employment or any
agreement or contract between the Parties will be
resolved through binding arbitration in Santa Clara County,
under the Arbitration Rules set forth in California Code of
Civil Procedure Section 1280 et seq . , and
pursuant to California law. This includes any claims the
Employee may make relating to alleged discrimination or
harassment during employment based on race, color, national
origin, religion, disability, age, gender or sexual
orientation, any claims relating to compensation (wages,
bonuses, benefits, etc.) and any claims under federal state,
or local laws or regulations relating to terms and conditions
of employment. THE PARTIES UNDERSTAND THAT BY AGREEING TO
ARBITRATE DISPUTES THEY ARE WAIVING ANY RIGHT TO A JURY
TRIAL. This Agreement Regarding Arbitration is not
intended to modify or limit the remedies available to either
Party, including the right to seek interim relief, such as
injunction or attachment, through judicial process, which will
not be deemed a waiver of the right to demand and obtain
arbitration. Any Dispute that is not arbitrated, including any
judicial action to enforce this Agreement Regarding
Arbitration will be litigated exclusively in federal or
California courts located in Santa Clara County, California,
and the parties hereby consent and submit to the jurisdiction
and venue of such courts.
9
Exhibit
C
Policy
Guidelines For Adjustment Of Stock Options In The Event Of An
Acquisition
Background
The
Employee’s stock option agreements provide that in the
event of a merger or other recapitalization, the Board of
Directors shall make appropriate adjustments to the terms of
the outstanding options. Those agreements give only minor
guidance as to what adjustments would be considered
“appropriate.”
Policy
(1)
In the event of the acquisition of all or substantially all of
the Corporation’s assets or capital stock, adjustments
are deemed “appropriate” if:
(a) the vested portion of
options may be exercised prior to the acquisition on not less
than 30 days’ notice; and
(b) arrangements are made
so that subject to continued employment of the optionee with
the successor corporation, the unvested portion of options
will receive one of the following benefits:
(i) a replacement option
that can be exercised on the same vesting schedule at the
same total exercise price to purchase the stock or other
securities of the successor corporation that would have been
received had the unvested option shares been outstanding at
the time of the acquisition; or
(ii) a cash payment made
with respect to each option share at the time of vesting
equal to the excess of the per-share value paid for the
acquisition (whether in cash or in securities of the
successor corporation) over the option exercise
price.
(2)
In the event the employment relationship between the employee
and the successor corporation is terminated within one year of
the date of the sale of the Corporation, it is intended that
100% of the remaining unvested portion of all options held by
such employee on the date of the sale of the Corporation would
vest and remain exercisable for at least 90 days after the
termination, provided that:
(a) the employee had been
employed by the Corporation continuously (except for approved
leaves of absence) for at least two years prior to the date
of the sale of the Corporation; and
(b) the employment
relationship of the successor corporation and the employee
was not
terminated by either:
(i) resignation by the
employee; or
(ii) by the successor
corporation due to acts of moral turpitude on the part of the
employee such as theft, embezzlement, fraud, dishonesty,
misappropriation or conversion of funds committed against the
Corporation or successor corporation, or due to the
employee’s material breach of an agreement with the
Corporation or successor corporation concerning disclosure
and ownership of inventions, conflict of interest, or
confidentiality of information.
In
the event the successor corporation had not assumed
outstanding Corporation options but rather was paying deferred
compensation whenever Corporation options vested, then the
successor corporation would pay the employee the amount
corresponding to such accelerated vesting.
10
Effect
This
policy guideline may be changed at any time by the Stock
Option Committee or the Corporation’s Board of
Directors. It does not constitute a part of this Plan. The
right of the Corporation or its successors to terminate the
employment of an optionee, with or without cause, shall not be
affected by this guideline.
11
Exhibit
D
Employee
Agreement
DREXLER TECHNOLOGY CORPORATION
EMPLOYEE AGREEMENT
DREXLER TECHNOLOGY
CORPORATION is dedicated to a policy of exerting a
significant influence in its chosen fields through technical
innovation and creative administration and
marketing. The competitive success of this policy
depends to a large extent on the Company's ability to
capitalize on the creative talents of its employees, and to
maintain a free flow of pertinent information among its
employees.
For this reason, all
employees are requested to sign the attached AGREEMENT under
which:
12
AGREEMENT
In part consideration of my
employment now being or to be given by DREXLER TECHNOLOGY
CORPORATION (hereinafter referred to as the "Company"), a
corporation of the State of Delaware, or by any subsidiary or
other affiliate of said Company, and effective as of the date
that said employment first commenced, I agree
that:
1.
During the term of my employment, I will not without the
prior written consent of the Company (a) engage in any other
professional employment or consulting, or (b) directly or
indirectly participate in or assist any business which is a
current or potential supplier, customer, or competitor of the
Company, except that I may invest to an extent not exceeding
one percent of the total outstanding shares in each of one or
more companies whose shares are listed on a national
securities exchange or quoted daily by The Nasdaq Stock
Market.
2.
I will disclose promptly to the Company any ideas,
inventions, works of authorship (including but not limited to
computer programs, software and documentation), improvements
or discoveries, patentable or unpatentable, copyrightable or
uncopyrightable, which during the term of my employment I may
conceive, make, develop or work on, in whole or in part,
solely or jointly with others, whether or not reduced to
drawings, written description, documentation, models or other
tangible form, and which relate either to product, service,
research or development fields in which the Company or any of
its affiliates is, at the time, actively engaged, or to my
employment activities; and all such ideas, inventions, works,
improvements and discoveries shall forthwith and without
further consideration become and be the exclusive property of
said Company, its successors and assigns. The Company hereby
notifies you that the foregoing does not apply to any
invention which qualifies fully for exemption under Section
2870 of the California Labor Code.
3.
I will assist the Company in every proper way, including the
signing of any and all papers, authorization, applications
and assignments, and making and keeping of proper records,
and the giving of evidence and testimony (all entirely at the
Company's expense), to obtain and to maintain for the use and
benefit of the Company or its nominees patents, copyrights or
other protection for any and all such ideas, inventions,
works, improvements and discoveries in all
countries.
4.
I understand and agree that all data and records coming into
my possession or kept by me in connection with my employment,
including notebooks, drawings, blueprints, computer programs,
software and documentation, bulletins, parts lists, reports,
customer lists, and production, cost, purchasing, and
marketing information, and employment data, including
polic
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