EXHIBIT 10.3
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") by and between IVIVI
TECHNOLOGIES, INC., a New Jersey corporation, having a place of business at
000-X Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 ("EMPLOYER"), and XXXXX
XXXXXX, an individual residing at 000 Xxxxxxxxx Xx., Xxxxxxx Xxxxxxxxx, XX 00000
("EMPLOYEE"), was originally dated as of October 18, 2006 ("Original Agreement
Date"), and is hereby amended and restated as of December 31, 2008
("Commencement Date").
WHEREAS, Employer desires to continue to employ Employee; and
WHEREAS, Employee is willing to accept such continued employment on the
terms and conditions set forth in this Agreement; and
WHEREAS, Employer and Employee desire to modify Employee's title,
duties and responsibilities; and
WHEREAS, Employer and Employee desire to amend and restate the
Agreement in accordance with Internal Revenue Service Notice 2007-86 in order to
conform the Agreement with the provisions of Section 409A of the Internal
Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the mutual agreements set forth
herein, Employer and Employee hereby agree as follows:
ARTICLE I
EMPLOYMENT; POSITION, DUTIES, AND RESPONSIBILITIES
1.01 EMPLOYMENT. Employer agrees to, and does hereby, continue to employ
Employee, and Employee agrees to, and does hereby, accept such continued
employment, upon the terms and subject to the conditions set forth in this
Agreement. Employee represents and warrants to Employer that (a) Employee has
the legal capacity to execute and perform this Agreement, (b) this Agreement is
a valid and binding agreement enforceable against Employee according to its
terms, and (c) the execution and performance of this Agreement by Employee does
not violate the terms of any existing agreement or understanding to which
Employee is a party or by which Employee may be bound. Employer represents and
warrants to Employee that (a) Employer has taken all requisite corporate actions
to enter into this Agreement, (b) this Agreement is a valid and binding
agreement enforceable against Employer according to its terms, and (c) the
execution and performance of this Agreement by Employer does not violate the
terms of any existing agreement or understanding to which Employer is a party or
by which Employer may be bound.
1.02 POSITION, DUTIES AND AUTHORITY. During the Term (as defined below),
Employee shall serve as Executive Vice President, Sales and Marketing, and Chief
Business Development Officer of Employer, and shall have such responsibilities,
duties and authority as are consistent with such positions and as may, from time
to time, be reasonably assigned by the Chief Executive Officer of Employer. Any
substantial changes to such responsibilities, duties and authority shall be
provided to Employee in writing and agreed to between Employer and Employee.
During the Term, Employee shall report directly to the Chief Executive Officer
of Employer. During the Term, Employee shall serve Employer, faithfully and to
the best of Employee's ability, and shall devote a majority of Employee's
business time, attention, skill and efforts exclusively to the business and
affairs of Employer (including its subsidiaries and affiliates) and the
promotion of its interests. Notwithstanding the foregoing, Employee may engage
in charitable, educational, religious, civic and similar types of activities
(all of which shall be deemed to benefit Employer) to the extent that such
activities do not inhibit or prohibit the performance of Employee's duties
hereunder or inhibit or conflict with the business of Employer, its subsidiaries
and affiliates. In no event may Employee serve on boards of directors or
advisory committees without the prior written consent of the Board of Directors
of Employer (the "Board"), which consent shall not be unreasonably withheld.
During the Term, Employee shall perform his duties from Employer's primary
business offices that are located in Los Angeles, California, subject to normal
and reasonable travel requirements in connection with his duties hereunder.
ARTICLE II
TERM
2.01 TERM OF EMPLOYMENT. Employee's continued employment under this Agreement
shall commence on the Commencement Date and, subject to earlier termination
pursuant to Article IV hereof, shall terminate on November 30, 2011 (the
"TERM"); PROVIDED, HOWEVER, that unless either party gives written notice to the
other at least 120 days prior to the expiration of the then-current Term that
such party elects not to renew this Agreement, the then-current Term shall be
automatically extended for additional one-year periods. The election of Employer
not to extend the then-current Term as provided in this Section 2.01 ("Employer
Non-Renewal") shall be deemed a termination by Employer under Section 4.01(D)
and shall constitute "Good Reason" under Section 4.01(E). The election of
Employee not to extend the then-current Term, as provided in this Section 2.01
("Employee Non-Renewal") shall not be deemed a termination for Good Reason and
Employee only shall be entitled to the compensation set forth in Section
4.02(B).
ARTICLE III
COMPENSATION AND EXPENSES
3.01 COMPENSATION AND BENEFITS. For all services rendered by Employee in any
capacity during the Term, including, without limitation, services as an officer,
director or member of any committee of Employer, or any subsidiary, affiliate or
division thereof, Employee shall be compensated as follows (subject, in each
case, to the provisions of Article IV below):
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(A) BASE SALARY. During the Term, Employer shall pay to Employee a base
salary at the rate of $225,000 on an annualized basis. ("BASE SALARY"), which
Base Salary shall be payable in accordance with Employer's customary payroll
practices in place from time to time, but no less frequently than twice per
month. Employee's Base Salary shall be subject to annual review and increases
effective as of the first day of each fiscal year commencing with the fiscal
year that begins April 1, 2009, which increases (if any) shall be in amounts as
the Board (or committee thereof) shall deem appropriate and substantially based
upon the overall financial performance of Employer and the individual
performance of Employee. The term "BASE SALARY" as used in this Agreement shall
refer to Base Salary as may be increased from time to time.
(B) BONUS. With respect to each fiscal year of Employer that ends
during the Term, commencing with the fiscal year ending March 31, 2009, Employee
shall be eligible to receive a cash bonus targeted to equal seventy-five percent
(75%) of the amount of Base Salary earned by Employee during such fiscal year,
subject to Employer's attainment of performance goals established by the Board
(or a committee thereof) in its sole discretion and communicated to Employee
within 30 days following the beginning of such year (for fiscal year ending
March 31, 2009, within 30 days of the Commencement Date) (the "BONUS"). Such
performance goals shall be established such that a partial Bonus may be earned
in the event applicable performance goals are partially attained, and a Bonus in
excess of the target amount may be earned in the event applicable performance
goals are materially exceeded. The performance goals relating to the Bonus shall
be established such that 50% of the Bonus shall be subject to goals relating to
the Company's financial performance, and 50% of the Bonus shall be subject to
goals relating to Employee's individual performance. The Bonus shall be paid in
a lump sum cash payment, if and to the extent earned, within sixty (60) days
following the end of the applicable fiscal year to which the Bonus relates. To
be eligible to receive the Bonus (or any portion thereof), Employee must be
employed by Employer both at the end of the applicable fiscal year and at the
time such Bonus is to be paid hereunder.
(C) EQUITY AWARDS.
(1) PRIOR OPTIONS. Prior to the Commencement Date, Employee
has been granted options to purchase common stock of Employer pursuant
to Employer's 2004 Amended and Restated Stock Option Plan (the "PLAN")
and a separate stock option grant agreement between Employer and
Employee (the "Prior Options"). In accordance with the existing terms
of the Prior Options (i) upon a Corporate Transaction (as defined in
the Plan), all outstanding and unvested Prior Options shall be deemed
fully vested and exercisable and (ii) if during the Term, Employer
shall terminate this Agreement and Employee's employment hereunder
without Cause (as defined below) and other than as a result of
Employee's death or Disability (as defined below) or Employee shall
terminate this Agreement and Employee's employment hereunder for Good
Reason (as defined below), then all outstanding and unvested Prior
Options shall be deemed fully vested and exercisable.
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(2) NEW AWARDS. Following the Commencement Date, Employee
shall be granted options to purchase common stock of Employer, and
shares of restricted common stock of Employer, as set forth on Annex A
hereto, and upon such terms and conditions as determined by the Board
(or a committee thereof) in its sole discretion (the "New Awards").
Notwithstanding anything contained in this Agreement to the contrary,
100% of the New Awards shall fully and immediately vest on the date of
(i) a Corporate Transaction (as such term is defined in the Employer's
2004 Amended and Restated Stock Option Plan, as in effect as of the
date hereof) but excluding any Corporate Transaction that is either a
Related Party Transaction (as defined in the Plan) and a transaction
involving a secondary public offering of the common stock of Employer;
(ii) a termination of Employee's employment due to death or Disability
(to the extent provided under Article IV below), or (iii) a termination
of Employee's employment by Employer without Cause or by him for Good
Reason (to the extent provided under Article IV below).
(D) BENEFITS. During the Term, Employee shall be entitled to
participate in all Employer's employee benefit plans and programs (excluding
severance plans, if any) as Employer generally maintains from time to time
during the Term for the benefit of its employees or its executives, in each case
subject to the eligibility requirements, enrollment criteria and other terms and
provisions of such plans or programs. Employer may amend, modify or rescind any
employee benefit plan or program and/or change employee contribution amounts to
benefit costs without notice in its discretion. In addition, with respect to
each fiscal year that ends during the Term, Employee shall receive payments of
$15,000 per year, paid on a monthly basis, for personal benefits and perquisites
as determined by Employee in his sole discretion and without the need to submit
documentation. Such amount shall be subject to periodic increases (such
increases will be at the same time, and equal to the same percentage increase,
as any increases to the Base Salary hereunder).
(E) VACATION DAYS. During the Term, Employee shall be entitled to paid
vacation days in accordance with Employer's policies with respect to such
vacation days in place from time to time and applicable to the Chief Executive
Officer of Employer; PROVIDED, HOWEVER, that Employee shall accrue or earn no
less than 20 paid vacation days per calendar year.
3.02 EXPENSES. Employee shall be entitled to receive reimbursement from
Employer for all reasonable out-of-pocket expenses incurred by Employee during
the Term in connection with the performance of Employee's duties and obligations
under this Agreement, according to Employer's expense account and reimbursement
policies in place from time to time and provided that Employee shall submit
reasonable documentation with respect to such expenses.
ARTICLE IV
TERMINATION
4.01 EVENTS OF TERMINATION. This Agreement and Employee's employment hereunder
shall terminate upon the occurrence of any one or more of the following events:
(A) DEATH. In the event of Employee's death, this Agreement and
Employee's employment hereunder shall automatically terminate on the date of
death.
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(B) DISABILITY. To the extent permitted by law, in the event of
Employee's physical or mental disability that prevents Employee from performing
Employee's duties under this Agreement for a period of at least 120 consecutive
days in any 12-month period or 150 non-consecutive days in any 12-month period,
Employer may terminate this Agreement and Employee's employment hereunder upon
written notice to Employee given within 30 days of the Employer's incurrence of
such right.
(C) TERMINATION BY EMPLOYER FOR CAUSE. Employer may, at its option,
terminate this Agreement and Employee's employment hereunder for Cause (as
defined herein) upon giving notice of termination to Employee. As used in this
Agreement, the term "CAUSE" shall mean Employee's (i) conviction of, plea of
guilty or NOLO contendre to, or confession of guilt of, a felony, (ii)
commission of a fraudulent, illegal or dishonest act (which dishonest act
results in material damage to Employer) in respect of Employer or any of its
affiliates or subsidiaries, (iii) willful misconduct or gross negligence that
reasonably could be expected to be injurious in the reasonable discretion of
Employer to the business, operations or reputation of Employer or any of its
affiliates or subsidiaries (monetarily or otherwise), (iv) material violation of
Employer's policies or procedures in effect from time to time; PROVIDED,
HOWEVER, to the extent such violation is subject to cure, Employee will have a
reasonable opportunity to cure such violation after written notice thereof, (v)
after a written warning and a reasonable opportunity to cure non-performance,
continued failure to perform Employee's duties as assigned, in accordance with
the terms of this Agreement, to Employee from time to time, or (vi) other
material breach of this Agreement (including, without limitation, any breach of
Employee's obligations under Article V hereof).
(D) WITHOUT CAUSE BY EMPLOYER. Subject to Section 4.02, Employer may,
at its option, at any time terminate this Agreement and Employee's employment
hereunder for no reason or for any reason whatsoever (other than for Cause or as
a result of Employee's death or Disability) by giving 30 days prior written
notice of termination to Employee.
(E) TERMINATION BY EMPLOYEE. Employee may terminate this Agreement and
Employee's employment hereunder with or without Good Reason (as defined below)
by giving (30) days prior written notice of termination to Employer; provided,
however, that Employer reserves the right to accept Employee's notice of
termination and instruct him not to report to work, but for all other purposes
Employee shall be deemed to remain an employee until the 30-day notice date that
Employee provided in such 30-day notice. For purposes of this Agreement, "GOOD
REASON" shall mean, in the absence of the prior written consent of Employee:
(i) the material failure of Employer or its successor to pay
any material amounts due to Employee hereunder, or any other material breach of
this Agreement by Employer; or
(ii) an action by Employer or its successor that results in a
material diminution in Employee's authority, duties or responsibilities
hereunder; or
(iii) a material change to the geographic location at which
Employee must perform his duties hereunder; or
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(iv) an Employer Non-Renewal.
Notwithstanding the foregoing, placing Employee on a paid leave for up to 90
days, pending a determination of whether there is a basis to terminate Employee
for "Cause," shall not constitute "Good Reason" hereunder. Employee shall be
deemed to have consented to any act or event that would otherwise give rise to
"Good Reason," unless Employee provides written notice of termination for Good
Reason to Employer within ninety (90) days following the action or event first
constituting Good Reason. Notwithstanding the foregoing (i) Employer shall have
30 days from the receipt of such notice to cure any of the actions or events
described in such notice, and Good Reason shall not exist if Employer cures such
actions or events during such 30 day period and (ii) Good Reason shall not exist
unless Employee terminates from employment within 2 years immediately following
the action or event first giving rise to Good Reason.
(F) MUTUAL AGREEMENT. This Agreement and Employee's employment
hereunder may be terminated at any time by the mutual agreement of Employer and
Employee.
(G) EXPIRATION OF TERM. This Agreement and Employee's employment
hereunder shall automatically terminate upon the expiration of the Term in
accordance with the 120 day notice provision herein, and any such expiration
shall be deemed either an Employer Non-Renewal or an Employee Non-Renewal, as
the case may be.
4.02 EMPLOYER'S OBLIGATIONS UPON TERMINATION.
(A) FOR CAUSE; OTHER THAN FOR GOOD REASON. If, during the Term, (i)
Employer shall terminate this Agreement and Employee's employment hereunder for
Cause, or (ii) Employee shall terminate this Agreement and Employee's employment
hereunder other than for Good Reason, Employer's sole obligation to Employee
under this Agreement or otherwise shall be to, on Employer's next regular pay
date following the date of termination, (i) pay to Employee any Base Salary
earned, but not yet paid to Employee, prior to the date of such termination,
(ii) pay to Employee any accrued, but unused, vacation days through the date of
termination, and (iii) reimburse Employee for any expenses incurred by Employee
through the date of termination in accordance with Section 3.02 (collectively,
the "ACCRUED OBLIGATIONS"). All vested equity awards shall remain in effect
pursuant to their existing terms.
(B) EXPIRATION OF TERM (EMPLOYEE NON-RENEWAL). Upon the expiration of
the Term pursuant to or following an Employee Non-Renewal, or if this Agreement
and the Employee's employment terminates at any time or for any reason following
an Employee Non-Renewal, Employer's sole obligation to Employee under this
Agreement or otherwise shall be (i) to pay to Employee the Accrued Obligations,
which Accrued Obligations shall be paid or provided in the manner and at the
time described in Section 4.02(A) above and (ii) to pay Employee the Pro Rata
Bonus (as defined below), which shall be paid within 30 days following
Employee's termination of employment. All vested equity awards shall remain in
effect pursuant to their existing terms.
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(C) DEATH; DISABILITY. If, during the Term, this Agreement and
Employee's employment hereunder shall terminate as a result of Employee's death
or Disability, Employer shall pay or provide to Employee or Employee's heirs,
beneficiaries, assigns or estate, as applicable, the Accrued Obligations, which
Accrued Obligations shall be paid or provided in the manner and at the time
described in Section 4.02(A) above. All equity awards vested at the time of
death shall be transferred to Employee's estate, subject to the terms of the
Plan. In addition, upon either such event (i) each of the New Awards and Prior
Options shall be deemed fully vested and the awards that are options shall be
deemed fully exercisable and (ii) Employee's estate or beneficiary, as
applicable, shall be paid the Severance Benefit (as defined below) on the 30th
day following such event.
(D) WITHOUT CAUSE; FOR GOOD REASON. If, during the Term, Employer shall
terminate this Agreement and Employee's employment hereunder without Cause and
other than as a result of Employee's death or Disability or Employee shall
terminate this Agreement and Employee's employment hereunder for Good Reason,
Employer's sole obligation to Employee under this Agreement or otherwise shall
be to: (i) pay to Employee the Accrued Obligations, which Accrued Obligations
shall be paid or provided in the manner and at the time described in Section
4.02(A) above, and (ii) subject to both (a) Transition Services and (b)
Employee's execution, delivery and non-revocation of a general release, in a
form utilized by the Employer with respect to other executive officers of
Employer, within 60 days following Employee's last day of employment with
Employer, but which does not release, alter or adversely affect any of
Employee's then-existing rights to indemnification from Employer or Employee's
rights to payments under this Article IV (the "RELEASE") (which Release, among
other things, will be provided by Employer to Employee within 5 days of
Employee's last day of employment with Employer and will include a general
release of Employer, its affiliates and subsidiaries and their respective
officers, directors, managers, members, shareholders, partners, employees and
agents from all liability, in such form determined by Employer in its sole
discretion), both (1) pay Employee the Severance Benefit on the 5th day
following the effectiveness of the Release, and (2) cause each of the New Awards
and Prior Options to be deemed fully vested and the awards that are options be
deemed fully exercisable. The Transition Services, as discussed above, means the
Employee remaining reasonably available to the chief executive officer and chief
financial officer of Employer, by telephone and electronic mail, to answer
questions that relate to the transition of Employee's duties to his successor,
for a period of 12 months, it being understood that the Employee shall not be
required to provide any material amount of time in providing such services.
(E) THE SEVERANCE BENEFIT.
(i) For purposes of this Section 4.02, the Severance Benefit
shall be made in the form of a lump sum cash payment. The amount to be paid in
respect of the Severance Benefit shall equal the sum of (A) $15,000, plus (B)
the product of (a) the Monthly Compensation, multiplied by (b) the Applicable
Months, plus (C) the Pro Rata Bonus (as defined below). The Monthly Compensation
shall mean the sum of (a) the then current Base Salary divided by 12, plus (b)
the most recently paid Bonus (if the applicable termination of employment occurs
prior to payment of the Bonus with respect to fiscal year ending March 31, 2009,
then the Bonus shall be deemed to equal $170,000), divided by 12. The Applicable
Months shall mean (a) if the applicable termination of employment occurs on or
prior to February 28, 2010, twenty four (24); and (b) if the applicable
termination of employment occurs after February 28, 2010, twenty four (24), less
the number of whole and partial months that have passed from and after February
28, 2010 through such date of termination; PROVIDED, HOWEVER, that in no event
shall the Applicable Months be less than eighteen (18). Pro Rata Bonus shall
mean the Bonus, at target level, for the year in which Employee's termination of
employment occurs (the "Termination Year"), multiplied by a fraction, the
numerator of which is the number of days that has passed from January 1 of the
Termination Year through the date of Employee's termination of employment, and
the denominator of which is 365.
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(ii) In the event Employee shall become entitled to receive
the Severance Benefit hereunder, then he shall also be entitled to receive
reimbursement for premium costs that he incurs with respect to COBRA
continuation coverage for himself and his eligible dependents for a period of
eighteen (18) months following his termination of employment; PROVIDED, that
such reimbursements shall cease when Employee becomes eligible for substantially
equivalent coverage (as far as overall coverage and costs to the Employee) under
any other group health care plan of a subsequent employer. Such reimbursements
must be submitted by Employee in writing on a monthly basis within fourteen (14)
days of the date the monthly premium is paid (each such monthly premium must be
paid within the applicable COBRA deadline) and the reimbursement will be paid,
net of tax, to Employee within thirty (30) days of its receipt of the
reimbursement request.
(iii) In addition to the payments and benefits set forth in
this Section 4.02, amounts that are vested benefits or that Employee is
otherwise entitled to receive under any plan, program, policy or practice (with
the exception of those relating to severance) on the date of termination, shall
be payable in accordance with such plan, policy, practice or agreement.
(F) NO MITIGATION; NO OFFSET. In the event of any termination of
Employee's employment under this Section 4.02, Employee shall be under no
obligation to seek other employment and there shall be no offset against amounts
due Employee under this Agreement on account of any compensation attributable to
any subsequent employment that he may obtain except as specifically provided in
this Section 4.02. Notwithstanding anything contained in this Agreement to the
contrary, all compensation and benefits payable under this Section 4.02 shall be
reduced by any other compensation and benefits payable under any severance or
change-in-control plan, program, policy or arrangement of Employer in which
Employee is a participant and under which he has actually and previously
received compensation and/or benefits.
ARTICLE V
CONFIDENTIALITY, ASSIGNMENT OF DEVELOPMENTS, NON-COMPETITION,
NON-SOLICITATION AND OTHER COVENANTS
5.01 CONFIDENTIALITY. While working or performing services for Employer
or otherwise, Employee may previously have developed or acquired, or may in the
future develop or acquire, knowledge in Employee's work or from directors,
officers, employees, agents or consultants of Employer and its affiliates and
subsidiaries (collectively, the "COMPANY") or otherwise of Confidential
Information relating to the Company, its business, potential business or that of
its customers and vendors. "CONFIDENTIAL INFORMATION" includes all trade
secrets, know-how, show-how, theories, technical, operating, financial, and
other business information, whether or not reduced to writing or other medium
and whether or not marked or labeled confidential, proprietary or the like,
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specifically including, but not limited to, information regarding source codes,
software programs, computer systems, algorithms, formulae, schematics, concepts,
creations, costs (including, without limitation, manufacturing costs), plans,
materials, enhancements, research, specifications, works of authorship,
techniques, documentation, models and systems, sales and pricing techniques,
designs, inventions, discoveries, products, improvements, modifications,
methodology, processes, concepts, records, files, memoranda, reports, plans,
proposals, price lists, client, customer, and supplier lists and information,
product development and project procedures. Confidential Information does not
include general skills, experience or information that is generally available to
the public, other than information which has become generally available as a
result of Employee's direct or indirect act or omission.
With respect to Confidential Information of the Company and its
customers and vendors:
(A) Employee has used, and will use, Confidential Information only in
the performance of Employee's duties for Employer. Employee has not used, and
will not use, Confidential Information at any time (during or after Employee's
employment with Employer) for Employee's personal benefit, for the benefit of
any other individual or entity, or in any manner adverse to the interests of the
Company and its customers and vendors;
(B) Employee has not, and will not disclose, Confidential Information
at any time (during or after Employee's employment with Employer) except to
authorized Employer personnel, unless Employer consents in advance in writing,
the Confidential Information indisputably becomes of public knowledge or enters
the public domain (other than through Employee's direct or indirect act or
omission), or the disclosure of which is required by law and reasonable written
notice has been provided to Employer sufficient to enable Employer to contest
the disclosure;
(C) Employee has safeguarded, and will safeguard, the Confidential
Information by all reasonable steps and abide by all policies and procedures of
Employer in effect from time to time regarding storage, copying, destroying,
publication or posting, or handling of Confidential Information, in whatever
medium or format the Confidential Information takes;
(D) Employee acknowledges that Employer may be required to sign
non-disclosure or confidentiality agreements with customers or vendors,
prospective customers or vendors, and other third parties in which Employer
agrees that its employees and agents will not disclose Confidential Information
of such customers or vendors, prospective customers or vendors, or other third
parties. By executing this Agreement, Employee acknowledges and agrees that
Employer may rely, and will rely, on this Agreement for purposes of entering
into such other agreements. Further, Employee will execute and abide by all
confidentiality agreements reasonably requested by Employer's customers or
vendors, prospective customers or vendors, and other third parties; and
(E) Employee will return all materials, substances, models, software,
prototypes and the like containing and/or relating to Confidential Information,
together with all other property of the Company (all of which shall remain the
exclusive property of the Company) and its clients and customers, to Employer
when Employee's employment relationship with Employer terminates or otherwise on
demand. Employee shall not retain any copies or reproductions of correspondence,
memoranda, reports, notebooks, drawings, photographs, databases, diskettes, or
other documents or electronically stored information of any kind relating in any
way to the business, potential business or affairs of the Company and its
clients and customers.
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5.02 ASSIGNMENT OF DEVELOPMENTS. Employee has disclosed, and will
disclose, promptly and fully to Employer and to no one else: (i) all inventions,
ideas, improvements, discoveries, works modifications, processes, software
programs, works of authorship, documentation, formulae, techniques, designs,
methods, trade secrets, technical specifications and technical data, know-how
and show-how, concepts, expressions or other developments whatsoever or any
interest therein (whether or not patentable or registrable under copyright,
trademark or similar statutes or subject to analogous protection) made,
authored, devised, developed, discovered, reduced to practice, conceived or
otherwise obtained by Employee (collectively, together with all patent rights,
copyrights, trade secret rights and other intellectual property rights,
worldwide, and the right to xxx for present, past and future infringements
thereof, the "DEVELOPMENTS"), solely or jointly with others, during the course
of Employee's employment with Employer (whether prior to or after the date of
this Agreement) that (a) are related to the business of the Company or any of
the products or services being researched, developed, distributed, manufactured
or sold by the Company or which may be used in relation therewith or (b) result
from tasks assigned to Employee by the Company; (ii) any Development that is
related to the business of the Company and in which Employee had an assignable
interest at the time of Employee's first employment by Employer; or (iii) any
Development made using the time, materials or facilities of the Company, even if
such Development does not relate to the business of the Company. The
determination as to whether a Development is related to the business of the
Company shall be made solely by an authorized representative of Employer. Any
Development relating to the business of the Company and disclosed to the Company
within one year following the termination of Employee's employment with Employer
shall be deemed to fall within the provisions of this Section 5.02. The
"BUSINESS OF THE COMPANY" as used in this Section 5.02 includes the actual
business currently conducted by the Company, as well as any business conducted
by the Company during the course of Employee's employment prior to the Original
Agreement Date and any business in which the Company is actively engaged in the
development of at any time during the period of Employee's employment. Employee
agrees that, to the maximum extent possible, all such Developments listed above
and the benefits thereof are and shall immediately become the sole and absolute
property of Employer from conception, as "works made for hire" (as that term is
used under the U.S. Copyright Act of 1976, as amended) or otherwise. Employee
shall have no interest in any Developments. To the extent that title to any
Developments or any materials comprising or including any Developments does not,
by operation of law, vest in Employer, Employee hereby irrevocably assigns to
Employer all of Employee's right, title and interest (including, without
limitation, tangible and intangible rights such as patent rights, trademarks,
copyrights and all other intellectual property rights, worldwide, and the right
to xxx for present, past and future infringements thereof) that Employee may
have or may acquire in and to all such Developments, benefits and/or rights
resulting therefrom, and agrees promptly to execute any further specific
assignments related to such Developments, benefits and/or rights at the request
of Employer. Employee also hereby assigns to Employer, or waives if not
assignable, all of Employee's "moral rights" in and to all such Developments,
and agrees promptly to execute any further specific assignments or waivers
related to moral rights at the request of Employer. Employee represents and
warrants to Company that Employee has at no time assigned or otherwise
transferred any interest in any Development (including, but not limited to, any
Developments arising in connection with Employee's employment prior to the
Original Agreement Date), to any third party, or granted any third party any
license, permission, or other right with respect to any such Development, or
permitted any lien, security interest or other encumbrance to be imposed on any
such Development, or entered into any contract or other arrangement pursuant to
which Employee has agreed to do any of the foregoing.
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Employee agrees to assist Employer without charge for so long as
Employee is an employee of Employer and for as long thereafter as may be
necessary (but at Employer's expense including reasonable compensation to
Employee if Employee is no longer an employee of Employer): (1) to apply,
obtain, register and renew for, and vest in, Employer's benefit alone (unless
Employer otherwise directs), patents, trademarks, copyrights, mask works, and
other protection for such Developments in all countries, and (2) in any
controversy or legal proceeding relating to Developments. In the event that
Employer is unable to secure Employee's signature after reasonable effort in
connection with any patent, trademark, copyright, mask work or other similar
protection relating to a Development, Employee hereby irrevocably designates and
appoints Employer and its duly authorized officers and agents as Employee's
agent and attorney-in-fact, to act for and on Employee's behalf and stead to
execute and file any such application and to do all other lawfully permitted
acts to further the prosecution and issuance of patents, trademarks, copyrights,
mask works or other similar protection thereon with the same legal force and
effect as if executed by Employee.
Notwithstanding the foregoing, this Section 5.02 shall not cover
Developments to the extent that California Labor Code Section 2870(a) prohibits
the assignment thereof. Section 2870(a) provides as follows:
"Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in
an invention to his or her employer shall not apply to an invention
that the employee developed entirely on his or her own time without
using the employer's equipment, supplies, facilities, or trade secret
information except for those inventions that either: (1) Relate at the
time of conception or reduction to practice of the invention to the
employer's business, or actual or demonstrably anticipated research or
development of the employer [or] (2) Result from any work performed by
the employee for the employer."
5.03 OBLIGATIONS TO OTHER PERSONS. Employee hereby represents and
warrants that Employee does not have any non-disclosure, non-compete,
non-solicitation or other obligations to any previous employer or other
individual or entity that would prohibit, limit, conflict or interfere with the
performance of Employee's duties for Employer or Employee's other obligations
under this Agreement. Employee will not disclose to the Company or its customers
and clients or induce the Company or its customers and clients to use any secret
confidential information or material belonging to others, including Employee's
former employer.
5.04 COVENANT AGAINST COMPETITION AND SOLICITATION.
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(A) Employee acknowledges and understands that, in view of the position
that Employee holds or will hold as an employee of Employer, Employee's
relationship with Employer will afford Employee extensive access to Confidential
Information of the Company. Employee therefore agrees that during the course of
Employee's employment with Employer and for a period of 24 months after
termination of Employee's employment with Employer (for any reason or no reason)
(collectively, "RESTRICTED PERIOD"), Employee shall not, anywhere in the world,
either directly or indirectly, as an owner, stockholder, member, partner, joint
venturer, officer, director, consultant, independent contractor, agent or
employee, with or without remuneration, engage in any business or other
commercial activity that is engaged in the business of (i) designing, developing
and/or commercializing electrotherapeutic technologies or (ii) designing,
developing, marketing, selling, distributing and/or providing any products or
services that are of the same nature as a product or service provided by the
Company or a product or service that the Company is developing or seeking to
provide and of which Employee has knowledge. Notwithstanding the foregoing,
nothing herein shall be deemed to prohibit Employee's ownership of less than 2%
of the outstanding shares of any publicly traded corporation that conducts a
business competitive with that of Employer.
(B) Employee further agrees that, during the Restricted Period,
Employee shall not, directly or indirectly, either on Employee's own behalf or
on behalf of any other individual or commercial enterprise: (i) contact,
communicate, solicit or transact any business with or assist any third party in
contacting, communicating, soliciting or transacting any business with (x) any
of the customers or vendors of the Company, (y) any prospective customers or
vendors of the Company being solicited at the time of Employee's termination, or
(z) any individual or entity who or which was within the most recent twelve (12)
month period a customer or vendor of the Company, for the purpose of inducing
such customer or vendor or potential customer or vendor to be connected to or
benefit from any competitive business or to terminate its or their business
relationship with the Company; (ii) solicit, induce or assist any third party in
soliciting or inducing any individual or entity who is then (or was at any time
within the preceding 12 months) an employee, consultant, independent contractor
or agent of Company) to leave the employment of the Company or cease performing
services for the Company; (iii) hire or engage or assist any third party in
hiring or engaging, any individual or entity that is or was (at any time within
the preceding 12 months) an employee, consultant, independent contractor or
agent of the Company, or (iv) solicit, induce or assist any third party in
soliciting or inducing any other person or entity (including, without
limitation, any third-party service provider or distributor) to terminate its
relationship with the Company or otherwise interfere with such relationship.
5.05 NON-DISPARAGEMENT. Employee will not at any time (during or after
Employee's employment with Employer) disparage the reputation of Employer, its
affiliates and their respective clients, customers and its or their respective
officers, directors, agents or employees. Employer will cause its officers,
directors, agents and/or employees to not at any time (during or after
Employee's employment with Employer) disparage the reputation of Employee.
5.06 COOPERATION. Employee agrees to cooperate both during and after
Employee's employment with Employer, at Employer's sole cost and expense, with
the investigation by the Company involving the Company or any employee or agent
of the Company.
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5.07 REASONABLE RESTRICTIONS/DAMAGES INADEQUATE REMEDY; BREACHES.
(A) Employee acknowledges that the restrictions contained in
this Article V are reasonable and necessary to protect the legitimate business
interests of the Company and that any breach or threatened breach by Employee of
any provision contained in this Article V will result in immediate irreparable
injury to the Company for which a remedy at law would be inadequate. Employee
understands that the Employer's business is global and, accordingly, the
restrictions can not be limited to any particular geographic area. Employee
further acknowledges that the restrictions contained in this Article V will not
prevent Employee from earning a livelihood during the applicable period of
restriction. Accordingly, Employee acknowledges that Company shall be entitled
to temporary, preliminary and permanent injunctive or other equitable relief in
any court of competent jurisdiction (without being obligated to post a bond or
other collateral) and to an equitable accounting of all earnings, profits and
other benefits arising, directly or indirectly, from such violation, which
rights shall be cumulative and in addition to (rather than instead of) any other
rights or remedies to which the Company may be entitled at law or in equity.
(B) Notwithstanding the foregoing, in the event Employee
breaches or threatens to breach any term or condition of this Agreement,
including the provisions of Section 5.04 or other sections of this Article V,
whether or not any court of competent jurisdiction shall determine that any one
or more of the provisions contained in this Article V, including Section 5.04,
is unenforceable, it shall constitute a material breach of this Agreement and in
addition to and not instead of the Company's other remedies hereunder or
otherwise at law or in equity, Employee shall be required to, upon written
notice from the Company, return the payments paid by the Company pursuant to
Section 4.02 of this Agreement, less the greater of: (a) $500, or (b) 5% of the
payments paid by Employer hereunder. However, the Company will not demand
repayment if such breach is (in the good faith discretion of the Company)
subject to cure and is cured to the Company's satisfaction by Employee within
five (5) calendar days following such notice of such breach. Without limitation,
in no event shall any breach of the provisions of Section 5.04 be subject to
cure. Employee agrees that if Employee is required to return the payments, this
Agreement shall continue to be binding on Employee and the Company shall be
entitled to enforce the provisions of this Agreement as if the payments had not
been repaid to the Company. In the event the Company provides written notice to
Employee of a breach or threatened breach, the Company, at the direction of the
Board, shall have the right to suspend all further payment obligations to
Employee hereunder and shall have no further payment obligations unless a court
of competent jurisdiction finds that Employee has not breached his obligations
under this Agreement. In the event of a threatened breach that has been cured to
the Company's satisfaction within five (5) days of notice to Employee, the
Company shall resume making payments pursuant to this Agreement. In the event of
a breach or threatened breach, the Company reserves to itself all remedies
available to it under this Agreement or otherwise at law or in equity.
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5.08 SEPARATE COVENANTS. In the event that any court of competent
jurisdiction shall determine that any one or more of the provisions contained in
this Article V shall be unenforceable in any respect, then such provision shall
be deemed limited and restricted to the extent that the court shall deem the
provision to be enforceable. It is the intention of the parties to this
Agreement that the covenants and restrictions in this Article V be given the
broadest interpretation permitted by law. The invalidity or unenforceability of
any provision of this Article V shall not affect the validity or enforceability
of any other provision hereof. The covenants and restrictions contained in this
Article V shall be deemed a series of separate covenants and restrictions one
for each of the fifty states of the United States of America. If, in any
judicial or arbitration proceedings, a court of competent jurisdiction or
arbitration panel should refuse to enforce all of the separate covenants and
restrictions in this Article V, then such unenforceable covenants and
restrictions shall be eliminated from the provisions of this Agreement for the
purpose of such proceeding to the extent necessary to permit the remaining
separate covenants and restrictions to be enforced in such proceeding.
ARTICLE VI
TAX MATTERS
6.01 WITHHOLDING. Employer may withhold from any amounts payable under
this Agreement such federal, state and local taxes as may be required to be
withheld pursuant to any applicable law or regulation.
6.02 SECTIONS 280G/4999 GOLDEN PARACHUTE TAX.
(A) If during or after the Employee's employment with Employer,
Employee becomes subject to the excise tax imposed by Internal Revenue Code
("IRC") Section 4999 (the "Parachute Excise Tax"), the parties agree that if the
aggregate of all "parachute payments" (as such term is used under IRC Section
280G) exceeds 300% of the "base amount" (as such term is used under IRC Section
280G), then, subject to Section 6.02(B), the parachute payment shall be reduced
to 299.99% of such base amount.
(B) Prior to reducing the parachute payment as provided in clause (A)
above, Employee and Employer, and their tax respective consultants, shall confer
with respect to the calculations and compare the taxable income to be received
by Employee if all Federal, State and local taxes payable if such reduction were
to occur, and not occur. If Employee's income, net of such taxes, would be more
by at least $10,000 in the absence of such reduction, then the reduction
provided in 6.02(A) shall not occur. In the event of a dispute between the
calculation of Employee and the Company, the Employee's calculation shall
control for the purpose of this Section 6.02(B).
(C) If the reduction provided in Section 6.02(A) is to occur, then
Employer shall (i) reduce payments that are in the form of equity before
reducing any payments in the form of cash, and (ii) subject to the provisions of
clause (i), payments to be paid later, will be reduced first. Further, should
the provisions of Section 280(G) be deemed by Employer's and Employee's tax
consultants to permit Employee at the time of such reduction to determine which
components of consideration be reduced first, then the Employer shall allow
Employee to do so.
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6.03 SECTION 409A.
(A) FULL COMPLIANCE. It is the intent of the parties that all
compensation and benefits payable or provided to the Executive (whether under
this Agreement or otherwise) shall fully comply with the requirements of IRC
Section 409A such that no amounts payable hereunder shall be subject to
"additional tax" within the meaning of IRC Section 409A. Employer agrees that it
will not, without Employee's prior written consent, take any action, or refrain
from taking any action, that would result in the imposition of "additional tax",
interest and/or penalties upon Employee under IRC Section 409A.
(B) SEPARATE PAYMENTS. Notwithstanding anything contained in this
Agreement to the contrary, each and every payment made under this Agreement
shall be treated as a separate payment and not as a series of payments.
(C) SPECIFIED EMPLOYEE. Notwithstanding anything contained in this
Agreement to the contrary (subject however to the provisions of the last
sentence of Section 6.03(A) or of 6.03(B), if Employee is a "specified employee"
(determined in accordance with IRC Section 409A and Treasury Regulation Section
1.409A-3(i)(2)) as of the termination of Employee's employment with Employer,
and if any payment, benefit or entitlement provided for in this Agreement or
otherwise both (i) constitutes a "deferral of compensation" within the meaning
of IRC Section 409A ("Nonqualified Deferred Compensation") and (ii) cannot be
paid or provided in a manner otherwise provided herein or otherwise without
subjecting Employee to additional tax, interest and/or penalties under IRC
Section 409A, then any such payment, benefit or entitlement that is payable
during the first 6 months following the date of termination shall be paid or
provided to Employee in a lump sum cash payment to be made on the earlier of (x)
Employee's death or (y) the first business day of the seventh calendar month
immediately following the month in which the date of termination occurs.
(D) CHANGE IN CONTROL. Notwithstanding anything contained in this
Agreement to the contrary, any payment or benefit that (i) qualifies as
Nonqualified Deferred Compensation and (ii) is paid or distributed due to a
Change in Control, whether pursuant to this Agreement or otherwise, shall only
be paid or distributed if such event that qualifies as a Change in Control under
this Agreement also qualifies as either a "change in the ownership or effective
control of a corporation" or a "change in the ownership of a substantial portion
of the assets of a corporation" in accordance with Treasury Regulation
1.409A-3(i)(5).
(E) EXPENSE REIMBURSEMENTS. Notwithstanding anything contained in this
Agreement to the contrary, except to the extent any reimbursement, payment or
entitlement under this Agreement does not qualify as Nonqualified Deferred
Compensation, (i) the amount of expenses eligible for reimbursement or the
provision of any in-kind benefit (as defined in IRC Section 409A) to Employee
during any calendar year will not affect the amount of expenses eligible for
reimbursement or provided as in-kind benefits to Employee in any other calendar
year, (ii) the reimbursements for expenses for which Employee is entitled shall
be made on or before the last day of the calendar year following the calendar
year in which the applicable expense is incurred and (iii) the right to payment
or reimbursement or in-kind benefits may not be liquidated or exchanged for any
other benefit.
15
(F) REIMBURSEMENT OF EXPENSES IN CONNECTION WITH A SEPARATION FROM
SERVICE. Notwithstanding anything contained in this Agreement to the contrary,
any payment or benefit paid or provided under Section 4.02 above or otherwise
paid or provided due to a "separation from service" (as such term is described
and used in IRC Section 409A and the Treasury Regulations promulgated
thereunder) that is exempt from IRC Section 409A pursuant to Treasury Regulation
Section 1.409A-1(b)(9)(v) shall be paid or provided to Employee only to the
extent the expenses are not incurred or the benefits are not provided beyond the
last day of the second taxable year of Employee following the taxable year of
Employee in which the separation from service occurs; PROVIDED, HOWEVER that
Employer reimburses such expenses no later than the last day of the third
taxable year following the taxable year of Employee in which the separation from
service occurs.
(G) DISPUTE RESOLUTION PAYMENTS. Any dispute resolution payment
(including related reimbursable expenses, fees and other costs) that does not
qualify as a "legal settlement" in accordance with Treasury Regulation
1.409A-1(b)(11) (as determined by Employer in its sole discretion) shall be paid
by Employer to Employee not later than the last day of Employee's taxable year
following the year in which the dispute is resolved.
6.04 SECTION 83. It is the intent of the parties that the New Awards be
taxed under IRC Section 83. Employee may - but is not obligated to - make an
election under IRC Section 83(b) within 30 days of the date of grant of the New
Awards subject to and in accordance with applicable regulations and notice to
Employee.
6.05 SECTION 162(mk). It is the intent of the parties that the New
Awards not qualify as "performance-based compensation" (as such term is
described in IRC Section 162(m)(4) and Treasury Regulation Section 1.162-27(e)).
ARTICLE VII
MISCELLANEOUS
7.01 BENEFIT OF AGREEMENT AND ASSIGNMENT. This Agreement shall inure to
the benefit of Employer, its affiliates and subsidiaries, and its and their
respective successors and assigns (including, without limitation, the purchaser
of all or substantially all of any of its or their respective assets) and shall
be binding upon Employer and its successors and assigns. This Agreement shall
also inure to the benefit of and be binding upon Employee and Employee's heirs,
administrators, executors and assigns. Employee may not assign or delegate
Employee's duties under this Agreement, without the prior written consent of
Employer.
7.02 NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be given in writing and shall be deemed to
have been duly given (i) on the date delivered if personally delivered, (ii)
upon receipt by the receiving party of any notice sent by registered or
certified mail (first-class mail, postage pre-paid, return receipt requested) or
(iii) on the date targeted for delivery if delivered by nationally recognized
overnight courier or similar courier service, in each case addressed to the
Employer or Employee, as the case may be, at the respective addresses indicated
in the caption of this Agreement or such other address as either party may in
the future specify in writing to the other. In addition, a copy (which shall not
itself constitute notice) of any notice sent to Employer hereunder shall be sent
to: Xxxxxxxxxx Xxxxxxx PC, 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000,
Attention: Xxxxxx X. Xxxxxxxx, Esq.
16
7.03 ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties hereto with respect to the terms and conditions of Employee's
employment during the Term and activities following termination of this
Agreement and supersedes any and all prior agreements and understandings,
whether written or oral, between the parties with respect to the subject matter
of this Agreement This Agreement may not be changed or modified except by an
instrument in writing, signed by an authorized representative of the Employer
and Employee.
7.04 INDEMNIFICATION. Employer shall indemnify Employee against all
claims arising out of Employee's actions or omissions occurring during
Employee's employment with Employer to the fullest extent provided (A) by
Employer's Certificate of Incorporation and/or Bylaws, and (B) under the New
Jersey General Corporation Law, as each may be amended from time to time.
Employer shall maintain a Directors & Officers liability insurance policy in at
least the amount that is in effect as of the dated hereof covering Employee.
Employer shall advance to Employee all reasonable costs and expenses incurred by
him in connection with any proceeding involving and that are subject to
indemnification within 20 days after receipt by Employer of a written request
for such advance. Such request shall include an undertaking by Employee to repay
the amount of such advance if it shall ultimately be determined that he is not
entitled to be indemnified against such costs and expenses. Notwithstanding any
other provision to the contrary herein, this Section 7.04 shall survive
termination of the Agreement.
7.05 NO ATTACHMENT. Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
to execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect; provided, however, that nothing in this Section
7.05 shall preclude the assumption of such rights by executors, administrators
or other legal representatives of Employer or his estate and their assigning any
rights hereunder to the person or persons entitled thereto.
7.06 SOURCE OF PAYMENT. All payments provided for under this Agreement
shall be paid in cash from the general funds of Employer. Employer shall not be
required to establish a special or separate fund or other segregation of assets
to assure such payments, and, if Employer shall make any investments to aid it
in meeting its obligations hereunder, Employee shall have no right, title or
interest whatever in or to any such investments except as may otherwise be
expressly provided in a separate written instrument relating to such
investments. Nothing contained in this Agreement, and no action taken pursuant
to its provisions, shall create or be construed to create a trust of any kind,
or a fiduciary relationship, between Employer and Employee or any other person.
To the extent that any person acquires a right to receive payments from Employer
hereunder, such right, without prejudice to rights which employees may have,
shall be no greater than the right of an unsecured creditor of Employer.
17
7.07 NO WAIVER. The waiver by either party of a breach of any provision
of this Agreement shall not operate or be construed as a continuing waiver or as
a consent to or waiver of any subsequent breach hereof.
7.08 HEADINGS. The Article and Section headings in this Agreement are
for the convenience of reference only and do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
7.10 GOVERNING LAW; JURISDICTION; JURY TRIAL WAIVER. Any and all
actions or controversies arising out of this Agreement or Employee's employment,
including, without limitation, tort claims, shall be construed and enforced in
accordance with the internal laws of the State of New Jersey, without regard to
the choice of law principles thereof. With respect to any such actions or
controversies, Employer and Employee hereby (a) irrevocably consent and submit
to the sole exclusive jurisdiction of the United States District Court for the
District of New Jersey or the Superior Courts of New Jersey (and of the
appropriate appellate courts therefrom), (b) irrevocably waive, to the fullest
extent permitted by law, any objection that any of them may now or hereafter
have to the laying of the venue of any such actions or controversies in any such
court or that any such any such actions or controversies which is brought in any
such court has been brought in an inconvenient forum, and (c) IRREVOCABLY WAIVE
ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY SUCH ACTIONS OR CONTROVERSIES AND
REPRESENTS THAT SUCH PARTY HAS CONSULTED WITH COUNSEL SPECIFICALLY WITH RESPECT
TO THIS WAIVER.
7.11 VALIDITY. The invalidity or enforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision or provisions of this Agreement, which shall remain in full
force and effect.
7.12 COUNTERPARTS. This Agreement may be executed in one more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
7.13 AGREEMENT TO TAKE ACTIONS. Each party to this Agreement shall
execute and deliver such documents, certificates, agreements and other
instruments, and shall take all other actions, as may be reasonably necessary or
desirable in order to perform his/her or its obligations under this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Employer and Employee have duly executed this
Agreement as of the date first written above.
EMPLOYER:
IVIVI TECHNOLOGIES, INC.
BY:
/s/Xxxxxx Xxxxxxxxxx, CEO
Ivivi Technologies, Inc.
EMPLOYEE:
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx, individually
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ANNEX A
TO XXXXX XXXXXX EMPLOYMENT AGREEMENT
DESCRIPTION OF THE NEW AWARDS (AS DEFINED IN THE EMPLOYMENT AGREEMENT)
During the fiscal year ending March 31, 2009, at such time as the Board (or a
committee thereof) determines to conduct an annual equity grant program for key
employees of Employer, and subject to requisite approvals, Employee shall be
granted equity incentive awards relating to the common stock of Employer. The
awards to be granted to Employee shall have a "value" equal to 75% of the Base
Salary as in effect as of the date of grant. For such purpose, "value" shall be
reasonably determined by Employer in its sole discretion but shall be consistent
with the valuation method Employer uses for purposes of the public financial
reporting of employee equity awards ("Value"). 50% of the Value of the award
will be in the form of options to purchase common stock of the Employer (with a
per share exercise price equal to the fair market value of the common stock as
of the date of grant), and 50% of the Value of the award will be in the form of
shares of restricted common stock of Employee. With respect to the awards
described in this paragraph (i) 50% shall vest subject to Employee's continued
employment with Employer (and the vesting schedule shall be no less favorable
than the vesting schedule applicable to the Prior Options) and (ii) 50% shall
vest subject to the Employer's attainment of financial performance goals to be
reasonably determined by the Board (or a committee thereof).
During the fiscal year ending March 31, 2010, at such time as the Board (or a
committee thereof) determines to conduct an annual equity grant program for key
employees of Employer, and subject to requisite approvals, Employee shall be
granted equity incentive awards relating to the common stock of Employer. The
awards to be granted to Employee shall have a Value equal to 60% of the Base
Salary as in effect as of the date of grant. 50% of the Value of the award will
be in the form of options to purchase common stock of the Employer (with a per
share exercise price equal to the fair market value of the common stock as of
the date of grant), and 50% of the Value of the award will be in the form of
shares of restricted common stock of Employee. With respect to the awards
described in this paragraph (i) 50% shall vest subject to Employee's continued
employment with Employer (and the vesting schedule shall be no less favorable
than the vesting schedule applicable to the Prior Options) and (ii) 50% shall
vest subject to the Employer's attainment of financial performance goals to be
reasonably determined by the Board (or a committee thereof).
During the fiscal year ending March 31, 2011, at such time as the Board (or a
committee thereof) determines to conduct an annual equity grant program for key
employees of Employer, and subject to requisite approvals, Employee shall be
granted equity incentive awards relating to the common stock of Employer. The
awards to be granted to Employee shall have a Value equal to 50% of the Base
Salary as in effect as of the date of grant. 50% of the Value of the award will
be in the form of options to purchase common stock of the Employer (with a per
share exercise price equal to the fair market value of the common stock as of
the date of grant), and 50% of the Value of the award will be in the form of
shares of restricted common stock of Employee. With respect to the awards
described in this paragraph (i) 50% shall vest subject to Employee's continued
employment with Employer (and the vesting schedule shall be no less favorable
than the vesting schedule applicable to the Prior Options) and (ii) 50% shall
vest subject to the Employer's attainment of financial performance goals to be
reasonably determined by the Board (or a committee thereof).
All of the equity grants described in this Annex A shall be granted on the terms
and conditions described herein and upon such addition terms and conditions
appropriate and typical for grants to senior executives of publicly traded
companies.
20
