Exhibit 10.1
EXECUTION VERSION
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the "Agreement") is made as of the
19th day of March, 2008, by and between GoAmerica, Inc., a Delaware corporation
(the "Company"), and Xxxxxx X. Xxxx ("Executive").
1. Duties and Scope of Employment.
(a) Positions; Duties. During the Employment Term (as defined in
Section 2), the Company shall employ Executive as the Chief Executive Officer of
the Company. Executive shall report solely and directly to the Board of
Directors of the Company (the "Board").
(b) Obligations. During the Employment Term, Executive shall devote
substantially all of his business efforts and time to the Company. Executive
agrees, during the Employment Term, not to actively engage in any other
employment, occupation or consulting activity for any direct or indirect
remuneration without the prior approval of the Board; provided, however, that
Executive may (i) serve in any capacity with any professional, community,
industry, civic, educational or charitable organization, (ii) serve as a member
of corporate boards of directors on which Executive currently serves and, with
the consent of the Board (which consent shall not be unreasonably withheld or
delayed), other corporate boards of directors, and (iii) manage his and his
family's personal investments and legal affairs; provided, however, that in each
instance, such activities do not materially interfere with the discharge of
Executive's duties.
2. Employment Term. The Company hereby agrees to continue to employ
Executive and Executive hereby accepts such continuing employment (the period of
such continuing employment, the "Employment Term"), in accordance with the terms
and conditions set forth herein, commencing on the date hereof (the "Employment
Commencement Date"). Executive and the Company understand and acknowledge that
Executive's employment with the Company constitutes "at-will" employment.
Subject to the Company's obligation to provide severance benefits as specified
herein, Executive and the Company acknowledge that this employment relationship
may be terminated at any time, upon written notice to the other party, with or
without Cause or Good Reason (as defined in Section 4(b) and 4(c), respectively)
and for any or no cause or reason, at the option of either the Company or
Executive.
3. Compensation/Benefits. During the Employment Term, the Company shall
pay and provide to Executive the following:
(a) Cash Compensation. As compensation for his services to the
Company, Executive shall receive a base salary and shall be eligible to receive
additional variable compensation. During the Employment Term, the Board or its
Compensation Committee (the "Compensation Committee") shall review Executive's
Base Salary (as defined below) and Bonus (as defined below) then in effect at
least annually and may increase (but not decrease) such Base Salary and/or Bonus
as the Compensation Committee may approve. The Base Salary shall be payable in
accordance with the Company's normal payroll practices in effect from time to
time, but in no event less frequently than monthly and, in the case of Bonus, as
soon as
practical during the year following the year with respect to which such Bonus is
payable, but in no event later than March 15 of such following year. No increase
in Base Salary shall be used to offset or otherwise reduce any obligations of
the Company to Executive hereunder or otherwise.
(i) Annual Base Salary. As of the Employment Commencement
Date, Executive's annual Base Salary shall be two hundred seventy five thousand
dollars ($275,000) ("Base Salary"); provided, however, that this amount shall be
applied retroactively to January 10, 2008 (the "Closing Date") and in order to
make Executive whole for any difference in salary paid to him between the
Closing Date and the Employment Commencement Date (such period, the
"Retroactivity Period"), Executive shall, on the Employment Commencement Date,
receive a lump-sum payment in an amount equal to the difference between the
amount he was actually paid during the Retroactivity Period and the amount he
would have been paid during such period if he had been paid at the rate set
forth in this Section 3(a).
(ii) Discretionary Bonus. Executive shall also be eligible to
earn annual variable compensation, the amount of which shall range from zero
percent (0%) to one hundred percent (100%) of the Base Salary (such variable
compensation, the "Bonus," which, together with the Base Salary, shall be
referred to herein as "Target Pay"). The Bonus for any calendar year shall be
awarded at the sole discretion of the Compensation Committee based upon the
Company's achievement of stated financial and strategic goals, as established by
the Compensation Committee.
(b) Equity Compensation.
(i) Stock Ownership. On February 11, 2008, in anticipation of
the execution of this Agreement, the Company granted Executive an option (the
"Option") to purchase four hundred thousand (400,000) shares of the common stock
of Company (the "Option Shares") under the Company's 2005 Equity Compensation
Plan, as amended and in effect on the date of such grant (the "Stock Plan"), at
a per share exercise price equal to the fair market value of the common stock of
the Company on that date, as determined by the Compensation Committee, in
accordance with the Stock Plan. Such Option is in the form attached hereto as
Exhibit A (the "Stock Option Agreement").
(ii) Ongoing Awards. Executive shall be eligible to
participate fully in annual stock option grants and any other long-term equity
incentive program at levels commensurate with his position.
(c) Employee Benefits. Executive shall, to the extent eligible, be
entitled to participate at a level commensurate with his position in all
employee benefit, welfare and retirement plans and programs, as well as equity
plans, provided by the Company to its senior executives in accordance with the
terms thereof as in effect from time to time. Notwithstanding the foregoing, at
all times, the Company reserves the right to amend, modify, or terminate any
such plan or program.
(i) The Company will provide to Executive, at its expense, a
parking place, executive office, secretarial assistance, facilities, supplies
and equipment appropriate to
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his position as Chief Executive Officer of the Company. In addition, if
Executive relocates to California for the purpose of continuing his employment
by the Company, the Company will reimburse Executive for reasonable relocation
expenses actually incurred (including real estate brokerage fees) in an amount
not to exceed one hundred thousand dollars ($100,000); provided, however, that
such reimbursement is made within ten (10) business days of Executive submitting
receipts for qualifying relocation expenses, and provided further, that such
reimbursement shall be made no later than March 15 of the year following the
year in which such expenses are incurred.
(d) Perquisites. The Company shall provide to Executive, at the
Company's cost, all perquisites to which other senior executives of the Company
are entitled to receive. Notwithstanding the foregoing, at all times, the
Company reserves the right to amend, modify, or terminate any such perquisites;
provided, however, that in no event shall such perquisites, in the aggregate, be
reduced below the level being provided to Executive on the Employment
Commencement Date, except as otherwise required because of changes in the law.
(e) Expense Allowance. Subject to and in accordance with the
Company's policies and procedures and in accordance with the Company's payroll
practices but no less frequently than monthly, the Company shall provide to
Executive a non-accountable, discretionary expense allowance of one thousand
dollars ($1,000) per month to be used by Executive for all of his own automobile
expenses (including, without limitation, his automobile lease or similar finance
payments, insurance, and all gas mileage (whether travel is personal or related
to his employment by the Company)), club and organization dues or memberships,
travel upgrades, technology devices, and similar executive perquisites and
related taxes.
(f) Business and Entertainment Expenses. Upon submission of
appropriate documentation by Executive in accordance with the Company's policies
in effect from time to time, the Company shall pay or reimburse Executive for
all business expenses that Executive incurs in performing his duties under this
Agreement, including, but not limited to, travel (excluding gas mileage),
entertainment, and professional dues and subscriptions, in accordance with the
Company's policies in effect from time to time. The Company shall not be
obligated to reimburse Executive for personal legal fees or taxes incurred for
any reason.
(g) Vacation, Holidays and Sick Leave. Executive shall be entitled
to vacations of no less than five (5) weeks per calendar year; provided,
however, that Executive shall be limited to future accruals of no more than six
(6) weeks of paid vacation. Executive shall also be entitled to absences because
of illness or other incapacity, and such other absences, whether for holiday,
personal time, or for any other purpose, as set forth in the Company's
employment manual or current procedures and policies, as the case may be, as the
same may be amended from time to time.
4. Termination of Employment.
(a) Death or Disability. The Company may terminate Executive's
employment for disability in the event Executive has been unable to perform his
material duties hereunder for six (6) consecutive months because of physical or
mental incapacity by giving Executive notice of such termination while such
continuing incapacity continues (a "Disability
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Termination"). Executive's employment shall automatically terminate on
Executive's death. In the event Executive's employment with the Company
terminates during the Employment Term by reason of Executive's death or a
Disability Termination, then upon the date of such termination:
(i) any Option Shares that would have vested solely due to the
passage of time during the twelve (12) month period beginning on the date of
Executive's death or Disability Termination shall immediately vest;
(ii) the Company shall, within thirty (30) days of the date
Executive's employment is terminated, pay and provide Executive (or in the event
of Executive's death, Executive's estate) (A) any unpaid Base Salary through the
date of termination and any accrued vacation, (B) reimbursement for any
unreimbursed expenses incurred through the date of termination, and (C) all
other payments, benefits or fringe benefits to which Executive may be entitled
subject to and in accordance with, the terms of any applicable compensation
arrangement or benefit, equity or fringe benefit plan or program or grant and
amounts that may become due under Sections 5 and 9 hereof (collectively, items
under this clause (i) are referred to as "Accrued Benefits"); and
(iii) the Company shall pay to Executive at the time other
senior executives are paid under any cash bonus or long-term incentive plan, but
in no event later than March 15 of the year following the year in which
Executive's employment is terminated, a pro-rata bonus equal to the amount
Executive would have received if Executive's employment had continued (without
any discretionary cutback) multiplied by a fraction where the numerator is the
number of days in each respective bonus period prior to Executive's termination
and the denominator is the number of days in the bonus period (the "Prorated
Bonus"); provided, however, that at the time of death or Disability Termination,
Executive is on pace to achieve the performance milestones necessary to be
eligible for such bonus.
(b) Termination for Cause. The Company may terminate Executive's
employment for Cause (as defined below). In the event that Executive's
employment with the Company is terminated during the Employment Term by the
Company for Cause, Executive shall not be entitled to any additional payments or
benefits hereunder, other than Accrued Benefits (including, but not limited to,
any then vested Option Shares and other equity awards), to be paid or provided
within thirty (30) days of the date Executive's employment is terminated.
(i) For the purposes of this Agreement, "Cause" shall mean:
(A) material breach of any provision of this Agreement
by Executive;
(B) the willful failure by Executive to perform his
duties with the Company (other than any such failure resulting from his
incapacity due to physical or mental impairment), unless any such failure is
corrected within thirty (30) days following written notice by the Board that
specifically identifies the manner in which the Board believes Executive has not
materially performed his duties; provided, however, that no act, or failure to
act, by
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Executive shall be "willful" unless committed without good faith and without a
reasonable belief that the act or omission was in the best interest of the
Company; or
(C) an act of gross misconduct by Executive with regard
to the Company that is materially injurious to the Company.
(c) Termination by the Company Other Than for Cause; Termination by
Executive With Good Reason. Any payments to be made or benefits to be provided
under this Section 4(c) are conditioned on (x) Executive's execution of a
general release and/or termination agreement satisfactory to the Company, and
(y) such general release and/or termination agreement becoming effective.
(i) If Executive's employment with the Company is
involuntarily terminated by the Company other than for Cause or if Executive
voluntarily terminates his employment with the Company for Good Reason (as
defined below), then the Company shall pay or provide Executive with the
following as of the date of termination:
(A) any Accrued Benefits, to be paid or provided within
thirty (30) days of the date Executive's employment is terminated;
(B) the Prorated Bonus; provided, however, that at the
time of the termination of Executive's employment, Executive is on pace to
achieve the performance milestones necessary to be eligible for such bonus, and
provided further that such Prorated Bonus is paid no later than March 15 of the
year following the year in which Executive's employment is terminated;
(C) a severance amount equal to the Executive's
then-current annual Base Salary, payable in a lump sum within thirty (30) days
of the date Executive's employment is terminated;
(D) the right to continue his participation in the
Company's health benefit plans to the extent that he is then a participant
therein, at no additional cost to Executive other than he would have incurred as
an employee, for a period of twelve (12) months starting with the first calendar
month after such date of termination; provided, however, that Company shall pay
the full premium for COBRA continuation coverage under its health plans for
Executive (and, if applicable, his dependents enrolled as participants in such
health plans as of the date of termination) for such twelve-month period. In the
event Executive obtains other employment during the twelve-month period in this
clause (D), pursuant to which he becomes covered for substantially similar or
improved benefits, the right to continue to participate in any health benefit
plan, at the Company's expense, offered or provided by the Company shall
immediately cease; and
(E) reasonable outplacement services at a level
commensurate with Executive's position, including use of an executive office and
secretary, for a period of ninety (90) days commencing on Executive's date of
termination but in no event extending beyond the date on which Executive
commences other full time employment.
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(ii) For purposes of this Agreement, "Good Reason" for
termination by Executive shall arise from the following conduct of the Company
or events without Executive's consent (other than in connection with or
subsequent to the termination or suspension of Executive's employment or duties
for Cause or in connection with Executive's death or disability, and excluding
any isolated action not taken in bad faith and which is promptly remedied by the
Company after receipt of notice thereof from Executive); provided, however, that
in each instance, Executive shall provide reasonably detailed written notice of
any action or event that would constitute Good Reason under this Section
4(c)(ii) to the Company within ninety (90) days of such action or event, and the
Company shall have thirty (30) days to cure such action or event, and provided
further that if such action or event is not cured by the Company within such
thirty (30) day period, Executive's employment will then be deemed to be
terminated with Good Reason:
(A) Material breach of any provision of this Agreement
by the Company; or
(B) After a Change of Control (as defined below), in the
event that (i) Executive's aggregate compensation is substantially diminished
(regardless of Executive's title, duties, or responsibilities) or (ii) Executive
is required to relocate more than one hundred (100) miles from his then-current
residence in order to continue to perform his duties under this Agreement.
(d) Termination by Executive Without Good Reason. Executive may
terminate his employment at any time without Good Reason by written notice to
the Company. In the event that Executive terminates his employment with the
Company during the Employment Term without Good Reason, Executive shall not be
entitled to any additional payments or benefits hereunder, other than Accrued
Benefits (including, but not limited to, any then-vested Option Shares and other
equity awards), to be paid or provided within thirty (30) days of the date
Executive's employment is terminated.
(e) No Mitigation/No Offset. Executive shall not be required to seek
other employment or otherwise mitigate the value of any severance benefits
contemplated by this Agreement, nor shall any such benefits be reduced by any
earnings or benefits that Executive may receive from any other source, except as
provided in Sections 4(c)(i)(D) and 4(c)(i)(E). The amounts payable hereunder
shall not be subject to setoff, counterclaim, recoupment, defense or other right
that the Company may have against Executive or others.
5. Change of Control Vesting Acceleration.
(a) In the event of a Change of Control (as defined below),
twenty-five percent (25%) of Executive's then-unvested Option Shares shall
immediately vest.
(b) After a Change of Control (as defined below), in the event that
(i) Executive's aggregate compensation is substantially diminished (regardless
of Executive's title, duties, or responsibilities) or (ii) Executive is required
to relocate more than one hundred (100) miles from his then-current residence in
order to continue to perform his duties under this Agreement, all of Executive's
then-unvested Option Shares and other equity awards shall
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immediately vest in full, and if, after a Change of Control, Executive
terminates his employment with the Company for Good Reason, he shall be entitled
to receive all severance benefits set forth in Section 4(c)(i).
(c) For the purposes of this Agreement, "Change of Control" is
defined as the occurrence of any of the following after the Employment
Commencement Date:
(i) any "person" (as defined in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) excluding for
this purpose, (i) the Company or any subsidiary of the Company, or (ii) any
employee benefit plan of the Company or any subsidiary of the Company, or any
person or entity organized, appointed or established by the Company for or
pursuant to the terms of any plan which acquires beneficial ownership of voting
securities of the Company, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly of securities of the
Company representing more than fifty percent (50%) of the combined voting power
of the Company's then outstanding securities; provided, however, that no Change
of Control will be deemed to have occurred as a result of a change in ownership
percentage resulting solely from an acquisition of securities by the Company,
the grant or exercise of any stock option, stock award, stock purchase right or
similar equity incentive, or the continued beneficial ownership by any party of
voting securities of the Company which such party beneficially owned as of the
Employment Commencement Date; or
(ii) persons, who, as of the Employment Commencement Date
constitute the Board (the "Incumbent Directors") cease for any reason, including
without limitation, as a result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a majority thereof, provided,
however, that any person becoming a director of the Company subsequent to the
Employment Commencement Date shall be considered an Incumbent Director if such
person's election or nomination for election was approved by a vote of at least
fifty percent (50%) of the Incumbent Directors; and provided further, that any
such person whose initial assumption of office is in connection with an actual
or threatened election contest relating to the members of the Board or other
actual or threatened solicitation of proxies or consents by or on behalf of a
"person" (as defined in Section 13(d) and 14(d) of the Exchange Act) other than
the Board, including by reason of agreement intended to avoid or settle any such
actual or threatened contest or solicitation, shall not be considered an
Incumbent Director; or
(iii) consummation of a reorganization, merger or
consolidation or sale or other disposition of at least 80% of the assets (other
than cash and cash equivalents) of the Company (a "Business Combination"), in
each case, unless, following such Business Combination, all or substantially all
of the individuals and entities who were the beneficial owners of outstanding
voting securities of the Company immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty percent (50%) of the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the company
resulting from such Business Combination (including, without limitation, a
company which, as a result of such transaction, owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the outstanding voting
securities of the Company; or
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(iv) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
6. Golden Parachute Payments.
(a) Executive shall bear all expense of, and be solely responsible
for, all federal, state, local or foreign taxes due with respect to any benefit
received pursuant to this Agreement, including, without limitation, any excise
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code"); provided, however, that any benefit received or to be received by
Executive in connection with a Change of Control ("Contract Benefits") or any
other plan, arrangement or agreement with the Company or an affiliate
(collectively with the Contract Benefits, the "Total Benefits") that would
constitute a "parachute payment" within the meaning of Section 280G of the Code,
shall be reduced to the extent necessary so that no portion thereof shall be
subject to the excise tax imposed by Section 4999 of the Code, but only if, by
reason of such reduction, the net after-tax benefit received by Executive as a
result of such reduction shall exceed the net after-tax benefit received by
Executive if no such reduction was made. For purposes of this Section 6, "net
after-tax benefit" shall mean the Total Benefits that Executive receives or is
then entitled to receive from the Company that would constitute a "parachute
payment" within the meaning of Section 280G of the Code, less (i) the amount of
all federal, state and local income and employment taxes payable by Executive
with respect to such "parachute payment," calculated at the highest marginal
income tax rate for each year in which the foregoing shall be paid to Executive
(based on the rates set forth in the Code as in effect at the time of the first
receipt of the foregoing benefits), and (ii) the amount of excise taxes imposed
with respect to such "parachute payment" by Section 4999 of the Code.
(b) The accounting firm engaged by the Company (or its successor)
for general tax purposes shall perform any adjustment pursuant to subsection (a)
of this Section 6. The Company shall bear all expenses with respect to the
determinations by such accounting firm required to be made hereunder. The
accounting firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to Executive and
to the Company within fifteen (15) calendar days of being engaged to perform
such determination and adjustment, or at such other time as requested by the
Company. Any good faith determinations of the accounting firm made hereunder
shall be final, binding and conclusive upon you and the Company.
7. Section 409A Compliance.
(a) To the extent that any amount payable under this Agreement
constitutes an amount payable under a "nonqualified deferred compensation plan"
(as defined in Section 409A of the Code ("Section 409A")) following a
"separation from service" (as defined in Section 409A), including any amount
payable under Section 4, then, notwithstanding any other provision in this
Agreement to the contrary, such payment will not be made to Executive earlier
than the day after the date that is six (6) months following Executive's
"separation from service." This Section 7(a) will not be applicable after
Executive's death.
(b) Executive and the Company acknowledge that the requirements of
Section 409A are still being developed and interpreted by government agencies,
that certain issues under
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Section 409A remain unclear at this time, and that the parties hereto have made
a good faith effort to comply with current guidance under Section 409A.
Notwithstanding anything in this Agreement to the contrary, in the event that
amendments to this Agreement are necessary in order to comply with future
guidance or interpretations under Section 409A, including amendments necessary
to ensure that compensation will not be subject to Section 409A, Executive
agrees that the Company shall be permitted to make such amendments, on a
prospective and/or retroactive basis, in its sole discretion.
8. Restrictive Covenants. Executive acknowledges that the Company's
ability to keep its Confidential Information (as defined in Section 9(b)) secret
and away from its competitors is important to the Company's and its affiliates'
viability and business. Executive further acknowledges that over the course of
his employment with the Company he has and will (i) develop special and
substantial relationships with the Company's and its affiliates' customers and
suppliers, and/or (ii) be privy to Confidential Information. Further, Executive
has and will help develop the goodwill of the Company and its affiliates during
the course of his employment. Finally, pursuant to Section 3(b), Executive will
have a substantial ownership interest in the Company. As such, Executive agrees
to abide by the following covenants in order to allow the Company to protect
those interests:
(a) Non-Competition. During the "Restricted Period" (as defined
below), Executive will not either directly or indirectly, for himself or any
other person or entity, anywhere within the United States, carry on, own, be
engaged in, assist, be employed by, consult for, serve as a director for, or
have any financial interest in any business or enterprise that is materially
engaged in the telecommunications relay service ("TRS") or call center service
industries or any other industry in which the Company is engaged to a material
extent at the time Executive's employment terminates, provided that an equity
investment of not more than two percent (2%) in any company that is publicly
traded and whose shares are listed on a national stock exchange will be
permitted.
For purposes of this Section 8, "Restricted Period" means the period
beginning on the Employment Commencement Date and continuing until the first
(1st) anniversary of Executive's employment termination date, irrespective of
the reason that Executive's employment is terminated with the Company.
(b) Non-Solicitation. During the Restricted Period, Executive will
not either directly or indirectly, for himself or any other person or entity,
(i) hire, solicit for services, encourage the resignation of, or in any other
manner seek to engage or employ, any person who is an employee of the Company,
or a consultant of the Company devoting more than seventy percent (70%) of his
or her time to the business of the Company or any of its affiliates, on
Executive's employment termination date or during the six (6) month period
preceding such termination date, or (ii) solicit, provide services to, or
otherwise interfere with the Company's business relationship with, any customer
of the Company in connection with services and/or products that compete with the
Company's services or products, provided that such customer is a customer of the
Company on the employment termination date or during the one (1) year period
preceding such termination date.
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(c) Equitable Relief. Executive acknowledges that the remedy at law
for his breach of Section 8, 9(a) and/or 10 will be inadequate, and that the
damages flowing from such breach will not be readily susceptible to being
measured in monetary terms. Accordingly, upon a violation of any part of such
Sections, the Company will be entitled to immediate injunctive relief (or other
equitable relief) and may obtain a temporary order restraining any further
violation. No bond or other security will be required in obtaining such
equitable relief, and Executive hereby consents to the issuance of such
equitable relief. Such equitable relief may be obtained from any court having
appropriate jurisdiction over the matter. Nothing in this Section 8(c) shall be
deemed to limit the Company's remedies at law or in equity that may be pursued
or availed of by the Company for any breach by Executive of any of the parts of
Sections 8, 9(a) and/or 10.
(d) Judicial Modification. Executive acknowledges that it is the
intent of the parties hereto that the restrictions contained or referenced in
Sections 8, 9 and 10 be enforced to the fullest extent permissible under the
laws of each jurisdiction in which enforcement is sought. If any of the
restrictions contained or referenced in such Sections is for any reason held by
a court or arbitrator to be excessively broad as to duration, activity,
geographical scope, or subject, then, for purposes of that jurisdiction, such
restriction shall be construed, judicially modified, or "blue penciled" so as to
thereafter be limited or reduced to the extent required to be enforceable in
accordance with applicable law. Executive acknowledges and understands that, due
to the nature and scope of the Company's existing and proposed business plans
and projects, and the technological advancements in electronic communications,
any narrower geographic restriction of his obligations under Sections 8(a) and
8(b) would be inappropriate and counter to the protections sought by the Company
thereunder.
9. Confidential Information.
(a) Non-Use and Non-Disclosure of Confidential Information.
Executive acknowledges that, during the course of his employment with the
Company, he has had and will have access to information about the Company and
its affiliates, and their customers and suppliers, that is confidential and/or
proprietary in nature, and that belongs to the Company and/or its affiliates. As
such, at all times, both during his employment and thereafter, Executive will
hold in the strictest confidence, and not use or attempt to use except for the
benefit of the Company and its affiliates, and not disclose to any other person
or entity (without the prior written authorization of the Board) any
"Confidential Information" (as defined in Section 9(b)). Notwithstanding
anything contained in this Section 9, Executive will be permitted to disclose
any Confidential Information to the extent required by validly-issued legal
process or court order, provided that Executive notifies the Board immediately
of any such legal process or court order in an effort to allow the Company to
challenge such legal process or court order, if the Company so elects, prior to
Executive's disclosure of any Confidential Information.
(b) Definition of Confidential Information. For purposes of this
Agreement, "Confidential Information" means any confidential or proprietary
information that belongs to the Company or its affiliates, or any of their
customers or suppliers, including, without limitation, technical data, market
data, trade secrets, trademarks, service marks, copyrights, other intellectual
property, know-how, research, business plans, product and service information,
projects, services, customer lists and information, customer preferences,
customer
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transactions, supplier lists and information, supplier rates, software,
hardware, technology, inventions, developments, processes, formulas, designs,
drawings, marketing methods and strategies, pricing strategies, sales methods,
financial information, project information, revenue figures, account
information, credit information, financing arrangements, and other information
disclosed to Executive by the Company or its affiliates in confidence, directly
or indirectly, and whether in writing, orally, or by electronic records,
drawings, pictures, or inspection of tangible property.
10. Return of Company Property. Upon the termination of Executive's
employment with the Company, or at any time during such employment upon request
by the Company, Executive will promptly deliver to the Company and not keep in
his possession, recreate, or deliver to any other person or entity, any and all
property that belongs to the Company or any of its affiliates, or that belongs
to any other third party and is in Executive's possession as a result of his
employment with the Company, including, without limitation, computer hardware
and software, Blackberries or other personal data assistants or similar devices,
pagers, mobile or cellular phones, other electronic equipment, records, data,
customer lists and information, supplier lists and information, notes, reports,
correspondence, financial information, account information, product and service
information, project information, files, and other documents and information,
including any and all copies of the foregoing.
11. No Prior Restrictions. Executive represents and warrants that his
employment with the Company does not violate, or cause him to be in breach of,
any obligation or covenant made to any former employer or other third party, and
that during the course of his employment with the Company he has not and will
not take any action that would violate or breach any legal obligation that he
may have to any former employer or other third party. In the event of a breach
of this Section 11, including in the event that Executive's representation and
warranty above is false, Executive shall hold the Company harmless and indemnify
it for any damages resulting to it or its affiliates, including, without
limitation, attorneys' fees, as a result of the breach of this Section 11.
12. Assignment.
(a) This Agreement shall be binding upon and inure to the benefit of
(i) the heirs, beneficiaries, executors and legal representatives of Executive
upon Executive's death and (ii) any successor of the Company, provided, however,
that any successor shall within ten (10) days of such assumption deliver to
Executive a written assumption in a form reasonably acceptable to Executive. Any
such successor of the Company shall be deemed substituted for the Company under
the terms of this Agreement for all purposes. As used herein, "successor" shall
mean any person, firm, corporation or other business entity that at any time,
whether by purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company. Notwithstanding such
assignment, the Company shall remain, with such successor, jointly and severally
liable for all of its obligations hereunder. This Agreement may not otherwise be
assigned by the Company.
(b) None of the rights of Executive to receive any form of
compensation payable pursuant to this Agreement shall be assignable or
transferable except through a testamentary disposition or by the laws of descent
and distribution upon the death of Executive
11
or as provided in Section 20 hereof. Any attempted assignment, transfer,
conveyance or other disposition (other than as provided in this Section 12) of
any interest in the rights of Executive to receive any form of compensation
hereunder shall be null and void; provided, however, that notwithstanding the
foregoing, Executive shall be allowed to transfer vested Option Shares or other
stock options or equity awards consistent with the rules for transfers to
"family members" as defined in U.S. Securities and Exchange Commission Form S-8.
13. Liability Insurance.
(a) The Company shall cover Executive under directors' and officers'
liability insurance both during and, while potential liability exists, after the
Employment Term in the same amount and to the same extent, if any, as the
Company covers its other officers and directors.
(b) The Company shall, both during and after the Employment Term,
indemnify and hold harmless Executive to the fullest extent permitted by
applicable law with regard to actions or inactions taken by Executive in the
performance of his duties as an officer, director and employee of the Company
and its affiliates or as a fiduciary of any benefit plan of the Company and its
affiliates.
14. Notices. All notices, requests, demands and other communications
called for hereunder shall be in writing and shall be deemed given if (a)
delivered personally or by facsimile, (b) one (1) day after being sent by
Federal Express or a similar commercial overnight service, or (c) three (3) days
after being mailed by registered or certified mail, return receipt requested,
prepaid and addressed to the parties or their successors in interest at the
following addresses, or at such other addresses as the parties may designate by
written notice in the manner set forth in this Section 14:
If to the Company:
GoAmerica, Inc.
Attn: Chairman of the Board
000 Xxxxxxxxxx Xxx., 0xx Xxxxx
Xxxxxxxxxx, XX 00000
If to Executive:
Xxxxxx X. Xxxx
000 Xxxxxxxxxx Xxx., 0xx Xxxxx
Xxxxxxxxxx, XX 00000
15. Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
16. Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Executive concerning Executive's
employment relationship with the Company, and supersedes and replaces any and
all prior agreements and
12
understandings concerning Executive's employment relationship with the Company
entered into prior to the date hereof, but it does not supersede or replace any
written agreements entered into simultaneous with this Agreement or thereafter.
17. Arbitration.
(a) Agreement. The Company and Executive agree that, except as
otherwise provided in Section 8(c), any dispute or controversy arising out of,
relating to, or in connection with the employment relationship between them, the
inception of that relationship, the termination of that relationship, this
Agreement, or the interpretation, validity, construction, performance, breach,
or termination thereof, including, without limitation, claims of discrimination,
harassment, and/or retaliation, and any violation of whistleblower laws, shall
be settled by final and binding arbitration to be held in New York, New York or
such other location agreed by the parties hereto, under the auspices of and in
accordance with the National Rules for the Resolution of Employment Disputes
then in effect of the American Arbitration Association ("AAA"). The arbitrator
may grant injunctions or other relief in such dispute or controversy. The
decision of the arbitrator shall be final, conclusive and binding on the parties
to the arbitration. Judgment may be entered on the arbitrator's decision in any
court having jurisdiction. The selection of the arbitrator will be conducted in
accordance with the AAA's practices and procedures for disputes of the nature
here contemplated. The arbitrator will have authority and discretion to
determine the arbitrability of any particular claim, should any disputes arise
with respect to such issue.
(b) Costs and Fees of Arbitration. The moving party shall pay the
costs of the initial arbitration filing (not to exceed two hundred fifty dollars
($250)), and the Company shall pay the remaining costs and expenses of such
arbitration. Unless otherwise required by law or pursuant to an award by the
arbitrator, the Company and Executive shall each pay separately its or his
counsel fees and expenses. Notwithstanding the foregoing, the arbitrator may,
but need not, award the prevailing party in any dispute its or his legal fees
and expenses.
18. No Oral Modification, Cancellation or Discharge. This Agreement may
only be amended, canceled or discharged in writing signed by Executive and an
appropriate officer or director of the Company.
19. Survivorship. The respective rights and obligations of Company and
Executive hereunder shall survive any termination of Executive's employment by
the Company to the extent necessary to preserve such rights and obligations.
20. Beneficiaries. Executive shall be entitled, to the extent permitted
under any applicable law, to select and change the beneficiary or beneficiaries
to receive any compensation or benefit payable hereunder upon his death by
giving the Company written notice thereof. If Executive dies, severance then due
or other amounts due hereunder shall be paid to his designated beneficiary or
beneficiaries or, if none are designated or none survive Executive, his estate.
13
21. Withholding. The Company shall be entitled to withhold, or cause to be
withheld, any amount of federal, state, city or other withholding taxes required
by law with respect to payments made to Executive in connection with his
employment hereunder.
22. Governing Law. This Agreement shall be governed by Delaware law
(without reference to rules of conflicts of law), which shall be applied to the
merits of any dispute or claim submitted to arbitration pursuant to Section 13
of this Agreement. Executive and the Company hereby expressly consent to the
personal jurisdiction of the state and federal courts located in New York, New
York for any action or proceeding relating to any arbitration pursuant to
Section 13 of this Agreement in which the parties are participants, or any claim
to which Section 8(c) applies.
[Remainder of page intentionally left blank - signatures on the following page]
14
EXECUTION VERSION
IN WITNESS WHEREOF, the undersigned have executed this Agreement:
GOAMERICA, INC.
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President
XXXXXX X. XXXX
/s/ Xxxxxx X. Xxxx
----------------------------------------
EXECUTION VERSION
Exhibit A
GOAMERICA, INC.
2005 EQUITY COMPENSATION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
GoAmerica, Inc., a Delaware corporation (the "Company"), hereby grants an
option to purchase shares of the common stock, par value $.01 per share, of the
Company (the "Stock") to the Optionee named below. The terms and conditions of
the option are set forth in this cover sheet, in the attached term sheet
(together with this cover sheet, the "Agreement"), and in the Company's 2005
Equity Compensation Plan, as amended (the "Plan"). Capitalized terms used herein
without definition shall have the meanings ascribed thereto in the Plan.
Grant Date: February 11, 2008
Name of Optionee: Xxxxxx X. Xxxx
Number of shares of Stock covered by option: 400,000
Option Exercise Price per share of Stock: $6.57
Vesting Start Date: February 11, 2008
By signing this cover sheet, you agree to all of the terms and conditions
described in this cover sheet, in the attached term sheet and in the Plan, a
copy of which is also attached. You acknowledge that you have carefully reviewed
the Plan and agree that the Plan will control in the event any provision of this
Agreement (as defined in the attached term sheet) should appear to be
inconsistent.
-------------------------------------- --------------------------------
(Optionee) Xxxxxx Xxxxxxxx, President
Attachment
This is not a stock certificate or a negotiable instrument.
EXECUTION VERSION
GOAMERICA, INC.
2005 EQUITY COMPENSATION INCENTIVE PLAN
NONSTATUTORY SOCK OPTION TERM SHEET
Nonstatutory This option is not intended to be an
Stock Option incentive stock option under Section 422 of
the Internal Revenue Code of 1986, as
amended, and will be interpreted accordingly.
Vesting This option is only exercisable before it
expires and then only with respect to the
vested portion of the option. Subject to the
preceding sentence, you may exercise this
option, in whole or in part, to purchase a
whole number of vested shares that is not
less than 100 shares, unless the number of
shares purchased is the total number
available for purchase under the option, by
following the procedures set forth in the
Plan and below in this Agreement.
Your right to purchase shares of Stock under
this option will vest as to two forty-eighths
(2/48ths) of the total number of shares
covered by this option, as shown on the cover
sheet, on the Vesting Start Date. Your right
to purchase shares of Stock under this option
will vest as to an additional one
forty-eighth (1/48th) of the total number of
shares covered by this option on the first
day of each month thereafter, provided you
then continue as an Service Provider. The
resulting aggregate number of vested shares
will be rounded to the nearest whole number,
and you cannot vest in more than the number
of shares covered by this option.
Except as provided in this Agreement and any
employment agreement entered into by you and
the Company, no additional shares of Stock
will vest during your employment with the
Company or after you cease to be a Service
Provider.
The Company will determine, in its sole
discretion, when your status as an Employee
and as a Service Provider terminates for all
purposes under the Plan.
Term This option will expire in any event at the
earlier of (i) the close of business on the
date six (6) months after the date of your
termination as an Employee (or if such day is
not a business day, on the next succeeding
business day), or (ii) the close of business
at Company headquarters on the day before the
tenth (10th) anniversary of the Grant Date,
as shown on the cover sheet.
Notice of When you wish to exercise this option, you
Exercise must notify the Company by filing the proper
"Notice of Exercise" form at the address
given on the form. Your notice must specify
the number of whole shares you wish to
purchase (in a parcel of at least 100 shares,
generally). Your notice must also specify how
your shares of Stock should be registered (in
your name only or in your and your spouse's
names as joint tenants with the right of
survivorship). The notice will be effective
when it is received by the Company.
If someone else wants to exercise this option
after your death, that person must prove to
the Company's satisfaction that he or she is
entitled to do so..
Form of Payment When you submit your notice of exercise, you
must include payment of the Option Exercise
Price for the shares you are purchasing.
Payment may be made in one (or a combination)
of the following forms:
o Cash, your personal check, a cashier's
check, a money order or another cash
equivalent acceptable to the Company.
o Shares of Stock that have already been
owned by you and which are surrendered to
the Company. The value of the shares,
determined as of the effective date of the
option exercise, will be applied to the
Option Exercise Price.
o By delivery (on a form prescribed by the
Company) of an irrevocable direction to a
licensed securities broker acceptable to
the Company to sell Stock and to deliver
all or part of the sale proceeds to the
Company in payment of the aggregate Option
Exercise Price and any withholding taxes.
Withholding Taxes You will not be allowed to exercise this
option unless you make acceptable
arrangements to pay any withholding or other
taxes that may be due as a result of the
option exercise or sale of Stock acquired
under this option. In the event that the
Company determines that any federal, state,
local or foreign tax or withholding payment
is required relating to the exercise or sale
of shares arising from this grant, the
Company will have the right to require such
payments from you, or withhold such amounts
from other payments due to you from the
Company or any Affiliate. Subject to the
prior approval of the Company, which may be
withheld by the Company in its sole
discretion, you may elect to satisfy this
withholding obligation, in whole or in part,
by causing the Company to withhold Stock
otherwise issuable to you or by delivering to
the Company Stock already owned by you. The
Stock so delivered or withheld must have an
aggregate Fair Market Value equal to the
withholding obligation and may not be subject
to any repurchase, forfeiture, unfulfilled
vesting or other similar requirements.
Transfer of Option During your lifetime, only you (or, in the
event of your legal incapacity or
incompetence, your guardian or legal
representative) may exercise this option. You
may not transfer or assign this option. For
instance, you may not sell this option or use
it as security for a loan. If you attempt to
do any of these things, this option will
immediately become invalid. You may, however,
dispose of this option in your will or it may
be transferred upon your death by the laws of
descent and distribution.
Regardless of any marital property settlement
agreement, the Company is not obligated to
honor a notice of exercise from your spouse,
nor is the Company obligated to recognize
your spouse's interest in this option in any
other way.
Retention Rights Neither this option nor this Agreement give
you the right to be retained by the Company
(or any Parent, Subsidiary or Affiliate) in
any capacity. The Company reserves (and any
Parent, Subsidiary or Affiliate reserves) the
right to terminate your status as an Employee
at any time and for any reason.
4
Shareholder Rights You, or your estate or heirs, have no rights
as a shareholder of the Company until a
certificate for this option's shares has been
issued (or an appropriate book entry has been
made). No adjustments are made for dividends
or other rights if the applicable record date
occurs before your stock certificate is
issued (or an appropriate book entry has been
made), except as described in the Plan.
Adjustments In the event of a stock split, a stock
dividend, reverse stock split or a similar
change in the Stock, the number of shares of
Stock covered by this option and the Option
Exercise Price per share will be adjusted
(and rounded down to the nearest whole
number) if required pursuant to the Plan.
This option will be subject to the terms of
the agreement of merger, liquidation or
reorganization in the event the Company is
subject to such corporate activity, to the
extent specified in the Plan.
Applicable Law This Agreement will be interpreted and
enforced under the laws of the State of
Delaware, other than any conflicts or choice
of law rule or principle that might otherwise
refer construction or interpretation of this
Agreement to the substantive law of another
jurisdiction.
Forum Selection At all times each party hereto (1)
irrevocably submits to the exclusive
jurisdiction of any New York court or Federal
court sitting in New York; (2) agrees that
any action or proceeding arising out of or
relating to this Agreement or the
transactions contemplated hereby will be
heard and determined in such New York or
Federal court; (3) to the extent permitted by
law, irrevocably waives (i) any objection
such party may have to the laying of venue of
any such action or proceeding in any of such
courts, or (ii) any claim that such party may
have that any such action or proceeding has
been brought in an inconvenient forum; and
(4) to the extent permitted by law,
irrevocably agrees that a final
non-appealable judgment in any such action or
proceeding will be conclusive and may be
enforced in other jurisdictions by suit on
the judgment or in any other manner provided
by law. Nothing in this section entitled
"Forum Selection" will affect the right of
any party hereto to serve legal process in
any manner permitted by law.
The Plan The text of the Plan is incorporated in this
Agreement by reference. Certain capitalized
terms used in this Agreement are defined in
the Plan, and have the meanings set forth in
the Plan.
This Agreement and the Plan constitute the
entire understanding between you and the
Company regarding this option. Any prior or
contemporaneous agreements, commitments or
negotiations concerning this option are
superseded.
5
Data Privacy In order to administer the Plan, the Company
may process personal data about you. Such
data include, but are not limited to, the
information provided in this Agreement and
any changes thereto, other appropriate
personal and financial data about you such as
home address and business addresses and other
contact information, payroll information and
any other information that might be deemed
appropriate by the Company to facilitate the
administration of the Plan.
By accepting this option, you give explicit
consent to the Company to process any such
personal data. You also give explicit consent
to the Company to transfer any such personal
data outside the country in which you work or
are employed (including, with respect to
non-U.S. resident Optionees, to the United
States) to transferees who will include the
Company and other persons who are designated
by the Company to administer the Plan.
Consent to The Company may choose to deliver certain
Electronic statutory materials relating to the Plan in
Delivery electronic form. By accepting this option
grant you agree that the Company may deliver
the Plan prospectus, the Company's annual
report and other documents to you in an
electronic format. If at any time you would
prefer to receive paper copies of these
documents, as you are entitled to, the
Company would be pleased to provide copies.
To request paper copies of these documents,
please contact the Secretary of the Company
at 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, XX
00000.
By signing the cover sheet of this Agreement, you agree to all of the
terms and conditions described above and in the Plan.
6
