EXHIBIT 10.1
EMPLOYMENT AND NON-COMPETITION
AGREEMENT
This Employment and Non-Competition
Agreement (this “Agreement”), is dated as of the
18 th day of October, 2005 (the
“Signing Date”) and is entered into by and between
Super Vision International, Inc., a Delaware corporation
(the “Employer”) and Danilo Regalado (the
“Employee”).
W I T N E S S E T
H :
WHEREAS , Employee desires to continue his employment
with the Employer, and the Employer desires to continue to employ
Employee upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE
, in consideration of the premises
and other good and valuable consideration, receipt and sufficiency
of which is hereby acknowledged, the Employee and the Employer
agree as follows:
Section 1.
Employment of Employee
(a) Term. Employee’s employment hereunder will
commence on January 1, 2006 (the “Effective Date”)
and will expire on December 31, 2007 (the “Initial
Term”). Employment of Employee will be extended automatically
for successive one-year periods thereafter (each a “Renewal
Term”; and together with the Initial Term, collectively, the
“Term”), unless either party gives at least thirty
(30) days’ written notice to the other party of its
desire to terminate this Agreement prior to the end of the Initial
Term or any Renewal Term, as the case may be (“Non-Renewal
Notice”). During such 30-day notice period, the Employee
agrees to continue to provide services under this Agreement. The
Employee’s employment hereunder may be terminated sooner than
the expiration of the Term pursuant to the terms and conditions
described below in Section 2. If either party provides written
notice to the other party of its desire to terminate this Agreement
at least thirty (30) days prior to the expiration of the
Initial Term or any Renewal Term, upon the expiration of the
Initial Term or any Renewal Term, as applicable, this Agreement
shall terminate. The provisions of this Agreement that may be
reasonably interpreted as surviving termination of this Agreement,
including without limitation Sections 2 and 3, shall continue in
effect after termination of this Agreement. The date on which
Employee ceases to be employed by Employer, regardless of the
reason therefore is referred to in this Agreement as the
“Date of Termination.”
(b) Duties and
Responsibilities . From
the Effective Date until December 31, 2007, Employee will
serve as Executive Vice President and CFO of the Employer or in
such other positions as assigned by Employer with Employee’s
consent from time to time. Employee agrees to apply his best
efforts, entire productive time, attention, and energies to the
business of Employer and shall assume and perform such reasonable
responsibilities and duties as may be assigned to him from time to
time by the President / CEO. To the extent that the Employer shall
have any parent, subsidiaries, affiliated corporations,
partnerships, or joint ventures (collectively “Related
Entities”), Employee shall perform such duties to promote
these entities and their respective interests to the same extent as
the interests of the Employer and without additional compensation.
At all times during the Term, Employee agrees to abide by any
employee handbook, policy, or practice that the Employer has
established with respect to its
employees. Notwithstanding the foregoing,
Employee shall be permitted to engage in charitable and civic
activities and manage his personal passive investments, provided
that such activities (individually or collectively) do not
materially interfere with the performance of his duties or
responsibilities under this Agreement.
(c) Compensation. During the Term, as full compensation for his
services hereunder and in consideration for the Employee’s
covenants contained in this Agreement, the Employer shall pay the
Employee a base salary at the per annum rate of $150,000 payable in
accordance with the customary payroll practices of the Employer
(“Base Salary”). In addition, during the Term, Employee
shall be eligible to receive performance bonus compensation in
accordance with the terms and conditions set forth on
Schedule 1 attached hereto. After the Initial Term,
performance bonus compensation, if any, shall be based upon
performance criteria to be determined by the Board or the
compensation committee of the Board (the “Compensation
Committee”) after consultation with Employee. Based on
Employee’s annual performance review by the Compensation
Committee, Employee may be eligible for future salary increases
depending on various factors, such as the Employer’s
performance and Employee’s satisfactory job performance,
provided that in no event may Employee’s annual salary
adjustment be less than 3% per annum for the Initial
Term.
(e) Stock Options .
On September 9, 2005 (the
“Grant Date”), Employee was granted a stock option to
purchase 50,000 shares of Employer’s Class A common
stock at an exercise price equal to the fair market value of such
shares on the Grant Date as determined by the Compensation
Committee. Such option became vested as to 10,000 of the shares
subject to the option on the Grant Date. Subject in all instances
to Employee’s continued employment with Employer on the
applicable vesting dates, and provided that the revenue and net
income before taxes milestones set forth in Employer’s 2006
Board approved operating plan are achieved, such option shall vest
as to 7,500 shares subject to such option on January 15, 2007
and 12,500 shares on March 31, 2007, respectively. Subject in
all instances to Employee’s continued employment with
Employer on the applicable vesting dates, and provided that the
revenue and net income before taxes milestones set forth in
Employer’s 2007 Board approved operating plan are achieved
such option shall vest as to 7,500 shares subject to such option on
January 15, 2008 and 12,500 shares on March 31, 2008,
respectively. If a revenue and net income before taxes milestone is
not achieved, but Employer achieves at least 25% of such milestone,
than the option shall vest with respect to a corresponding pro rata
percentage of shares on the relevant vesting date. For example, if
Employer achieves 50% of the targeted net income before taxes
milestone for 2006, 6,250 or 50%, of the shares subject to the
option shall vest on March 31, 2007. All such options shall be
subject to the terms and conditions of Employer’s stock
option plan pursuant to which the options are granted and shall be
conditioned upon Employee’s execution of a stock option
agreement with Employer in the form specified by the Compensation
Committee.
For purposes of this Agreement, net income
before taxes shall be determined without regard to any gains,
losses, profits, charges or expenses realized by the Company from
any legal proceeding to which the Company is a party that is
pending on the Effective Date including, without limitation, awards
to Employer of attorneys’ fees and costs incurred by Employer
in such proceedings and any legal fees or costs of any party to
such proceedings, other than Employer, that are paid by
Employer.
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(f) Expenses . Employer agrees to pay or reimburse Employee for
all reasonable vouchered business expenses incurred during his
employment which have been submitted in accordance with any expense
reimbursement policy or practice of the Employer.
(g) Benefits . Employer will provide to the Employee and, to
the extent eligible, his dependents, any benefit, including without
limitation, medical insurance program reimbursement, 401k savings
plan, etc., which are provided by Employer generally to its
employees, subject to the provisions of the various benefit plans,
programs, or policies in effect from time to time. Employer
reserves the right to change or eliminate these benefits at any
time.
(h) Vacation; Personal Days
. During the Term, Employee shall be
entitled to fifteen (15) days paid vacation annually, three
(3) personal/sick days and as many holidays as are in
accordance with Employer’s policy then in effect generally
for its employees.
(i) Life Insurance.
Employee agrees that Employer shall
have the right to obtain life insurance on Employee’s life,
at Employer’s sole expense and with Employer as the sole
beneficiary thereof. Employee shall (i) cooperate fully with
Employer in obtaining such life insurance, (ii) sign any
necessary consents, applications and other related forms or
documents, and (iii) take any required medical
examinations.
Section 2.
Termination of Employment
(a) Termination by the
Employer . The
Employer may terminate the employment of Employee at any time, with
or without cause, upon thirty (30) days prior written notice.
If the Employee’s employment is terminated by Employer for
any reason other than Disability or Cause (as such terms are
defined below), including the termination of Employee’s
employment upon expiration of the Initial Term or any Renewal Term
pursuant to a Non-Renewal Notice delivered by Employer to Employee,
Employee shall receive (i) three months’ Base Salary
payable in accordance with the customary payroll practices of
Employer over the three month period immediately following the Date
of Termination, (ii) any unpaid reimbursable expenses
outstanding as of the Date of Termination and (iii) payment
for accrued and unused benefits as of the Date of Termination such
as vacation. In the event of a termination of Employee’s
employment by Employer for Cause (as defined below), Employee shall
receive unpaid Base Salary through, and any unpaid reimbursable
expenses outstanding as of, the Date of Termination and payment for
accrued and unused benefits as of the Date of Termination such as
vacation. If Employee’s employment with Employer is
terminated by Employer for any reason, or no reason, all of the
restrictions contained in Section 3 shall survive the
expiration or termination of Employee’s employment in
accordance with the terms set forth therein. Except as set forth in
this paragraph, if Employee’s employment with Employer is
terminated by the Employer, following the Date of Termination the
Employer shall have no further obligations under this
Agreement.
“Cause” shall be limited to the
following: (i) Employee’s refusal to perform his duties
in a satisfactory manner as contemplated by this Agreement;
(ii) dishonesty or other acts by Employee that adversely
affect Employer; (iii) a violation of Employer’s
policies or practices which justifies immediate termination;
(iv) arrest or conviction of a felony or of any crime
involving moral turpitude, fraud or misrepresentation; (v) the
commission by Employee of any
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act which could reasonably be expected to injure
the reputation, business, or business relationships of Employer or
any Related Entities; or (vi) any material breach of this
Agreement.
(b) Termination by Employee.
Employee agrees to provide Employer
with at least thirty (30) days’ prior written notice of
his intent to terminate his employment (“Termination Notice
Period”). Failure to provide such notice terminates
Employee’s entitlement to payment for accrued, unused
benefits, such as vacation. In the event of a termination of
Employee’s employment by Employee, including the termination
of Employee’s employment upon expiration of the Initial Term
or any Renewal Term pursuant to a Non-Renewal Notice delivered by
Employee to Employer, Employee shall receive unpaid Base Salary
through, and any unpaid reimbursable expenses outstanding as of,
the Date of Termination and payment for accrued and unused benefits
as of the date of Termination such as vacation. If Employee’s
employment with Employer is terminated by Employee for any reason,
or no reason, all of the restrictions contained in Section 3
shall survive the expiration or termination of Employee’s
employment in accordance with the terms set forth therein. Employer
reserves the right to terminate Employee before the end of the
Termination Notice Period provided that Employee shall receive the
Base Salary that he would have received from the date of the last
payroll payment to the end of the Termination Notice Period and any
unpaid reimbursable expenses outstanding as of the Date of
Termination and payment for accrued and unused benefits as of the
Date of Termination such as vacation. During the Termination Notice
Period, the Employee agrees to provide services under this
Agreement using his best efforts. Except as set forth in this
paragraph, if Employee’s employment with Employer is
terminated by Employee, following the Date of Termination, the
Employer shall have no further obligations under this
Agreement.
(c) Termination Due to Death or
Disability . If
Employee’s employment with Employer terminates by reason of
his death or Disability (as defined below), Employee, or his estate
as applicable, shall receive unpaid Base Salary through, and any
unpaid reimbursable expenses outstanding as of, the Date of
Termination and payment for accrued and unused benefits as of the
Date of Termination such as vacation. For purposes hereof, the term
“Disability” means the Employee’s inability, due
to a medical condition, physical disability or mental illness, to
perform his regular duties for at least 90 days in any 180
consecutive day period, without any reasonable prospect of a full
recovery within an additional 30 days that will allow Employee to
resume his regular full-time duties. In the case of Disability, the
Date of Termination shall be the date the Board determines that
Employee’s employment has terminated due to Disability. If
Employee’s employment with Employer terminates as a result of
his Disability, all of the restrictions contained in Section 3
shall survive the expiration or termination of Employee’s
employment in accordance with the terms set forth therein. Except
as set forth in the paragraph, If Employee’s employment with
Employer terminates by reason of his death or Disability, following
the Date of Termination, the Employer shall have no further
obligations under this Agreement.
Section 3.
Non-Competition; Protection of Confidential Information;
Etc.
(a) Rationale for
Restrictions. Employee agrees that his services hereunder are
of a special, unique, extraordinary and intellectual character,
and
