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| Transition Agreement |
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10/14/2006 |
Stephen A. Aanderud
Exhibit
10.2
TRANSITION
AGREEMENT
THIS TRANSITION AGREEMENT
(the "Agreement") is made and entered into as of October 1,
2006 (the "Effective Date"), by and between DayStar Technologies,
Inc., a Delaware corporation (the "Company") and Stephen A.
Aanderud ("Executive").
WITNESSETH:
WHEREAS, Executive has
determined, and the Board of Directors of the Company (the "Board")
has accepted, that it is in the best interests of the Company and
its stockholders for Executive to resign as the Company's and the
Company's subsidiaries' Chief Financial Officer,
Treasurer & Secretary through November 15, 2006;
and
WHEREAS, Executive and the
Company wish to terminate and supersede the provisions of the
Amended and Restated Employment Agreement (“Employment
Agreement”), executed as of January 1, 2006
between Executive and Company;
WHEREAS, the Company desires
to retain the services of Executive as an independent consultant
after the termination of the Employment Agreement on terms modified
from those reflected in the Employment Agreement, and to enter into
a independent contractor’s agreement (the “Independent
Contractor’s Agreement”) (in substantially the form
attached hereto as Exhibit A) embodying the terms of such modified
relationship; and
WHEREAS, the parties hereto
wish to enter into this Agreement to provide for an orderly
transition of Executive's responsibilities:
NOW, THEREFORE, in
consideration of the mutual promises and covenants herein
contained, the parties hereto agree as follows:
| 1. |
Resignation as Officer and Employee |
As of November 15, 2006,
the (“Transition Effective Date”), Executive has and
shall (a) voluntarily and irrevocably resigned as (i) the
Company's Chief Financial Officer, Treasurer & Secretary,
(ii) the Chief Financial Officer, Treasurer &
Secretary of the Company's subsidiary, DayStar Solar, LLC and
(iii) a trustee of the Company's 401(k) Plan and Trust, and
(b) accepts the position as independent contractor to the
Company, to serve in that capacity until the earlier of discharge
upon 30 days written notice or December 31, 2007 ("Contract
Termination Date"). Thereafter, Executive may continue to serve at
the pleasure of the CEO in accordance with and subject to the
applicable provisions of the Independent Contractor’s
Agreement, the Company's By-Laws and applicable law; provided,
however, that he will tender his resignation if the Company
requests anytime after October 1, 2006.
(a) Upon the Transition
Effective Date, the Company shall pay to Executive any accrued,
unpaid salary and vacation pay, that will have accrued as of the
Transition Effective Date, subject to applicable withholding taxes.
Executive shall not be entitled to any other payments from the
Company except as specifically provided herein.
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10/14/2006 |
Stephen A. Aanderud
(b) After the Transition
Effective Date, and subject to the provisions of Section 3,
Executive shall be entitled to severance payments equal to three
(3) month's base salary, payable in accordance with the
Company's usual payroll practices (every two weeks) and subject to
applicable withholding taxes.
(c) At the Transition
Effective Date, all options granted to the Executive pursuant to
the Employee Incentive Programs of 2004 and 2006 by the Company
with a grant price of less than $10.00 (the "Accelerated Option"),
that would vest by December 31, 2007 shall become vested and
immediately exercisable. This has the effect to accelerate 5,708
options to purchase one share of the Company’s common
stock.
(d) The Executive shall have
the right to purchase all vested stock options (including those
granted on June 21, 2005 (8,333) until December 31,
2007, per the attached Schedule A.
(e) Upon the Transition
Effective Date, the Restricted Shares of Common Stock granted to
Executive by the Company (the "Restricted Shares"), that would vest
by December 31, 2007 shall not be subject to the
Company’s right of repurchase under the Restricted Stock
Agreement so long as the Independent Contractor’s Agreement
has not been terminated.
(f) Ownership of the computer
and peripherals being used by Executive will transfer to the
Executive. This includes the Dell D 810 being used in the
Company’s offices and the Toshiba laptop purchased 12/18/2003
and currently being used in the Executive’s home office as
per the Employment Agreement. Such computers will be surrendered
upon termination of the Independent Contractor’s Agreement to
the IT Department for removal of Company related material not
needed to perform your work as an Independent Contractor to the
Company.
(g) From the Effective Date
to the Transition Effective Date, the Company shall reimburse
Executive for interim housing, travel and other normal expenses
related to Executive service to the Company as the Company’s
Chief Financial Officer, Treasurer & Secretary in New York
state.
| 3. |
Conditions to Benefits |
The rights of Executive to
the consideration described in Sections 2(c), (d), (e) and
(f), as applicable, are subject to continued satisfaction of the
following conditions, which require that Executive shall not have
done or do any of the following:
(a) Diverted or attempted to
divert, directly or indirectly, any business of the Company, or
induced, or attempted to induce, any customers of the Company not
to purchase goods or services from the Company.
(b) Initiate contact with any
person for the purpose of inducing or attempting to induce,
directly or indirectly, any person to leave his or her employment
or consulting relationship with the Company, or not accept an
employment or consulting relationship with the Company (in each
case, through assistance to professional recruiters or potential
employers, or direct solicitation or otherwise).
(c) Materially breached his
confidentiality obligations under the Executive’s Proprietary
Information and Inventions Agreement, or materially breached any
provision of this Agreement.
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10/14/2006 |
Stephen A. Aanderud
(d) Initiated, filed,
financed, participated as a named plaintiff in or aided any action
or other proceeding against the Company or any of its officers,
directors or employees (including without limitation any class
action or derivative action) based upon any claims, liens, demands,
causes of action, obligations, damages or liabilities, other than
(i) the submission to arbitration of a claim for payments or
benefits due under this Agreement pursuant to the provisions of
Section 5 and (ii) as compelled by lawfully issued and
served subpoena or as otherwise required by law (collectively, any
"Legal Request"); provided, however, that Executive must provide
the Company with immediate notice of such Legal Request by
forwarding a copy of such Legal Request to the Company's Chief
Executive Officer and at least one member of the Board of Directors
who is not the Company's Chief Executive Officer.
(e) Initiated, filed,
financed, participated in or materially aided any proxy fight or
tender offer initiated against the Company, or sought to be
reinstated as an officer.
(f) Disparaged the Company,
or its officers, directors, employees or products, which shall
include, but not be limited to, writing disparaging articles or
making disparaging statements to the Company’s customers or
suppliers.
(g) Become fully employed as
an officer or senior level manager of a corporation or any other
entity within three (3) months of the Transition Effective
Date.
The Board shall determine
reasonably and in good faith whether Executive has committed any of
the acts or made any of the omissions described in this
Section 3. If the Board determines that Executive has
committed any of the acts or omissions described in this
Section 3, the Board shall notify Executive in writing,
stating the particular action(s) or omission(s). If the act or
omission is capable of being cured, Executive shall have 10 days
after receipt of the notice to cure the particular action or
omission. If Executive effects a cure to the satisfaction of the
Board, exercised in their good faith business judgment, the Board
shall provide written notice of the rescission of the notice, and
it shall be of no further force or effect. If the act or omission
is not capable of being cured or is not cured, the severance
benefits shall terminate as of the date of such breach.
The parties agree that if any
dispute between Executive and the Company arises over whether any
of the conditions in this Section 3 have been
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