September 14, 2007
EXHIBIT
10.22
September
14, 2007
Xxxxxx
X.
Xxxxxx
000
Xxxxxxxxx Xxxxx
Xxxxxxxx,
XX 00000
Re: Employment
with PureDepth, Inc.
Dear
Xxx:
PureDepth,
Inc. (the “Company”) is pleased to extend you (hereinafter, “Employee”) the
following offer of employment, on the terms set forth in this letter agreement
(the “Agreement”), effective upon your acceptance by execution of a counterpart
copy of this Agreement where indicated below (the “Effective
Date”).
1. Employment. Company
hereby employs Employee, and Employee hereby accepts employment, upon the
terms
and conditions set forth herein.
2. Duties.
2.1 Position. Employee
is employed as Chief Executive Officer (“CEO”) and shall report to and have the
duties and responsibilities assigned by Company’s Board of Directors (“Board”)
both upon initial hire and as may be reasonably assigned from time to
time. Employee shall perform faithfully and diligently all duties
assigned to Employee.
2.2 Best
Efforts/Full-time. Employee will expend Employee’s best efforts
on behalf of Company, and will abide by all policies and decisions made by
Company, as well as all applicable federal, state and local laws, regulations
or
ordinances. Employee will act in the best interest of Company at all
times. Employee shall devote Employee’s full business time and
efforts to the performance of Employee’s assigned duties for
Company. Employee may, without seeking or obtaining approval by the
Board (so long as the following do not materially interfere with the performance
of the Employee’s duties hereunder and such do not create a conflict of interest
as more fully described in section 8 of this Agreement) (i) make and
manage personal business investments of his choice; and (ii) serve in any
capacity with any civic, educational, religious or charitable
organization.
2.3 Work
Location. Employee’s principal place of work shall be located at
the Company’s primary office in the San Francisco Bay area. Employee
shall be required, as part of his duties, to travel extensively for business
and
such travel shall include international trips.
3. Term.
3.1 Term. The
employment relationship pursuant to this Agreement shall be on an at-will
basis
and may be terminated by the Company or the Employee at any time, for any
reason
subject to the provisions regarding termination as set forth in section 7
below.
3.2 Start
Date. Employee’s employment with the Company will begin as of
September 1, 2007 (the “Employment Date”).
4. Compensation.
4.1 Base
Salary. Subject to the terms of this Agreement, as compensation
for Employee’s performance of Employee’s duties hereunder, Company shall pay to
Employee a base salary of $276,000.00 per year (“Base Salary”), payable in
accordance with the normal payroll practices of Company, less required
deductions for state and federal withholding tax, social security and all
other
employment taxes. In the event Employee’s employment under this
Agreement is terminated by either party, for any reason, Employee will earn
the
Base Salary pro rated to the date of termination.
4.2 Equity. Subject
to approval by the Board on or before each of the grant dates set forth below,
Employee will be granted the following stock options (the
“Options”):
(a) an
option to purchase 150,000 shares of Company common stock to be granted on
the
date which is the earlier of (i) the date of the Company’s achievement of a
milestone to be determined by the Board, or (ii) October 15, 2007 (the
“September Option”), which shall vest on a monthly basis over the three (3)
month period following September 11, 2007 (subject to Employee’s continuous
service to the Company in any capacity);
(b) an
option to purchase 150,000 shares of Company common stock to be granted on
December 1, 2007 (the “December Option”), which shall vest on a monthly
basis over the three (3) month period following the grant date (subject to
Employee’s continuous service to the Company in any capacity);
(c) at
the discretion of the Board (upon recommendation of the Compensation Committee
of the Board (the “Compensation Committee”)), an option to purchase shares of
Company common stock to be granted on the date that the Board (upon
recommendation of the Compensation Committee) determines whether and the
extent
to which the 90 Day Goals (described in Section 5 below) have been met, and
which shall be exercisable for a number of shares to be determined by the
Board
(upon recommendation of the Compensation Committee) but not to exceed 37,500;
and
(d) at
the discretion of the Board (upon recommendation of the Compensation Committee),
an option to purchase shares of Company common stock to be granted on the
date
that the Committee determines whether and the extent to which the 180 Day
Goals
(described in Section 5 below) have been met, and exercisable for a number
of shares of Company common stock to be determined by the Board (upon
recommendation of the Compensation Committee) but not to exceed
37,500.
The
exercise price of each of the foregoing Options will be equal to the closing
price of the Company’s common stock on the Option grant date as reported by the
OTC Bulletin Board. Each Option will also be subject to the terms and
conditions of the Company’s 2006 Stock Incentive Plan and form of stock option
agreement, which Employee will be required to sign as a condition of receiving
the Option.
4.3 Customary
Fringe Benefits. Employee will be eligible for all customary and
usual fringe benefits generally available to employees of Company subject
to the
terms and conditions of Company’s benefit plan documents. Company
reserves the right to change or eliminate the fringe benefits on a prospective
basis, at any time.
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5. Performance
Bonus. Employee shall be entitled to a performance bonus based on
achievement of certain goals as determined by the Compensation
Committee.
5.1 Ninety
(90) Day Goals. Employee and the Compensation Committee shall
mutually establish goals to be achieved by Employee within the initial
90 days of Employee’s employment (“90 Day Goals”). Such
goals shall be established within the initial ten (10) day period following
Employee’s execution of this Agreement.
The
90 Day Goals target bonus will be $50,000 (the “90 Day
Bonus”). Achievement of the 90 Day Goals and eligibility for the
90 Day Bonus will be determined by the evaluation of the Compensation
Committee. The 90 Day Bonus will be paid (in full or in part) by
December 15, 2007.
5.2 180
Day Goals. The 180 Day Goals will be mutually established by
the Compensation Committee and Employee promptly following the October 3,
2007 Board meeting.
The
180 Day Goals target bonus will be $50,000 (the “180 Day
Bonus”). Achievement of the 180 Day Goals and eligibility for the 180
Day Bonus will be determined by the evaluation of the Compensation Committee
not
later than February 29, 2008 and paid (in full or in part) by
March 15, 2008.
6. Business
Expenses. Employee will be reimbursed for all reasonable,
out-of-pocket business expenses incurred in the performance of Employee’s duties
on behalf of Company. To obtain reimbursement, expenses must be
submitted promptly with appropriate supporting documentation in accordance
with
Company’s policies.
7. Termination
of Employee’s Employment.
7.1 Termination
for Cause by Company. Although Company anticipates a mutually
rewarding employment relationship with Employee, Company may terminate
Employee’s employment immediately at any time for Cause if the Board finds that
good grounds exist for a “for cause” termination. For purposes of
this Agreement, Cause shall mean:
(a) the
Employee’s theft, dishonesty, willful misconduct, breach of fiduciary duty for
personal profit, or falsification of any Company documents or
records;
(b) the
Employee’s unauthorized use, misappropriation, destruction or diversion of any
material asset or corporate opportunity of the Company (including, without
limitation, the Employee’s improper use or disclosure of the Company’s
confidential or proprietary information or his failure to abide by Company
policies relating to confidentiality or reasonable workplace
conduct);
(c) any
intentional act by the Employee which has a material detrimental effect on
the
Company’s reputation or business;
(d) any
violation of the Company’s Code of Ethics, as previously approved by the Board,
as well as Employee’s material failure to abide by the Company’s policies, as
may be established from time to time;
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(e) any
material breach by the Employee of this Agreement and any other agreement
between the Company and Employee, including without limitation, the Company’s
Employee Proprietary Rights Agreement/Non-Disclosure Agreement, which breach
is
not cured within 15 days after Employee receives notice from the Board
specifying said breach; or
(f) the
Employee’s conviction (including any plea of guilty or nolo contendere) of any
criminal act involving fraud, dishonesty, misappropriation or moral turpitude,
or which impairs the Employee’s ability to perform his duties with the
Company.
In
the
event Employee’s employment is terminated in accordance with this
subsection 7.1, Employee shall be entitled to receive only the Base Salary
then in effect, pro rated to the date of termination. Employee will
also be permitted to retain all rights to fringe benefits and/or equity that
had
vested as of the date of his termination. All other Company
obligations to Employee pursuant to this Agreement will become automatically
terminated and completely extinguished. Employee will not be entitled
to receive the Severance described in subsection 7.2 below.
7.2 Termination
Without Cause by Company/Severance.
(a) Company
may terminate Employee’s employment under this Agreement without Cause at any
time on thirty (30) days’ advance written notice to Employee. In the
event of such termination, Employee willreceive the following:
(i) the
Base Salary then in effect, pro rated to the date of termination;
(ii) a
“Severance Payment” equal to four and one-half (4.5) months of Employee’s Base
Salary (the “Severance Period”) then in effect on the date of termination, less
applicable withholding, payable in accordance with the Company’s standard
payroll procedures following the effective date of the release of claims
described in (b) herein;
(iii) in
the event Employee is covered by the Company’s group medical plan as of his
employment termination and he timely elects to continue coverage under that
plan
pursuant to applicable law (“COBRA”), the Company will pay Employee’s COBRA
premiums until the earlier of (A) Employee’s coverage under another group
health plan, or (B) the last day of the Severance Period; thereafter,
Employee shall be solely responsible for payment of his COBRA premiums;
and
(iv) to
the extent that the September Option and/or the December Option are then
outstanding and shares subject thereto are not yet vested, such shares shall
become fully vested immediately prior to such termination.
(b) The
Severance Payment, the COBRA premiums and the accelerated vesting of the
September Option and/or December Option (hereafter, collectively referred
to in
total as “Severance”) shall be provided to Employee subject to the
following:
(i) Employee
complies with all surviving provisions of this Agreement as specified in
subsection 13.8 below; and
(ii) Employee
executes a full general release in a form satisfactory to the Company, releasing
all claims, known or unknown, that Employee may have against Company arising
out
of or any way related to Employee’s employment or termination of employment with
Company.
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7.3 Voluntary
Resignation by Employee for Good Reason/Severance. Employee may
voluntarily resign Employee’s position with Company for Good Reason, at any time
on thirty (30) days’ advance written notice. In the event of
Employee’s resignation for Good Reason, Employee will be entitled to receive the
following: (i) Base Salary then in effect, prorated to the date
of termination; and (ii) the Severance described in subsection 7.2
above, provided Employee complies with all of the conditions in
subsection 7.2 above. All other Company obligations to Employee
pursuant to this Agreement will become automatically terminated and completely
extinguished. Employee will be deemed to have resigned for Good
Reason in the following circumstances: (a) Company’s material
breach of this Agreement; (b) Employee’s Base Salary is materially reduced
below Employee’s salary in effect at any time during the preceding twelve
months, unless the reduction is made as part of, and is generally consistent
with, a general reduction of senior executive salaries; (c) Employee’s
position and/or duties are modified so that Employee’s duties are no longer
consistent with the position of CEO or Employee no longer reports to the
Board
of Directors; or (d) Company relocates Employee’s principal place of work
to a location away from the location specified in subsection 2.3, without
Employee’s prior written approval.
7.4 Voluntary
Resignation by Employee Without Good Reason. Employee may
voluntarily resign Employee’s position with Company, at any time on thirty (30)
days’ advance written notice. In the event of Employee’s resignation,
Employee will be entitled to receive only the Base Salary for the thirty-day
notice period. All other Company obligations to Employee pursuant to
this Agreement will become automatically terminated and completely
extinguished. In addition, Employee will not be entitled to receive
the Severance described in subsection 7.2 above.
8. No
Conflict of Interest. During the term of Employee’s employment
with Company and during any period Employee is receiving payments from Company
pursuant to this Agreement, Employee must not engage in any work, paid or
unpaid, that creates an actual conflict of interest with
Company. Such work shall include, but is not limited to, directly or
indirectly competing with Company in any way, or acting as an officer, director,
employee, consultant, over 5% stockholder, volunteer, lender, or agent of
any
business enterprise of which is in direct competition with the business in
which
Company is now engaged or in which Company becomes engaged during the term
of
Employee’s employment with Company, as may be determined by the Board in its
sole discretion. If the Board believes such a conflict exists during
the term of this Agreement, the Board may ask Employee to choose to discontinue
the other work or resign employment with Company if he chooses not to
discontinue the other work. If the Board believes such a conflict
exists during any period in which Employee is receiving payments pursuant
to
this Agreement, the Board may ask Employee to choose to discontinue the other
work or forfeit the remaining Severance Payment(s). Notwithstanding
the above, Employee shall not be required to sever his current relationship
with
Newforth Partners nor shall Employee be required to sever his current
relationship with RG5 as a board member and which shall not require more
than
one (1) business day per quarter of Employee’s time.
9. Confidentiality
and Proprietary Rights. As a condition of employment, Employee
agrees to read, sign and abide by the terms of Company’s Employee Proprietary
Rights Assignment Agreement/Non-Disclosure Agreement, which is provided with
this Agreement and incorporated herein by reference.
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10. Nonsolicitation. Employee
understands and agrees that Company’s employees and any information regarding
Company employees is confidential and constitute trade secrets of the
Company. Employee agrees that during the term of this Agreement and
for a period of one (1) year after the termination of employment with the
Company, Employee will not, separately or in conjunction with others, encourage
or cause others to solicit or personally encourage any employees of the Company
to terminate or alter their relationships with the Company.
11. Injunctive
Relief. Employee acknowledges that Employee’s breach of the
covenants contained in Sections 8-10 (collectively “Covenants”) would cause
irreparable injury to Company and agrees that in the event of any such breach,
Company shall be entitled to seek temporary, preliminary and permanent
injunctive relief without the necessity of proving actual damages or posting
any
bond or other security.
12. Agreement
to Arbitrate. In the event of any dispute or claim relating to or
arising out of Employee’s employment relationship with the Company, this
Agreement, or the termination of Employee’s employment with the Company for any
reason (including, but not limited to, any claims of breach of contract,
defamation, wrongful termination or age, sex, sexual orientation, race, color,
national origin, ancestry, marital status, religious creed, physical or mental
disability or medical condition or other discrimination, retaliation or
harassment), Employee and the Company agree that all such disputes shall
be
fully resolved by confidential, binding arbitration conducted by a single
arbitrator through the American Arbitration Association (“AAA”) under the AAA’s
National Rules for the Resolution of Employment Disputes then in effect,
which
are available online at the AAA’s website at
xxx.xxx.xxx. Claims for breach of the Company’s Employee
Proprietary Rights and Assignment Agreement/Non-Disclosure Agreement and
Company’s right to obtain injunctive relief pursuant to Section 11, above,
are excluded.
13. General
Provisions.
13.1 Successors
and Assigns. The rights and obligations of Company under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of Company. Employee shall not be entitled to assign any
of Employee’s rights or obligations under this Agreement.
13.2 Waiver. Either
party’s failure to enforce any provision of this Agreement shall not in any way
be construed as a waiver of any such provision, or prevent that party thereafter
from enforcing each and every other provision of this Agreement.
13.3 Attorneys’
Fees. Each side will bear its own attorneys’ fees in any dispute
unless a statutory section at issue, if any, authorizes the award of attorneys’
fees to the prevailing party.
13.4 Severability. In
the event any provision of this Agreement is found to be unenforceable by
an
arbitrator or court of competent jurisdiction, such provision shall be deemed
modified to the extent necessary to allow enforceability of the provision
as so
limited, it being intended that the parties shall receive the benefit
contemplated herein to the fullest extent permitted by law. If a
deemed modification is not satisfactory in the judgment of such arbitrator or
court, the unenforceable provision shall be deemed deleted, and the validity
and
enforceability of the remaining provisions shall not be affected
thereby.
13.5 Interpretation;
Construction. The headings set forth in this Agreement are for
convenience only and shall not be used in interpreting this
Agreement. This Agreement has been drafted by legal counsel
representing Company, but Employee has participated in the negotiation of
its
terms. Furthermore, Employee acknowledges that Employee has had an
opportunity to review and revise the Agreement and have it reviewed by legal
counsel, if desired, and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party
shall
not be employed in the interpretation of this Agreement.
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13.6 Governing
Law. This Agreement will be governed by and construed in
accordance with the laws of the United States and the State of
California. Each party consents to the jurisdiction and venue of the
state or federal courts in Santa Xxxxx County, California, if applicable,
in any
action, suit, or proceeding arising out of or relating to this
Agreement.
13.7 Notices. Any
notice required or permitted by this Agreement shall be in writing and shall
be
delivered as follows with notice deemed given as
indicated: (a) by personal delivery when delivered personally;
(b) by overnight courier upon written verification of receipt; (c) by
telecopy or facsimile transmission upon acknowledgment of receipt of electronic
transmission; or (d) by certified or registered mail, return receipt
requested, upon verification of receipt. Notice shall be sent to the
addresses set forth below, or such other address as either party may specify
in
writing.
13.8 Survival. Sections
8 (“No Conflict of Interest”), 9 (“Confidentiality and Proprietary Rights”), 10
(“Nonsolicitation”), 11 (“Injunctive Relief”), 12 (“Agreement to Arbitrate”), 13
(“General Provisions”) and 14 (“Entire Agreement”) of this Agreement shall
survive Employee’s employment by Company.
14. Entire
Agreement. This Agreement, including the Company Employee
Proprietary Rights Assignment Agreement/Non-Disclosure Agreement incorporated
herein by reference and Company’s stock option plan and related option documents
described in subsection 4.2 of this Agreement, constitutes the entire
agreement between the parties relating to this subject matter and supersedes
all
prior or simultaneous representations, discussions, negotiations, and
agreements, whether written or oral. This Agreement may be modified
or amended only with the written consent of Employee and an authorized officer
of the Company, provided, however, that the Company may amend or modify this
Agreement in order to comply with the provisions of, or to be exempt from
the
application of, Section 409A of the Internal Revenue Code, to the extent
applicable. Notwithstanding the preceding sentence, the Company will
have no obligation to amend or modify this Agreement to provide that any
payment
or benefit hereunder will comply with, or be exempt from, Section 409A, and
the
Company makes no representation or warranty regarding compliance with, or
exemption from, Section 409A with respect to any payment or benefit provided
by
this Agreement. Employee agrees that Employee shall bear sole and
exclusive responsibility for any and all federal, state, local and/or foreign
tax consequences (including, without limitation, any and all tax liability
under
Section 409A) of this Agreement, and fully indemnifies and holds the Company
harmless therefore. Employee should consult with his own tax advisor
in connection with this Agreement and its tax consequences. No oral
waiver, amendment or modification will be effective under any circumstances
whatsoever, including without limitation any changes that may be necessary
to
comply with the provisions of Section 409A of the Code, to the extent
applicable. No oral waiver, amendment or modification will be
effective under any circumstances whatsoever.
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15. Authority. The
individual signing this Agreement on behalf of the Company has the authority
to
bind the Company to the terms of this Agreement and both parties will be
considered bound to the terms of this Agreement upon their signatures thereto
below.
Sincerely,
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Xxxx
Xxxxx
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Member,
Board of Directors
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Date:
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Acknowledged,
Accepted and Agreed:
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Xxx
Xxxxxx
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Date:
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