EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit
10.11
This
Executive Employment Agreement (“Agreement”) is made effective as of
November 10, 2006 (“Effective Date”), by and between PureDepth, Inc., a
Delaware corporation (“Company”), and Xxxx Xxxxxxxxxxxx (“Executive”) to
establish the terms and conditions of employment.
The
parties agree as follows:
1. Employment.
Company
hereby employs Executive, and Executive hereby accepts such employment, upon
the
terms and conditions set forth herein.
2. Duties.
2.1 Position.
Executive is hereby employed on a full-time basis as Chief Executive Officer
and
shall report directly to the Board of Directors of the Company (“Board of
Directors” or “Board”), and shall have the duties and responsibilities
reasonably and in good faith assigned by the Board, including all duties
attendant to the position of Chief Executive Officer.
2.2 Best
Efforts.
Executive shall expend Executive’s best efforts on behalf of Company, and shall
abide by all policies and decisions made by Company, as well as all applicable
federal, state and local laws, regulations and ordinances. Executive shall
act
in the best interests of Company at all times. Except for vacation and illness
periods, Executive shall devote the necessary time and effort to the performance
of Executive’s assigned duties for Company. Executive may, without seeking or
obtaining approval by the Board (so long as the following do not materially
interfere with the performance of the Executive’s duties hereunder), (i) make
and manage personal business investments of his choice and (ii) serve in
any
capacity with any civic, educational, religious or charitable organization.
3. Nature
of Employment.
The
nature of Executive’s employment with Company under this Agreement shall be on
an “at-will” basis. As used herein, “Term of Employment” shall commence on the
Effective Date and shall end upon any termination of Executive’s employment with
Company.
4. Compensation.
4.1 Base
Salary.
As
compensation for Executive’s performance of Executive’s duties as set forth
herein, Company shall pay to Executive a base salary of $250,000 per year
(“Base
Salary”), payable in accordance with the normal payroll practices of Company,
less all legally required or authorized payroll deductions and tax withholdings.
Base Salary shall be reviewed annually, and may be adjusted, at the Board’s
discretion, in light of the Executive’s performance and the Company’s financial
performance and other economic conditions and relevant factors.
4.2 Bonus.
Executive shall be eligible to participate in any applicable bonus plan that
the
Company, at is sole discretion, may provide to Executive. The Company expects
for fiscal year 2007 to make available a bonus arrangement that establishes
objective and subjective performance criteria and that establishes a maximum
annual bonus potential equal to fifty percent (50%) of Executive’s Base Salary.
For fiscal year 2007, in the event Executive completes a deal with IGT,
Executive shall receive the bonus he would have received under the existing
bonus plan (“IGT Bonus”). Any IGT Bonus paid shall reduce dollar for dollar any
other bonus payable for fiscal year 2007.
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4.3 New
Options.
Subject
to approval of the Board, after the Effective Date the Company may in its
discretion grant Executive stock options to purchase shares of the Company’s
common stock at an exercise price equal to the fair market value of that
stock
on the date of the grant under a stock option plan that is adopted by the
Board
and approved by the Company’s stockholders (“New Options”).
4.4 Old
Options.
Executive and Company acknowledge that Executive holds stock options to purchase
shares of the Company’s common stock that were granted prior to the Effective
Date (“Old Options”).
(a) Fixed
Exercise Schedule.
Executive and Company agree that, notwithstanding any existing agreement
to the
contrary, the Old Options shall be mandatorily exercised solely in accordance
with the fixed schedule indicated on Exhibit A
hereto.
Exercise outside this schedule shall not be permitted. Executive and Company
agree to cooperate to amend Executive’s Old Option agreements to so provide.
(b) Methods
of Exercise.
Company
may in its discretion make available to Executive certain methods by which
the
Old Options may be exercised. Such methods shall include a cashless exercise
procedure (“Cashless Exercise”), under which Executive shall be required to
deliver a properly executed notice together with irrevocable instructions
to a
broker in a form acceptable to the Company providing for the assignment to
the
Company of the proceeds of a sale or loan with respect to some or all of
the
shares of common stock acquired upon exercise of the Old Options, to the
extent
such procedure is available to Executive given market conditions. During
Executive’s employment with Company, Company shall make available a net exercise
methodology (“Net Exercise”), under which Company will, upon exercise of any of
the Old Options, provide to Executive a single payment, in either cash or
shares
of common stock of the Company or a combination thereof, equal to the value
of
the shares of Company common stock being exercised, reduced by the aggregate
exercise price of such shares and all applicable tax withholdings and other
lawful deductions. The extent to which Net Exercise is available is in the
Board’s sole discretion and will be made available for between ten percent (10%)
and fifty percent (50%) of Executive’s options exercised in a given calendar
year.
(c) Limitations
on Subsequent Sale.
Subject
to all applicable securities and other laws, rules, and regulations, and
the
Company’s xxxxxxx xxxxxxx policies, Executive shall sell no more than the number
of shares of Company common stock indicated on Exhibit
B
acquired
upon exercise of the Old Options per calendar year.
(d) Share
Numbers.
As used
in this Agreement, all references to numbers of shares of Company common
stock
shall be adjusted to account for stock splits, reverse stock splits and similar
transactions.
5. Customary
Fringe Benefits.
Executive shall be eligible for all customary and usual fringe benefits
generally available to full-time employees of Company, subject to the terms
and
conditions of Company’s policies and benefit plan documents. Company reserves
the right to change or eliminate the fringe benefits on a prospective basis,
at
any time, effective upon notice to Executive.
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6. Business
Expenses.
Executive shall be reimbursed for all reasonable, out-of-pocket business
expenses incurred in the performance of Executive’s duties on behalf of Company.
To obtain reimbursement, expenses must be submitted promptly with appropriate
supporting documentation in accordance with Company’s policies. All such
expenses shall be reimbursed within the same fiscal year in which they were
incurred or within two and one-half (2½) months after the end of such
year.
7. Termination
of Employment.
Subject
to the terms and conditions of this Section 7, either Company or Executive
may terminate Executive’s employment with Company at any time, with or without
Cause (as hereinafter defined), during the Term of Employment. Any termination
of Executive’s employment during the Term of Employment shall be communicated by
written notice of termination from the terminating party to the other party
(“Notice of Termination”). The Notice of Termination shall indicate the specific
provision(s) of this Agreement relied upon in effecting the termination and
a
written statement of the reason(s) for the termination. In the case of a
Notice
of Termination provided by Executive to Company, such Notice of Termination
shall not be effective for a period of fifteen (15) business days after receipt
of such Notice of Termination by Company. In the case of a Notice of Termination
provided by Company to Executive, such Notice of Termination shall be effective
on the date designated by the Company in the Notice of Termination. In the
event
Executive’s employment is terminated by either party, for any reason, during the
Term of Employment, Company shall pay the prorated Base Salary earned as
of the
date of Executive’s termination of employment and the accrued but unused
vacation as of the date of Executive’s termination of employment to Executive
upon Executive’s termination of employment. Except as otherwise provided in this
Section 7, Company shall have no further obligation to make or provide to
Executive, and Executive shall have no further right to receive or obtain
from
Company, any payments or benefits in respect of the termination of Executive’s
employment with Company during the Term of Employment.
7.1 Severance
Package Upon Involuntary Termination without Cause or Voluntary Termination
for
Good Reason.
In the
event that, during the Term of Employment, either Company causes to occur
an
involuntary termination without Cause (as hereinafter defined) of Executive’s
employment with Company or Executive voluntarily terminates Executive’s
employment with Company for Good Reason (as hereinafter defined), and such
termination qualifies as a “Separation from Service” under Section 409A (as
hereinafter defined), Executive shall be entitled to a “Severance Package” that
consists of the following: (a) substantially equal payments, made over a
period of nine months following the date of Executive’s termination of
employment, on the basis of Executive's annual rate of Base Salary in effect
immediately prior to Executive’s termination of employment (or, if greater, the
annual rate of $250,000) and payable in accordance with the Company’s
established payroll schedule, (b) Company’s direct-to-insurer payment or
reimbursement of amounts documented on receipts of any group health premiums
that Executive would otherwise have been required to pay for a period of
twenty-four (24) months following the date of Executive’s termination of
employment (subject to Executive’s eligibility for, and proper and timely
election of insured continued group health benefits under a combination of
the
Consolidated Omnibus Budget and Reconciliation Act (“COBRA”) and/or California
COBRA); and (c) the immediate vesting of any New Options to the extent that
Executive would have vested in such New Options if Executive had remained
an
active employee of the Company until the one-year anniversary of the date
of his
termination of employment; provided,
however,
that
all of the following conditions are first satisfied: (i) Executive
reaffirms Executive’s commitment to comply with all surviving provisions of this
Agreement, including Section 9 and Section 10 of this Agreement; and
(ii) Executive executes a Separation Agreement that includes a general
release in favor of Company and its parent, and all subsidiary and related
entities, and their officers, directors, shareholders, employees and agents
to
the fullest extent permitted by law, drafted by and in a form reasonably
satisfactory to Company, and does not revoke the general release within any
legally required revocation period, if applicable. All legally required and
authorized deductions and tax withholdings shall be made from the severance
payments, including for wage garnishments, if applicable, to the extent required
or permitted by law. Effective immediately upon termination of employment,
Executive shall no longer be eligible to contribute to or to be an active
participant in any retirement or benefit plan covering employees of Company.
All
other Company obligations to Executive shall be automatically terminated
and
completely extinguished.
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7.2 Section
409A Compliance.
The
parties intend for this Agreement either to satisfy the requirements of Section
409A or to be exempt from the application of Section 409A, and this Agreement
shall be construed and interpreted accordingly. If this Agreement either
fails
to satisfy the requirements of Section 409A or is not exempt from the
application of Section 409A, then the parties hereby agree to amend or to
clarify this Agreement in a timely manner so that this Agreement either
satisfies the requirements of Section 409A or is exempt from the application
of
Section 409A.
(a) Notwithstanding
any provision in this Agreement to the contrary, in the event that Executive
is
a “specified employee” (as defined in Section 409A), any severance payment,
severance benefits or other amounts payable under this Agreement that would
be
subject to the special rule regarding payments to “specified employees” under
Section 409A(a)(2)(B) of the Code (together, “Specified Employee Payments”)
shall not be paid before the expiration of a period of six months following
the
date of Executive’s termination of employment (or the date of Executive’s death,
if earlier). The Specified Employee Payments to which Executive would otherwise
have been entitled during the six-month period following the date of Executive’s
termination of employment shall be accumulated and paid as soon as
administratively practicable following the first date payable without incurring
a penalty tax under Section 409A.
(b) To
ensure
satisfaction the requirements of Section 409A(b)(3) of the Code, assets shall
not be set aside, reserved in a trust or other arrangement, or otherwise
restricted for purposes of the payment of amounts payable under this Agreement.
(c) Company
hereby informs Executive that the federal, state, local, and/or foreign tax
consequences (including without limitation those tax consequences implicated
by
Section 409A) of this Agreement are complex and subject to change.
Executive acknowledges and understands that Executive should consult with
his or
her own personal tax or financial advisor in connection with this Agreement
and
its tax consequences. Executive understands and agrees that Company has no
obligation and no responsibility to provide Executive with any tax or other
legal advice in connection with this Agreement and its tax consequences.
Executive agrees that Executive shall bear sole and exclusive responsibility
for
any and all adverse federal, state, local, and/or foreign tax consequences
(including without limitation any and all tax liability under Section 409A)
of this Agreement, and fully indemnifies and holds Company harmless therefor.
7.3 Ineligibility
For Severance.
Executive shall not be entitled to any Severance Package under this Agreement
if
at any time during the Term of Employment, either (a) Executive voluntarily
resigns or otherwise terminates employment with Company for any reason other
than Good Reason, or (b) Company involuntarily terminates Executive’s
employment for any reason other than without Cause. Effective immediately
upon
termination of employment, Executive shall no longer be eligible to contribute
to or to be an active participant in any retirement or benefit plan covering
employees of Company. All other Company obligations to Executive shall be
automatically terminated and completely extinguished.
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7.4 Taxes
and Withholdings.
The
Company may withhold from any amounts payable under this Agreement, including
any benefits or severance payment, such federal, state or local taxes as
may be
required to be withheld pursuant to applicable law or regulations, which
amounts
shall be deemed to have been paid to Executive.
7.5 Definitions.
(a) “Cause”
shall mean the occurrence during the Term of Employment of any of the following:
(i) Executive’s indictment for, formal admission to (including a plea of
guilty or nolo
contendere
to), or
conviction of either a felony or a crime of moral turpitude,
(ii) Executive’s dishonesty, breach of trust, breach of fiduciary duty,
unethical business conduct, or commission of any crime involving Company,
(iii) gross negligence or willful misconduct by Executive in the
performance of Executive’s duties to the Company; (iv) willful or knowing
unauthorized dissemination by Executive of Confidential Company Information
(as
hereinafter defined); (v) failure by Executive to perform Executive’s
duties which are reasonably and in good faith requested in writing and by
the
Board of Directors and which are not cured (to the extent curable) by Executive
within thirty (30) days following receipt by Executive of such written request;
or (vi) material breach of this Agreement by Executive which is not cured
(to the extent curable) by Executive within thirty (30) days following written
notice by the Board of Directors to the Executive describing such alleged
breach.
(b) “Good
Reason” shall mean the occurrence during the Term of Employment of any of the
following: (i) a material breach of this Agreement by Company which is not
cured by Company within thirty (30) days following Company’s receipt of written
notice by Executive to Company describing such alleged breach;
(ii) Executive’s Base Salary is materially reduced by Company (other than a
reduction affecting the Company’s management employees generally); (iii) a
material reduction in Executive’s title, duties and/or responsibilities, or the
assignment to Executive of any duties materially inconsistent with Executive’s
position as Chief Executive Officer; or (iv) a requirement by Company that
Executive, without Executive’s consent, relocate to a facility or a location
outside of a fifty (50) mile radius from Executive’s facility or location
immediately prior to such relocation.
(c) “Section
409A” shall mean Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), and all applicable guidance promulgated thereunder.
7.6 Effect
of a Change in Control.
In the
event of, and subject to the consummation of, a Change in Control (as defined,
or as such analogous term is defined, in the relevant Company stock option
or
equity incentive plan or agreement, or as is reasonably and in good faith
defined by the Board), Company shall cause to occur the immediate vesting
of any
New Options granted to Executive.
7.7 Nonduplication
of Benefits.
Notwithstanding any provision in this Agreement or in any other Company benefit
plan or compensatory arrangement to the contrary, but at all times subject
to
Section 7.2, (a) any payments due under Section 7.1 shall be made not
more than once, if at all, (b) no payments made under this Agreement shall
be
considered for purposes of any benefit plan or compensatory arrangement of
Company, and (c) under no circumstances shall Executive be entitled to severance
benefits from Company other than as contemplated under this Agreement, unless
such other severance benefits offset and reduce the benefits due under this
Agreement on a dollar-for-dollar basis, but not below zero.
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8. No
Competition and No Conflict of Interest.
Except
as otherwise provided in Section 2.2 of this Agreement, during the Term of
Employment, Executive must not engage in any work, paid or unpaid, that creates
an actual conflict of interest with the essential business-related interests
of
the Company where such conflict would materially and substantially disrupt
operations. Such work shall include, but is not limited to, directly or
indirectly competing with the Company Business in any way, or acting as an
officer, director, employee, consultant, stockholder, volunteer, lender,
or
agent of any business enterprise of the same nature as, or which is in direct
competition with, the Company Business or any business in which Company becomes
engaged during the Term of Employment, as may be determined by the Board
of
Directors. In
addition, Executive agrees not to refer any customer or potential customer
of
Company to competitors of Company, without obtaining Company’s prior written
consent, during the Term of Employment. Notwithstanding the foregoing,
Executive’s investment in, or ownership of, less than five percent (5%) of the
capital stock of any business entity that competes with or could reasonably
be
expected to compete with the Company Business and whose securities are traded
on
any national securities exchange or registered pursuant to Section 12(g)
of the
Securities Exchange Act of 1934, shall not be treated as a breach of this
Section 8. For purposes of this Agreement, the term “Company Business”
shall mean any business in which the Company is engaged as of the date hereof
in
the [State of California].
9. Confidentiality.
During
the Term of Employment, Executive has been and shall continue to be given
access
to a wide variety of information about the Company, its affiliates and other
related businesses that the Company considers “Confidential Company
Information.” As a condition of continued employment, Executive agrees to abide
by Company’s business policies and directives on confidentiality and
nondisclosure of “Confidential Company Information.” “Confidential Company
Information” shall mean all information applicable to the business of the
Company which confers or may confer a competitive advantage upon the Company
over one who does not possess the information; and has commercial value in
the
business of the Company or any other business in which the Company engages
or is
preparing to engage during Executive’s employment with Company. “Confidential
Company Information” includes, but is not limited to, information regarding the
Company’s business plans and strategies; contracts and proposals; licenses,
artwork, designs, drawings and specifications for development and redevelopment
projects; clients and customers and prospective clients and customers; suppliers
and other business partners and Company’s business arrangements and strategies
with respect to them; current and future marketing or advertising campaigns;
software programs; codes, formulae or techniques; rent rolls; financial
information; personnel information; and all ideas, plans, processes or
information related to the current, future and proposed projects or other
business of the Company that has not been disclosed to the public by an
authorized representative of the Company, acting within the scope of his
or her
authority, whether or not such information would be enforceable as a trade
secret of the Company or enjoined or restrained by a court or arbitrator
as
constituting unfair competition. “Confidential Company information” also
includes confidential information of any third party who may disclose such
information to the Company or Executive in the course of the Company’s business.
9.1 Nondisclosure.
Executive acknowledges that Confidential Company Information constitutes
valuable, special and unique assets of the Company’s business and that the
unauthorized disclosure of such information to competitors of the Company,
or to
the general public, shall be highly detrimental to the Company. Executive
therefore agrees to hold Confidential Company Information in strictest
confidence. Executive agrees not to disclose or allow to be disclosed to
any
individual or entity, other than those individuals or entities authorized
by the
Company, any Confidential Company Information that Executive has or may acquire
during Executive’s employment by Company (whether or not developed or compiled
by Executive and whether or not Executive has been authorized to have access
to
such Confidential Company Information).
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9.2 Continuing
Obligation.
Executive agrees that the agreement not to disclose Confidential Company
Information shall be effective during Executive’s employment and continue even
after Executive is no longer employed by Company. Any obligation not to disclose
any portion of any Confidential Company Information shall continue indefinitely
unless Executive can demonstrate that such information (a) has become
public knowledge through no fault of Executive; or (b) has been developed
independently without any reference to any information obtained during
Executive‘s employment with Company; or (c) must be disclosed in response
to a valid order by a court or government agency or is otherwise required
by
law.
9.3 Return
of Company Property.
On
termination of employment with Company for whatever reason, or at the request
of
the Company before termination, Executive agrees to promptly deliver to Company
all records, files, computer disks, memoranda, documents, lists and other
information regarding or containing any Confidential Company Information,
including all copies, reproductions, summaries or excerpts thereof, then
in
Executive’s possession or control, whether prepared by Executive or others.
Executive also agrees to promptly return, on termination or the Company’s
request, any and all Company property issued to Executive, including but
not
limited to computers, cellular phones, keys and credits cards. Executive
further
agrees that should Executive discover any Company property or Confidential
Company Information in Executive’s possession after the return of such property
has been requested, Executive agrees to return it promptly to Company without
retaining copies, summaries or excerpts of any kind.
9.4 No
Violation of Rights of Third Parties.
Executive warrants that the performance of all the terms of this Agreement
does
not and shall not breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by Executive prior to Executive’s
employment with Company. Executive agrees not to disclose to Company, or
induce
Company to use, any confidential or proprietary information or material
belonging to any previous employers or others. Executive warrants that Executive
is not a party to any other agreement that shall interfere with Executive’s full
compliance with this Agreement. Executive further agrees not to enter into
any
agreement, whether written or oral, in conflict with the provisions of this
Agreement while such provisions remain effective.
10. Interference
with Business Relations.
10.1 Interference
with Customers, Suppliers and Other Business Partners.
Executive acknowledges that Company’s customer base and sales strategies for
such customers, its suppliers and purchasing strategies for such suppliers,
and
its other business arrangements have been developed through substantial effort
and expense, and its nonpublic business information regarding these customers,
suppliers and other business partners is confidential and constitutes trade
secrets. In addition, because of Executive’s position, Executive understands
that Company shall be particularly vulnerable to significant harm from
Executive’s use such information for purposes other than to further Company’s
business interests. Accordingly, Executive agrees that during Executive’s
employment with Company, and for a period of twelve (12) months thereafter,
Executive shall not, either directly or indirectly, separately or in association
with others, interfere with, impair, disrupt or damage Company’s relationship
with any of the customers, suppliers or other business partners of Company
with
whom Executive has had contact, or conducted business, by contacting them
for
the purpose of inducing or encouraging any of them to divert or take away
business from Company.
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10.2 Interference
with Company’s Employees.
Executive acknowledges that the services provided by Company’s employees are
unique and special, and that Company’s employees possess trade secrets and
Confidential Company Information that is protected against misappropriation
and
unauthorized use. As such, Executive agrees that during, and for a period
of
twelve (12) months after, Executive’s employment with Company, Executive shall
not, either directly or indirectly, separately or in association with others,
interfere with, impair, disrupt or damage Company’s business by contacting any
Company employees for the purpose of inducing or encouraging them to discontinue
their employment with Company.
10.3 Negative
Information.
During
the Term of Employment and thereafter, Executive shall not disclose confidential
or negative non-public information regarding, or take any action materially
detrimental to the reputation of Company or its directors, officers, employees,
investors, shareholders or advisors and any affiliates of any of the foregoing
(collectively, the “Company Affiliates”); provided, however, that nothing
contained in this Section 10.3 shall affect any legal obligation of Executive
to
respond to mandatory governmental inquiries concerning the Company Affiliates
or
to act in accordance with, or to establish, his rights under this Agreement.
Company likewise agrees that it shall not disclose negative non-public
information regarding, or take any action materially detrimental to the
reputation of, Executive; provided, however, that nothing contained in this
Section 10.3 shall affect any legal obligation of the Company Affiliates
to
respond to mandatory governmental inquiries concerning Executive or to act
in
accordance with, or to establish, the rights of the Company Affiliates under
this Agreement.
11. Injunctive
Relief.
Executive acknowledges that Executive’s breach of the covenants contained in
Sections 8 through 10 of this Agreement inclusive (collectively
“Covenants”) would cause irreparable injury and continuing harm to Company for
which there shall be no adequate remedy at law, and agrees that in the event
of
any such breach, Company seek temporary, preliminary and permanent injunctive
relief to the fullest extent allowed by the California Arbitration Act, without
the necessity of proving actual damages or posting any bond or other
security.
12. Agreement
to Arbitrate.
Executive and Company agree to resolve any and all disputes between them
arising
out of or in any way related to this Agreement, the employment relationship
and
any disputes upon termination of employment by binding arbitration as the
sole
and exclusive remedy of the parties, to the fullest extent permitted by law.
The
disputes subject to this agreement include, but are not limited to, breach
of
contract, tort, discrimination, harassment, wrongful termination, demotion,
discipline, failure to accommodate, family and medical leave, compensation
or
benefits claims, constitutional claims; and any claims for violation of any
local, state or federal law, statute, regulation or ordinance or common law.
For
the purpose of this agreement to arbitrate, references to “Company” include all
parent, subsidiary or related entities and their employees, supervisors,
officers, directors, agents, pension or benefit plans, pension or benefit
plan
sponsors, fiduciaries, administrators, affiliates and all successors and
assigns
of any of them, and this agreement shall apply to them to the extent Executive’s
claims arise out of or relate to their actions on behalf of Company.
This
agreement to arbitrate does not include any claims that by law may not be
subject to mandatory arbitration.
12.1 Consideration.
The
mutual promise by Company and Executive to arbitrate any and all disputes
between them (except for those referenced above) rather than litigate them
before the courts or other bodies, provides the consideration for this agreement
to arbitrate.
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12.2 Initiation
of Arbitration.
Either
party may exercise the right to arbitrate by providing the other party with
written notice of any and all claims forming the basis of such right in
sufficient detail to inform the other party of the substance of such claims.
In
no event shall the request for arbitration be made after the date when
institution of legal or equitable proceedings based on such claims would
be
barred by the applicable statute of limitations.
12.3 Arbitration
Procedure.
The
arbitration shall be conducted in San Mateo County,
California
in accordance with the national rules for arbitration of employment disputes
of
the American Arbitration Association at xxx.xxx.xxx.
in
effect at the time the claim is made. The arbitration shall be conducted
by a
single neutral arbitrator agreed upon by the parties. If the parties cannot
agree on an arbitrator, the arbitrator shall be selected in accordance with
AAA
rules. Notwithstanding any choice of law provision, this agreement to arbitrate
shall be subject to the Federal Arbitration Act (9 U.S.C. Sections 1-16)
and, to
the extent not inconsistent, the California Arbitration Act, California Code
of
Civil Procedure section 1281, et seq. The parties are entitled to
representation by an attorney or other representative of their choosing.
The
arbitrator shall have the power to enter any award that could be entered
by a
judge of the trial court of the State of California, and only such power,
and
shall follow the law. The parties agree to abide by and perform any award
rendered by the arbitrator. The arbitrator shall issue the award in writing
and
therein state the essential findings and conclusions on which the award is
based. Judgment on the award may be entered in any court having jurisdiction
thereof.
12.4 Costs
of Arbitration.
Company
shall bear the costs of the arbitration filing and hearing fees and the cost
of
the arbitrator.
13. General
Provisions.
13.1 Successors
and Assigns.
The
rights and obligations of Company under this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of Company.
The
Company shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) or assignee to all or substantially all
of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or assignment
had
taken place. Executive shall not be entitled to assign any of Executive’s rights
or obligations under this Agreement without Company’s written
consent.
13.2 Legal
Protection Clause.
The
Company shall defend, indemnify and hold harmless the Executive from and
against
any claim or legal action taken against Executive as a direct consequence
of the
discharge of Executive’s duties or obedience to directions of the Company, in
accordance with California Labor Code 2802. Such protection, if applicable,
includes the cost of legal defense and judgment, if any, against
Executive.
13.3 Nonexclusivity
of Rights.
Except
as expressly provided in this Agreement, Executive is not prevented from
continuing or future participation in any Company benefit, bonus, incentive
or
other plans, programs, policies or practices provided by Company subject
to the
terms and conditions of such plans, programs, or practices.
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13.4 Waiver.
Either
party’s failure to enforce any provision of this Agreement shall not in any way
be construed as a waiver of any such provision, or prevent that party thereafter
from enforcing each and every other provision of this Agreement.
13.5 Attorneys’
Fees.
In the
event of incurred attorneys’ fees in any dispute attorneys’ fees of the
prevailing party shall be paid by the non-prevailing party, and the arbitrator
shall award such attorneys’ fees accordingly.
13.6 Severability.
In the
event any provision of this Agreement is found to be unenforceable by an
arbitrator or court of competent jurisdiction, such provision shall be deemed
modified to the extent necessary to allow enforceability of the provision
as so
limited, it being intended that the parties shall receive the benefit
contemplated herein to the fullest extent permitted by law. If a deemed
modification is not satisfactory in the judgment of such arbitrator or court,
the unenforceable provision shall be deemed deleted, and the validity and
enforceability of the remaining provisions shall not be affected thereby.
13.7 Interpretation;
Construction.
The
headings set forth in this Agreement are for convenience only and shall not
be
used in interpreting this Agreement. This Agreement has been drafted by legal
counsel representing Company, but Executive has participated in the negotiation
of its terms. Furthermore, Executive acknowledges that Executive has had
an
opportunity to review and revise the Agreement and have it reviewed by legal
counsel, if desired, and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party
shall
not be employed in the interpretation of this Agreement.
13.8 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of California. Each party consents to the jurisdiction and venue of
the
state or federal courts in San Mateo County, California, if applicable, in
any
action, suit, or proceeding arising out of or relating to this
Agreement.
13.9 Notices.
Any
notice required or permitted by this Agreement shall be in writing and shall
be
delivered as follows with notice deemed given as indicated: (a) by personal
delivery when delivered personally; (b) by overnight courier upon written
verification of receipt; (c) by telecopy or facsimile transmission upon
acknowledgment of receipt of electronic transmission; or (d) by certified
or registered mail, return receipt requested, upon verification of receipt.
Notice shall be sent to the addresses set forth below, or such other address
as
either party may specify in writing.
13.10 Survival.
The
following provisions shall survive Executive’s employment with Company to the
extent reasonably necessary to fulfill the parties’ expectations in entering
this Agreement: Sections 7 (“Termination of Employment”), 8 (“No
Conflict of Interest”), 9 (“Confidentiality”), 10 (“Interference with
Business Relations”) 11 (“Injunctive Relief”), 12 (“Agreement to
Arbitrate”), 13 (“General Provisions”), and 14 (“Entire
Agreement”).
-10-
14. Entire
Agreement.
This
Agreement, together with the other agreements and documents governing the
benefits described in this Agreement, constitute the entire agreement between
the parties relating to this subject matter hereof and supersedes all prior
or
simultaneous representations, discussions, negotiations, and agreements,
whether
written or oral, including without limitation the Executive Employment Agreement
between Executive and PureDepth Incorporated Limited dated March 31, 2005,
and Executive hereby waives any and all rights under such agreement in
consideration of the mutual covenants undertaken by the parties under this
Agreement. This Agreement may be amended or modified only with the written
consent of the Executive and the Board. No oral waiver, amendment or
modification shall be effective under any circumstances whatsoever.
THE
PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND
EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED
THIS AGREEMENT ON THE DATES SHOWN BELOW.
| Xxxx Xxxxxxxxxxxx | ||
| Dated: 11/10/06 |
By:
|
/s/
|
| Address: | ||
| PureDepth, Inc. | ||
| Dated: 11/10/06 |
By:
|
/s/
|
| Name: Xxxxxx X. Xxxxxx | ||
| Title: Chairman, Compensation Committee |
-11-
Exhibit
A
Option
Exercise Schedule
|
2006:
|
100,000
Shares
|
|
2007:
|
1,300,000
Shares
|
|
2008:
|
1,560,476
Shares
|
Note:
In the
event of Executive’s termination of employment other than (a) an
involuntary termination other than for Cause, or (b) Executive’s
resignation for Good Reason, the unexercised Old Options contemplated in
this
schedule shall immediately cease to be exercisable. In the event of an
involuntary termination other than for Cause, or a resignation for Good Reason,
the Old Options that would have been exercisable in the twelve (12) month
period
following the termination shall remain exercisable to the extent permitted
pursuant to the schedule above.
-12-
Exhibit
B
Selling
Schedule
|
2006:
|
100,000
Shares
|
|
2007:
|
600,000
Shares
|
|
2008:
|
600,000
Shares
|
|
2009:
|
900,000
Shares
|
|
2010:
|
800,000
Shares
|
-13-
