EMPLOYMENT AGREEMENT
Exhibit 10.2
This Employment Agreement (this “Agreement”), dated as of July 18, 2003, is entered into between Viewpoint Corporation, a Delaware Corporation with its principal office at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, X.X. 00000 (“Viewpoint”), and Xxxxxxx X. Xxxxxxxx (“Executive”).
(e) Executive’s employment hereunder shall commence on August 4, 2003 (the “Commencement Date”), and terminate at 12:01 a.m. on August 4, 2005, unless terminated earlier pursuant to Section 3 below. Executive’s employment shall be extended for additional one (1) year terms after the initial term of employment unless either party gives the other party notice of its or his intention not to renew at least sixty (60) days prior to the expiration of the then current term of employment. The initial term of employment and any subsequent extensions shall be referred to as the “Term of Employment”. |
2. Compensation and Benefits. Viewpoint shall pay the following compensation and provide the following benefits to Executive during the Term of Employment:
(i) Annual Bonus. Executive shall receive a bonus of not less than $25,000 per annum payable in four (4) equal quarterly installments, with the first such installment payable on November 4, 2003. | |||
(ii) Discretionary Bonus. Viewpoint and Executive shall cooperate in good faith to establish management based objectives for Executive for each annual period during the Term of Employment. To the extent that Executive achieves these management-based objectives, Executive will be eligible to receive a bonus of up to $50,000 per annum in addition to the annual bonus described above and such bonus will be payable within thirty (30) days of the anniversary of the Commencement Date. The management-based objectives for the first year of the Term of Employment will be established in mutual cooperation by Executive and the Chief Executive Officer within sixty (60) days following the Commencement Date. |
(c) Housing Allowance. Viewpoint will reimburse Executive for his reasonable expenses associated with lodging in New York City in an amount not to exceed $2,080 per month during the first twelve (12) months of the Term of Employment. | ||
(d) Options to Acquire Viewpoint Common Stock. Viewpoint will grant to Executive an option to acquire shares of Viewpoint common stock (the “Options”) as follows: |
(i) Viewpoint will grant to Executive an Option to acquire 350,000 shares of Viewpoint common stock at an exercise price equal to the closing price of Viewpoint’s common stock at the close of business on the business day immediately preceding the Commencement Date. | |||
(ii) Viewpoint will grant to Executive an Option to acquire an additional 150,000 shares of Viewpoint common stock on or before the first (1st) anniversary of the Commencement Date at an exercise price equal to the closing price of Viewpoint’s common stock on the date of grant. | |||
(iii) Twenty-five percent (25%) of the shares subject to each of the above Options will vest on the first (1st) anniversary of the date the Option is granted and one-thirty-sixth (1/36th) of the remaining shares will vest monthly thereafter. | |||
(iv) The Options will be subject to the terms of award agreements to be executed by Viewpoint and Executive. |
(i) Change in Control Agreement Executed Within First Twelve (12) Months. If, within twelve (12) months following the Commencement Date, (A) Viewpoint enters into an agreement that leads to a Change in Control (as defined below), and (B) Executive’s employment is terminated by Viewpoint without Cause, or by Executive for Good Reason, at any time within one (1) year following the Change in Control, then |
(A) Executive shall be entitled to a lump sum amount, in cash and payable within ten (10) days following the Termination Date, equal to one (1) times Executive’s Base Salary; | ||
(B) Fifty percent (50%) of the unvested portion of Options granted to Executive at any time before such termination will immediately vest and will remain exercisable by Executive for three (3) months following the Termination Date; | ||
(C) Unless otherwise prohibited by the terms of the applicable plans, Executive shall be entitled to continued participation in Viewpoint’s welfare benefit plans for one (1) year following the Termination Date, including, without limitation, all medical, prescription, dental, disability, group life, accidental death and travel accident insurance plans and programs of Viewpoint, at the level provided to Executive immediately prior to the Change in Control; provided, however, that if Executive becomes eligible for coverage under any plans of another employer that provide substantially similar coverage, the coverage provided by Viewpoint pursuant to this Subsection 3(c)(i)(C) will cease. In addition to the foregoing, Executive will be entitled to continue his coverage under the |
above plans to the extent required by the Consolidated Omnibus Budget Reconciliation Act of 1985 “COBRA”) commencing on the first (1st) anniversary of the Termination Date. |
(ii) Change in Control Agreement Executed After First Anniversary of Term of Employment. If, at any time after the first (1st) anniversary of the Commencement Date (A) Viewpoint enters into an agreement that leads to a Change in Control, and (B) Executive’s employment is terminated by Viewpoint without Cause, or by Executive for Good Reason, at any time within one (1) year following the Change in Control, then |
(A) Executive shall be entitled to a lump sum amount, in cash and payable within ten (10) days following the Termination Date, equal to two (2) times Executive’s Base Salary, | ||
(B) One hundred percent (100%) of the unvested portion of any Options granted to Executive at any time before such termination will immediately vest and will remain exercisable by Executive for three (3) months following the Termination Date, | ||
(C) Unless otherwise prohibited by the terms of the applicable plans, Executive shall be entitled to continued participation in Viewpoint’s welfare benefit plans for one (1) year following the Termination Date, including, without limitation, all medical, prescription, dental, disability, group life, accidental death and travel accident insurance plans and programs of Viewpoint, at the level provided to Executive immediately prior to the Change in Control; provided, however, that if Executive becomes eligible for coverage under any plans of another employer that provide substantially similar coverage, the coverage provided by Viewpoint pursuant to this Subsection 3(c)(ii)(C) will cease. In addition to the foregoing, Executive will be entitled to continue his coverage under the above plans to the extent required by COBRA commencing on the first (1st) anniversary of the Termination Date. |
4. Definitions. In addition to certain terms defined elsewhere in this Agreement, the following terms will have the following respective meanings:
(b) “Cause” means the occurrence of any of the following: |
(i) the willful and continuing refusal of Executive to follow the lawful directives of the Chief Executive Officer or the Board, provided that such directives are consistent with Executive’s title and position. | |||
(ii) conduct that is intentional and known by Executive to be materially harmful or potentially materially harmful to Viewpoint’s best interest, | |||
(iii) gross negligence in the performance of, or willful disregard of, Executive’s obligations hereunder, | |||
(iv) Executive’s conviction of any felony, or | |||
(v) Executive’s commission of any act of dishonesty or moral turpitude which, in the good faith opinion of the Board, is materially detrimental to Viewpoint; | |||
provided, however, that in the event of a termination due to one or more of the reasons set forth in clauses (a)(i), (ii) and/or (iii), Executive shall be provided with a period of five (5) business days from the date Viewpoint gives notice of such termination to effectively cure or remedy such reason or reasons (unless such cure or remedy is not possible). |
(c) “Good Reason” means the occurrence of any of the following: |
(i) any material breach by Viewpoint of its obligations under this Agreement, | |||
(ii) a significant diminution of Executive’s duties as set forth in Section 1 without Executive’s consent, or | |||
(iii) a failure by Viewpoint to obtain a written agreement from any successor or assign of Viewpoint to assume the material obligations under this Agreement upon a Change in Control; | |||
provided, however, that in the event of a termination for Good Reason, Viewpoint shall be provided with a period of five (5) business days from the date Executive gives notice of such termination to effectively cure or remedy such reason or reasons; and if Viewpoint fails to cure or remedy the reason or reasons for termination, Executive’s Good Reason termination shall be effective as of the date the notice was given. |
(c) “Change in Control of Viewpoint” means and includes each of the following: |
(i) the acquisition, in one or more transactions, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) by any person or any group of persons who constitute a group (within the meaning of Section 13d-3 of the Exchange Act) of any securities of Viewpoint such that, as a result of such acquisition, such person or group beneficially owns (within the meaning of Rule 13d-3 of the Exchange Act), directly or indirectly, more than fifty percent (50%) of Viewpoint’s outstanding voting securities entitled to vote on a regular basis for a majority of the members of the Board; | |||
(ii) the consummation of any merger or any other business combination, in one or more transactions, including, but not limited to a sale of all or substantially all of the assets of Viewpoint, other than a transaction immediately following which the shareholders of Viewpoint who owned shares immediately prior to the transaction continue to own, by virtue of their prior ownership of Viewpoint shares, at least fifty percent (50%) of the voting power, directly or indirectly, of the surviving corporation in any such merger or business combination; or | |||
(iii) the consummation of a plan of complete liquidation of Viewpoint. |
(a) Non-Assignability. Neither this Agreement nor any right or interest hereunder shall be assignable by Executive, his beneficiaries or legal representatives without Viewpoint’s prior written consent.
(f) Relevant Law. This Agreement shall be construed and enforced in accordance with the internal laws of the State of New York, without regard to the conflict of laws principles thereof.
6. Acknowledgement. Executive represents and acknowledges the following:
(a) | He has carefully read this Agreement in its entirety; | ||
(b) | He understands the terms and conditions contained herein; | ||
(c) | He has had the opportunity to review this Agreement with legal counsel of his own choosing and has not relied on any statements made by Viewpoint or its legal counsel as to the meaning of any term or condition contained herein or in deciding whether to enter into this Agreement; and | ||
(d) | He is entering into this Agreement knowingly and voluntarily. |
EXECUTIVE | VIEWPOINT CORPORATION | |
/s/ Xxxxxxx X. Xxxxxxxx | /s/ Xxxxxx X. Xxxx | |
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Xxxxxxx X. Xxxxxxxx | By: Xxxxxx X. Xxxx | |
Chief Executive Officer |