EXHIBIT 10.4
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
BETWEEN
ITERATED SYSTEMS, INC.
AND
XXXX X. XXXXX
EFFECTIVE AS OF FEBRUARY 16, 1998
1
TABLE OF CONTENTS
EXECUTIVE EMPLOYMENT AGREEMENT
SECTION PAGE NO.
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1. Background................................................ 1
2. Definitions............................................... 1
3. Employment................................................ 3
4. Responsibilities.......................................... 3
5. Compensation.............................................. 3
6. Termination............................................... 4
7. Proprietary Information................................... 5
8. Ownership................................................. 6
9. Exclusive Service and Non-Competition Covenant............ 6
10. Covenant Not to Hire...................................... 7
11. Non-Solicitation.......................................... 7
12. Equitable Relief.......................................... 7
13. Severability.............................................. 7
14. Attorneys' Fees........................................... 7
15. Headings.................................................. 8
16. Arbitration............................................... 8
17. Notices................................................... 8
18. General Provisions........................................ 9
19. Entire Agreement.......................................... 9
EXHIBIT A - Duties of Employee
EXHIBIT B - Bonus Arrangement
EXHIBIT C - 1994 Amended and Restated Stock Option Plan
EXHIBIT D - Stock Option Terms
EXHIBIT E - Additional Benefits
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement")
is entered into by and between ITERATED SYSTEMS, INC., a Georgia corporation
with its principal offices at Suite 600 - Seven Piedmont Center, 0000 Xxxxxxxx
Xxxx, Xxxxxxx, Xxxxxxx 00000 (the "the Company") and XXXX X. XXXXX
("Employee"), an individual, and shall be effective on the Effective Date, as
defined below.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements of the parties hereto, the parties do hereby covenant and agree
as follows:
1. BACKGROUND.
A. The Company is engaged in the business of (i) research and development
in the area of fractal geometry and dynamical systems, (ii) application of the
results from such research and development in the compression, transmission,
storage and decompression of images using computer technology, and (iii) design,
development, marketing and distribution of products and services which embody or
relate to the compression, transmission, storage and decompression of images.
B. The Company desires to secure and retain the services of Employee in
the office and in the capacities to be designated pursuant to Subsection 4A.
hereof, and Employee desires to engage in the full and active employ of the
Company in accordance with the terms and conditions herein set forth, and the
Company desires to retain Employee's valuable skills and services for the
benefit of the Company.
2. DEFINITIONS.
As used in this Agreement and the Exhibits, the following terms shall have
the meaning as set forth below, and the parties hereto agree to be bound by the
provisions hereof:
A. AREA means the geographic area of the United States and Canada in which
operations are performed, supervised, or assisted in by Employee on behalf of
the Company as of and after the Effective Date while Employee is employed by the
Company.
B. BOARD OF DIRECTORS means the Board of Directors of the Company.
C. BUSINESS OF THE COMPANY means (i) research and development in the area
of fractal geometry and dynamical systems, (ii) application of the results from
such research and development in the compression, transmission, storage and
decompression of images using computer technology, and (iii) the design,
development, marketing and distribution of products and services which embody or
relate to the compression, transmission, storage and decompression of images.
D. CHANGE IN CONTROL has the meaning set forth in EXHIBIT D, Section 5.
E. COMPANY means Iterated Systems, Inc. and its successors.
F. CONTINUOUS SERVICE means a period of continuous performance of services
by Employee for the Company or its successor, as determined by the Board of
Directors.
G. EFFECTIVE DATE means February 16, 1998.
H. OFFERING means the closing of a public sale of common stock by the
Company within twenty-four (24) months after the Effective Date resulting in (i)
the Company having an aggregate market capitalization in an amount of at least
$250 million as determined by the Board of Directors based only on the then
current issued and outstanding common stock of the Company, and (ii) a payment
of proceeds to the Company in an amount of at least $20 million, each as a
result of a filing of a registration statement by the Company declared effective
by the U.S. Securities and Exchange Commission ("SEC") with respect to an
underwritten firm commitment offering of the Company's common stock and the
listing thereof on a nationally recognized stock exchange in the U.S.; the
filing of a Form 10 with the SEC shall not constitute an Offering.
I. OFFERING CLOSING DATE means the date on which the net proceeds of an
Offering are paid in full to the Company.
J. PERMANENT DISABILITY means a physical or mental condition which renders
Employee incapable of performing his regular duties hereunder for a period of
ninety (90) consecutive days as reasonably determined by the Board of Directors.
K. PLAN means the Company's 1994 Amended and Restated Stock Option Plan.
L. TERM means the period from the Effective Date and continuing until
three (3) years thereafter, unless the Agreement is earlier terminated for any
reason as set forth herein. This Agreement may be extended beyond the Term upon
written agreement by each party.
M. TERMINATION WITH CAUSE means the termination of this Agreement and
the employment relationship of Employee with the Company, only for the
following:
(i) Theft or embezzlement by Employee with regard to property of the
Company;
(ii) Continued gross neglect by Employee in fulfilling his duties as set
forth in this Agreement, after written notification from the Board of
Directors of such gross neglect, setting forth in detail the matters
involved and Employee's failure to cure the problem resulting in such gross
neglect within thirty (30) days after receipt of notice by Employee from
the Company;
(iii) Death or Permanent Disability of Employee;
(iv) Actual fraud or other material acts of dishonesty in conducting the
Company's business or in the fulfillment by Employee of his assigned
responsibilities; the destruction of any material amount of the Company's
property willfully or through Employee's gross neglect; or the unauthorized
disclosure of any information constituting Confidential Information which
disclosure has a material adverse impact on the financial condition of the
Company, or a Trade Secret, but not including general statements regarding
the Company and its business which do not include Trade Secrets or
Confidential Information, to any person, business or entity in violation of
Section 7; or
(v) A violation or other failure of Employee to perform in accordance
with any material provision of any written agreement with the Company or to
perform in accordance with the reasonable directives imposed upon him by
the Board of Directors, if such violation or other
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failure is not cured within thirty (30) days after receipt of notice by
Employee from the Company.
N. TERMINATION WITHOUT CAUSE means a termination by the Company of this
Agreement and the employment relationship of Employee with the Company which is
not a Termination With Cause or a Voluntary Termination, but not including the
expiration of this Agreement.
O. VOLUNTARY TERMINATION means unilateral termination by Employee of his
employment with the Company prior to the end of the Term; provided that Employee
shall not be considered to have unilaterally terminated his employment with the
Company, even though such termination is initiated by Employee, if such
termination occurs following: (i) a breach of a material term of this Agreement
by the Company, which is not cured by the Company within thirty (30) days after
receipt by the Company of notice from Employee, or (ii) any relocation to which
Employee has not agreed to an office of the Company located more than thirty-
five (35) miles from the city limits of Atlanta, Georgia.
3. EMPLOYMENT. Subject to the terms and conditions hereof, the Company, through
its Board of Directors, agrees to employ Employee in the office of Chief
Executive Officer and President of the Company, and Employee agrees to accept
such employment and office upon the terms and conditions set forth herein.
4. RESPONSIBILITIES.
A. Commencing as of the Effective Date and during the Term, Employee shall
assume the responsibilities, perform the duties, and exercise the powers as
directed by the Board of Directors (which are presently described on EXHIBIT A).
B. In performing the duties and exercising the powers as set forth in this
Agreement, Employee agrees and acknowledges to act in a professional, ethical
and business like manner at all times and under all circumstances in which
Employee may be representing or acting on behalf of the Company. Employee also
agrees to comply with and follow all codes of conduct and other provisions
included in any employee handbook distributed by the Company.
5. COMPENSATION. The Company shall pay, and Employee agrees to accept, as full
and complete compensation for services to be rendered hereunder during the Term,
the remuneration described below:
A. MONTHLY SALARY. The Company shall pay Employee a base monthly salary
as of the Effective Date of Twenty Three Thousand Seven Hundred and Fifty
Dollars ($23,750.00) per month ("Monthly Salary"), subject to increases which,
if granted, shall be effective and in such amounts as the Board of Directors in
its sole discretion may deem appropriate. Monthly Salary shall be payable
according to the customary payroll practices of the Company.
B. BONUS. The Company shall pay Employee the bonus in accordance with the
terms and conditions set forth on EXHIBIT B hereof.
C. STOCK OPTIONS. Employee will be granted stock options in accordance
with the Company's 1994 Amended and Restated Stock Option Plan as set forth in
EXHIBIT C (the "Plan") subject to the restrictions and rights set forth in the
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Plan and shareholder approval of an increase in the number of shares reserved
under the Plan from 2,400,000 to 3,400,000, according to the stock option terms
set forth on EXHIBIT D.
D. INSURANCE AND BENEFITS.
(i) The Company shall allow Employee to participate in or receive benefits
under all employee and executive benefit plans or arrangements
maintained by the Company all at the highest level that is available
through the Company to other senior officers of the Company subject to
the same terms and conditions as generally apply to such other senior
officers.
(ii) Employee shall be entitled to all holidays recognized by the Company
and vacation time as are generally available to other senior officers
of the Company, with continuing payment of all compensation as set
forth herein. Employee shall be reimbursed by the Company for all
necessary and reasonable expenses incurred on behalf of the Company in
accordance with then current reimbursement policies of the Company.
(iii) Employee shall receive the additional benefits set forth in EXHIBIT E.
E. FORM OF CURRENCY. All amounts set forth in this Agreement are
designated in U.S. dollars.
6. TERMINATION.
A. During the Term, this Agreement may be terminated, subject to the
terms, conditions and obligations hereof, by any of the following events:
(i) Written agreement by each party expressed in a single document
signed by both the Company and Employee;
(ii) Voluntary Termination by Employee;
(ii) Death of Employee;
(iii) Termination Without Cause; or
(iv) Termination With Cause.
B. If the Company elects in its discretion to terminate the employment of
Employee at any time in such a manner as constitutes a Termination Without
Cause, then the Company shall be required to continue to pay Employee an amount
equal to Employee's Monthly Salary at then current rate for a period of eighteen
(18) months ("Severance Payment"). The Severance Payment shall be payable to
Employee in accordance with the Company's standard pay periods and shall be
subject to all applicable withholdings, or, in the Company's sole discretion, in
a lump sum equal to the Severance Payment. The foregoing shall constitute the
sole and exclusive liability of the Company for a Termination Without Cause.
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C. The obligations of Employee under Sections 7, 8, 9, 10, and 11
shall survive termination or expiration of this Agreement for any reason. The
obligations of the Company under Section 6B., to the extent applicable, shall
also survive such termination.
D. Upon termination of employment for any reason, Employee shall return
immediately to the Company all documents, property, and other records of the
Company, and all copies thereof, and all Property, within Employee's possession,
custody or control, including but not limited to any materials containing any
Trade Secrets or Confidential Information or any portion thereof.
7. PROPRIETARY INFORMATION.
A. In performance of services under this Agreement, Employee may have
access to:
(i) information in any form (written, oral or electronic) of the Company
or a third party providing information to the Company under
obligations of non-disclosure which derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use, and is the subject of
efforts that are reasonable under the circumstances to maintain its
secrecy (referred to herein as "Trade Secrets" or, individually, as a
"Trade Secret"); or
(ii) information in any form (written, oral or electronic) of the Company
or a third party providing information to the Company under
obligations of non-disclosure which does not rise to the level of a
Trade Secret, but is valuable to the Company or a third party
providing such information to the Company and treated as confidential
by the Company or a third party providing such information to the
Company (referred to herein as "Confidential Information").
B. Employee acknowledges and agrees that with respect to Trade Secrets
and Confidential Information provided to or obtained by Employee (hereinafter
collectively the "Proprietary Information"):
(i) that the Proprietary Information is and shall remain the exclusive
property of the Company or a third party providing such information to the
Company;
(ii) to use the Proprietary Information exclusively for the purpose of
fulfilling the obligations under this Agreement;
(iii)to return the Proprietary Information, and any copies thereof, in
his possession or under his control, to the Company upon request of the
Company, or expiration or termination of this Agreement for any reason; and
(iv) to hold the Proprietary Information in confidence and not to copy,
publish, or disclose to others or allow any other party to copy, publish,
or disclose to others, in any form, any Proprietary Information without the
prior written approval of an authorized representative of the Company.
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C. The obligations and restrictions set forth in Subsection 7B(iv) above
shall survive expiration or termination of this Agreement, for any reason, and
shall remain in full force and effect as follows:
(i) as to Trade Secrets, for so long as such information remains subject
to protection under applicable law;
(ii) as to Confidential Information, for a period of three (3) years after
expiration or termination of this Agreement for any reason.
D. The obligations set forth in this Section 7 shall not apply or shall
terminate with respect to any particular portion of the Proprietary Information
which:
(i) was in Employee's possession, free of any obligation of confidence,
prior to his receipt from the Company;
(ii) is in the public domain at the time the Company communicates it to
Employee, or becomes available to the public through no breach of this
Agreement by Employee; or
(iii) is received by Employee independently and in good faith from a third
party lawfully in possession thereof and having no obligation to keep such
information confidential.
E. The confidentiality, property, and proprietary rights protections
available in this Agreement are in addition to, and not exclusive of, any and
all other rights, including those provided under copyright, corporate officer or
director fiduciary duties, and trade secret and confidential information laws
and under the Georgia Trade Secrets Act.
8. OWNERSHIP. Employee agrees and acknowledges that all works of authorship and
inventions, including but not limited to products, goods, know-how, Trade
Secrets and Confidential Information, and any improvements, modifications,
enhancements, derivative works, and/or revisions to existing products, goods,
know-how, Trade Secrets and/or Confidential Information, in any form and in
whatever stage of creation or development, arising out of or resulting from, or
in connection with, the services provided by Employee to the Company under this
Agreement or at any time prior to the Effective Date (collectively, the
"Property"), as they now exist and are currently used by the Company or
otherwise, or as they may exist in the future or have existed in the past, are
works made for hire and shall be the sole and exclusive property of the Company.
Employee hereby transfers and assigns to the Company any and all right, title
and interest in the Property, in whatever form, including all worldwide
copyrights, patents, trade secrets, moral rights and confidential and
proprietary rights therein and agrees to execute such documents as the Company
may reasonably request for the purpose of effectuating the rights of the Company
herein.
9. EXCLUSIVE SERVICE AND NON-COMPETITION COVENANT. Employee covenants and agrees
that during his employment with the Company and for a period of two (2) years
following the termination or expiration of his employment with the Company for
any reason, Employee shall not, anywhere within the Area, engage in any one or
more of the activities set forth on EXHIBIT A ("Duties of Employee") attached
hereto and in effect as of the Effective Date in which
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Employee is engaged during the two (2) year period (or the period of time
Employee has been employed by the Company, if shorter) prior to the termination
or expiration of this Agreement, on behalf of any person, firm, corporation or
entity engaged in the Business of the Company, if the Company is engaged in such
business on the date of termination or expiration.
10. COVENANT NOT TO HIRE. Employee agrees that Employee will not, for a period
of two (2) years after termination or expiration of employment with the Company
for any reason, solicit for employment, attempt to employ or affirmatively
assist any other person or entity in employing or soliciting for employment any
person employed by the Company.
11. NON-SOLICITATION. Employee agrees that during his employment with the
Company and during the period of two (2) years immediately following cessation
of Employee's employment with the Company for any reason, Employee shall not, on
Employee's own behalf or on behalf of any person, firm, partnership,
association, corporation or business organization, entity or enterprise,
solicit, contact, call upon, communicate with or attempt to communicate with,
any customer or prospect of the Company, or any representative of any customer
or prospect of the Company, with a view to selling or providing any product,
equipment, or service competitive with any product, equipment or service sold or
provided or under development by the Company during the period of two (2) years
(or the period of time Employee has been employed by the Company, if shorter)
immediately preceding cessation of Employee's employment with the Company,
provided that the restrictions set forth in this Section 11 shall apply only to
customers or prospects of the Company, or representatives of customers or
prospects of the Company, with which Employee had contact during such two (2)
year period (or the period of time Employee has been employed by the Company, if
shorter).
12. EQUITABLE RELIEF. The parties to this Agreement acknowledge that a breach by
Employee of any of the terms or conditions of Sections 7, 8, 9, 10 or 11 of this
Agreement will result in irrevocable harm to the Company and that the remedies
at law for such breach may not adequately compensate the Company for damages
suffered. Accordingly, Employee agrees that in the event of such breach, the
Company shall be entitled to injunctive relief or such other equitable remedy as
a court of competent jurisdiction may provide. Nothing contained herein will be
construed to limit the Company's right to any remedies at law, including the
recovery of damages for breach of this Agreement.
13. SEVERABILITY. If any provision of this Agreement is held to be invalid or
unenforceable by any court of competent jurisdiction, such holdings shall not
affect the enforceability of any other provision of this Agreement, and all
other provisions shall continue in full force and effect.
14. ATTORNEYS' FEES. If a dispute between the parties arises in connection with
this Agreement, the prevailing party as determined through arbitration or final
judgment of a court of competent jurisdiction (which arbitration or judgment is
not subject to further appeal due to the passage of time or otherwise) shall be
entitled to reimbursement from the other party for reasonable attorneys' fees
and expenses incurred by the prevailing party in connection with the resolution
of the dispute.
15. HEADINGS. The headings of the several paragraphs in this Agreement are
inserted for convenience of reference only and are not intended to affect the
meaning or interpretation of this Agreement.
16. ARBITRATION. Other than controversies or claims arising out of or relating
to the covenants contained in Sections 7, 8, 9, 10 and 11 hereof, any
controversy or claim arising out of or relating to this Agreement shall be
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settled by arbitration in accordance with the Commercial Arbitration Rules
("Rules") of the American Arbitration Association ("AAA"). Arbitration shall be
initiated by a party by giving notice in the manner set forth herein to the
other party of its intention to arbitrate, which notice shall contain a
statement setting forth the nature of the dispute, the amount claimed, if any,
and the remedy sought. The initiating party shall then file a copy or copies of
the notice as set forth under the Rules. Atlanta, Georgia shall be the location
where the arbitration is held. The parties shall agree upon and appoint three
(3) arbitrators in accordance with the Rules within twenty (20) days of the
effective date of notice of arbitration; however, if the parties fail to make
such designation within twenty (20) days, the AAA shall make the appointment.
The determinations of such arbitrators will be final and binding upon the
parties to the arbitration, and judgment upon the award rendered by the
arbitrators may be entered in any such court having jurisdiction, or application
may be made to such court for a judicial acceptance of the award and an order of
enforcement, as the case may be. The arbitrators shall apply the laws of the
State of Georgia as to both substantive and procedural questions.
17. NOTICES. All notices, consents, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given or
delivered if (i) delivered personally; (ii) mailed by certified mail, return
receipt requested, with proper postage prepaid; or (iii) delivered by recognized
courier contracting for same day or next day delivery with signed receipt
acknowledgment to:
(a) To the Company:
Iterated Systems, Inc.
Suite 600 - Seven Piedmont Center
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Chairman of the Board of Directors
With a copy to:
Xxxx X. Xxxxx, Esq.
Xxxxxx, Xxxxxxx & Xxxxxx, LLP
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
(b) To Employee:
Xxxx X. Xxxxx
000 Xxxxxxxx XX
Xxxxxxx, Xxxxxxx 00000
or at such other address as the parties hereto may have last designated by
notice to the other parties. Any item delivered personally or by recognized
courier contracting for same day or next day delivery shall be deemed delivered
on the date of delivery. Any item mailed by certified mail shall be deemed to
have been delivered on the date evidenced on the return receipt.
18. GENERAL PROVISIONS. This Agreement shall be governed by and construed under
the laws of the State of Georgia, without giving effect to its conflict of law
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principles. The terms of this Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns. Neither party may assign
his or its rights and obligations under this Agreement to any other party.
19. ENTIRE AGREEMENT. This Agreement contains the entire agreement between the
parties hereto, and except as otherwise provided in this Agreement, supersedes
and cancels all previous and contemporaneous written and oral agreements,
including the Employment Agreement dated March 1, 1997 between the Company and
Employee and any and all amendments thereto. No amendment or modification of
this Agreement shall be valid or binding unless in writing and signed by the
party to be bound.
IN WITNESS WHEREOF, the parties hereto have affixed their seals and
executed this Agreement effective as of the Effective Date.
ITERATED SYSTEMS, INC.
/s/ Xxxx X. Xxxxx
----------------------------------
By: Xxxx X. Xxxxx
---------------------------
Title: Executive Vice President
------------------------
Date: 3/12/98
-------------------------
EMPLOYEE:
/s/ Xxxx X. Xxxxx
----------------------------------
XXXX X. XXXXX, Individually
Date: 9 March, 1998
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EXHIBIT A
TO AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
WITH XXXX X. XXXXX
Duties of Employee
------------------
The following duties of Employee may be modified, reduced or revised by the
Board of Directors in its discretion and upon providing notice to Employee:
1. Manage the daily business and affairs of the Company.
2. Exercise general supervision and administration over all daily affairs
of the Company with power to make and execute all contracts, leases and other
documents or instruments in the conduct of the regular and ordinary business of
the Company, subject to and unless otherwise directed by the Board of Directors.
3. Exercise general supervision over other officers and agents of the
Company.
4. Ensure that all orders and resolutions of the Board of Directors are
carried into effect.
5. Formulate and implement business plans of the Company as approved by
the Board of Directors.
6. Do and perform all such other acts as specified in the Bylaws of the
Company or as directed by the Board of Directors of the Company.
7. Comply with all policies, restrictions and procedures adopted by the
Company or the Board of Directors relating to the sale or purchase of securities
of the Company including all U.S. and Norwegian rules and regulations relating
thereto.
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EXHIBIT B
TO AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
WITH XXXX X. XXXXX
Bonus Arrangement
-----------------
1. Cash Bonus. Pursuant to Section 5B., the Company shall pay Employee a
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cash bonus in the amount of $500,000 ("Cash Bonus") within thirty (30) days
after the first to occur of either:
(a) the Offering Closing Date; or
(b) a Change in Control.
2. Termination. The obligations of the Company to pay any bonuses or
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grant any options as set forth in this Agreement shall terminate in all respects
upon termination of this Agreement for any reason. Employee shall not be
entitled to any bonus payment or option grant as set forth above unless Employee
is employed by the Company as of the date on which the applicable bonus or
option grant is to be made as set forth in this Agreement.
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EXHIBIT C
TO EXECUTIVE EMPLOYMENT AGREEMENT
WITH XXXX X. XXXXX
1994 Amended and Restated Stock Option Plan
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[Attached to original]
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EXHIBIT D
TO AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
WITH XXXX X. XXXXX
Stock Option Terms
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1. OPTION GRANT NO. 1.
Subject to the terms of the Plan, the Company shall grant Employee options
to purchase common stock of the Company on the following terms:
(a) Date of Grant: Effective Date
(b) Exercise Price Per Share: The exercise price per share of the
Company's common stock shall equal $7.26, the closing price on the Effective
Date of the Company's common stock traded on the Oslo Stock Exchange.
(c) Term of Option: 10 years from the Effective Date
(d) Shares Subject to Option and Vesting: 500,000 vesting during
Employee's employment with Company as follows:
(i) 166,667 options vesting on February 16, 1999, of which 13,774
options will be designated as incentive stock options, as such term is defined
in Section 422 of the Internal Revenue Code of 1986, as amended ("ISOs");
(ii) an additional 166,667 options vesting on February 16, 2000,
of which 13, 774 options will be designated as ISOs;
(iii) an additional 166,666 options vesting on February 16, 2001,
of which 13, 774 options will be designated as ISOs.
These options shall vest on a Change of Control, defined as set forth below.
2. OPTION GRANT NO. 2.
Subject to the terms of the Plan, the Company shall grant Employee options
to purchase common stock of the Company according to the following terms:
(a) Date of Grant: Effective Date
(b) Exercise Price Per Share: The option exercise price per share of
the Company's common stock shall equal the closing price on the Effective Date
of the Company's common stock traded on the Oslo Stock Exchange.
(c) Term of Option: 10 years from the Effective Date
(d) Shares Subject to Option and Vesting: 250,000 options shall vest
during Employee's employment with Company upon the first to occur of the
following:
(i) the Offering Closing Date;
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(ii) a Change in Control; or
(iii) Employee completing seven (7) years of Continuous Service
following the Effective Date.
3. OPTION GRANT NO. 3.
Subject to the terms of the Plan, the Company shall grant Employee options
to purchase common stock of the Company according to the following terms:
(a) Date of Grant: Effective Date
(b) Exercise Price Per Share: The option exercise price per share of
the Company's common stock shall equal the closing price on the Effective Date
of the Company's common stock traded on the Oslo Stock Exchange.
(c) Term of Option: 10 years from the Effective Date
(d) Shares Subject to Option and Vesting: 250,000 options shall
vest during Employee's employment with Company upon the first to occur
of the following:
(i) one hundred and eighty (180) days after the Offering
Closing Date;
(ii) Employee completing seven (7) years of Continuous Service
following the Effective Date; or
(iii) a Change in Control.
4. If for any reason the Company is prohibited by applicable corporate or
securities laws from granting the options as set forth above or on the date as
set forth therein, then the obligation of the Company shall be effective as of
the first day on which such prohibition lapses or is no longer in effect.
5. For purposes of this Agreement, a "Change in Control" means the closing
of a transaction during the Term in which the Company's then current
shareholders owning the then currently issued and outstanding shares of common
stock receive consideration valued at $250 million or greater as determined by
the Board of Directors and where:
(a) the beneficial ownership of ninety percent (90%) or more of the
then current issued and outstanding common stock of the Company (or other
securities having generally the right to vote for election of the Board of
Directors) shall be sold, assigned or otherwise transferred to one party, other
than an existing shareholder or optionholder of the Company, whether by sale or
issuance of common stock or other securities or otherwise; or
(b) the Company shall sell, assign or otherwise transfer assets (but
other than stock or other securities of subsidiaries or the grant of license to
intangible assets in the ordinary course of business) having a fair market value
of ninety percent (90%) or more of the total value of the assets of the Company
to one party, other than an existing shareholder or optionholder of the Company
or a majority-held subsidiary of the Company.
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Notwithstanding the above, the following shall not constitute a "Change in
Control" as used herein:
(i) with respect to subsection (b) above only, any conveyance,
transfer or grant to an entity of a collateral assignment of
security title to or security interest in any goods, accounts,
inventory, general intangibles or other assets of the Company or
any of its subsidiaries to secure the obligations of the Company
or any of its subsidiaries to such entity or entities, or the
exercise of any rights or remedies by such entity after a default
of corporate indebtedness; or
(ii) any corporate reorganization where the resulting corporate
entity or entities are controlled by a majority in interest of
the then current shareholders of the Company.
6. For purposes of this Agreement, a "Change of Control" means any
transaction or series of related transactions occurring within a ninety (90) day
period, whereby (i) the beneficial ownership of fifty percent (50%) or more of
the then outstanding Common Stock of the Company (or other securities having
generally the right to vote for election of the Board) shall be sold, assigned
or otherwise transferred to one party, other than an existing shareholder or
optionholder of the Company, whether by sale or issuance of common stock or
other securities or otherwise, or (ii) the Company shall sell, assign or
otherwise transfer assets (but other than stock or other securities of
subsidiaries or the grant of licenses to intangible assets in the ordinary
course of business) having a fair market value of fifty percent (50%) or more of
the total value of the assets of the Company to one party, other than an
existing shareholder or optionholder of the Company or a majority-held
subsidiary of the Company. Notwithstanding the above, the following shall not
constitute a "Change of Control" as used herein: (a) the closing of an
underwritten offering of the Company's Common Stock following the declaration of
effectiveness by the SEC under the Securities Act of 1933, as amended,
("Offering"), (b) the closing of an offering of Shares in any amount by the
Company on the Oslo Stock Exchange, or (c) with respect to subsection (ii) above
only, any conveyance, transfer or grant to an entity of a collateral assignment
of security title to or security interest in any goods, accounts, inventory,
general intangibles or other assets of the Company or any of its subsidiaries to
secure the obligations of the Company or any of its subsidiaries to such entity
or entities, or the exercise of any rights or remedies by such entity after a
default of corporate indebtedness, or (c) any corporate reorganization where the
resulting corporate entity or entities are controlled by a majority in interest
of the then current shareholders of the Company.
-15-
EXHIBIT E
TO EXECUTIVE EMPLOYMENT AGREEMENT
WITH XXXX X. XXXXX
Additional Benefits
-------------------
During the Term, Employee shall receive an automobile allowance of $800.00
per month and membership in the Buckhead Club (or such other club as may be
mutually agreeable to Employee and the Board of Directors).
-16-
