AGREEMENT
AGREEMENT
THIS AGREEMENT, with Effective
Date of October 22, 2010, is made by and amongst Patient Safety Technologies,
Inc., a Delaware Corporation, (the “Company”), having its principal offices at
00000 Xxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxxxx, XX 00000, and Xxxxx Xxxxxx
(“Executive”).
WHEREAS,
Executive and the Company desire to set forth the terms and conditions of
Executive’s employment with the Company by entering into this Agreement
regarding each parties’ respective rights and obligations as set forth herein;
and
NOW,
THEREFORE, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Definitions. For
purposes of this Agreement, the following terms shall have the meanings set
forth below:
(a) “Annual Base Salary” shall mean
Executive’s rate of regular base annual compensation prior to any reduction
under (i) a salary reduction agreement pursuant to Section 401(k) or
Section 125 of the Code or (ii) any plan or arrangement deferring any
base salary.
(b) “Board” shall mean the Board of
Directors of the Company. The Board may delegate its authority to
a committee of the Board (the “Committee”), including without
limitation a remuneration committee, which shall consist of outside directors as
defined under Section 162(m) of the Code, and related Treasury regulations,
and “non-employee directors” as defined under Rule-16b-3 under the Securities
Exchange Act of 1934 (the “Exchange Act”). Unless otherwise specified
in the Agreement, the term “Board” shall include any Committee (or
sub-committee) to which the Board’s authority has been delegated
to.
(c) “Cause” any of the following
(i) conviction of Executive by a court of competent jurisdiction of any
felony or a crime involving moral turpitude; (ii) Executive’s knowing
failure or refusal to follow reasonable instructions of the Board or reasonable
policies, standards and regulations of the Company or its affiliates;
(iii) Executive’s failure or refusal to faithfully and diligently perform
the usual, customary duties of his employment with the Company or its
affiliates; (iv) fraudulent conduct by Executive; (v) conduct by Executive
that materially discredits the Company or any affiliate or is materially
detrimental to the reputation, character and standing of the Company or any
affiliate, or (vi) a material breach of the terms of this Agreement, including
any of the provisions in Section 5 of this Agreement.
(d) “Change in Control” shall be
deemed to have occurred as of the first day, (i) any person or entity (other
than an entity or person in control of the Company as of the date of this
Agreement, or other than a trustee or other fiduciary holding securities under
an employee benefit plan of the Company, or a company owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company) becomes the beneficial
owner, 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, (ii) there is a sale, license or disposition of all or
substantially all of the Company’s assets, or (iii) the consummation of a
merger, consolidation or reorganization of the Company with or involving any
other company, other than a merger, consolidation or reorganization that would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least fifty percent
(50%) of the combined voting power of the voting securities of the Company (or
such surviving entity) outstanding immediately after such merger, consolidation
or reorganization.
(e)
“Code” shall mean the
Internal Revenue Code of 1986, as amended, and, as applicable, Treasury
Regulations promulgated thereunder.
(f) “Company” shall mean Patient
Safety Technologies, Inc. and any successor to its business and/or assets which
assumes (either expressly, by operation of law or otherwise) and/or agrees to
perform this Agreement by operation of law or otherwise (except in determining,
under subsection (d) hereof, whether or not any Change in Control of the
Company has occurred in connection with such succession).
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(g) “Date of Termination” shall
mean with respect to any purported termination of Executive’s employment,
(i) if Executive’s employment is terminated by his death, the date of his
death, (ii) if Executive’s employment is terminated for Cause or without
Cause by the Company, the date specified in the Company’s notice of termination,
(iii) if Executive’s employment is terminated as a result of a Disability,
the date on which it is finally determined that Executive is Disabled, and
(iv) if Executive terminates his employment for Good Reason or otherwise
voluntarily terminates his employment, the date specified in Executive’s notice
of termination.
(h) “Disability” shall mean
Executive’s inability for medical reasons to perform the essential duties of
Executive’s position for either ninety (90) consecutive calendar days or one
hundred twenty (120) business days in a twelve month period by reason of any
medically determined physical or mental impairment as determined by a medical
doctor selected by written agreement of the Company and Executive upon the
request of either party by notice to the other.
(i) “Good Reason” shall mean a
termination of employment by the Executive within three (3) months of any of the
following events:
(i) a
material diminution in the character or scope of Executive’s duties, Annual Base
Salary, responsibilities, or authority; or
(ii) the
Company’s material breach of the Agreement; provided, however, that the Company
shall be provided written notice of, and thirty (30) days thereafter to cure,
any such purported breach.
(iii) a
material change in the geographic location of Executive’s regular office
location (for purposes of this Section 1.I.(iii), a relocation of
Executive’s regular office by more than fifty (50) miles shall be deemed to
be a material change in the geographic location);
(j) “Person” shall have the meaning
ascribed thereto in Section 3(a)(9) of the Exchange Act, as modified,
applied and used in Sections 13(d) and 14(d) thereof; provided, however, a Person
shall not include (i) the Company or any of its respective subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any of its respective subsidiaries (in its
capacity as such), or (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities.
(k) “Positive Operating Income
Determination” means a determination that the Company’s total operating
income, as determined under GAAP, disregarding (a) the effect of all non-cash
charges and (b) the contribution to operating income from Forward Purchase
Revenue, for any period after the date hereof of two (2) consecutive fiscal
quarters, is zero or greater. A Positive Operating Income
Determination shall be made by the Company’s compensation committee acting
reasonably, and after consultation with the Executive, based on and consistent
with (subject to the adjustments required by this definition) the reported GAAP
financial results in the Company’s publicly filed SEC reports for the applicable
fiscal quarters or, in the absence of a timely SEC report or any failure of an
SEC report to be filed, based on and consistent with the Company’s financial
statements for the applicable fiscal quarters. For purposes of this
definition, “Forward Purchase Revenue” shall be the amount of revenue that would
otherwise have positively affected operating income attributable to the line
item “Deferred Revenue” on the Company’s balance sheet (or any other title or
line item which may hereafter be assigned to substantively the same matter and
underlying transaction). In the event of any disagreement regarding
the definition of Positive Operating Income Determination, the matter may, at
the option of any party, be submitted to a mutually agreeable third party with
the experience necessary to make a determination, which written determination
will be final and binding.
(l) “Release” shall mean a general
release of the Company and Executive containing a mutual non-disparagement
clause and mutually agreed to by the parties hereto. The Release must
be signed by Executive and returned to the Company by no later than the fifth
day after the date any applicable review period has expired or if no review
period applies, by no later than the twenty-sixth day after the date the Release
is provided to Executive.
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(m) “Stock Option Plan” shall mean
the Patient Safety Technologies, Inc. Employee Stock Option Plan.
2. Term of this
Agreement. The term of this Agreement shall commence upon the
date of this Agreement set forth above and shall continue until the third
anniversary of the date of this Agreement unless terminated on an earlier date
pursuant to the terms of this Agreement; provided however, that the term of this
Agreement shall automatically be extended for an additional term of one year on
each anniversary (the “Term”) unless either party to this Agreement delivers a
written notice of non-extension to the other party by at least ninety (90) days
prior to the expiration of the Term.
3. Duties; Scope of Employment;
Compensation and Benefits.
(a) Position and
Duties. The Company shall employ Executive in the position of
Chief Financial Officer and Vice President of the Company. During the
Term, beginning as of the Effective Date, Executive will devote substantially
all of Executive’s business efforts and time to the Company. With the
exception of the Company’s acknowledgement that Executive shall be permitted to
be a member of the board of directors of two other companies (one of which being
InfuSystem Inc.), executive agrees not to actively engage in any other material
employment, occupation or consulting activity for any direct or indirect
remuneration without the prior written approval of the Board, which shall not be
unreasonably withheld or delayed.
(b) Annual Base
Salary. Executive’s Annual Base Salary shall initially equal
Two Hundred Thousand Dollars ($200,000). This amount shall be reviewed annually
in January of each year by the Board and, in the sole discretion of the Board,
may be adjusted upward with such adjustments effective January 1 of the
respective year. In addition, effective upon a Positive Operating
Income Determination, the Annual Base Salary will automatically be increased to
$240,000 for the balance of the year in which such event takes place and
thereafter during the Term (i.e., for clarity, this is not a retroactive
increase, but a go-forward increase), subject to any other adjustments to Annual
Base Salary that are made in accordance with the second sentence of this Section
3(b).
(c) Bonus. Executive
shall be eligible to participate in the Company’s executive bonus plan in
accordance with the terms of the executive bonus plan adopted by the Board or
Committee, in its discretion, for the Company’s most senior executives, covering
the applicable bonus period; provided, however, that the minimum target bonus
opportunity provided under such executive bonus plan shall not be less than twenty five percent 25%
of Executive’s Annual Base Salary. The target amount for Executive’s
first bonus shall be prorated based on the number of calendar days during which
Executive is employed by the Company during the bonus year divided by three
hundred sixty-five (365).
(d) Pension and Welfare
Plans. During the Term, Executive and Executive’s dependents,
if applicable, shall be entitled to participate in all incentive, savings and
retirement plans, health and welfare benefit plans, practices, policies and
programs (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and dismemberment and
travel accident insurance plans and programs) sponsored by the Company or its
affiliates on the same terms and conditions generally applicable to executives
of the Company generally.
(e) Equity Compensation Grants and
Plans.
(i) Initial Stock Option Grant.
The Company agrees to grant Executive a stock option under the Stock
Option Plan (the “Option”) for Four Hundred and Fifty Thousand (450,000) shares
of common stock of the Company (“Shares”). In addition,
upon the six month anniversary of the Effective Date of this Agreement, One
Hundred Thousand (100,000) Shares subject to the Option shall vest and become
exercisable and thereafter the remaining Shares shall vest over a forty-two
month period at the rate of 1/48th of the
total Shares subject to the Option per month with 100% of the Option becoming
exercisable on the forty-eight month anniversary of the Effective Date of this
Agreement. The Option price will be set at the weighted average
trading price of the Company’s stock on the Executive’s first day of employment,
but not less than Seventy Five cents ($.75) per share.
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(ii) Equity Compensation
Plans. Executive shall be entitled to continue to participate
in any stock option, restricted stock, stock appreciation rights, or any other
equity compensation plan or program sponsored by the Company or its affiliates
on the same terms and conditions generally applicable to executives of the
Company. Any equity interests or rights to purchase equity interests
in the Company held by Executive and issued pursuant to an equity compensation
plan shall be administered and subject to the terms of the plan and any
amendments thereto.
(f) Designation as Qualified
Performance-Based Compensation. The Company may determine that
any bonus or equity awards issued under Sections 3(c) or 3(e) of this
Agreement (“Awards”) shall be considered “qualified performance-based
compensation” under Section 162(m) of the Code. Any Awards shall
be administered by the Committee in accordance with this
Section 3(f).
(g) Fringe Benefits and
Prerequisites. Executive shall be entitled to fringe benefits
and prerequisites available to similarly situated executives of the Company in
accordance with the plans, practices, programs and policies of the Company from
time to time.
(h) Expenses. Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by Executive in accordance with the applicable policy of the Company
and its affiliated companies.
(i) Vacation.
Executive shall be entitled to an annual vacation allotment to be used for
vacations, during each twelve (12) month period of full employment, exclusive of
legal holidays. The scheduling of Executive’s vacation should not
interfere with the Company’s normal business operations and should be consistent
with the Company’s policies. Executive shall accrue 10.00 hours of
vacation per month, totaling one hundred twenty (120) hours or fifteen (15) days
per year. The Company strongly encourages Executive to utilize all
vacation during the year in which it is accrued. Executive shall
cease accruing vacation once accrued and unused vacation equals 180 hours in the
aggregate, and shall not accrue additional vacation until the amount of accrued
and unused vacation is less than 180 hours.
(j) Change in
Control. Upon Change in Control, one hundred percent of all
then unvested stock options and unvested deferred compensation will immediately
vest with suitable opportunity for Executive to exercise such
options.
4. Termination. If
Executive’s employment shall terminate upon the occurrence of any of the events
listed below after the Effective Date of this Agreement, the following
provisions shall apply:
(a) Termination Without Cause;
Resignation for Good Reason.
(i) The
Company may remove Executive at any time without Cause from the position in
which Executive is employed hereunder upon not less than thirty (30) days’
prior written notice of termination to Executive; provided, however, that, in
the event that such notice is given, Executive shall be under no obligation to
render any additional services to the Company and shall be allowed to seek other
employment. Should the Company provide Executive with such notice,
Executive may elect to resign under this Section 4(a) for Good Reason during the
thirty (30) day period. In addition, Executive may initiate
termination of employment by resigning under this Section 4(a) for Good
Reason. Executive shall give the Company not less than thirty (30)
days’ prior written notice of such resignation provided, however, that in the
event that such notice is given, and upon written request from the Company,
Executive shall cease to render any additional services to the
Company.
(ii) Upon
any removal or resignation described in Section 4(a)(i) above, but subject
to Section 4(e) below, the Executive shall be entitled to receive, upon
execution of the Release, for a period of six (6) months a monthly cash payment
equal to the monthly portion of the Executive’s Annual Base Salary in effect
immediately before the Executive’s separation from service (“Termination Annual
Base Salary”). This six (6) month benefit shall accrue during the
first six (6) months of Executive’s employment as follows: The Executive shall
be deemed to have accrued three (3) months of benefit as of the date hereof; at
the end of the fourth (4th) month of employment Executive shall accrue an
additional month of benefit (i.e., total of four months of benefit); at the end
of the fifth (5th) month of benefit the Executive shall accrue an additional
month of benefit (i.e., total of five months of benefit); and at the end of the
sixth (6th) month of employment the Executive shall accrue an additional month
of benefit, for a total and maximum of not more than six (6) months of benefit
in the aggregate (the “Accrued Period”).
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(iii) Upon
any removal or resignation described in Section 4(a)(i) above, the
Executive shall also receive:
(1) The
Executive shall continue to receive the medical coverage and other health and
welfare benefits in effect at the Date of Termination (or generally comparable
coverage) for himself and, where applicable, his spouse and dependents, as the
same may be changed from time to time for employees generally, for the Accrued
Period from the Date of Termination. As an alternative to the
foregoing, the Company may elect to pay the Executive cash in lieu of such
coverage in an amount equal to the Executive’s after-tax cost of continuing such
coverage, where such coverage may not be continued (or where such continuation
would adversely affect the tax status of the plan pursuant to which the coverage
is provided). The COBRA health care continuation coverage period
under Section 4980B of the Code, as amended, shall run concurrently with
the foregoing benefit period.
(2) The
Executive’s stock options will continue to vest for the Accrued Period from the
Date of Termination.
(iv) Notwithstanding anything set
forth herein to the contrary, in the event that Executive violates the
provisions of Section 5(a) of this Agreement after his separation from service,
the payments and benefits provided under this Section 4(a) shall cease and all
obligations of the Company under this Section 4(a) shall terminate.
(b) Termination for Cause; Voluntary
Resignation Without Good Reason. In the event that Executive
voluntarily terminates his employment for any reason other than Good Reason or
in the event that Company terminates Executive for Cause no further payments
shall be due under this Agreement, except that Executive shall be entitled to
any amounts earned, accrued or owing but not yet paid under Section 3 above
and any benefits accrued or earned under the Company’s benefit plans and
programs.
(c) Disability. In the
event that Executive’s employment is terminated due to Disability, Executive
shall be entitled to receive all of the benefits described in Section 4(a)
above upon execution of a Release except that the monthly payments described in
subparagraph (a)(ii)(1) shall be paid for a period of three (3) months
beginning after Executive’s separation from service.
(d) Death. If Executive
dies while employed by the Company, the Company shall upon receiving a Release
from Executive’s executor, legal representative, administrator or designated
beneficiary (the “Heir(s)”) pay to the Heir(s), the
following: The Heirs shall receive (1) any amounts earned,
accrued or owing but not yet paid under Section 3 above, accelerated
vesting of the next three (3) months stock options held by Executive, and any
benefits accrued or earned under the Company’s benefit plans and programs and
(2) a lump sum cash payment equal to three (3) months of Executive’s
monthly Annual Base Salary at the rate in effect immediately before Executive’s
termination of employment.
(e) Compliance with Section 409A of
the Code. Notwithstanding any other provision of this
Agreement, to the extent that (i) any amount paid pursuant to Section 4 of the
Agreement is treated as nonqualified deferred compensation pursuant to Section
409A of the Code and (ii) Executive is a “specified employee” pursuant to
Section 409A(2)(B) of the Code, then such payments shall be made on the date
which is six (6) months after the date of Executive’s separation from service,
such payment to be in a lump sum.
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5. Non-Solicitation and
Non-Disclosure. In consideration of the promises of the
Company made herein, Executive agrees to the following:
(a) Non-Solicitation. Except
for the furtherance of the interests of the Company, Executive agrees that he or
she will not, during the term of Executive’s employment and for a period
of one (1) year following the date of termination of employment (such
period, the “Restricted Period”) do any of the following directly or indirectly
within the continental United States, without the prior written consent of the
Company: solicit or call upon, either directly or indirectly, any employee or
independent contractor of the Company to attempt to persuade or induce the
employee or independent contractor to terminate employment with the Company and
commence employment with another entity.
(b) Non-Disclosure. Executive
agrees not to use or disclose at any time, except with the prior written consent
of the Company, any proprietary, trade secret, or confidential information
relating to the business of the Company, including, without limitation,
information relating to formulas, designs, processes, suppliers, machines,
compositions, improvements, inventions, operations, manufacturing, processing,
marketing, distributing, selling, cost and pricing data, master files, or
customer lists utilized by the Company and all other similar information
material to the conduct of the business of the Company, which is not presently
generally known to the public and which is or was obtained or acquired by
Executive while an employee of the Employer; provided, however, that this
Subsection (b) shall not preclude Executive from (i) the use or disclosure of
such information that presently is known to the public generally or that
subsequently comes into the public domain, other than by way of disclosure in
violation of the Agreement or in any other unauthorized fashion, or (ii)
disclosure of such information required by law or court order, provided that
prior to such disclosure required by law or court order, Executive shall give
the Company three (3) business days’ written notice (or, if disclosure is
required to be made in less than three (3) business days, such notice shall be
given as promptly as practicable after determination that disclosure may be
required) of the nature of the law or order requiring disclosure and the
disclosure to be made in accordance therewith.
(c) Inventions. Executive
hereby sells, transfers, and assigns to the Company all of the entire right,
title, and interest of Executive in and to all inventions, ideas, disclosures,
and improvements, whether patented or unpatented, and copyrightable material,
made or conceived by Executive, solely or jointly, during his or her employment
by the Employer that directly relate to methods, apparatus, designs, products,
processes, or devices, sold, leased, used, or under development by the Company,
or that otherwise directly relate or pertain to the business, functions, or
operations of the Company or that arise from the efforts of Executive during the
course of his or her employment with the Employer (the
“Inventions”). Executive shall communicate promptly and disclose to
the Company, in such form as the Company requests, all information, details, and
data pertaining to the Inventions. Executive shall execute and
deliver to the Company such formal transfers and assignments and such other
papers and documents as may be necessary or required of Executive to permit the
Company or any person or entity designated by the Company to file and prosecute
the patent applications and, as to copyrightable material, to obtain copyright
thereof. Any Invention relating to the business of the Company and
disclosed or utilized by Executive within one (1) year following the date of
Executive’s termination of employment shall be deemed to fall within the
provisions of this Subsection (c). Nothing in this Subsection (c)
shall be deemed to require any assignment of an Invention to the extent such
assignment would be inconsistent with Section 2870 of the California Labor Code,
and by signing this Agreement, Executive acknowledges that he has received
written notice of the provisions of Section 2870, which provides:
(a) Any
provision in an employment agreement which provides that an employee shall
assign, or offer to assign, any of his or her rights in an invention to his or
her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer’s equipment,
supplies, facilities, or trade secret information except for those inventions
that either:
(1) Relate
at the time of conception or reduction to practice of the invention to the
employer’s business, or actual or demonstrably anticipated research or
development of the employer; or
(2) Result
from any work performed by the employee for the employer.
(b) To
the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable.
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(d) Acknowledgement. Executive
acknowledges and agrees that the restrictions contained in the foregoing
covenants are necessary to protect legitimate interests of the Company and
acknowledges that remedies for damages in the event of their violation or
potential violation would be inadequate. Accordingly, Executive
agrees that the Company shall be entitled to injunctive relief, without the
necessity of posting a bond, in the event of any violation by Executive of any
provisions of this Section 5. Such right to an injunction shall be in
addition to, and not in limitation of, any other rights or remedies that the
Company may have. The period of time during which the provisions of
this Section 5 will be in effect shall be extended by the length of time during
which Executive is in breach of the terms hereof as determined by any court of
competent jurisdiction where the injunctive relief is sought.
(e) Enforceability and
Understanding. If any provision of this Section 5 shall be
deemed invalid or unenforceable, either in whole or in part, the Agreement shall
be deemed amended to delete or modify, as necessary, the offending provision and
to reform the terms thereof to render it valid and enforceable. This
Section 5 contains all the understandings between Executive and the Company
pertaining to the matters referred to herein, and supersedes any other
undertakings and agreements, whether oral or in writing, previously entered into
by them with respect thereto. Executive represents that, in executing
the Agreement, Executive does not rely and has not relied upon any
representation or statement made by the Company not set forth herein with regard
to the subject matter or effect of this Section 5 or otherwise.
(f) Non-Violation of Current Contractual
Obligations. Executive hereby represents and warrants to
Company that (i) Executive is fully authorized and empowered to enter into this
Agreement and that the performance of Executive’s obligations hereunder will not
violate any agreement between Executive and any other person, firm, organization
or other entity; and (ii) Executive is not bound by the terms of any agreement
with any previous employer or other party to refrain from competing, directly or
indirectly, with the business of such previous employer or other party that
would be violated by Executive’s entering into this Agreement and/or providing
services to Company pursuant to the terms of this Agreement.
(g) No Disclosure of Confidential
Information. Executive hereby represents and warrants to
Company that Executive’s performance of Executive’s duties under this Agreement
will not require Executive to and Executive will not, whether voluntarily or
involuntarily, rely on in the performance of Executive’s duties or disclose to
Company or any other person or entity or induce Company in any way to use or
rely on any trade secret or other confidential or proprietary information or
material belonging to any previous employer of Executive or other third party to
whom Executives owes a duty of confidentiality.
6. Miscellaneous.
(a) Indemnification. Subject
to applicable law, Executive will be provided indemnification to the maximum
extent permitted by the Company’s bylaws, including any directors and officers
insurance policies, on terms no less favorable than any other executive officer
or Director of the Company.
(b) Legal Costs. The
Company will reimburse Executive for reasonable legal fees and expenses directly
relating to the negotiation of this Agreement up to $2500.
(c) Arbitration.
a. Any
dispute or controversy arising out of or relating to any interpretation,
construction, performance, termination or breach of this Agreement or arising
out of Executive’s employment with or termination from the Company, will be
settled by final and binding arbitration by a single arbitrator to be held in
Los Angeles County, California, in accordance with the rules applicable to
employment disputes of the Judicial Arbitration and Mediation
Services, Inc. (“JAMS”) then in effect (“JAMS Rules”). The arbitrator
selected shall have the authority to grant Executive or the Company or both all
remedies otherwise available by law, including injunctions.
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b. Notwithstanding
anything to the contrary in the JAMS Rules, the arbitration shall provide (i)
for written discovery and depositions adequate to give the parties access to
documents and witnesses that are essential to the dispute and (ii) for a written
decision by the arbitrator that includes the essential findings and conclusions
upon which the decision is based. Consistent with applicable law,
Executive and the Company shall each bear his/her or its own costs and
attorneys’ fees incurred in conducting the arbitration and, except in such
disputes where Executive asserts a claim otherwise under a state or federal
statute prohibiting discrimination in employment (“a Statutory Discrimination
Claim”), shall split equally the fees and administrative costs charged by the
arbitrator and JAMS. In disputes where Executive asserts a Statutory
Discrimination Claim against the Company, Executive shall be required to pay
only the JAMS filing fee to the extent such filing fee does not exceed the fee
to file a complaint in state or federal court. The Company shall pay
the balance of the arbitrator’s fees and administrative costs.
c. The
decision of the arbitrators will be final, conclusive and binding on the parties
to the arbitration. In disputes where Executive asserts a Statutory
Discrimination Claim, reasonable attorneys’ fees shall be awarded by the
arbitrator based on the same standard as such fees would be awarded if the
Statutory Discrimination Claim had been asserted in state or federal
court. Judgment may be entered on the arbitrator's decision in any
court having jurisdiction.
(d) No Mitigation. The
Company agrees that, if Executive’s employment is terminated during the Term,
Executive is not required to seek other employment or to attempt in any way to
reduce any amounts payable to Executive by the Company pursuant to this
Agreement.
(e) Successors. In
addition to any obligations imposed by law upon any successor to the Company,
the Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume 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 had taken place. Failure
of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle Executive to compensation from the Company in the same amount and
on the same terms as Executive would be entitled to hereunder if Executive were
to terminate Executive’s employment for Good Reason, except that, for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
(f) Binding
Agreement. This Agreement shall inure to the benefit of and be
enforceable by Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If Executive shall die while any amount would still be
payable to Executive hereunder (other than amounts which, by their terms,
terminate upon the death of Executive) if Executive had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the executors, personal representatives or
administrators of Executive’s estate.
(g) Notices. For the
purpose of this Agreement, notices and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given
when hand delivered, mailed by United States certified mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth
below, or to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notice of change of address shall
be effective only upon actual receipt.
(h) Amendments. No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by
Executive and such officer as may be specifically designated by the
Company. No waiver by either party hereto at any time of any breach
by the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
(i) Entire
Agreement. Except as otherwise provided, this Agreement
contains the entire agreement between the parties concerning the subject matter
hereof and supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, express or implied,
between the parties with respect thereto.
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(j) Applicable Law. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of California without regard to the
principles of conflict of laws thereof.
(k) Captions. The
captions of this Agreement are not part of the provisions hereof and shall have
no force or effect.
(l) Withholding. Any
payments provided for hereunder shall be paid net of any applicable withholding
required under federal, state or local law and any additional withholding to
which Executive has agreed.
(m) Survivorship. The
rights and obligations of the Company and Executive under this Agreement shall
survive the expiration of the Term.
(n) Mutual Intent. All
parties participated in the drafting of the Agreement, and the language used in
this Agreement is the language chosen by Executive and the Company to express
their mutual intent. The parties agree that in the event that any
language, section, clause, phrase or word used in the Agreement is determined to
be ambiguous, no presumption shall arise against or in favor of either party and
that no rule of strict construction shall be applied against either party with
respect to such ambiguity.
(o) Validity. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
(p) Counterparts. This
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original but all of which together will constitute one and the same
instrument.
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement on October 22, 2010.
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By: /s/
Xxxxx X. Xxxxxxx
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Name: Xxxxx
X. Xxxxxxx
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Title: Chief
Executive Officer
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EXECUTIVE
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/s/
Xxxxx
Xxxxxx
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Name: Xxxxx
Xxxxxx
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