EMPLOYMENT AGREEMENT
EXHIBIT
10.47
This
EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of November 6,
2009, between COLLECTORS UNIVERSE, INC., a Delaware corporation (the “Company”
or “CUI”), and XXXXXXX X. XXXXXXXXX (Executive”), with reference to the
following:
A. Effective
March 16, 2009, the Company employed Executive as its interim Chief
Executive Officer. The Company now desires to continue Executive’s
employment as its Chief Executive Officer and Executive desires to accept such
employment, for the period and on the terms and conditions set forth hereinafter
in this Agreement and, consequently, his employment as the Company’s Chief
Executive Officer shall no longer be on an interim basis.
B. Certain
of the terms in this Agreement with initial capital letters are defined in Exhibit A
hereto which, by this reference, is incorporated into and made an integral part
of this Agreement.
NOW,
THEREFORE, in consideration of the respective promises of each party made to the
other in this Agreement and other good and valuable consideration, the receipt
of which is hereby acknowledged by each of the parties, it is agreed as
follows:
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1.
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Employment as Chief
Executive Officer.
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1.1
Position with
Company. Executive is hereby employed by the Company as its
Chief Executive Officer (the “CEO”) to perform the duties customarily performed
by a chief executive officer of a publicly traded, NASDAQ listed company, and
Executive hereby accepts such employment and agrees to serve in that position in
accordance with the terms and subject to the conditions contained in this
Agreement. Executive shall perform his duties and responsibilities as
the Company’s CEO fully, faithfully and in a diligent and timely manner
throughout the term of his employment with the Company and in his capacity as
CEO he will report to the Board of Directors of the Company (the
“Board”).
1.2 CEO
Responsibilities. As the Company’s CEO, Executive shall be
responsible for (i) the formulation of strategic and business plans and
initiatives for the Company and its subsidiaries and upon their approval by the
Board, their implementation, (ii) the supervision of the senior management
personnel of the Company and its subsidiaries, (iii) the financial
performance and financial condition of the Company and its subsidiaries, and
(iv) the accuracy and completeness of the Company’s financial and public
reporting, including the reports filed with the Securities and Exchange
Commission, all under the oversight of the Company’s Board. Executive
also shall perform such other duties as may be assigned from time to time to
Executive by the Board, provided that such duties are commensurate with those
customarily assigned to chief executive officers of public companies with
revenues and market capitalizations comparable to that of the
Company. Executive hereby represents and warrants that, except as may
otherwise have been disclosed in writing to the Company, he is under no
contractual or other commitments (written or oral) that are inconsistent or
would interfere with the performance of his duties as the Company’s CEO,
including, but not limited to, any non-competition, trade secret or
confidentiality or similar agreements. In addition, Executive also
represents that none of the information that he needs or will use in performing
his duties as the Company’s CEO was obtained from any Person who employed
Executive in the past as an employee or engaged Executive’s services as an
non-employee consultant or advisor.
1.3. Employee Confidentiality
Agreement. It is hereby acknowledged that Executive has
previously executed and delivered to the Company and is a party to an
Employee Confidentiality Agreement and the parties agree that such Agreement is
and shall continue to be in full force and effect.
2. Term of
Employment. Unless sooner terminated as provided in
Section 4 below, the term of Executive’s employment with the Company as its
CEO shall continue until and shall end on June 30, 2011 (the “Expiration
Date”).
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3. Compensation and
Benefits. Executive’s compensation for all services rendered
to CUI or to any Affiliate of CUI (as hereinafter defined in this Agreement)
shall be as follows:
3.1 Salary. As
compensation for Executive’s services as the Company’s CEO, Executive will
receive a base salary of Fifteen Thousand Dollars ($15,000) per month (the
“Monthly Salary”), which shall be payable in equal twice-monthly installments in
accordance with the Company’s customary payroll practices, less tax and other
required withholdings. If Executive’s employment terminates other
than on the last business day of any calendar month, the Monthly Salary for such
month shall be pro-rated based on the number of days in such month that
Executive was employed by the Company as its CEO.
3.2 Benefits. During
the term of Executive’s employment as the Company’s CEO, he will be entitled to
participate in those employee benefit programs that are generally made available
to other full time employees of the Company, subject to the eligibility
requirements thereof, including, without limitation, health insurance coverage
for him and his immediate family and paid vacation which shall accrue in
accordance with the Company’s applicable vacation policy. The Company
also shall pay Executive an automobile allowance in the amount of $650 per month
as reimbursement to Executive for the costs of using his personal automobile on
Company business during the term of your employment as the Company’s
CEO.
3.3 Reimbursement of
Expenses. Executive shall be entitled to be reimbursed
promptly for the reasonable out-of-pocket expenses incurred by him in the
performance of his duties for the Company, in accordance with and subject to the
Company’s expense reimbursement policies as in effect from time to
time. Without limiting the Company’s obligation pursuant to the
preceding sentence, reimbursement of any such expenses shall (a) be paid to
the Executive no later than December 31 of the year following the year in which
the expenses were incurred, (b) the right to reimbursement during the year
will not affect reimbursements or in-kind benefits provided to the Executive in
any other year, and (c) the Executive’s right to reimbursement shall not be
subject to liquidation or exchange for any other benefit.
3.4 Taxes and
Withholdings. All compensation and benefits payable to
Executive under this Agreement, including amounts payable to him pursuant to
Section 5 below, shall be paid net of any employment taxes and any other
withholdings required pursuant to applicable law or under any employee benefit
plans or programs in which Executive or his dependents participate.
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4.
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Early
Termination.
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4.1 Termination by the Company
without Cause. The Company shall be entitled, by action of the
Board, at any time to terminate Executive's employment with the Company without
Cause, effective on fifteen (15) days prior written notice to Executive, provided, that in the
event of such a termination without Cause, the Company shall be entitled to make
such termination effective immediately on notice thereof, in which event,
however, Executive will continue receiving his compensation, as set forth in
Section 3 above, for a period of 15 days following that earlier effective
date of such termination. Executive’s employment with the Company
also shall terminate in the event and on the occurrence of his Disability or his
death (which for purposes of this Section 4.1 shall be deemed to constitute
a termination of Executive’s employment by the Company without
Cause). In the event of any such termination of Executive’s
employment pursuant to this Section 4.1, the Company shall:
(a) Salary
Continuation. continue to pay Executive (or in the case of his
death, his heirs) his base salary, at the rate in effect on the date of such
termination of employment for the then remaining original term of his employment
as set forth in Section 2 above, payable in equal installments on the Company’s
regular payroll dates and in accordance with the Company’s customary payroll
procedures as then in effect. Each salary continuation payment shall
be considered a separate payment for purposes of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), including for purposes of
Treasury Regulation Section 1.409A-2(b)(2)(iii).
(b)
Continuation of Medical
Insurance. Upon Executive’s timely election of continuation
coverage under COBRA, for the period hereinafter specified (the “Insurance
Continuation Period”), the Company will pay one hundred percent (100%) of
Executive’s COBRA premiums for the medical insurance coverage as in effect on
the day immediately preceding the effective date of such termination without
Cause for the entire Insurance Continuation Period. For purposes of
this Section 4.1, the term “Insurance Continuation Period” shall mean the
shorter of (i) twenty-four (24) months following such termination of
employment (ii) the date on which Executive obtains employment with another
employer that makes health insurance available to him and his dependents
(“Alternative Insurance Coverage”). In the event that Executive’s
COBRA eligibility period expires prior to the end of the Insurance Continuation
Period (other than by reason of his obtaining Alternative Insurance Coverage),
the Company shall procure and pay 100% of the premiums for comparable health
insurance coverage for Executive and his dependents for the then remainder of
the Insurance Continuation Period. Executive agrees that if he
obtains Alternative Insurance Coverage from another employer prior to the
expiration of the above-mentioned 24 month period, he shall promptly notify
the Company thereof. Each premium payment shall be paid when due and
shall be considered a separate payment for purposes of Section 409A of the
Code.
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4.2 Termination for Cause or by
Executive. The Company may terminate Executive’s employment
for Cause (as defined in Exhibit A hereto), at any time effective on written
notice to him. Executive may resign or terminate his employment with
the Company at any time and for any reason effective on fifteen (15) days prior
written notice to the Company, provided that, if Executive elects to resign or
terminate his employment, the Company may elect, instead, to terminate
Executive’s employment for Cause effective immediately on written notice to
Executive. In either case, the Company’s sole obligation and
liability to Executive shall be to pay Executive any unpaid salary, together
with any unused vacation, accrued to the effective date of such
termination.
4.3 Change of
Control. In the event a Change of Control (as defined in Exhibit A) of
the Company is consummated, Executive shall be entitled, within the succeeding
thirty (30) days, to terminate his employment with the Company (or any
successor thereto if the Company is not the surviving party in such Change of
Control) effective on fifteen (15) days prior written notice to the Company
or its successor (as the case may be) and any such termination shall be deemed,
for purposes of this Section 4, to constitute a termination by the Company
of Executive’s employment without Cause and Executive shall thereupon become
entitled to receive the salary continuation and medical insurance coverage
continuation benefits on the same terms and conditions as set forth in
Section 4.1 above.
4.4 Effect of Company
Breach. In the event the Company commits a breach of any of
its material obligations under this Agreement and fails to cure such breach
within thirty (30) days of its receipt of a written notice from Executive
specifying the nature of such breach, Executive shall be entitled, as
Executive’s sole right and remedy therefor, to terminate his employment with the
Company on ten (10) days’ prior written notice to it which, to be
effective, must be given within thirty (30) days of Executive’s discovery
of such breach. If Executive elects to exercise such right of
termination in accordance with and within the time period specified in the
immediately preceding sentence, such termination of employment by him shall be
deemed to constitute a termination of Executive’s employment by the Company
without Cause pursuant to Section 4.1 hereof, entitling Executive to the
post termination continuation of salary and medical insurance coverage on the
same terms and conditions as are specified in that Section.
4.5 Continuation of Health
Insurance on Expiration of Employment. If Executive ceases to
be employed as Chief Executive Officer by the Company due to the expiration of
this Employment Agreement on June 30, 2011, then upon Executive’s timely
election of continuation coverage under COBRA, the Company will pay fifty
percent (50%) of Executive’s COBRA premiums for the medical insurance coverage
as in effect on the day immediately preceding the expiration of this Agreement
for the entire Insurance Continuation Period (as defined in Section 4.1
above). Each premium payment shall be paid when due and shall be
considered a separate payment for purposes of Section 409A of the
Code.
4.6 Exclusivity of
Remedies. In the event of any termination of Executive’s
employment by the Company or by Executive, and whether such termination is or is
not for Cause, then the respective rights and remedies and the respective
obligations of the parties hereto set forth in this Section 4 shall
constitute the sole and exclusive rights, remedies and obligations of the
parties arising out of or in connection with any termination of this Agreement
and Executive’s employment with the Company, and each party expressly disclaims
and waives any and all other rights or remedies it or he (as the case may be)
would, but for the provisions of this Section 4.5, have under this
Agreement or under applicable law by reason of such termination of employment or
the acts or omissions that led to such termination of employment.
4.7 Effect of Termination of
Employment on this Agreement. Upon a termination of
Executive’s employment with the Company for any reason whatsoever, and whether
by the Company or Executive, this Agreement shall terminate and shall be of no
further force or effect; provided, however, that this
Section 4, Section 5 and Section 6 of this Agreement and
Executive’s Employee Confidentiality Agreement shall survive any such
termination.
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4.8 Payment
Delay. Notwithstanding anything herein to the contrary, to the
extent any payments to Executive pursuant to this Section 4 are treated as
non-qualified deferred compensation subject to Section 409A of the Code,
then (i) no such amount shall be payable pursuant to this Section 4
unless Executive’s termination of employment constitutes a “separation from
service” with the Company, as such term is defined in Treasury Regulation
§ 1.409A-1(h) or any successor provision thereto (a “Separation from
Service”), and (ii) if Executive, at the time of his Separation from
Service, is determined by the Company to be a “specified employee” for purposes
of Section 409A(a)(2)(B)(i) of the Code and the Company determines that delayed
commencement of any portion of the termination benefits payable to Executive
pursuant to this Agreement is required in order to avoid a prohibited
distribution under Section 409A(a)(2)(B)(i) of the Code (any such delayed
commencement, a “Payment Delay”), then such portion of the Executive’s
termination benefits described in this Section 4 shall not be provided to
Executive prior to the earlier of (A) the expiration of the six (6)
month period measured from the date of the Executive’s Separation from Service,
(B) the date of the Executive’s death or (C) such earlier date as is
permitted under Section 409A of the Code. Upon the expiration of
the applicable Code Section 409A(a)(2)(B)(i) deferral period, all payments
deferred pursuant to a Payment Delay shall be paid in a lump sum to Executive
within 10 days following such expiration, and any remaining payments due
under the Agreement shall be paid as otherwise provided herein. The
determination of whether Executive is a “specified employee” for purposes of
Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from
Service shall made by the Company in accordance with the terms of
Section 409A of the Code and applicable guidance thereunder (including
without limitation Treasury Regulation Section 1.409A-1(i) or any successor
provision thereto).
4.9 Exceptions to Payment
Delay. Notwithstanding Section 4.8 above, to the maximum
extent permitted by applicable law, amounts payable to Executive pursuant to
this Section 4 shall be made in reliance upon Treasury Regulation
§ 1.409A-1(b)(9) with respect to separation pay plans, or Treasury
Regulation § 1.409A-1(b)(4) with respect to short-term
deferrals. Accordingly, the severance payments provided for in this
Section 4 are not intended to provide for any deferral of compensation
subject to Section 409A of the Code to the extent (i) the severance
payments payable pursuant to this Section 4 by their terms, and determined
as of the date of Executive’s Separation from Service, may not be made later
than the 15th day of the third calendar month following the later of
(A) the end of the Company’s fiscal year in which Executive’s Separation
from Service occurs or (B) the end of the calendar year in which
Executive’s Separation from Service occurs, or (ii) (A) such severance
payments do not exceed an amount equal to two times the lesser of (1) the
amount of Executive’s annualized compensation based upon Executive’s annual rate
of pay for the calendar year immediately preceding the calendar year in which
Executive’s Separation from Service occurs (adjusted for any increase during the
calendar year in which such Separation from Service occurs that would be
expected to continue indefinitely had Executive remained employed with the
Company) or (2) the maximum amount that may be taken into account under a
qualified plan pursuant to Section 401(a)(17) of the Code for the calendar year
in which Executive’s Separation from Service occurs, and (B) such severance
payments shall be completed no later than December 31 of the second calendar
year following the calendar year in which Executive’s Separation from Service
occurs.
5.
Continued Service on the
Board of Directors. Your position as a member of the Company’s
Board of Directors shall not be affected by your employment as the Company’s CEO
and you will continue to receive the same compensation for your services as a
director as is received by outside (non-management) directors for their service
as members of the Board.
6.
Miscellaneous.
6.1 No Other
Agreements. This Agreement (together with the Employee
Confidentiality Agreement and any such other agreements referenced in Section 5
above), contain all of the terms and provisions relating to and governing the
employment relationship between you and the Company and supersede any other
prior or contemporaneous agreements or understandings (written, oral or implied)
between you and the Company relating in any way to your employment as CEO of the
Company, including the above referenced letter dated March 16, 2009, which is
hereby superseded in its entirety and is no longer in effect.
6.2 Amendments and
Waivers. This Agreement, the Employee Confidentiality
Agreement and such other agreements relating to intellectual property of the
Company to which Executive is or becomes a party, may be amended at any time,
but only by a written instrument signed by both parties. A waiver by
either party of any right or other matter may only be made by an instrument in
writing signed by the party to be charged thereby. No failure to
exercise and no delay on the part of either party in exercising any right or
power hereunder or granted by law will operate as a waiver thereof and any
single or partial exercise of any right, power or privilege shall not preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege.
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6.3 Severability. If
any provision of this Agreement or of the Employee Confidentiality Agreement is
held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof or thereof (as the case may
be) shall not be affected or impaired in any way.
6.4 Governing
Law. This Agreement is made and is to be performed in the
state of California and shall be governed by, construed in accordance with and
enforced under the internal laws of the State of California, excluding its
choice of law rules and principles.
6.5 Arbitration.
(a) Arbitration. Any
dispute between the parties relating to this Agreement or any agreements entered
into pursuant hereto by the parties, including any controversy or dispute
regarding the enforceability or the interpretation of any of the provisions
hereof or thereof, or with respect to any alleged or actual non-performance by a
party of its obligations hereunder or thereunder or with respect to your
performance as the Company’s CEO, shall be resolved exclusively by binding
arbitration in accordance with the rules of commercial arbitration of the
American Arbitration Association. Any arbitration proceeding shall be
held exclusively in Orange County, California and any service of process in or
in connection with any such proceeding shall be adequate if sent by certified or
registered mail, postage prepaid to the address of the other party last
communicated in writing by such other party to the party initiating such
arbitration. The party deemed by the arbitrator to be the prevailing
party in any such arbitration proceeding shall be entitled to an award
obligating the other party to pay to the prevailing party the reasonable fees
and disbursements of such prevailing party’s attorneys, accountants and expert
witnesses incurred in any such proceeding. The determinations of the
arbitrator in any such proceeding shall be final and binding on and
non-appealable by the parties.
(b) Waiver of Jury
Trial. Each of the parties acknowledges that by agreeing to
resolve their disputes exclusive by arbitration, as provided in Section 9(a)
above, they are waiving any right they may otherwise have had to have any such
disputes or controversies resolved by means of a jury trial. EACH
PARTY DOES HEREBY EXPRESSLY AND IRREVOCABLY WAIVE SUCH PARTY’S RIGHTS TO A TRIAL
BY JURY IN ANY SUCH PROCEEDING, AND IN ANY TRIAL OR OTHER PROCEEDING BETWEEN THE
PARTIES RELATING IN ANY WAY TO THIS AGREEMENT, AND EXPRESSLY AND IRREVOCABLY
AGREES THAT THE TRIER OF FACT IN ANY SUCH PROCEEDING OR TRIAL OR OTHER
PROCEEDING SHALL BE THE ARBITRATOR OR THE JUDGE.
(c) Exception for Equitable
Relief. Notwithstanding anything to the contrary that may be
contained in this Section 6.5, each party shall have the right to petition
and obtain from any court of competent jurisdiction any equitable remedies,
including immediate temporary, preliminary and permanent injunctive relief, to
halt a breach or prevent a threatened breach of this Agreement or of the
Employee Confidentiality Agreement or to obtain specific performance of any of
the obligations of the other party hereunder or thereunder, and it is further
expressly agreed by the parties that, in the event any action or proceeding is
brought in equity to obtain any such relief or remedies, no party will urge, as
a defense thereto, that there is an adequate remedy available at law and no
party seeking such relief shall be obligated to post a bond or other security as
a condition to the granting of same.
6.6 Construction and Certain
Definitions. This Agreement is the result of arms’ length
negotiations between the parties hereto, and no provision hereof shall be
construed against a party by reason of the fact that such party or its legal
counsel drafted said provision or for any other reason.
6.7 No
Assignment. No party may transfer or assign any of its rights
or obligations under this Agreement and any attempt to do so shall be null and
void; provided,
however, that,
subject to Section 4.3 above, the Company shall be entitled, without the
necessity of having to obtain the consent of Executive, to assign this Agreement
and delegate its duties hereunder to any corporation or other entity that
acquires a majority or more of the outstanding common stock or all or
substantially all of the assets of the Company, whether by purchase, merger,
consolidation or otherwise.
6.8 Binding on
Successors. Subject to Section 6.7 above, this Agreement
shall inure to and be binding on the parties and their respective heirs, legal
representatives and successors and assigns.
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6.9 Headings. Section,
subsection and paragraph headings are for convenience of reference only and
shall not affect the meaning or have any bearing on the interpretation of any
provision of this Agreement.
6.10 Counterparts. This
Agreement may be executed in any number of counterparts, and each of such signed
counterparts, including any photocopies or facsimile copies thereof, shall be
deemed to be an original, but all of such counterparts shall constitute one and
the same instrument.
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and
date first above written:
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COLLECTORS
UNIVERSE, INC.
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By:
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/s/
XXXXXX X. XXXXXXX
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Name:
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XXXXXX
X. XXXXXXX
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Title:
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CHIEF
FINANCIAL OFFICER
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EXECUTIVE:
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XXXXXXX
X. XXXXXXXXX
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6
EXHIBIT A
TO
EMPLOYMENT
AGREEMENT DATED AS OF NOVEMBER 6, 2009
BETWEEN
XXXXXXX X. XxXXXXXXX AND COLLECTORS UNIVERSE, INC.
DEFINITIONS
This
Exhibit is incorporated into and is made an integral part of that certain
Employment Agreement dated as of October 6, 2009 (the “Agreement”) between
Xxxxxxx X. XxXxxxxxx (referred to therein and herein as “Executive”) and
Collectors Universe, Inc. (referred to therein and herein as the
“Company”).
The
following terms, as used in the Agreement or in this Exhibit, shall have the
respective meanings set forth below:
1. An
“Affiliate” of
the Company means any individual, entity or organization that controls, is under
common control with or is controlled by the Company.
2. The
term “Parent”
shall mean any corporation or other entity that owns beneficially, either
directly or indirectly through its beneficial ownership or control of another
corporation or business entity, at least 51% of the outstanding voting
securities of that other corporation or entity.
3. The
term “Person”
means any natural person and any corporation, limited liability company, general
or limited partnership, joint venture, trust, estate or any other
organization.
4. The
term “Cause”
shall mean the occurrence of any of the following:
(a) Executive’s
conviction of an act that, under applicable law or government regulations,
constitutes a felony or a misdemeanor involving moral turpitude;
(b) Executive’s
commission of an act that subjects the Company, or any Affiliate (as hereinafter
defined) to any material civil liabilities or penalties or any criminal
penalties or fines or which, in the good faith judgment of the Board, materially
damages the Company’s reputation or its competitive position within any of its
markets;
(c) Executive’s
breach or violation of any of his covenants in his Employee Confidentiality
Agreement, or of any conflict of interest or ethics policies from time to time
adopted by the Board and made applicable generally to the officers of the
Company, which continues unremedied for a period of ten (10) days following
written notice thereof to the from the Company or which is not susceptible to
cure;
(d) Executive’s
breach or violation of any of his material covenants or obligations contained in
the Letter Agreement which continues unremedied for a period of fifteen (15)
days following written notice thereof from the Company to Executive or which is
not susceptible of cure;
(e) Executive’s
failure, on at least two separate occasions, to perform his material duties as
Chief Executive Officer (other than due to his illness); or
(f) Executive’s
insubordination with respect to any lawful direction of the Board.
5. Change of
Control. A “Change in Control” of the Company shall be deemed
to have occurred if:
(a) There
is consummated:
(i) any
consolidation or merger of the Company with another Person, if (A) the
Company is not the continuing or surviving corporation, or (B) the shares
of the Company’s Common Stock are converted into cash, securities or other
property, provided, however, any such
merger or consolidation shall not constitute a Change in Control if the holders
of the Company’s Common Stock immediately prior to such merger or consolidation
will own, in the aggregate, at least 50% of the outstanding shares of voting
securities of the surviving corporation or its Parent (as hereinabove defined)
immediately after the merger or consolidation; or
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(ii) any
sale, exchange or other transfer (in one transaction or a series of related
transactions during the 12-month period ending on the date of the most recent
transaction) of all, or substantially all, of the assets of the Company,
provided, however, that such sale, exchange or other transfer shall not
constitute a Change in Control if (i) the Person acquiring such assets is a
corporation or other entity in which the holders of the Company’s Common Stock
immediately prior to such transaction will own, in the aggregate, at least 50%
of the outstanding voting securities of such Person acquiring such assets or its
Parent immediately after consummation of such transaction, or (ii) such Person
is a “related person” within the meaning of Treasury Regulation
§ 1.409A-3(i)(5)(vii)(B); or
(b) any
Person or group (acting in concert) (as such terms are used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)), shall acquire (other than in or as a result of a
transaction described in Paragraph 5(a) above) beneficial ownership (within the
meaning of Rule 13d 3 under the Exchange Act) of a number of the outstanding
voting securities of the Company that, together with the voting securities held
by such Person or group, constitutes more than fifty percent (50%) of the total
outstanding voting securities of the Company, provided, however, that such a
transaction shall not result in or constitute a Change in Control if
(i) the Person or group making such acquisition of beneficial ownership
(the “Acquiring Person”) was the beneficial owner of more than 10% of the
outstanding voting securities of the Company immediate prior to the acquisition,
or (ii) the transaction that caused such Acquiring Person’s beneficial
ownership to exceed fifty percent (50%) of the outstanding voting securities of
the Company was a purchase of voting securities of the Company in a firmly
underwritten public offering of voting securities of the Company.
6. Disability. the
term “Disability” shall
mean Executive’s incapacity due to physical or mental illness that causes the
Executive to be absent from his duties with the Company on a full-time basis for
three (3) consecutive months. In the event there is a dispute
over whether the Executive is disabled, then, such dispute shall be resolved by
a practicing physician, licensed as such and in good standing, in California
that is selected by the Company, to conduct a physical or, in the case of an
alleged mental disability a psychiatrist to conduct a psychological, examination
of the Executive and Executive agrees that he will submit to such examination in
the event of such a dispute. The determination of such physician or
psychiatrist (as the case may be) shall be binding on and
non-appealable.
7. Wherever
the terms “include” or “including” appear in
this Employment Agreement, such term shall mean “include without limitation” or
“including but not limited to” and, unless the context indicates clearly and
unambiguously to the contrary, the terms “hereof,” “herein,” “hereinafter,” “hereunder” and “hereto” and any other
terms of similar meaning, whenever used in this Agreement, shall refer to this
Agreement as a whole and not to the particular section or subsection of, or
paragraph or clause of this Agreement where any such term appears.
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