Contract
EMPLOYMENT AGREEMENT, dated as
of February 19, 2010 (the “Agreement”) between
SHEERVISION, INC., a Delaware corporation with a principal place of business at
0000 Xxxxx Xxxxxx Xxxxx X., Xxxxx 000, Xxxxxxx Xxxxx Xxxxxxxxxx 00000, and
Xxxxxxx Xxxxxxxxx, an individual resident of the State of California residing at
000 Xxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxx Xxxxxxx, XX 00000 (“Employee”).
In
consideration for the mutual covenants and conditions set forth herein, the
parties hereby agree as follows:
1. Employment. The
Company hereby employs Employee in the capacity of Chief Executive
Officer. Employee accepts such employment and agrees to perform such
services as are customary to such offices and shall from time to time be
assigned to Employee by the Board of Directors.
2. Term. Subject to
earlier termination as provided in Section 5, the employment hereunder shall be
for a period of four years, commencing on February 19, 2010 (the “Commencement Date”) and
ending on February 19, 2014. Employee’s employment will be on a
full-time basis requiring the devotion of such amount of Employee’s productive
time as is necessary for the efficient operation of the business of the
Company.
3. Compensation and
Benefits.
3.1 Salary. For the
performance of Employee’s duties hereunder, the Company shall pay Employee an
annual salary of $175,000 (less required withholdings), payable no less
frequently than twice monthly.
3.2 Benefits. Employee
shall be entitled to such medical, disability, and life insurance coverage and
such vacation, sick leave, and holiday benefits, if any, as are made available
to the Company’s top executive personnel, all in accordance with the Company’s
benefits program in effect from time to time, including full medical benefits
for Employee and her dependents at Company cost, and reimbursement of
out-of-pocket medical expenses for the Employee. Employee may also participate
in the Section 125 Cafeteria Plan and in the new 401k Savings Plan. Should the
Company implement any special executive deferred savings programs, Employee
shall also have access to those Plans.
3.3 Reimbursement of
Expenses. Employee shall be entitled to reimbursement for all
reasonable expenses for travel, meals, and entertainment, incurred by Employee
in connection with and reasonably related to the furtherance of the Company’s
business.
3.4 Annual
Review. On each anniversary of the Commencement Date, the Board of
Directors will review Employee’s performance and compensation hereunder
(including salary, bonus, and stock options and/or other equity incentives) and
will approve an increase in such compensation of not less than 5% annually, but
will not have authority, as the result of such review, to decrease any portion
of such compensation without the written consent of Employee. From time to time,
the Board of Directors may approve additional bonus amounts or salary increases
depending on Company performance.
4. Change of
Control. In the event of a Change in Control of the Company (as
defined below), all options, warrants, or restricted shares then granted to
Employee which are unvested at the date of the Change in Control will be
immediately vested. In addition, in the event of a termination of
Employee’s employment for any reason (other than as set forth in Section 5.1(f))
following a Change of Control, the Company will promptly pay Employee, in
addition to the amounts required under Section 5.2(a), a lump-sum severance
amount payable immediately upon such termination of employment, equal to the
product of (i) Employee’s then current annual salary multiplied by (ii)
[two]. This payout shall be in lieu of any amount which may otherwise
be due under Section 5.2(b).
As used
herein, a “Change of
Control” of the Company shall be deemed to have occurred:
(a) Upon
the consummation, in one transaction or a series of related transactions, of the
sale or other transfer of voting power (including voting power exercisable on a
contingent or deferred basis as immediately exercisable voting power)
representing effective control of the Company to a person or group of related
persons who, on the date of this Agreement, is not affiliated (within the
meaning of the Securities Act of 1933) with the Company, whether such sale or
transfer results from a tender offer or otherwise; or
(b) Upon
the consummation of a merger or consolidation in which the Company is a
constituent corporation and in which the Company’s stockholders immediately
prior thereto will beneficially own, immediately thereafter, securities of the
Company or any surviving or new corporation resulting therefrom having less than
a majority of the voting power of the Company or any such surviving or new
corporation; or
(c) Upon
the consummation of a sale, lease, exchange, or other transfer or disposition by
the Company of all or substantially all its assets to any person or group of
related persons.
5. Termination.
5.1 Termination
Events. The employment hereunder will terminate upon the occurrence
of any of the following events:
(a) Employee
dies;
(b) The
Company, by written notice to Employee or Employee’s personal representative,
discharges Employee due to the inability to perform the duties assigned to
Employee hereunder for a continuous period exceeding 90 days by reason of
injury, physical or mental illness, or other disability, which condition has
been certified by a physician; provided, however, that prior to discharging
Employee due to such disability, the Company shall give a written statement of
findings to Employee or Employee’s personal representative setting forth
specifically the nature of the disability and the resulting performance
failures, and Employee shall have a period of ten (10) days thereafter to
respond in writing to the Board of Director’s findings;
(c)
Employee is discharged by the Board of Directors of the Company for
cause. As used in this Agreement, the term “cause” shall
mean:
(i) Employee’s
conviction of (or pleading guilty or no lo contendere to a
felony or misdemeanor involving dishonesty or moral turpitude; or
(ii) (a)
the willful and continued failure of Employee to substantially perform
Employee’s duties with the Company (other than any such failure resulting from
illness or disability) after a demand for substantial performance is requested
by the Company’s Board of Directors, which specifically identifies the manner in
which it is claimed Employee has not substantially performed Employee’s duties,
or (b) Employee is willingly engaged in misconduct which has a direct and
material adverse monetary effect on the Company. For purposes of this
subpart (ii) no act or failure to act on Employee’s part shall be considered
“willful” unless done, or omitted to be done, by Employee not in good faith and
without reasonable belief that Employee’s actions were in the best interest of
the Company. No termination shall be effected for cause pursuant to
this subpart (ii) unless Employee has been provided with specific information as
to the acts or omissions which form the basis of the allegation of cause, and
Employee has had an opportunity to be heard, with counsel if Employee so
desires, before the Board of Directors and such Board determines in good faith
that Employee was guilty of conduct constituting “cause” as herein defined,
specifying the particulars thereof in detail;
(d)
Employee is discharged by the Board of Directors of the Company without cause,
which the Company may do at any time upon notice to Employee;
(e)
Employee voluntarily terminates Employee’s employment due to either (i) a
default by the Company in the performance of any of its obligations hereunder,
or (ii) an Adverse Change in Duties (as defined below), which default or Adverse
Change in Duties remains unremedied by the Company for a period of ten (10) days
following its receipt of written notice thereof from Employee; or
(f)
Employee voluntarily terminates Employee’s employment for any reason other than
the Company’s default or an Adverse Change in Duties, which Employee may do at
any time with at least 30 days advance written notice.
As used
herein, “Adverse Change in Duties” means an action or series of actions taken by
the Company, without Employee’s prior written consent, which results
in:
(1) A
change in Employee’s reporting responsibilities, titles, job responsibilities,
or offices, which, in Employee’s reasonable judgment, results in a diminution of
Employee’s status, control, or authority;
(2) The
assignment to Employee of any positions, duties, or responsibilities which, in
Employee’s reasonable judgment, are inconsistent with Employee’s positions,
duties, and responsibilities or status with the Company;
(3) A
requirement by the Company that Employee be based or perform Employee’s duties
anywhere other than (i) at the Company’s corporate office location on the date
of this Agreement, or (ii) if the Company’s corporate office location is moved
after the date of this Agreement, at a new location that is no more than 60
miles from such prior location; or
(4) A
failure by the Company (i) to continue in effect any material benefit, whether
or not qualified, or other compensation, bonus, or incentive plan in effect on
the date of this Agreement or subsequently adopted, (ii) to continue Employee’s
participation in such benefits or plans at the same level or to the same extent
as on the Commencement Date or, with respect to subsequently adopted benefits or
plans, on the date of the initial implementation thereof, or (iii) to provide
for Employee’s participation in any newly adopted benefits or plans at a level
commensurate, in Employee’s reasonable judgment, with that of other top
executives of the Company.
5.2 Effects of
Termination.
(a) Upon
termination of Employee’s employment hereunder for any reason, the Company will
promptly pay Employee all compensation owed to Employee and unpaid through the
date of termination (including, without limitation, salary and employee expense
reimbursements).
(b) In
addition (except in a situation where severance is due pursuant to Section 4),
if Employee’s employment is terminated under Sections 5.1(a), (b), (d), or (e),
the Company shall also pay Employee, immediately upon such termination of
employment, a lump-sum severance amount equal to Employee’s then current annual
salary.
(c) Upon
termination of Employee’s employment hereunder for any reason, Employee agrees
that for the one year period following the Termination Event:
(i) Employee
will not directly or indirectly, whether for Employee’s own account or as an
individual, employee, director, consultant, or advisor, or in any other capacity
whatsoever, provide services to any other person, firm, corporation, or other
business enterprise which is involved in optical loupes, optical lighting,
or related matters unless Employee obtains the prior written consent of the
Board of Directors.
(ii) Employee
will not directly or indirectly encourage or solicit, or attempt to encourage or
solicit, any individual to leave the Company’s employ for any reason or
interfere in any other manner with the employment relationships at the time
existing between the Company and its current or prospective
employees.
(iii) Employee
will not induce or attempt to induce any customer, supplier, distributor,
licensee, or any other business relation of the Company to cease doing business
with the Company or in any way interfere with the existing business relationship
between any such customer, supplier, distributor, licensee, or any other
business relation and the Company.
Employee
acknowledges that monetary damages may not be sufficient to compensate the
Company for any economic loss which may be incurred by reason of breach of the
foregoing restrictive covenants. Accordingly, in the event of any
such breach, the Company shall, in addition to any remedies available to the
Company at law, be entitled to obtain equitable relief in the form of an
injunction precluding Employee from continuing to engage in such
breach.
If any
restriction set forth in this paragraph is held to be unreasonable, then
Employee and the Company agree, and hereby submit, to the reduction and
limitation of such prohibition to such area or period as shall be deemed
reasonable.
6. General
Provisions.
6.1 Assignment. Neither
party may assign or delegate any of its rights or obligations under this
Agreement without the prior written consent of the other party, except that the
Company may assign its rights and obligations hereunder to a successor by merger
or an assignee of all or substantially all of the Company’s assets.
6.2 Entire
Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior agreements between the parties relating to such subject
matter.
6.3 Modifications. This
Agreement may be changed or modified only by an agreement in writing signed by
both parties hereto.
6.4 Successor and
Assigns. The provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Company and its successors and assigns
and Employee and Employee’s legal representatives, heirs, legatees,
distributees, assigns, and transferees by operation of law, whether or not any
such person shall have become a party to this Agreement and have agreed in
writing to join and be bound by the terms and conditions hereof.
6.5 Governing
Law. This Agreement shall be governed by, and be
construed in accordance with, the laws of California.
6.6 Severability. If
any provision of this Agreement is held by a court of competent jurisdiction to
be invalid, void, or unenforceable, the remaining provisions shall nevertheless
continue in full force and effect.
6.7 Further Assurances;
Committees of Board. The parties will execute such further instruments
and take such further actions as may be reasonably necessary to carry out the
intent of this Agreement. The term “Board of Directors” shall include
any committee of the Board.
6.8 Notices. Any
notices or other communications required or permitted hereunder shall be in
writing and shall be deemed received by the recipient when delivered personally
or, if mailed, five (5) days after the date of deposit in the United States
mail, certified or registered, postage prepaid and addressed, in the case of the
Company, to 0000 Xxxxx Xxxxxx Xxxxx X., Xxxxx 000, Xxxxxxx Xxxxx Xxxxxxxxxx
00000, and in the case of Employee, to 000 Xxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxx
Xxxxxxx, XX 00000, or to such other address as either party may later specify by
at least ten (10) days advance written notice delivered to the other party in
accordance herewith.
6.9 No
Waiver. The failure of either party to enforce any
provision of this Agreement shall not be construed as a waiver of that
provision, nor prevent that party from thereafter enforcing that provision or
any other provision of this Agreement.
6.10 Legal Fees and
Expenses. In the event of any disputes under this
Agreement, each party shall be responsible for their own legal fees and expenses
which it may incur in resolving such dispute.
6.11 Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original, but all of which together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the
Company and Employee have executed this Agreement effective as of the date first
above written.
| SHEERVISION INC. | |||
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By:
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| Name: | |||
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| Name: | |||
