EXECUTIVE EMPLOYMENT AGREEMENT

 

                                                                    Exhibit 10.1

 

 

                         EXECUTIVE EMPLOYMENT AGREEMENT

 

 

     This Executive Employment Agreement (the "Agreement") is made as of May 9,

2005 (the "Effective Date"), between Staktek Holdings, Inc., a Delaware

corporation (the "Company"), and Wayne Lieberman ("Executive").

 

     WHEREAS, the Company desires to retain the services of Executive as

President;

 

     WHEREAS, the Parties desire to enter into this Agreement to set forth the

terms and conditions of Executive's employment by the Company and to address

certain matters related to Executive's employment with the Company;

 

     NOW, THEREFORE, in consideration of the foregoing and the mutual provisions

contained herein, and for other good and valuable consideration, the Parties

hereto agree as follows:

 

     1. Employment. Effective on the Effective Date and subject to the terms and

conditions of this Agreement, the Company agrees to employ Executive as its

President, and Executive agrees to perform the duties associated with that

position diligently and to the reasonable satisfaction of the Company's Board of

Directors. From the Effective Date until termination of this Agreement,

Executive will devote Executive's full business time, attention and energies to

the business of the Company. Executive will report to the Chief Executive

Officer of the Company, and will comply with the reasonable directives,

policies, and guidelines established by the Company's Board of Directors from

time to time.

 

     2. Term and Termination.

 

     (a) Term. Executive will be employed under this Agreement for an initial

     term of two (2) years (the "Initial Term"), beginning on the Effective

     Date. This Agreement shall renew for successive one (1) year periods after

     the completion of the Initial Term unless either party gives written notice

     of termination at least forty-five (45) days prior to the expiration of the

     Initial Term, or any renewal term. As set forth in Section 3(d), upon

     termination by the Company without Cause, Executive shall be entitled to

     Severance Benefits. In the event the Initial Term or any subsequent renewal

     term expires and the Agreement is no longer in effect, the only provision

     that shall survive is Section 8 and Section 3 to the extent that there are

     any amounts payable to Executive.

 

     (b) Termination. Notwithstanding the foregoing, either party may terminate

     this Agreement at any time, with or without Cause (defined below), by

     giving written notice of termination to the other party. Upon termination,

     neither party will have any continuing obligation to the other party,

     except that the provisions of Sections 3(c), 3(d), 5, 7 and 8 and, to the

     extent not theretofore paid or provided in respect of services rendered

     prior to the date of termination, the provisions of Section 4, will survive

     any termination of this Agreement and will remain in effect in accordance

     with their terms.

 

     (c) Cause. For purposes of this Agreement, a termination of employment is

     for "Cause" if the termination occurs because of Executive's: (i)

     unauthorized use or disclosure of the confidential information or trade

     secrets of the Company, which use or disclosure causes, or could reasonably

     be expected to cause, material harm to the Company; however, Company

     confidential information or trade secrets does not include any information

 

 

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     that has become publicly known and made generally available through no

     wrongful act of Executive, or information already known to Executive prior

     to entering into this Agreement. Further, disclosure of confidential

     information or trade secrets made in the ordinary course of the Company's

     business under a non-disclosure agreement and in the best interest of the

     Company shall not be deemed an unauthorized use or disclosure; (ii)

     conviction of, or plea of "guilty" or "no contest" to, a felony or any

     crime involving moral turpitude; (iii) willful misfeasance or gross

     misconduct in the performance of Executive's duties; (iv) substance abuse

     that in any manner materially interferes with the performance of

     Executive's duties; (v) chronic absence from work for reasons other than

     illness; or (vi) failure to perform Executive's assigned duties, after

     receiving written notice from the Company, which shall be based on

     reasonable grounds relating to failure to perform, and an opportunity of at

     least thirty (30) days or whatever additional time may be reasonably

     necessary, not to exceed ninety (90) days, to correct any such failure

     and/or dispute the original notice.

 

     3. Compensation.

 

     (a) Beginning on the Effective Date, and thereafter during the term of

     Executive's employment, the Company will pay Executive a base salary at the

     rate of $22,916.66 per month (the "Base Salary"), payable in accordance

     with the standard payroll practices of the Company in effect from time to

     time. All of Executive's compensation under this Agreement will be subject

     to deduction and withholding authorized by Executive or required by

     applicable law. Salary adjustments will be determined by the Board of

     Directors, in its sole and absolute discretion, on at least an annual

     basis; however, under no circumstances may Executive's salary be reduced

     below the Base Salary without his consent.

 

     (b) Beginning on the Effective Date, Executive will be eligible to

     participate in the Company's profit sharing program (attached hereto as

     Exhibit A, and as may be amended by the Company from time to time) on

     substantially the same terms as other executives of the Company.

     Executive's maximum potential payout under the program is 100% of

     Executive's annual base salary. Executive is entitled to a minimum bonus

     payment of $25,000 per quarter for each quarter beginning with the second

     quarter of 2005 and ending with the first quarter of 2006. After March 31,

     2006, Executive is not entitled to any minimum bonus payment.

 

     (c) Upon approval by the Company's Board of Directors, Executive will be

     granted (i) an option to purchase up to Five Hundred Seven Thousand Five

     Hundred Seven (507,507) shares of the Company's common stock, and (ii) an

     option to purchase an additional Five Hundred Thousand (500,000) shares of

     the Company's common stock, which with respect to (ii), exercisability is

     subject to approval of the Company's stockholders (both grants,

     collectively the "Option Shares"), at an exercise price equal to the

     closing price on Nasdaq on the first day following the Company's restricted

     trading period with respect to its first quarter 2005 earnings

     announcement. Consistent with the terms of the Company's 2003 Stock Option

     Plan, 25% will vest on the first anniversary of the Effective Date of this

     Agreement, with the remaining Shares vesting in equal monthly installments

     over the following thirty-six (36) months of Executive's employment with

     the Company. Except as otherwise provided in this Agreement, vesting of

     Option Shares shall cease upon the termination of Executive's employment