EMPLOYMENT AGREEMENT
Exhibit
10.1
AGREEMENT
(the “Agreement”)
made this 10th day of May, 2007 (the “Effective
Date”) by and between Presstek, Inc., a Delaware corporation (the
“Employer”),
and Xxxxxxx Xxxxxxxx, (the “Employee”).
WHEREAS,
both the Employer and the Employee believe it is in the best interests of
the
Employer and the Employee that the Employee be employed as President, Chief
Executive Officer and Director of the Board of Directors (the “Board”)
of the Employer.
THEREFORE,
in consideration of the promises contained in this Agreement the parties agree
as follows:
1. Employment. During
the
Term of
this Agreement, the Employee agrees to serve as President, Chief Executive
Officer, and as a member of the Board of the Employer. The Employee agrees
to
devote all of his business time and efforts to the performance of his duties.
The Employee shall at all times report to, and his activities shall at all
times
be subject to, the direction and control of the Board. The Employee shall
exercise such powers and comply with such directions and duties in relation
to
the business and affairs of the Employer as may from time to time be vested
in
or requested of him, and shall not engage in any other business activity,
whether or not for profit, without the written authorization of the Board.
If
Employee shall be elected to other offices of the Employer or any of its
affiliates, he shall serve in such positions without further compensation than
provided for in this Agreement.
2. Term.
The Term
of this Agreement shall commence on May 10, 2007 (May 10 being the “Effective
Date”)
and
end on the day preceding the fourth anniversary of the Effective Date (that
four
year period, and any extensions thereof, being the “Term”),
unless terminated sooner in accordance with the provisions of this Agreement.
On
each anniversary of the Effective Date, commencing with the fourth anniversary
of the Effective Date, the Term shall be automatically extended for an
additional year unless the Employer or the Employee gives written notice to
the
other, at least 180
days
prior to such anniversary, that the Employer or the Employee does not concur
in
such extension.
3. Compensation.
The Employer agrees to pay the Employee an annual Base Salary of $600,000
in the
first year of the Term. The Board or the Compensation Committee will review
the
Base Salary no less than annually during the Term, and increase the Base
Salary
so that it is no less than $633,000 in the second year of the Term, no less
than
$667,000 in the third year of the Term, and no less than $700,000 in the
fourth
year of the Term. In the annual salary review, the Board or Compensation
Committee may also compensate the Employee for increases in the market value
of
the Employee's duties and responsibilities and may provide for performance
or
merit increases. The Base Salary of the Employee and his Target Bonus shall
not
be decreased at any time during the Term from the amount then in effect,
unless
the Employee otherwise agrees in writing. The Base Salary shall be payable
to
the Employee in accordance with the Employer’s payroll system, as determined by
the Employer, but not less frequently than monthly. All payments and benefits
in
this Agreement shall be subject to all applicable federal, state and local
withholding, payroll and other taxes.
Participation
in discretionary bonuses, retirement and other employee benefit plans and fringe
benefits shall not reduce the Base Salary payable to the Employee under this
Section 3.
4. Target
Bonuses.
Employee
will be entitled to a guaranteed cash bonus for 2007 of $400,000, provided
that
Employee commences employment no later than May 15, 2007. In the event
Employee commences employment subsequent to May 15, 2007, such 2007 bonus
shall be pro-rated so that Employee is paid one-twelfth (1/12) of said amount
for each full month of service completed during calendar year 2007. Said bonus
shall be paid upon completion of the Employer’s annual audit, but in no event
later than April 1, 2008. Beginning with calendar year 2008, the Employee is
also eligible to receive an annual discretionary target bonus of no less than
66.67% of that year’s Base Salary (the “Target Bonus”). In the third year of the
Term the Target Bonus shall be no less than 75% of that year’s Base Salary. In
the fourth year of the Term the Target Bonus shall be no less than 100% of
that
year’s Base Salary. Such Target Bonus, if any, shall be based on the Employee’s
achievement of certain goals and objectives to be determined by the Board in
consultation with the Employee in the first quarter of each calendar year or
otherwise as practical and paid upon completion of the Employer’s annual audit
for the year of the Target Bonus.
5. Stock
Grant, Stock Option Grant, Employee Benefit Plans.
(a)
On
the Effective Date, Employer shall grant Employee 300,000 shares of the
Employer’s restricted stock (the “Signing
Bonus”),
subject to the terms and conditions of the Subscription Agreement annexed hereto
as Appendix A, which Signing Bonus shall vest in full on the day Employee
commences employment.
(b)
On
the Effective Date, subject to the terms and conditions of the Stock Option
Agreement annexed hereto as Appendix B,
the
Employee shall be granted the right to purchase 1,000,000 shares of the
Employer's Common Stock (the “Stock
Option Grant”),
which
options shall vest equally as follows:
20%
on
the Effective Date;
an
additional 20% on January 1, 2008;
an
additional 20% on January 1, 2009;
an
additional 20% on January 1, 2010;
the
final
20% on January 1, 2011.
(c)
The
per share exercise price for Employee’s Stock Option Grant will be determined by
the average closing price of a share of the Employer’s Common Stock for the five
(5) trading days immediately prior to the Effective Date.
(d)
The
Signing Bonus and the Stock Option Grant referred to in this Section 5 are
made
pursuant to NASDAQ Rule 4350(i)(1)(A)(iv) (the “NASDAQ
Exception”)
as an
inducement material to the Employee’s entering into employment with the Employer
and are approved by the Employer’s independent compensation committee. Following
the issuance of these grants in reliance on this NASDAQ Exception, Employer
will
disclose in a press release the material terms of the grants, including the
recipient of the grants and the number of shares and options
involved.
(e)
The above Stock Option Grant pursuant to the NASDAQ Exception shall vest
in its
entirety on the date that any of the following occur: (i) the Employer
terminates the Employee’s employment without Cause; (ii) the Employee voluntary
terminates his employment for Good Reason; (iii) a Change in Control; (iv)
the
Employer or the Employee gives written notice that it or he does not concur
to
an extension of the Term; (v) the Employee’s death, or (vi) the Employee becomes
Totally Disabled (as those capitalized terms are defined below).
(f)
Each
portion of the option contained in the above Stock Option Grant shall be
exercisable for five (5) years after that portion of the option has vested,
unless sooner terminated as set forth in this Agreement.
(g)
In
addition to the foregoing, the Employee may participate during the Term in
any
other plan or arrangement of the Employer relating to stock options, stock
purchases, pension, thrift, profit sharing benefits, other benefits under
qualified or non-qualified deferred compensation plans, group life insurance,
medical coverage, education or any other employee benefits that the Employer
in
its sole discretion may adopt and elect to make available for the benefit of
the
employees.
(h)
The
Employer fully reserves its rights to change, modify or discontinue any of
its
stock purchase, retirement, or employee benefit plans at any time during the
Term in its sole and absolute discretion, and in accordance with applicable
law,
however any such change, modification or discontinuance shall not materially
adversely affect any Equity that has been granted to Employee, whether or not
such Equity has vested.
6. Vacations.
The
Employee shall be entitled to an annual paid vacation of four (4) weeks per
year
during each year of the Term. The timing of paid vacations shall be scheduled
in
a reasonable manner by the Employee.
7. Termination
of Employment.
The
Employee’s employment with the Employer may terminate as
follows (and the last day of employment shall be the “Termination
Date”):
(A) termination
by the Board of the Employer either (i) for Cause (as defined in Section
7(a)(iii) below) or (ii) without Cause;
(B) termination
by the Employee either for (i) Good Reason (as defined in Section 7(b) below)
or
(ii) without Good Reason;
(C) death
or
Total Disability of the Employee, or
(D) non-concurrence
in the automatic extension of the Term.
(a)
Termination
by the Board.
(i)
The Board may terminate the
Employee’s employment at any time, but any termination by the Employer other
than termination for Cause (as defined in Section 7(a)(iii) below) shall not
prejudice the Employee’s right to receive compensation and other benefits under
this Agreement, except as otherwise stated in this Agreement. In the event
of a
termination for Cause, the Employee shall have no right to receive payment,
compensation or other benefits, except that the Employee’s entitlement to
indemnification under Paragraph 13 of the Agreement, entitled “Indemnification”,
is unaffected by any termination of employment except for a termination for
Cause related to the claim with respect to which indemnification is sought.
Where the Employer terminates the employment of the Employee other than for
Cause, the Employer shall, after the Termination Date, continue to be subject
to
any obligations to the Employee under this Agreement and under any employee
benefit plan in which the Employee is then a participant, except as otherwise
provided in this Agreement.
(ii)
In
the event that the Employee’s employment ceases by reason of the Employer’s
termination of the Employee’s employment during the Term other than for Cause,
or if the Employee voluntarily resigns for a Good Reason, or as a result of
the
Employee’s death or Total Disability, or, if either
party provides the other party with written notice of the party’s
non-concurrence in the automatic extension of the Term, as set forth in Section
2 of this Agreement, then (A) all unvested options, restricted stock and other
equity (options, restricted stock and other equity are, collectively,
“Equity”)
that
has previously been granted to Employee shall vest on the Termination Date;
any
restrictions that had been placed on Equity shall lapse and the Equity shall
be
freely transferable; (B) the Employer shall, in lieu of the obligation to pay
Employee compensation and other benefits under this Agreement, make severance
payments to the Employee in an aggregate amount that is equal to the Employee's
then current annual cash compensation consisting of Base Salary, Target Bonus
and discretionary bonus, multiplied by a factor depending on the circumstances,
as set forth below. Base Salary, Target Bonus and discretionary bonus, are
collectively referred to as the “Aggregate
Amount”.
The
Target Bonus shall be valued as if Employee had achieved 100% of his goals
for
the year in which the Termination Date occurs. The discretionary bonus shall
be
based on the amount of any discretionary bonus paid for the year preceding
the
year in which the Termination Date occurs. The severance payments shall not
include the value of the Signing Bonus, or the value of the initial Stock Option
Grant, or gains realized from the sale of restricted stock or from the sale
of
stock obtained through the exercise of stock options. The Aggregate Amount
shall
be multiplied by a factor of 1.5 (one point five) and the product shall be
paid
to Employee over a period of eighteen months (collectively, the "Severance
Payments")
beginning immediately following the Termination Date, except that if the Term
expires because the Employee has provided the Employer with written notice
of
non-concurrence in the extension of the Term as set forth in Section 2, the
Aggregate Amount shall be multiplied by a factor of 1 (one) and shall be paid
to
Employee over a period of eighteen months beginning immediately following the
Termination Date. The Severance Payments shall be paid in equal monthly
installments according to the Employer’s normal payroll practices then in
effect. Except for the expiration of this Agreement as a result of the
Employee’s non-concurrence in the extension of the Term, the Severance Payments
under this Section 7(a)(ii) shall not be reduced by any direct or indirect
compensation which the Employee may receive for other employment with another
employer after the Termination Date. The Employee shall continue to receive
health insurance benefits during any period which the Employee receives
Severance Payments
(unless
comparable health care coverage becomes available to Employee from a new
employer).
The
Employee shall thereafter be entitled to statutory benefit continuation rights
in accordance with COBRA (or a state law equivalent), provided Employee makes
the appropriate voluntary contribution payments and subject to applicable law
and the requirements of the Employer’s health insurance plans then in effect.
The
Employer shall have no obligation to make any contributions to any retirement
plan applicable to the Employee after the Termination Date except as may be
required by such applicable plan. The Employee shall be entitled to keep
contributions made by the Employer to the retirement plan on the Employee’s
behalf prior to the Termination Date which have vested or for which the Employee
is otherwise eligible in accordance with the written terms of the plan documents
governing such retirement plan. The Employer shall have no obligation to make
the Severance Payments set forth in this Section unless the Employee fully
complies with his obligations under this Agreement, including, but not limited
to, his obligations under Sections 8 and 9 of this Agreement.
Notwithstanding
anything stated herein to the contrary, and for purposes of clarity, should
the
Employer terminate the employment of the Employee for Cause, or should the
Employee voluntarily terminate employment without Good Reason, the Employee
shall not be entitled to receive Severance Payments.
(iii)
References in this Agreement to “termination
for Cause”
shall
mean termination on account of acts or omissions of the Employee which
constitute Cause as defined below. Any determination with respect to a
termination for Cause shall require the approval of the Board of the Employer
after the Employee has been given written notice of the facts and circumstances
that may constitute Cause and the Employee and his counsel have had an
opportunity to meet with the Board concerning the allegation of facts and
circumstances that may constitute Cause. “Cause”
shall
mean any of the following:
(A) Employee’s
conviction of a felony,
(B) Employee’s
theft from the Employer,
(C) Employee’s
breach of fiduciary duty involving personal profit,
(D) sustained
and continuous conduct by the Employee which adversely affects the reputation
of
the Employer,
(E) Employee’s
failure to comply with lawful directions of the Board that is not remedied
within a reasonable period of time after receipt of written notice from the
Board specifying such failure.
Notwithstanding
the foregoing, no “Cause” for termination shall be deemed
to exist
with respect to Employee’s act or failure to act as described in clauses (D) or
(E) above, unless the Employer shall have given written notice to Employee
setting forth the act or failure to act of Employee that gives rise to the
“Cause” and, within a period of time of thirty days after receiving such notice,
Employee shall not have cured the act or failure to act which gives rise to
such
“Cause.”
(b) Termination
by the Employee.
The
Employee may terminate his employment under this Agreement prior to the end
of
the Term of this Agreement for (i) Good Reason, or (ii) as approved by the
Board. In the event that the Employee terminates his employment without Good
Reason, the Employee shall have no right to receive compensation or other
benefits, including payment of legal fees and expenses incurred (with exception
of paragraph 13), for any period after the Termination Date except as otherwise
required by law.
The
Employee’s entitlement to indemnification under Paragraph 13 of the Agreement,
entitled “Indemnification”, is unaffected by any termination of employment
except for a termination for Cause related to the claim with respect to which
indemnification is sought.
References
in this Agreement to “Good
Reason”
shall
mean resignation on account of acts or omissions of the Employer which
constitute Good Reason as defined below. Any
voluntary resignation for Good Reason shall be communicated to the Employer
by a
Notice of Resignation for Good Reason. A “Notice
of Resignation for Good Reason”
shall
mean a written notice which: (i) sets forth the specific separation provision
in
this Agreement relied upon; (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
Employee’s voluntary resignation for Good Reason; and (iii) if the Date of
Resignation for Good Reason (as defined below) is other than the date of receipt
of such Notice, specifies the Date of Resignation for Good Reason. The Employer
shall have thirty (30) days from the receipt of such Notice to cure the specific
basis cited in the Notice of Resignation for Good Reason. The failure by
Employee to set forth in the Notice of Resignation for Good Reason any fact
or
circumstance which contributes to a showing of Good Reason shall not constitute
a waiver of any rights of Employee hereunder and shall not preclude Employee
from asserting such fact or circumstance in enforcing Employee’s rights against
the Employer. For this purpose, the Date of Resignation for Good Reason shall
mean the date of receipt of the Notice of Resignation or any later date
specified therein or as agreed between the Employer and the Employee.
“Good
Reason”
shall
mean any of the following:
(A) any
material diminution in Employee’s duties, title, authority or reporting line, or
failure to reappoint or reelect Employee to the Board;
(B) a
reduction in or failure to pay compensation when due;
(C) a
Change
in Control (as defined below);
(D) the
Employee’s benefits under any employee benefit or welfare plan are reduced to
less (subject to Employer’s right to provide equivalent benefits in cash or
otherwise in kind) than the benefits of 90% of the Employer’s employees under
any employee benefit or welfare plan, or, unless such reduction is initiated
by
the Employee or approved by the Employee in his capacity as a member of the
Board;
(E) the
Employee is reassigned, without his consent, to a principal work place which
is
more than 50 miles from either the Employer’s headquarters in Hudson, New
Hampshire, or such new location is more than 50 miles from the Xxxxxxxxxxx
Xxxxxx Xxxxxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000.
(c) Death
and Disability.
The
Employee’s employment under this Agreement may also be terminated by the
Employer prior to the end of the Term of this Agreement in the event of the
Employee’s death or upon the Employee becoming “Totally Disabled.” For purposes
of this Agreement, “Totally
Disabled” shall mean such situation where the Employee, because of
his injury (the “Injury”) or sickness (the “Sickness”), is unable to perform the
material duties of his regular occupation for six consecutive months in any
twelve month period. In addition to the Severance Payments described in Section
7(a)(ii), in the event of the termination of Employee’s employment as a result
of his death, the Employee’s immediate family shall be receive continuation of
health and medical benefits at the Employer’s expense for eighteen (18) months
from the Termination Date.
(d) The
Employer shall have no obligation to make the payments set forth herein if
the
Employee is in material breach of the Employee’s obligations under this
Agreement. As
a
condition to receiving the Severance Payments, the Employee or his Estate shall,
as soon as practicable, execute a general release of claims in favor of the
Employer, its current and former parents, subsidiaries, subdivisions, divisions,
shareholders, Board, affiliated entities and persons, and the current and former
directors, officers, employees and agents of the Employer, in a form reasonably
acceptable to the Employee and the Employer which does not impose upon Employee
any post-employment obligations in addition to those contained herein (the
“Release”).
8. Confidential
Information and Non-Competition.
(a) “Confidential
Information”
shall
mean trade secrets or confidential information relating to the Employer, its
customers, affiliates and their respective businesses, including, but not
limited to, the identity of the Employer’s customers; the entity of distributors
and suppliers of the Employer; the identity of representatives responsible
for
entering into contracts with the Employer; specific customer, distributor and
supplier needs and requirements; the details of contracts and proposals between
the Employer and its customers, distributors and suppliers; selling and
marketing strategies, prices, costs and profit margins; the names, addresses
and
other contact information of purchasing agents, vendors or other entities;
purchasing techniques, methods, procedures and processes; manufacturing and
production techniques, methods, procedures and processes; other techniques,
methodologies and processes used by the Employer in the conduct of its business;
techniques, methods, procedures, know-how, show-how, prototypes and technical
specifications; computer data, software, software codes, computer models,
research projects, data processing and other programs; production and
manufacturing equipment and operating practices; information with respect to
products and product formulae, designs, plans for future business, new business,
products or other developments; new or innovative ideas, customer proposals,
marketing plans and ideas, and future developments or strategies; information
pertaining to research and development, acquisitions or divestitures, marketing
and sales, cost cutting, revenue generation, or other matters concerning the
Employer’s planning and strategy; and other nonpublic financial and other
information of the Employer disclosed to or known by the Employee as a
consequence of or through the Employee’s employment (or other service
relationship) with the Employer (including information conceived, originated,
discovered or developed by the Employee), which information is not generally
known in the relevant trade or industry or public knowledge. The Employee
acknowledges and agrees that the Confidential Information is not generally
known
or available to the public, but has been developed, compiled or acquired by
the
Employer at its great effort and expense. Confidential Information can be in
any
form: oral, written or machine readable, including electronic files.
Confidential Information does not include any information or “know how” that
Employee had prior to the date of this Agreement.
(b) The
Employee acknowledges and agrees that the Employer is engaged in a highly
competitive business and that its competitive position depends upon its ability
to maintain the confidentiality of the Confidential Information which was
developed, compiled and acquired by the Employer at its great effort and
expense. The Employee further acknowledges and agrees that any disclosure,
divulging, revelation or use of any of the Confidential Information, other
than
in connection with the Employer’s business or as specifically authorized by the
Employer, will be highly detrimental to the Employer, and that serious loss
of
business and goodwill and pecuniary damage may result therefrom. During the
Employee’s employment with the Employer and thereafter, the Employee shall hold
for the benefit of the Employer, and not for the Employee’s own benefit or
disclosure to third parties, all Confidential Information relating to the
Employer and its business, including all Confidential Information of customers
of the Employer (i) obtained by the Employee during the Employee’s employment
with the Employer and (ii) not otherwise public knowledge or generally known
in
the trade or industry. The Employee shall not, without the prior written consent
of the Employer, unless compelled pursuant to the order of a court or other
governmental or legal body having jurisdiction over such matter, communicate
or
divulge any such Confidential Information to anyone other than the Employer
and
those designated by it. In the event the Employee is compelled by order of
a
court or other governmental or legal body to communicate or divulge any such
Confidential Information to anyone other than the Employer and those designated
by it, the Employee shall promptly notify the Employer of any such order and
the
Employee shall cooperate fully with the Employer in protecting such information
to the extent possible under applicable law and will only disclose that portion
of the Confidential Information necessary to satisfy any such
order.
(c) Upon
termination of the Employee’s employment with the Employer, or at any time the
Employer requests, all equipment, property, documents, files, records, notes,
memoranda, designs, reports, price lists, cost sheets, prototypes, blue prints,
technical specifications, estimates, databases, home office equipment,
automobiles, computer equipment, computer files, computer programs, plans,
documents and all other property and Confidential Information of the Employer
(including all copies in all forms in the Employee’s possession or control),
whether prepared by the Employee solely or jointly with others, shall be left
with or promptly returned to the Employer and shall at all times be the property
of the Employer.
(d) The
Employee acknowledges and agrees that competitive products and services shall
be
defined to mean non-photographic imaging, computer-to-plate, direct-to-press,
thermal laser or chemistry-free printing plate technology products and services
or any other additional products and services substantially similar to the
products and services designed, conceived, marketed, distributed or developed
by
the Employer as may exist at the time of termination of the Employee’s
employment (the “Restricted
Activity”).
This
is a highly competitive business, and by virtue of the Employee’s position and
responsibilities with the Employer, and the Employee’s access to Confidential
Information, the Employee’s engaging in any business which is directly or
indirectly competitive with the Restricted Activity will cause the Employer
great and irreparable harm. During the period of employment as an officer and/or
employee of the Employer, the Employee will devote his available business time
and best efforts to promoting and advancing the business of the Employer. During
the Term and for the lesser of the Severance Period or any period during which
Employee is subject to post-employment restrictions (the “Restricted
Period”),
the
Employee agrees that he will not, in any jurisdiction around the world in which
the Employer conducts business, whether alone or as a partner, officer,
director, consultant, agent, employee or stockholder of any Employer or other
commercial enterprise, engage in any business or other commercial activity
which
is competitive with the Restricted Activity including related products and
services being designed, conceived, marketed, distributed or developed by the
Employer at the time of termination of such
employment, unless written approval is obtained from the Employer’s
Board.
If the
Employee is terminated for Cause or resigns without Good Reason, or if the
Employee gives notice of non-concurrence in an extension pursuant to Section
2,
the Restricted Period shall end eighteen months from the Termination Date.
If
the Employee elects to resign for Good Reason as a result of a Change in
Control, the Restricted Period shall end twelve months from the date of the
Change in Control. If the Employee’s employment is terminated by the Employer
without Cause, or if Employee resigns for a Good Reason (other than as a result
of a Change in Control), the Restricted Period shall end six (6) months from
the
Termination Date. If the Employer gives notice of non-concurrence in an
extension pursuant to Section 2, the Restricted Period shall end on the
Termination Date.
(e) The
Employee acknowledges and agrees that during the course and solely as a result
of the Employee’s employment with the Employer, the Employee has and will become
aware of some, most or all of the customers of the Employer, their names and
addresses, their representatives responsible for engaging the services of the
Employer and their specific needs and requirements. The Employee further
acknowledges and agrees that the loss of such customers will cause the Employer
serious loss of business and will be detrimental to the Employer’s goodwill and
will cause great and irreparable harm. During the period of the lesser of the
Severance Period or the Restricted Period the Employee will not directly or
indirectly either for himself or for any other person or commercial enterprise
(1) divert or take away or attempt to divert or take away, any of the Employer’s
customers or business in existence at the time of termination of such employment
that the Employee had contact with, for whom the Employee performed services
during his employment with the Employer and/or that were made known to the
Employee by the Employer during his employment with the Employer; and/or (2)
solicit or attempt to solicit, ask for, accept, or seek to do business with,
for
the purpose or effect of engaging in competition with the Employer, any of
the
Employer’s customers or business in existence at the time of termination of such
employment with whom the Employee had contact, for whom the Employee performed
services during his employment with the Employer and/or that were made known
to
the Employee by the Employer during his employment, except that this restriction
shall not apply to customers or clients which Employee had contact with prior
to
the date of this Agreement.
(f) The
Employee acknowledges and agrees that during the course and solely as a result
of the Employee’s employment with the Employer, the Employee has and will become
aware of some, most or all of the employees of the Employer, and has and will
acquire knowledge of their qualifications, skills, abilities, salaries,
commissions, benefits and other matters with respect to such employees not
generally known to the public. The Employee further acknowledges and agrees
that
any solicitation, luring away or hiring of such employees of the Employer will
cause serious loss of business and will be detrimental to the Employer’s
goodwill and will cause great and irreparable harm. During the Term and for
a
period of the
lesser of the Severance Period or the Restricted Period,
the
Employee will not directly or indirectly either for himself or for any other
person or commercial enterprise (1) solicit or induce any employee to terminate
his employment relationship with the Employer, and/or (2) recruit, attempt
to
recruit, hire, or attempt to hire any employee of the Employer other than on
behalf of the Employer.
(g) The
Employee hereby acknowledges and agrees that the type and periods of
restrictions imposed in Sections 8(a) through 8(f) of this Agreement are fair
and reasonable and are reasonably required for the protection of the Employer’s
Confidential Information and the goodwill associated with the business of the
Employer. Further, the Employee acknowledges and agrees that the restrictions
imposed in Sections 8(a) through 8(f) will not prevent him from obtaining
suitable employment after his employment with the Employer ceases or from
earning a livelihood. The Employee hereby acknowledges, agrees and understands
that he would not be entitled to the Severance Payments (as described in Section
7(a)(ii)) except for his agreement to fulfill his obligations under this
Agreement, including, but not limited to, his obligations under Sections 8(a)
through 8(f) and Section 9 of this Agreement.
9. Assignment
of Inventions.
The
Employee expressly understands and agrees that any and all right or interest
he
may obtain in any designs, trade secrets, technical specifications and technical
data, know-how and show-how, customer and vendor lists, marketing plans, pricing
policies, inventions, concepts, ideas, works of authorship, documentation,
formulae, data, designs, techniques, discoveries, improvements or intellectual
property rights of any kind or any interest therein (whether or not patentable
or registrable under copyright, trademark or similar statutes (including, but
not limited to, the Semiconductor Chip Protection Act) or subject to analogous
protection) that he, whether alone or jointly with others, authors, conceives,
devises, develops, reduces to practice, or otherwise obtains during the
Employee’s employment with the Employer, and that (i) relate to or arise out of
his employment with the Employer; (ii) relate to the Employer’s present or
planned business or any of the products or services being designed, conceived,
developed, marketed, manufactured or distributed by the Employer or that may
be
used in relation therewith; (iii) result from the use of premises or personal
property (whether tangible or intangible) owned, leased or contracted for or
by
the Employer; (iv) result from activities engaged in during the Employer’s time;
and/or (v) result from use of Confidential Information of the Employer whether
such use occurred prior to or during the Employee’s employment with the Employer
(the “Inventions”), are and shall immediately become the sole and absolute
property of the Employer and its assigns, as works made for hire or otherwise,
subject to any rights his former employer may claim in such
Inventions.
The
Employee hereby assigns to the Employer the sole and exclusive right to such
Inventions, subject to any rights his former employer may claim in such
Inventions. The Employee agrees that he will promptly disclose to the Employer
any and all such Inventions, and that, upon request of the Employer, the
Employee will execute and deliver any and all documents or instruments and
take
any other action which the Employer shall deem necessary to assign to and vest
completely in the Employer, to perfect trademark, copyright and patent
protection with respect to, or to otherwise protect the Employer’s trade secrets
and proprietary interest in such Inventions. The Employer agrees to pay any
and
all copyright, trademark and patent fees and expenses or other costs incurred
by
the Employee for any assistance rendered to the Employer pursuant to this
Section.
In
the
event the Employer is unable, after reasonable effort, to secure the Employee’s
signature on any letters, patent, copyright or other analogous protection
relating to an Invention, the Employee hereby irrevocably designates and
appoints the Employer and any of its officers as his agent and attorney-in-fact,
to act for and on his behalf and stead to execute and file any such application
or applications and to do all other lawfully permitted acts to further the
prosecution and issuance of letters patent, copyright or other analogous
protection thereon with the same legal force and effect as if executed by the
Employee. The obligations in this Section shall continue beyond the termination
of the Employee’s employment.
10. Change
in Control.
(a)
(i)
If during the Term of this Agreement there is a Change in Control of the
Employer and the Employee exercises his right to resign for Good Reason, then
the Employee shall be entitled to receive a lump sum cash payment as provided
in
Section 10(a)(ii) below (the “Additional
Payment”)
less
any Severance Payments already received under Section 7(a)(ii). The Employer
shall have no obligation to make the Additional Payment set forth in this
Section unless the Employee complies with his obligations under this Agreement,
including, but not limited to, his obligations under Sections 8 and 9 of this
Agreement. The
Employee agrees that following a Change in Control, he will, if requested by
the
Employer or the successor Employer, agree to remain employed by the successor
Employer for up to six (6) months from the date of the Change in Control, in
such capacity as is reasonably requested by the successor Employer (the
“Six
Months Employment Continuation Period”).
Compensation received from the successor Employer for such employment shall
not
be considered as mitigation or offset of any obligation of Employer to Employee
under this Agreement. Any termination by the Employer of Employee’s employment,
even if for Cause during the Six Months Employment Continuation Period, or
for
any act alleged to have occurred during the Six Months Employment Continuation
Period, shall have no effect upon any of Employee’s Equity or any other benefit
or obligation due to Employee from Employer. The Six Months Employment
Continuation Period shall be counted as part of any Restricted Period.
Employee’s compensation for the Six Months Employment Continuation Period shall
be no less than his Base Salary, Target Bonus and discretionary bonus (if any)
for the year immediately preceding the Change in Control, prorated for the
period that Employee is actually employed under the Six Months Employee
Continuation Period.
The
Employer shall also make the Additional Payment set forth in this Section in
the
event of the Employee’s death or upon Employee becoming “Totally Disabled” (as
described in Section 7(a)(c)) within six (6) months of the date of a Change
in
Control.
Unless
payment may be made sooner without triggering a tax or penalty under Section
409A of the Internal Revenue Code, any payment due under this section 10(a)(i)
shall be made not later than 2-1/2 months following the end of the year in
which
occurs the later of the Change in Control or the first to occur of the
Employee's termination of employment, death or becoming Totally Disabled;
provided, however, that if the Change in Control is not a "change in control"
within the meaning of Section 409A(a)(2)(A)(v) of the Code (as hereinafter
defined), then payment shall be made at the first to occur of any event
following a Change in Control that would permit distribution under Section
409A(a)(2)(A) of the Code.
(ii)
Subject to Section 10(b)(iii) hereof, the Additional Payment shall be in an
amount equal to 2.99 times the Employee’s average annual cash compensation (Base
Salary, Target Bonus, discretionary bonus) paid to the Employee by the Employer.
In
addition, in the event of a Change in Control, all Equity that has been granted
to the Employee shall immediately vest. In determining the Employee’s average
annual cash compensation to arrive at the amount of the Additional Payment,
the
Target Bonus for the year in which the Change of Control occurs shall be valued
as if Employee had achieved 100% of his goals for the year in which the Change
in Control occurs and had been paid that Target Bonus without pro-ration in
that
year, and the discretionary bonus for the year in which the Change of Control
occurs shall be valued at the amount of any discretionary bonus paid for the
year preceding the year in which the Change in Control occurs and, at Employee’s
option, treated as if a discretionary bonus had been paid without pro-ration
in
the year in which the Change of Control occurs. The Additional Payment shall
not
include the value of the Signing Bonus, or the value of the initial stock option
grant or any form of deferred compensation, or gains realized from the sale
of
restricted stock or from the sale of stock obtained through the exercise of
stock options.
(iii)
To
the extent that the payments and benefits provided under this Agreement and
benefits provided to, or for the benefit of, the Employee, under any other
Employer plan or agreement (such payments or benefits collectively referred
to
as the "Payments")
would
be subject to the excise tax (the "Excise
Tax")
imposed under Section 4999 of the Internal Revenue Code of 1986, as amended
(the
"Code"),
the
Employee may direct the Employer to reduce the Payments to the extent necessary
so that no Payment to be made or benefit to be provided to the Employee shall
be
subject to the Excise Tax. If the Employee elects not to direct Employer to
reduce the Payments, Employee shall be responsible for paying his own Excise
Tax.
(b)
A
“Change
in Control”
of
the
Employer, for purposes of this Agreement, shall be deemed to have taken place
(A) if as the result of, or in connection with, any cash tender or exchange
offer, merger, or other business combination, sale of assets or contested
election, or any combination of the foregoing transactions, the persons who
were
directors of the Employer within twelve months before such transaction shall
cease to constitute a majority of the Board of the Employer or any successor
entity; (B) the consummation of a merger or consolidation of the Employer,
with
or into another entity or any other corporate reorganization, if more than
50%
of the combined voting power of the continuing or surviving entity's issued
shares or securities outstanding immediately after such merger, consolidation
or
other reorganization is owned by persons who were not shareholders of the
Employer immediately prior to such merger, consolidation or other
reorganization; (C) the sale, transfer or other disposition of all or
substantially all of the Employer’s assets
(c) The
Employer shall have no obligation to make the payments set forth herein if
the
Employee is in material breach of the Employee’s obligations under this
Agreement. The Employee shall be obligated to execute a Release as a condition
to receiving the payments set forth in this Section.
11. Remedies.
The
Employee acknowledges and agrees that compliance with the covenants set forth
in
this Agreement is necessary to protect the business and goodwill of the Employer
and that any breach of Sections 8 through 9 of this Agreement will result in
irreparable and continuing harm to the Employer, for which money damages will
not provide adequate relief. Accordingly, in the event of any breach or
anticipatory breach of Sections 8 or 9 by the Employee, the Employer and the
Employee agree that the Employer shall be entitled to the following particular
forms of relief as a result of such breach, in addition to any remedies
otherwise available to it at law or equity: injunctions, whether temporary,
preliminary or permanent, enjoining or restraining such breach or anticipatory
breach, and the Employee hereby consents to the issuance thereof forthwith
and
without bond by any court of competent jurisdiction.
12. Expenses;
Automobile Allowance.
(a) The
Employee is authorized to incur, during the Term of this Agreement, reasonable
expenses for promoting the business of the Employer, including without
limitation expenses for entertainment, travel and similar items. The Employer
will promptly reimburse the Employee for all such expenses, upon the
presentation by the Employee, from time to time, of an itemized account of
such
expenses.
(b) During
the Term of this Agreement, the Employer shall provide Employee with an
automobile allowance of $1000 per month.
(c)
The
parties acknowledge that the Employee shall be required to travel extensively
in
connection with the business of the Employer. Employee shall be reimbursed
for
such expenses upon production of reasonable documentation of such
expenses.
13.
Indemnification.
Except
as otherwise set forth on this Agreement, the
Employer shall indemnify and defend the Employee to the fullest extent permitted
under Delaware law (including without limitation the Delaware Corporation law
and the Employer’s Certificate of Incorporation) from and against any expenses,
judgments, fines, penalties and amounts paid in settlement and actually and
reasonably incurred by the Employee in connection with any proceeding in which
the Employee was or is made party or was or is involved by reason of the fact
the Employee was or is a director, officer or employed by the Employer, and
shall be represented by Employer’s counsel. In
the
event of a real or threatened conflict of interest which makes it inadvisable
or
precludes Employer’s counsel from also representing Employee, Employer shall
advance to Employee’s attorneys such reasonable fees, expenses of investigation
and preparation and fees and disbursements of the Employee's accountants or
other experts and such other funds as are reasonably required. Employee will
cooperate with Employer in the defense or prosecution of any action to the
extent permissible.
14.
Successors
and Assigns; Assumption by Successors.
All
rights hereunder shall inure to the benefit of the parties hereto, their
personal or legal representatives, heirs, successors or assigns. This Agreement
may not be assigned or pledged by the Employee. The Employer will require any
successor (whether direct or indirect, by purchase, assignment, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Employer in any consensual transaction or in any Change in Control
expressly to assume this Agreement and to agree to perform hereunder in the
same
manner and to the same extent that the Employer would be required to perform
if
no such succession had taken place. References herein to the Employer will
be
understood to refer to the successor or successors of the Employer,
respectively.
15. Other
Contracts.
The
Employee shall not, during the Term have any other paid employment (other than
with a subsidiary or affiliate of the Employer), except with the prior approval
of the Board.
16. Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties with respect
to
the subject matter contained herein, and supersedes all prior employment
agreements and understandings, whether written or oral, except for the
Employer’s Code of Business Conduct and Ethics, Corporate Communications
Disclosure Policies and Xxxxxxx Xxxxxxx Statement.
No
alteration or variation of the terms of this Agreement can be valid unless
made
in writing and signed by both parties, wherein specific reference is made to
this Agreement.
17. Section
Headings.
The
section headings used in this Agreement are included solely for convenience
and
shall not affect, or be used in connection with, the interpretation of this
Agreement.
18. Severability.
Each
promise and provision contained in this Agreement shall be enforceable
independently of every other promise and provision in this Agreement. If any
provision contained in this Agreement is determined to be partially or totally
invalid or unenforceable in any respect, such determination shall not affect
any
other provision of this Agreement, but this Agreement shall be considered
divisible as to such provision which shall become null and void, leaving the
remainder of this Agreement in full force and effect.
19. Governing
Law.
This
Agreement shall be governed by the laws of the United States where applicable
and otherwise by the laws of the State of New Hampshire, without giving effect
to the conflicts of laws principles thereof.
20. Arbitration
of Disputes and Jury Waivers.
(a) The
parties hereto agree to arbitrate any dispute, claim, or controversy
("claim")
against each other arising out of the cessation of the Employee’s employment,
any claim of unlawful discrimination or harassment that might or did arise
during or as a result of the Employee’s employment which could have been brought
before an appropriate government administrative agency or in an appropriate
court, including but not limited to claims of age discrimination under the
Age
Discrimination in Employment Act of 1967, as amended, as well as any claim
or
controversy arising under this Agreement. The Arbitration shall be arbitrated
by
one arbitrator in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association. The decision or
award of the arbitration shall be final and binding upon the parties. Any
arbitral award may be entered as a judgment or order in any court of competent
jurisdiction. Any claims under Sections 8 and 9 of this Agreement shall not
be
subject to arbitration, but shall be subject to the remedies set forth in
Section 11 hereof.
(b)
If
for any reason this arbitration provision is declared unenforceable, the
Employee agrees to waive any right he may have to a jury trial with respect
to
any dispute or claim against the Employer relating to this Agreement, his
employment, termination or any terms and conditions of employment, including,
but not limited to claims of age discrimination under the Age Discrimination
in
Employment Act of 1967, as amended.
21.
Conflicting
Agreement.
Employee hereby represents and warrants to the Employer that his entering into
this Agreement, and the obligations and duties undertaken by him hereunder,
will
not conflict with, constitute a breach of, or otherwise violate the terms of,
any other employment or other agreement to which he is a party, except to the
extent any such conflict, breach or violation under any such agreement has
been
disclosed to the Employer in advance of the signing of this Agreement. Employee
has provided Employer with a copy of the Xxxxxxx Kodak Company Executive Special
Employee’s Agreement as required by said agreement.
22.
Representation
by the Employer.
The
Employer represents that (i) the execution of this Agreement and the provision
of all benefits and grants provided herein have been duly authorized by the
Employer, including, where necessary, by the Board and its Compensation
Committee, (ii)
to
the best of its knowledge, the execution, delivery and performance of this
Agreement does not violate any law, regulation, order, decree, agreement, plan
or corporate governance document of the Employer, and (iii) upon the execution
and delivery of this Agreement, it shall be the valid and binding obligation
of
the Employer enforceable in accordance with its terms.
23.
IRC
Section 409A.
If
any
provision of this Agreement contravenes Section 409A of the Internal Revenue
Code or any regulations or guidance promulgated thereunder or could cause
Employee to incur any tax, interest or penalties under Section 409A of the
Code,
the parties agree to modify such provision to (i) comply with, or avoid being
subject to, Section 409A of the Code, or to avoid the incurrence of additional
taxes, interest and penalties under Section 409A, and/or (ii) maintain, to
the
maximum extent practicable, the original intent and economic benefit to employee
of the applicable provision without violating the provisions of Section 409A
of
the Code.
24.
Notice. Any
Notice required to be given under this Agreement shall be to the Employer at
its
principal place of business and to the Employee at such address as he shall
direct, and to their representatives:
If
to the
Employer:
Xx.
Xxxxxxxx Xxxxxx
000
Xxxxx
Xxxxxx, 00xx
xxxxx
Xxx
Xxxx,
XX 00000
000-000-0000
xxxxxxx@xxxxxxxxx.xxx
If
to the
Employee:
XxXxxxxx
& English, LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxxxx Xxxxxxx, Esq.
212
609
6800
xxxxxxxx@xxxxxxxx.xxx
[Signature
page to follow.]
IN
WITNESS WHEREOF, the parties have knowingly and voluntarily executed this
Agreement this 10th day of May, 2007.
PRESSTEK,
INC. (the “Employer”)
By:
/s/ Xxxx X. Xxxxxx
Xxxx
X. Xxxxxx
Chairman
of the Board of Directors
/s/
Xxxxxxx Xxxxxxxx
Xxxxxxx
Xxxxxxxx
(the
“Employee”)
Appendix
A
May
10,
2007
Presstek,
Inc.
00
Xxxxxxxxx Xxxxx
Xxxxxx,
XX 00000
Attn:
Xxxxxxx Xxxx, Chief Financial Officer
Ladies
and Gentlemen:
The
undersigned Subscriber (the “Subscriber”) hereby subscribes to the immediate
acquisition of 300,000 shares of common stock, $0.01 par value (“Common Stock”),
of Presstek,
Inc.,
a
Delaware corporation (the “Company”). The shares are being issued to the
Subscriber in consideration of the Subscriber’s agreement to act as the
Company’s Chief Executive Officer pursuant to that certain employment agreement
between the Company and the Subscriber executed contemporaneously with this
Agreement and are made pursuant
to NASDAQ Rule 4350(i)(1)(A)(iv) (the “NASDAQ Exception”) as an inducement
material to the Subscriber entering into employment with the Company and
are
approved by the Company’s independent compensation committee. Following the
issuance of these shares in reliance on this NASDAQ Exception, the Company
will
disclose in a press release the material terms of the grant, including the
recipient of the grant and the number of shares involved.
The
shares, when issued, shall be fully vested, fully paid and non-assessable
and
properly issued as a matter of law. Such shares of Common Stock are referred
to
herein as the “Securities.”
In
connection with the issuance of the Securities to the Subscriber, the Subscriber
acknowledges, warrants and represents to and agrees with the Company as
follows:
1. The
Subscriber is acquiring the Securities for investment for his own account
and
without the intention of participating, directly or indirectly, in a
distribution of the Securities, and not with a view to resale or any
distribution of the Securities, or any portion thereof.
2. The
Subscriber has such knowledge and experience in financial and business matters
that he is capable of evaluating the merits and risks of this investment.
The
Subscriber has consulted with his own professional representatives as he
has
considered appropriate to assist in evaluating the merits and risks of this
investment. The Subscriber has carefully reviewed all of the Company’s filings
with the Securities and Exchange Commission. The Subscriber has had access
to
and an opportunity to question the officers of the Company, or persons acting
on
their behalf, with respect to publicly available material information about
the
Company, and, in connection with the evaluation of this investment, has,
to the
best of his knowledge, received all information and data with respect to
the
Company that the Subscriber has requested and which is necessary to enable
the
Subscriber to make an informed decision regarding the purchase of the
Securities. The Subscriber is acquiring the Securities based solely upon
his
independent examination and judgment as to the prospects of the
Company.
3. The
Securities were not offered to the Subscriber by means of publicly disseminated
advertisements or sales literature.
4. The
Subscriber acknowledges that an investment in the Securities is speculative
and
involves significant risk and the Subscriber may have to continue to bear
the
economic risk of the investment in the Securities for an indefinite
period.
5. The
Subscriber acknowledges that the Securities are being sold to the Subscriber
without registration under any state or federal law requiring the registration
of securities for sale, and accordingly will constitute “restricted securities”
as defined in Rule 144 of the U.S. Securities and Exchange Commission.
Consequently, the transferability of the Securities is restricted by applicable
United States Federal and state securities laws.
6. In
consideration of the acceptance of this subscription, the Subscriber agrees
that
the Securities will not be offered for sale, sold or transferred by the
Subscriber other than pursuant to (i) an effective registration under the
Securities Act of 1933, as amended (“the Act”), an exemption available under the
Act or a transaction that is otherwise in compliance with the Act; and (ii)
an
effective registration under the securities law of any state or other
jurisdiction applicable to the transaction, an exemption available under
such
laws, or a transaction that is otherwise in compliance with such
laws.
7. The
Subscriber understands that no U.S. federal or state agency has passed upon
the
offering of the Securities or has made any finding or determination as to
the
fairness of any investment in the Securities.
8. The
Subscriber agrees not to disclose or use any information provided to the
Subscriber by the Company or any of its agents in connection with the purchase
of the Securities, except for the purpose of evaluating an investment in
the
Securities.
9. The
residence address of the Subscriber is as set forth below.
10. The
Subscriber is an “accredited investor” as defined in Appendix A-1
hereto
11. The
Subscriber agrees to indemnify and hold harmless the Company and its officers,
directors, employees and agents from and against any and all costs, liabilities
and expenses (including attorneys’ fees) arising out of or related in any way to
any breach of any representation or warranty contained herein. The Company
agrees to indemnify and hold harmless the Subscriber from and against any
and
all costs, liabilities and expenses (including attorneys’ fees) arising out of
or related in any way to any breach of any representation or warranty contained
herein.
12. The
Company has the right, in its sole discretion, to accept or reject this
subscription.
|
ACCEPTANCE
OF SUBSCRIPTION
|
SUBSCRIBER
|
|
Presstek,
Inc.
|
_/s/
Xxxxxxx Jacobson_______
|
|
Name:
Xxxxxxx Xxxxxxxx
|
|
|
By: /s/
Xxxxxxx Xxxx
|
Address:
|
|
Xxxxxxx
Xxxx, Chief Financial Officer
|
|
|
_______________________________
|
|
|
_______________________________
|
|
|
Dated:
May 10, 2007
|
__________________________
|
APPENDIX
A-1
An
“Accredited Investor” within the meaning of Regulation D under the Securities
Act of 1933 includes the following:
Organizations
(1) A
bank as
defined in section 3(a)(2) of the Act, or any savings and loan association
or
other institution as defined in section 3(a)(5)(A) of the Act, whether acting
in
its individual or fiduciary capacity; a broker or dealer registered pursuant
to
section 15 of the Securities Exchange Act of 1934; insurance company as defined
in section 2(13) of the Act; an investment company registered under the
Investment Company Act of 1940 or a business development company as defined
in
section 2(a)(48) of that act; a Small Business Investment Company licensed
by
the U.S. Small Business Administration under section 301(c) or (d) of the
Small
Business Investment Act of 1958; an employee benefit plan within the meaning
of
Title I of the Employee Retirement Income Security Act of 1974, if the
investment decision is made by a plan fiduciary, as defined in section 3(21)
of
such act, which is either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee benefit plan
has
total assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are accredited
investors.
(2) A
private
business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
(3) A
trust
(i) with total assets in excess of $5,000,000, (ii) not formed for the specific
purpose of acquiring the Securities, (iii) whose purchase is directed by
a
person who, either alone or with his purchaser representative, has such
knowledge and experience in financial and business matters that he is capable
of
evaluating the merits and risks of the proposed investment.
(4) A
corporation, business trust, partnership, or an organization described in
section 501(c)(3) of the Internal Revenue Code, which was not formed for
the
specific purpose of acquiring the Securities, and which has total assets
in
excess of $5,000,000.
(5) An
entity, all of whose equity owners are “accredited investors”, as defined
herein.
Individuals
(6) Individuals
with income from all sources for each of the last two full calendar years
whose
reasonably expected income for this calendar year exceeds either
of:
(i) $200,000
individual income; or
(ii) $300,000
joint income with spouse.
NOTE: Your
"income" for a particular year may be calculated by adding to your adjusted
gross income as calculated for Federal income tax purposes any deduction
for
long term capital gains, any deduction for depletion allowance, any exclusion
for tax exempt interest and any losses of a partnership allocated to you
as a
partner.
(7) Individuals
with net worth as of the date hereof (individually or
jointly
with your spouse), including the value of home, furnishings, and automobiles,
in
excess of $1,000,000.
(8) Directors,
executive officers or general partners of the Issuer.
