BONUS AGREEMENT
This
BONUS AGREEMENT (this "Agreement")
is
entered into as of this 13th day of November, 2007, by and between San Holdings,
Inc, a Colorado corporation (the "Company"),
and
Xxxxx Xxxxx, an individual ("Employee"),
on
the following terms and conditions:
| 1. |
Pursuant
to the terms and conditions of this Agreement, the Company shall pay
Employee a cash bonus (the “Bonus”)
in an aggregate amount of [$150,000].
Employee agrees and acknowledges that if Employee (i) is no longer
an
employee, for whatever reason, of the Company or its affiliates as
of the
Payment Date (as defined below), or (ii) breaches or violates (as
determined in the sole discretion of the Company's Board of Directors)
any
of the terms or provisions of this Agreement, any grant agreement whereby
the Company or
any of its affiliates granted (or in the future grants) options or
other
securities to Employee, or any employment, bonus, option grant or other
agreement between Employee and the Company or any of its affiliates
on or
before the Payment Date, then Employee will not be entitled to be paid
the
Bonus.
|
| 2. |
The
Bonus shall be payable, subject to the terms hereof, as follows:
|
| (a) |
Upon
the occurrence of a Change in Control (as defined below), the Company
shall pay Employee an amount equal to $150,000
on
the date of the Change in Control (the “Payment
Date”);
provided,
however,
that the Company shall not be obligated to pay the Bonus to Employee
if
Employee has been offered employment subsequent to the Change in Control
with the Company, the other party to the Change in Control transaction
or
their affiliates and (i) the position offered to Employee consists
of
authority and duties generally consistent with or greater than Employee’s
employment position with the Company at the time of the closing of
the
Change in Control transaction (the “Closing”),
and (ii) Employee’s base and bonus compensation for such position is equal
to or greater than Employee’s base and bonus compensation in Employee’s
employment position with the Company at the time of the Closing.
|
| (b) |
For
purposes of this Agreement, "Change
in Control"
shall mean (i) a merger with or into, a consolidation with or other
transaction with another entity (other than any such transaction for
the
purpose of changing the Company's domicile or form of organization)
in
which the beneficial owners of the outstanding voting stock of the
Company
immediately prior to such transaction are the beneficial owners of
less
than fifty percent (50%) of the outstanding voting stock of the surviving
entity immediately after such transaction, (ii) a sale of all or
substantially all of the assets of the Company, or (iii) a transaction
or
series of related transactions (other than a merger or a transaction
or
series of transactions involving the sale of securities by the Company
for
primarily financing purposes) in which any person or group of persons
becomes the beneficial owner of equity securities possessing more than
fifty percent (50%) of the total combined voting power of the Company’s
outstanding equity securities; provided,
however,
that the term “Change in Control” shall not include transactions (x) with
affiliates of Sun Capital Partners, Inc. (“Sun”)
or the Company, or (y) pursuant to which more than fifty percent (50%)
of
the shares of voting stock of the surviving or acquiring entity is
owned
and/or controlled (by agreement or otherwise), directly or indirectly,
by
Sun or its affiliates; provided,
further,
that a transaction shall not constitute a Change in Control unless
the
transaction also constitutes a change in the ownership or effective
control of the
Company, or in the ownership of a substantial portion of the Company's
assets, within the meaning of Section 409A(a)(2)(A)(v) of the Internal
Revenue Code of 1986, as amended (the "Code"),
and the regulations or other published guidance (including, without
limitation, Treasury Regulation Section 1.409A-3) promulgated
thereunder.
|
| (c) |
Anything
in this Agreement to the contrary notwithstanding, in the event it
shall
be determined that any payment by the Company in connection with a
Change
in Control to or for the benefit of Employee (whether paid or payable
pursuant to the terms of this Agreement or otherwise) (a "Payment")
would be nondeductible by the Company for Federal income tax purposes
because of Section 280G of the Code, then the amount payable to Employee
hereunder shall be reduced to the Reduced Amount (as hereinafter defined).
The "Reduced
Amount"
shall be the maximum amount of the Payment which could be paid hereunder
without causing all or any portion of a Payment to be nondeductible
by the
Company because of Section 280G of the
Code.
|
| 3. |
The
permitted payment events specified in Section 2 are intended to
comply with the provisions of Section 409A(a)(2) of the Code . The
Company
may make any changes to this Agreement it determines in its sole
discretion are necessary to comply with the provisions of Code Section
409A and any final, proposed, or temporary regulations or any other
guidance issued thereunder without the consent of
Employee.
|
| 4. |
The
Company, or its designated paying agent, may withhold from any amounts
payable to Employee under this Agreement such foreign, federal, state,
local and other taxes as may be required to be withheld pursuant to
any
applicable law or regulation.
|
| 5. |
Employee
agrees to abide by and hereby reaffirms the covenants and agreements
set
forth in this Agreement, any grant agreement whereby the Company or
any of
its affiliates granted (or in the future grants) options or other
securities to Employee, or any employment, bonus, option grant or other
agreement between Employee and the Company or any of its affiliates;
and
agrees that this Agreement constitutes additional consideration in
support
of such covenants and agreements.
|
| 6. |
This
Agreement is legally binding on the parties and their respective
successors and assigns. It may be executed in counterparts, each of
which
shall be deemed an original, but all of which together shall constitute
one and the same instrument. It constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof,
and supersedes and preempts any prior written or oral agreements
understandings, or representations with respect thereto. Except as
set
forth herein, the terms and provisions of this Agreement cannot be
terminated, modified ora amended except in a writing signed by the
party
against whom enforcement is sought. This Agreement shall be governed
by,
and construed and, except as set forth in the next to last sentence
of
this paragraph, interpreted in accordance with, the laws of the State
of
Colorado, and any suit, action or proceeding arising out of or relating
to
this Agreement shall be commenced and maintained in any court of competent
subject matter jurisdiction located in the state of Colorado. In any
suit,
action or proceeding arising out of or in connection with this Agreement,
the prevailing party shall be entitled to recover from the other party,
upon final judgment on the merits, all attorneys’ fees and disbursements
actually billed to such party, including all such fees and disbursements
incurred at trial, during any appeal or during negotiations. None of
Employee’s rights under this Agreement may be transferred, assigned,
pledged or encumbered. Any ambiguity with respect to any term of this
Agreement or any interpretation thereof shall be resolved in the sole
discretion of the Company's Board of Directors. EACH OF THE PARTIES
TO
THIS AGREEMENT IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO
A TRIAL
BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF, CONNECTED
WITH
OR RELATING TO THIS AGREEMENT, THE MATTERS CONTEMPLATED HEREBY, OR
THE
ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE
OR
ENFORCEMENT OF THIS AGREEMENT.
|
| 7. |
Employee
agrees and acknowledges that nothing in this Agreement shall confer
upon
Employee any right to continue in the employ of the Company or any
of its
subsidiaries or affiliates, or interfere in any way with any right
of the
Company or any of its subsidiaries or affiliates to terminate such
employ-ment at any time for any reason whatsoever (whether for cause
or
without cause) without liability to the Company or any of its subsidiaries
or affiliates.
|
|
8.
|
This
Agreement shall remain in effect until the earlier of (i) a Change
in
Control, or (ii) March 31, 2008. If no Change in Control has occurred
on
or before March 31, 2008, this Agreement shall be null and void and
of no
further effect.
|
[REMAINDER
OF THE PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the parties have executed this Bonus Agreement as of the date
first above written.
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SAN
HOLDINGS, INC.
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|
Accepted
and Agreed:
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/s/
Xxxxx Xxxxx
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By:
|
/s/
Xxxx Xxxxx
|
|
|
Xxxxx
Xxxxx
|
Name:
|
Xxxx
Xxxxx
|
|
|
Title:
|
CEO
& President
|
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