Exhibit 10.5
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT
(“Agreement”) is effective as of the 28 th
day of September 2005 (“Commencement Date”) by and
between MPC Computers, LLC, a Delaware Limited liability
company (the “Employer” or “Company”) and
Adam M. Lerner (the “Executive”). In
consideration of the mutual covenants contained in this Agreement,
the Employer agrees to employ the Executive and the Executive
agrees to be employed by the Employer upon the terms and conditions
hereinafter set forth.
ARTICLE I
TERM OF EMPLOYMENT
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1.1
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Initial Term . The initial term of employment hereunder shall
commence upon the Commencement Date and shall continue until April
1, 2007.
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1.2
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Renewal; Non- Renewal Benefits to the
Executive . At the end of
the initial term of this Agreement, and on each anniversary
thereafter, the term of the Executive’s employment shall be
automatically extended one additional year unless, at least ninety
(90) days prior to such anniversary, the Employer shall have
delivered to the Executive or the Executive shall have delivered to
the Employer written notice that the term of the Executive’s
employment hereunder will not be extended.
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ARTICLE 2
DUTIES OF THE EXECUTIVE
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2.1
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Duties. The Executive shall be employed with the title
of Executive Vice President, Sales & Marketing with the
responsibilities and authority assigned to Executive by the
Company’s Board of Directors (the “Board”) that
are customary to the powers and duties of similar executive
positions in companies that engage in business similar to that of
Employer. The Executive’s job description is attached as
Exhibit A.
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2.2
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Extent of Duties. Except as provided below, the Executive shall
devote his full-time, best efforts to the business of the Employer;
provided, however, that Executive agrees to disclose to the Board
in general terms any other business activities in which he is
involved, and Executive agrees that such business activities shall
not violate the provisions of Article 4 below.
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ARTICLE 3
COMPENSATION OF THE EXECUTIVE
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3.1
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Base Salary. As compensation for services rendered under this
Agreement, the Executive shall receive an annual base salary of
$282,000.00. The Executive’s salary is payable in accordance
with the Employer’s normal business practices. The
Executive’s base salary may be increased from time-to-time as
determined by the Board in its sole discretion.
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3.2
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Bonus. The Executive shall participate in a bonus
compensation plan as approved by the Board, and attached as Exhibit
B.
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3.3
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Equity Compensation . In addition to any restricted stock, stock
units or options (“Equity Grants”) previously granted
to the Executive under the Hyperspace Communications, Inc. 2004
Equity Incentive Plan (the “Plan”), the Executive shall
receive Equity Grants of the Employer’s common stock as
incentive compensation, from time-to-time, in amounts and on terms
and conditions, determined by the Board in its sole discretion. In
the event of
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any “Company
Transaction,” as defined in the Plan, any unvested Equity
Grants shall be accelerated and shall vest immediately prior to the
occurrence of such Company Transaction. In the event the Executive
is terminated by the Employer without “Cause” (as
defined in section 5.1(d)), or by election of the Executive for
“Cause” (as set forth in section 5.1(a)), any unvested
Equity Grants shall be accelerated and shall vest immediately prior
to the occurrence of such termination.
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3.4
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Benefits. The Executive shall be entitled to paid vacation
and all paid holidays as customarily extended to executive
employees. The Executive shall be entitled to participate in all of
the Employer’s employee benefit plans and employee benefits,
including any retirement, pension, profit-sharing, insurance,
hospital or other plans and benefits which now may be in effect or
which may hereafter be adopted, it being understood that the
Executive shall have the same rights and privileges to participate
in such plans and benefits as any other executive employee during
the term of this Agreement. Participation in any benefit plans
shall be in addition to the compensation otherwise provided for in
this Agreement.
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3.5
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Expenses. The Executive shall be entitled to prompt
reimbursement for all reasonable expenses incurred by the Executive
in the performance of his duties hereunder, including but not
limited to, all expenses incurred in connection with travel, meals,
and lodging.
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ARTICLE 4
NON-COMPETITION; CONFIDENTIALITY; WORK FOR
HIRE
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4.1
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The Executive will offer to the Employer any
investment or other opportunity in the business of the type
conducted by the Employer of which the Executive may become aware
during the Executive’s employment under this Agreement. If
the Board refuses the opportunity to participate in the investment
or venture, the Executive may do so only if the Executive obtains
consent to do so from a majority of the directors.
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4.2
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The Executive shall not make investments in
companies involved in the business of the type conducted by the
Employer, as identified in writing from time to time by the Board,
at any time during the Executive’s employment with Employer;
provided this provision does not apply to investments in
broad-based mutual funds.
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4.3
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Except as provided in Sections 4.1 and 4.2
hereof, the Executive may not participate in the business of the
type conducted by the Employer at any time during the
Executive’s employment under this Agreement except through
and on behalf of the Company.
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4.4
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For a period of one year after the termination
or expiration of the Executive’s employment under this
Agreement, the Executive shall not: (i) own, manage, operate,
control, be employed by, participate in, or be connected in any
manner with the ownership, management, operation or control of any
business which is engaged in the business of the type conducted by
the Employer at any time during the Executive’s employment
with the Employer, (ii) call upon, solicit, attempt to sell any
products or services in competition with those offered by the
Employer to any person or firm that was solicited by the Executive
on behalf of the Employer; or (iii) solicit or otherwise attempt to
persuade any other employee to leave the employment of the
Employer. In the event of the Executive’s actual or
threatened breach of this paragraph, the Employer shall be entitled
to a preliminary restraining order and injunction restraining the
Executive from violating its provisions. Nothing in this Agreement
shall be construed to prohibit the Employer from pursuing any other
available remedies for such breach or threatened breach, including
the recovery of damages from the Executive. If the
Executive’s employment under this Agreement is terminated by
the Executive for any reason enumerated under (i) Section 5.1(a)
(by the Executive for Cause) or (ii) by the Employer for any reason
enumerated under Section 5.1(e) (by the Employer upon termination
of
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business), then this Section 4.4
shall terminate on the Date of Termination and the one year period
referred to in the first sentence of this Section will not
apply.
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4.5
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The Executive recognizes and acknowledges that
the information, business, list of the Employer’s customers
and any other trade secret or other secret or confidential
information relating to the Employer’s business as they may
exist from time to time are valuable, special and unique assets of
the Employer’s business. Therefore, the Executive agrees as
follows:
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(a)
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That the Executive will hold in strictest
confidence and not disclose, reproduce, publish or use in any
manner, whether during or subsequent to this employment, without
the express authorization of the Board, any information, business,
customer lists, or any other secret or confidential matter relating
to any aspect of the Employer’s business, except as such
disclosure or use may be required in connection with the
Executive’s work for the Employer.
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(b)
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That upon request or at the time of leaving the
employ of the Employer the Executive will deliver to the Employer,
and not keep or deliver to anyone else, any and all notes,
memoranda, documents and, in general, any and all material relating
to the Employer’s business.
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(c)
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That the Board may from time–to-time
reasonably designate other subject matters requiring
confidentiality and secrecy which shall be deemed to be covered by
the terms of this Agreement.
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In the event of a breach or
threatened breach by the Executive of the provisions
of this paragraph 4.5, the Employer
shall be entitled to an injunction (i) restraining the Executive
from disclosing, in whole or in part, any information as described
above or from rendering any services to any person, firm,
corporation, association or other entity to whom such information,
in whole or in part, has been disclosed or is threatened to be
disclosed; and/or (ii) requiring that the Executive deliver to the
Employer all information, documents, notes, memoranda and any and
all other material as described above upon the Executive’s
leave of the employ of the Employer. Nothing herein shall be
construed as prohibiting the Employer from pursuing other remedies
available to the Employer for such breach or threatened breach,
including the recovery of damages from the Executive.
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4.6
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The Executive agrees that any and all
inventions, discoveries, improvements, creations and/or other
information, whether patentable or unpatentable and whether or not
confidential (“work(s)”) which the Executive may
conceive or make during the Executive’s employment under this
Agreement that is, in any way, directly and indirectly, solely
and/or jointly, related to the business of the Employer shall be
deemed a “work made for hire” as that term is used in
Title 17 of the United States Code and shall be the sole and
exclusive property of the Employer. The Employer shall be owner of
all such work and deemed the author of such work with the full
right to apply for a patent, trademark or copyright in such work in
the United States and all foreign countries. The Executive shall
execute any and all documents requested by the Employer to effect
the foregoing. The Executive hereby grants, bargains, sells and
assigns all right, title and interest in any copyrighted and/or
proprietary work relating to the business of the Employers that the
Executive conceives or makes while employed by the Employer. To the
extent that work product of any work done by the Executive while
employed by the Employer is not deemed to be “work made for
hire,” the Executive hereby assigns all proprietary rights,
including patent and copyright, in these works to the Employer
without further compensation. The Executive further agrees to: (1)
disclose promptly to the Employer all such work which the Executive
may make solely, jointly or commonly with others; (2) assign all
work to the Employer; and (3) execute and sign any and all
applications, assignments or other instruments which the Employer
may deem necessary in its sole discretion in order to enable the
Employer, at its expense, to apply for,
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prosecute and obtain copyrights,
patents, trademarks or other proprietary rights in the Untied
States and foreign countries and in order to transfer to the
Employer all right, title and interest in said work.
ARTICLE 5
TERMINATION OF EMPLOYMENT
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5.1
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Termination. The Executive’s employment hereunder may
be terminated without any breach of this Agreement only under the
following circumstances:
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(a)
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By the Executive for Cause.
Upon the occurrence of any of the
following events, the Executive may terminate the Executive’s
employment under this Agreement for Cause by written notice to the
Employer:
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(i)
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upon the sale by the Employer of substantially
all of its assets; or
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(ii)
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upon a decision by the Employer to terminate its
business and liquidate its assets; or
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(iii)
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upon a material or reduction in the nature,
character, or responsibility of Executive’s position, title,
duties or responsibilities or a detrimental change in the
Executive’s compensation or benefits without the consent of
the Executive; or
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(iv)
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upon a Change in Control of the Company.
“Change in Control” means: (A) Any “person”
(as such term is used in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)),
other than a trustee or other fiduciary holding securities of the
Company under an employee benefit plan of the Company, becomes the
“beneficial owner” (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of (1) the
outstanding shares of common stock of the Company or (2) the
combined voting power of the Company’s then outstanding
securities entitled to vote generally in the election of directors;
or (B) The Company (1) is party to a merger, consolidation or
exchange of securities which results in the holders of voting
securities of the Company outstanding immediately prior thereto
failing to continue t
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