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| 2.1.| Employee acknowledges and agrees that Employee will have access to confidential and proprietary information (whether originated by the Company or received from third parties) concerning the business and financial activities of the Company, including information relating to the Company's research and development, banking, investments, investors, properties, employees, marketing plans, customers, suppliers, trade secrets, test results, processes, data, know-how, improvements, inventions, techniques and products (actual or planned). Such information, whether documentary, written, oral or computer generated, shall be referred to as "Proprietary Information". ---|---|--- | | | 2.2.| Proprietary Information shall be deemed to include any and all proprietary information disclosed by or on behalf of the Company and irrespective of form but excluding information that (i) was known to Employee prior to Employee's association with the Company and can be so proven; (ii) is or shall become part of the public knowledge except as a result of the breach of the Agreement or this Exhibit by the Employee; (iii) reflects general skills and experience gained during Employee's engagement by the Company; or (iv) reflects information and data generally known in the industries or trades in which the Company operates. | | | 2.3.| Employee agrees that all Proprietary Information, and patents, trademarks, copyrights and other intellectual property and ownership rights in connection therewith shall be the sole property of the Company and its assigns. At all times, both during Employee's engagement by the Company and after Employee's termination, Employee will keep in confidence and trust all Proprietary Information, and the Employee will not use or disclose any Proprietary Information or anything relating to it without the written consent of the Company, except as may be necessary in the ordinary course of performing Employee's duties under the Agreement. |
| 3.1.| Employee understands that the Company is engaged in a continuous program of research, development, and production and marketing in connection with its business. ---|---|--- | | | 3.2.| From and after the date Employee first became employed with the Company, Employee undertakes and covenants that Employee will promptly disclose in confidence to the Company all inventions, improvements, designs, concepts, techniques, methods, systems, processes, know how, computer software programs, databases, mask works and trade secrets ("Inventions"), whether or not patentable, copyrightable or protectable as trade secrets, that are made or conceived or first reduced to practice or created by Employee, either alone or jointly with others, during the period of Employee's employment and in connection with Employee's employment. | | | 3.3.| Employee agrees that all Inventions that (a) are developed using equipment, supplies, facilities or trade secrets of the Company, (b) result from work performed by Employee for the Company, or (c) relate to the Company's business or current or anticipated research and development, will be regarded as Service Invention in the meaning of the Israeli Patent Law, 5727-1967 and will be the sole and exclusive property of the Company ("Company Inventions"). | | | 3.4.| Employee hereby irrevocably transfers and assigns to the Company all worldwide patents, patent applications, copyrights, mask works, trade secrets and other intellectual property rights in any Company Invention, and any and all moral rights that Employee may have in or with respect to any Company Invention, and expressly waives any right to any consideration of any kind with regard to the Company Inventions, the assignment of such and any use thereof, including without limitation any royalty payment and/or other payment with respect thereto. |
| 3.5.| Employee agrees to assist the Company, at the Company's expense, in every proper way to obtain for the Company and enforce patents, copyrights, mask work rights, and other legal protections for the Company's Inventions in any and all countries. Employee will execute any documents that the Company may reasonably request for use in obtaining or enforcing such patents, copyrights, mask work rights, trade secrets and other legal protections. Such obligation shall continue beyond the termination of Employee's employment with the Company for a period of 2 years. Employee hereby irrevocably designates and appoints the Company and its authorized officers and agents as Employee's agent and attorney in fact, coupled with an interest to act for and on Employee's behalf and in Employee's stead to execute and file any document needed to apply for or prosecute any patent, copyright, trademark, trade secret, any applications regarding same or any other right or protection relating to any Proprietary Information (including Company Inventions), and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights, trademarks, trade secrets or any other right or protection relating to any Proprietary Information (including Company Inventions), with the same legal force and effect as if executed by the Employee himself. ---|---|--- |
| 4.1.| Both Company and Employee acknowledge Employee's right for freedom of occupation whilst protecting the Company's legitimate interests. Therefore Employee agrees and undertakes that, so long as Employee is employed by the Company and for a period of twelve (12) months following termination of Employee's employment for whatever reason, Employee will not, directly or indirectly, as owner, partner, joint venturer, stockholder, employee, broker, agent, principal, trustee, corporate officer, director, licensor or in any capacity whatsoever engage in, become financially interested in, be employed by, or otherwise render services to, any business or venture that is engaged in any activities involving products, information, processes, technology or equipment that are or could reasonably and imminently be competitive to those of the Company or any of its subsidiaries or affiliates; provided, however, that Employee may own any securities of any corporation which is engaged in such business and is publicly owned and traded but in an amount not to exceed at any one time one percent of any class of stock or securities of such company, and so long as Employee has no role in the publicly owned and traded company as director, employee, consultant or otherwise. Employee agrees and understand that his Salary (set forth in Exhibit A) includes adequate compensation for his undertakings in this Section 4.1 and is about 20% higher than it would have been should the Employee had not taken said undertakings. ---|---|--- | | | 4.2.| Employee agrees and undertakes that during the period of Employee's employment and for a period of twenty four (24) months following termination, Employee will not, directly or indirectly, including personally or in any business in which Employee is an officer, director or shareholder, for any purpose or in any place, solicit for employment or employ any person employed by the Company (or retained by the Company as a consultant, if such consultant is prevented thereby from continuing to render its services to the Company) on the date of such termination or during the preceding twelve (12) months. |
Employee: Oren Harari | ---|--- | | By: | /s/ Oren Harari | Name: | Oren Harari | Title: | Chief Financial Officer | | | The Company: Enertec Electronics Ltd. | | | By: | /s/ David Lucatz | Name: | David Lucatz | Title: | President and Chief Executive Officer | |
1. Employment Term. The Company agrees to employ Executive and Executive hereby accepts such employment from the Company upon the terms and conditions set forth in this Agreement for the period beginning on the Effective Date and continuing for a period of five (5) years (Employment Period) (unless otherwise terminated earlier in accordance with Section5 hereof). ---|--- | |
3. Adherence to Company Rules. Executive, at all times during the Employment Period, shall strictly adhere to and obey all of the Companys lawful written rules, policies and procedures, which are available for review and are now in effect, or as are subsequently adopted or modified by the Company, which govern the operation of the Companys business and the conduct of employees of the Company. ---|--- Executive shall, in an annual Officers and Directors Questionnaire, disclose in writing to the Company all stockholdings, membership interests, partnership interests, and other ownership interests in any private company or of 2% or more of the issued and outstanding securities of any class of a publicly reporting company, as well as all positions as a director, officer, manager, partner, or other similar managerial position, held in or with any other business entity. Upon any change or anticipated change in such information, including the acquisition of additional ownership interests or the assumption of additional managerial positions, Executive shall notify the Company in writing of such change or anticipated change within ten (10) days after such change or anticipated change first becomes known to Executive. |
b. Annual Cash Incentive Bonus.As described in Exhibit A, Executive shall be eligible for an annual at-target incentive cash bonus of $300,000 from the Company during each calendar year of the Employment Period (Annual Bonus) provided the conditions set forth in Exhibit A are satisfied. The Company and Executive shall mutually agree upon a recommendation to the Board as to the performance targets described in Exhibit A for each calendar year after 2017 on or before the 90th calendar day of such calendar year as a part of the annual DMV Portfolio operating plan for such calendar year, and such performance targets will be established by the final approval by the Board as part of the Companys annual operating plan and the final approval by the Compensation Committee of the Board of such performance targets. Neither the Company nor the Executive shall unreasonably withhold, condition or delay its or his agreement as to the recommendation of such performance targets. Executive must be employed by the Company on the bonus payment date specified in order to be eligible to receive the Annual Bonus. The Annual Bonus with respect to each fiscal year of the Company falling in whole or in part within the Employment Period shall be paid in cash. The Annual Bonus shall be subject to applicable federal, state and local withholding taxes. ---|--- | |
(ii) TBRSUs.For each remaining calendar year of the Employment Period (i.e., calendar years 2018 through 2021), the Company shall grant Executive TBRSUs with an at-target value of $500,000 per grant on the date of each such grant, subject to vesting and other requirements described in Exhibit C and the terms of the ICP; provided, however, that for any such TBRSU grant, in order for Executive to be eligible to receive such grant, (A) Executive must be employed by the Company as the date of grant and (B) the DMV Portfolio must have achieved at least 95% of the Adjusted EBITDA Target (described in Exhibit A) for the calendar year immediately preceding the calendar year in which the date of grant falls. TBRSUs will be granted, vest and pay out in accordance with the Companys standard timing cycle and terms and conditions for all of its RSU grants under the ICP.Notwithstanding the foregoing, any Evidence of Grant documenting an equity award to Executive under this Agreement as provided in Exhibit B and Exhibit C shall provide Executives award shall be paid 60% in shares of the Companys Series A Common Stock and 40% in cash. The actual number |
of TBRSUs to be granted will be based on (A) the closing market price of the Companys Series A Common Stock on the date of grant and (B) the DMV Portfolios achievement level of the Adjusted EBITDA Target for the calendar year immediately preceding the calendar year in which the date of grant falls, using the following table: --- Prior Year Achievement of Adjusted EBITDA Target |
If the DMV Portfolio achieves between 95% and 100% (or more) of the Adjusted EBITDA Target for the applicable calendar year within one of the tranches set forth in the chart above, then the number of TBRSUs subject to the award for such calendar year will be determined using a straight line interpolation within such tranche. By way of example, if the DMV Portfolio achieves 95.5% of the Adjusted EBITDA Target for the applicable calendar year, then $275,000 of TBRSUs would be earned for such calendar year. The number of TBRSUs will be capped at 100% of the Adjusted EBITDA Target. |
d. Standard Benefits.During the Employment Period, Executive shall be entitled, at his election, to participate in all employee benefit plans and programs generally available to other similarly situated Company executives, including without limitation, medical, dental, life and short and long term disability insurance.Executives participation in any benefit plan or program will be subject to the terms, conditions, eligibility and premium payment requirements of the applicable plans. Without limiting the generality of the foregoing, the Company will also provide the following benefits to Executive during the Employment Period: (i) the DMV Portfolio will pay Executives membership dues and related expenses for the Young Presidents Organization; (ii) the DMV Portfolio will pay Executives dues and related expenses for such other business organizations as are reasonably requested by Executive, up to a maximum amount of $5,000 per calendar year; (iii) Executive shall be entitled to five weeks of Paid Time Off (PTO) per calendar year, to be taken at such times as mutually decided by Executive and the Company, consistent with business needs; and (iv) the DMV Portfolio will pay Executive a cell phone allowance of $100 per month. ---|--- | |
e. Expenses.During the Employment Period, Executive shall be entitled to receive prompt reimbursement from the DMV Portfolio for all reasonable and customary travel and business expenses he incurs in connection with his employment hereunder, including Admirals Club membership.Executive must account for and document those expenses in accordance with the policies and procedures established by the Company, all such expenses to be charged to the DMV Portfolio. ---|--- -3- |
a. Termination by the Company for Cause.The Company shall have the right to immediately terminate Executives employment and this Agreement at any time for any of the following reasons (each of which is referred to herein as Cause): ---|--- (i)willful and material breach by Executive of any provision of this Agreement; |
c. Termination by Executive with Good Reason. Executive shall have the right to terminate his employment for Good Reason (as defined below). In the event that Executive terminates his employment with the Company for Good Reason, the Company shall pay Executive (i) any earned and accrued but unpaid installments of base salary and benefits due to Executive under Section 4 above (including, without limitation, unreimbursed expenses due under Section 4) through the date of termination and, (ii) subject to the provisions of Sections 14 and 26 below, an amount equal to Executives Base Salary (as determined on the date of termination) that would be payable for the remaining months in theEmployment Period to be paid pursuant to the Companys standard payroll practices over the remaining term of the Employment Period, less applicable taxes and deductions. The disposition of any PBRSUs and TBRSUs awarded to Executive prior to the date of termination shall be as set forth on Exhibit D. For purposes of this Agreement, Good Reason shall mean the following: ---|--- (i) a reduction in Executives annual Base Salary (as determined in comparison to Executives level of annual Base Salary immediately prior to such reduction); |
Notwithstanding the foregoing, Executive shall not be deemed to have Good Reason to terminate his employment unless Executive has provided written notice to the Company setting forth in reasonable detail the reasons for Executives intention to terminate his employment for Good Reason within thirty (30) days after the event occurs.The Company shall have thirty (30) days following the receipt of such notice to remedy the condition constituting such reduction, change or breach and, if so remedied, any termination of Executives employment on the basis of the circumstances described in such notice shall not be for Good Reason.If the Company does not remedy the condition that has been the subject of a notice as described in this paragraph within thirty (30) days of the Companys receipt of such notice, Executive must terminate his employment within ninety (90) days following the occurrence of such condition in order for such termination to be considered for Good Reason for purposes of this Agreement. |
d. Termination by Executive without Good Reason.Executive shall have the right to terminate his employment for any reason other than Good Reason by giving the Company not less than sixty (60) days prior written notice. If Executive terminates his employment without Good Reason, the Company shall pay the Executive any earned and accrued but unpaid installments of base salary and benefits due to Executive under Section 4 above (including, without limitation, unreimbursed expenses due under Section 4) through the date of termination, and the Company shall have no further obligations to Executive hereunder from and after the date of termination; provided, however, that the disposition of any PBRSUs and TBRSUs awarded to Executive prior to the date of termination shall be as set forth on Exhibit D. ---|--- | |
e. Termination Upon Death.In the event that Executives employment with the Company is terminated due to the death of Executive, the Company shall pay Executives estate any earned and accrued but unpaid installments of base salary and benefits due to Executive under Section 4 above (including, without limitation, unreimbursed expenses due under Section 4) through the date of death, and the Company shall have no further obligations to Executive hereunder from and after the date of termination; provided, however, that the disposition of any PBRSUs and TBRSUs awarded to Executive prior to the date of termination shall be as set forth on Exhibit D. ---|--- -6- |
7. Non-Disclosure.Executive agrees that, during the Employment Period, the Company, the DMV Portfolio and the TCV Entities shall provide Executive with access to certain confidential, proprietary and/or trade secret information concerning the Company, the DMV Portfolio and the TCV Entities (Confidential Information).Confidential Information includes, but is not limited to, proprietary technology, trade secrets, operating procedures and methods of operation, financial statements and other financial information, market studies and forecasts, target markets, advertising techniques, competitive analyses, pricing policies and information, product information, product designs, manufacturing processes, cost information, customer information, customer preferences, the substance of agreements with customers, vendors, referral sources and others, marketing and similar arrangements, servicing and training programs and arrangements, and any other documents embodying confidential, proprietary or trade secret information.Executive acknowledges and agrees that disclosing this Confidential Information to third parties would be detrimental to the Company, the DMV Portfolio and the TCV Entities and could place the Company, the DMV Portfolio and the TCV Entities at a competitive disadvantage.Executive agrees that he shall not during the Employment Period or at any time thereafter, directly or indirectly, disclose to any person or entity any Confidential Information or use any such information in any employment, work or business, except in furtherance of Executives job duties on behalf of the Company, the DMV Portfolio and the TCV Entities. Confidential Information does not include: (i) any information that is or becomes generally available to the public other than as a result of an unauthorized disclosure, directly or indirectly, by Executive and Executive has no reason to believe was made public as a result of an unauthorized disclosure, or (ii) any information obtained by Executive from a third party which Executive has no reason to be believe is violating any obligation of confidentiality to the Company, the DMV Portfolio or the TCV Entities. Executive acknowledges and agrees that his confidentiality obligations shall apply to all Confidential Information no matter when he obtained such knowledge or access to such Confidential Information. ---|--- | |
(ii)Business shall mean the marketing automation, digital marketing, search marketing, search optimization, commercial printing, or printing brokerage businesses or any other business, in each case as conducted by the Company, the DMV Portfolio or the TCV Entities during the portion of the Employment Period commencing on the Effective Date and ending on the effective date of any termination of the Employment Period. |
b.Customer Non-Solicitation.Executive further agrees that, during the Non- Competition Term (as defined above), Executive shall not, directly or indirectly, as an individual, director, officer, principal, agent, employee, employer, adviser, consultant, owner, shareholder, stockholder, lender, partner, member, manager or in any other individual or representative capacity whatsoever of any other person, entity or business, request, solicit, encourage, induce, influence or attempt to request, solicit, encourage, induce or influence, directly or indirectly, any customer or client of the Company, the DMV Portfolio or the TCV Entities to terminate, limit or otherwise negatively alter his, her or its relationship with the Company, the DMV Portfolio or the TCV Entities or provide or seek to provide services related to the Business to any present clients or customers of the Company, the DMV Portfolio, the TCV Entitiesor any respective affiliate thereof. |
c.Employee Non-Solicitation.Executive further agrees that, during the Non- Competition Term, he will not solicit, directly or indirectly, or cause or permit others to solicit, directly or indirectly, any person (i) formerly employed by the Company, the DMV Portfolio or the TCV Entities during the twelve (12) month period immediately preceding or following Executives termination of employment (Former Employee) or (ii) currently employed by the Company, the DMV Portfolio or the TCV Entities (Current Employee).The term solicit includes, but is not limited to, the following (regardless of whether done directly or indirectly): (a) requesting that a Former or Current Employee change employment; (b) informing a Former or Current Employee that an opening exists elsewhere; (c) inquiring if a Former or Current Employee might have an interest in employment elsewhere; or (d) any other similar conduct, the intended or actual effect of which is that a Former or Current Employee affiliates with another employer or a Current Employee leaves the employment of the Company; provided, however, that Executive will not be in breach of this Section 8(c) merely due to any situation in which any Current Employee or Former Employee seeks employment by Executive or one of his affiliates in response to Executives or such affiliates general recruiting efforts not targeted at |
If, during any period within the Non-Competition Term, Executive is not in compliance with the terms of Section 8, Executive agrees that the Company shall be entitled to, among other remedies, compliance by Executive with the terms of Section 8 for an additional period equal to the period of such noncompliance.For purposes of this Agreement, the term Non-Competition Term shall also include this additional period, if any.Executive hereby acknowledges that the geographic boundaries, scope of prohibited activities and the time duration of the provisions of Section 8 are reasonable and are no broader than are necessary to protect the legitimate business interests of the Company. |
The Company and Executive agree and stipulate that the agreements and covenants not to compete and not to solicit contained in Section 8 hereof are fair and reasonable in light of all of the facts and circumstances of the relationship between Executive and the Company and are necessary to protect the Companys, the DMV Portfolios and the TCV Entities Confidential Information, customer goodwill and business interests; provided however, Executive and the Company are aware that in certain circumstances courts have refused to enforce certain terms of agreements not to compete and not to solicit.Therefore, in furtherance of, and not in derogation of the provisions of Section 8, the Company and Executive agree that in the event a court should decline to enforce any terms of any of the provisions of Section 8, that Section 8 shall be modified or reformed to restrict Executives competition with the Company, the DMV Portfolio or the TCV Entities to the maximum extent as to time, geography and business scope, which the court finds enforceable; provided, however, in no event shall the provisions of Section 8 be modified or reformed by any court to be more restrictive to Executive than those contained herein. |
Section 8 shall survive the termination of Executives employment for any reason, whether voluntary or involuntary, and can only be revoked or modified by a writing signed by the parties which specifically states an intent to revoke or modify these provisions.Such a writing may only be signed on behalf of the Company by an executive officer of the Company. Executive agrees that during the Non-Competition Term, he shall immediately notify the Company in writing of any employment, work, task or business he undertakes with or on behalf of any person (including himself) or entity, whether or not for compensation. |
10. Return of Documents and Property.Executive agrees that if Executives employment with the Company is terminated (for any reason), Executive shall not take with Executive, but will leave with the Company, all Company, DMV Portfolio and the TCV Entities property, including but not limited to Confidential Information, records, files, electronic mail, memoranda, reports, documents, devices, computer passwords, computer equipment, computer software, cell phones, PDAs, corporate credit cards, identification cards, manuals and other information that is the property of the Company, the DMV Portfolio or the TCV Entities, in whatever form (including on computer disk, other storage device or other external medium), and any copies thereof, or if such items are not on the premises of the Company, the DMV Portfolio or the TCV Entities, Executive agrees to return such items immediately upon Executives termination or any time at the request of the Company.Executive acknowledges that all such items are and remain the property of the Company, the DMV Portfolio and the TCV Entities.Notwithstanding the foregoing, Executive shall be permitted to retain his Company computer, iPad, cell phone(s) and the telephone number(s) associated therewith (provided he meets with a designated member of the Companys Management Committee within fourteen (14) days of his separation and, in such Management Committee members presence, deletes all proprietary Company, DMV Portfolio and TCV Entities software and Company, DMV Portfolio and TCV Entities records thereon other than those records that solely relate to him personally) and a copy of all Company records that solely relate to him personally for his recordkeeping purposes. ---|--- | |
11. Severability and Reformation.Subject to the provisions of Section 8, if any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of Executive or the Company under this Agreement would not be materially and adversely affected thereby, such provision shall be fully severable, and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom, and in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible, and the Company and Executive hereby request the court to whom disputes relating to this Agreement are submitted to reform the otherwise unenforceable provision in accordance with this Section11. ---|--- | |
12. Injunctive Relief. Executive acknowledges that the breach of any of the covenants contained herein, including, without limitation, the non-disclosure covenants contained in Section7 and the non-competition and non-solicitation covenants in Section8, will give rise to injury to the Company, the DMV Portfolio and the TCV Entities.Accordingly, Executive agrees that the Company (on behalf of itself, the DMV Portfolio and the TCV Entities) shall be entitled to seek injunctive relief in a court of competent jurisdiction to prevent or cure breaches or threatened breaches of the provisions of this Agreement and to enforce specific performance of the terms and provisions hereof, in addition to any other legal or equitable remedies, which may be available.Executive further acknowledges and agrees that the enforcement of a remedy hereunder by way of injunction shall not prevent Executive from earning a reasonable livelihood.Executive further acknowledges and agrees that the covenants contained herein are necessary for the protection of the Companys, the DMV Portfolios and the TCV Entities legitimate business interests, including their Confidential Information and |
a. For purposes of this Section, Work Product shall mean any and all ownership, moral and/or intellectual property rights, including all trade secrets, copyrights, trademarks and service marks, inventions, discoveries and other ownership and intellectual property rights in or arising in connection with any ideas, drawings, plans, calculations, technical specifications, works of authorship, inventions, patents, information, marks, copyrights, concepts, programming, designs, documentation, technology, or other work product or materials that are created by Executive in connection with Executives assignments or required performance by or for the Company, the DMV Portfolio and the TCV Entities and any productive output that relates to the business of the Company, the DMV Portfolio and the TCV Entities Work.In addition, all rights in any preexisting programming, design, documentation, technology, or other work product created or provided to the Company during Executives employment shall automatically become part of the Work Product hereunder, whether or not it arises specifically out of Executives Work. ---|--- | |
b. Executive acknowledges and agrees that the Company, the DMV Portfolio and the TCV Entities shall own any and all rights in and to the Work Product and that all Work Product is, was and shall hereafter be, a work made for hire for, and owned by, the Company, the DMV Portfolio and the TCV Entities within the meaning of 17 U.S.C. 101.If any of the Work Product is not, by operation of law or agreement, considered a work made for hire and owned by the Company, the DMV Portfolio or the TCV Entities, Executive hereby agrees to assign and irrevocably assigns to the Company, the DMV Portfolio and the TCV Entities any and all right, title and interest worldwide in and to the Work Product and all claims and causes of action with respect to any of the foregoing.In the event Executive has any right or interest in any Work Product which cannot be assigned, Executive agrees to waive enforcement of same against the Company, the DMV Portfolio and the TCV Entities and Executive hereby exclusively and irrevocably licenses same to the Company, the DMV Portfolio and the TCV Entities in perpetuity and royalty-free, along with the unfettered right to sublicense. All such rights are fully assignable by the Company, the DMV Portfolio and the TCV Entities. Executive hereby agrees that all Work Product is created or developed for the sole use of the Company, the DMV Portfolio and the TCV Entities, and that Executive has no right to utilize in any manner whatsoever any such Work Product. ---|--- | |
c. Executive agrees to perform upon the request of the Company, during or after Executives Work or employment, such further acts as may be reasonably requested by the Company that the Company believes are necessary or desirable to assign, convey, transfer, perfect, and defend the Companys, the DMV Portfolios and the TCV Entities ownership of the Work Product. ---|--- | |
14. Release Agreement. Executive agrees that, as a condition to receiving any severance benefits or payments under this Agreement, including those referenced in Section 5 of this Agreement, Executive shall execute and deliver a non-revocable general release of all claims arising out of Executives service as an employee of the Company, its subsidiaries or any of their affiliates and the termination of such relationship.Such claims include, without limitation, all claims based on any federal, state or local statute, including without limitation the Age Discrimination in Employment Act of 1967, as amended, Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Americans with Disabilities Act, as amended, and the Employee Retirement Income Security Act of 1974, as amended. ---|--- | |
20. Entire Agreement.This Agreement and the Exhibits attached hereto shall embody the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein and supersedes all prior or contemporaneous conflicting or inconsistent agreements, consents and understandings relating to such subject matter, including without limitation, the Proposed Transaction Confidential Term Sheet and that certain Employment Agreement dated January 2, 2015 between Executive and DMV (the DMV Employment Agreement); provided, however, that the provisions of Sections 7, 9, 11, 12, 13, 15, 16, 17, 18 (as modified by this Agreement), 19, 20, 21, 22, 23, 24, 25 and 26 of the DMV Employment Agreement shall survive in full force and effect in accordance with their terms except as otherwise expressly provided herein.The parties acknowledge and agree that there is no oral or other agreement between the Company and Executive which has not been incorporated in this Agreement. This Agreement and the Exhibits attached hereto may only be modified pursuant to Section24. ---|--- | |
21. No Waiver.The forbearance or failure of one of the parties hereto to insist upon strict compliance by the other with any provisions of this Agreement, whether continuing or not, shall not be construed as a waiver of any rights or privileges hereunder.No waiver of any right or privilege of a party arising from any default or failure hereunder of performance by the other shall affect such partys rights or privileges in the event of a further default or failure of performance. ---|--- | |
Executives annual cash bonus opportunity for a calendar year is based on specific financial performance objectives and metrics, as follows: (i) the achievement by the consolidated operations of DMV Digital Holdings Company (DMV), Your Speakeasy, LLC and Connect (together, the DMV Portfolio) of the Adjusted EBITDA (as defined below) performance target for that calendar year (the Adjusted EBITDA Target) and (ii) the attainment of the Total Contract Value (defined below) performance target for that calendar year (the TCV Target) by Distribion, Inc. and Vertical Nerve, Inc. (together, the TCV Entities). Any additional entities, businesses and operating units other than those set forth above to be included in the DMV Portfolio or the TCV Entities in a particular calendar year will be mutually agreed upon by the Company and Executive within the first ninety (90) calendar days of that calendar year and may not thereafter be revised for that calendar year.At the end of the year, actual results are compared to the performance objectives, and the amount of Executives cash bonus is determined accordingly. |
Fifty percent (50%) of Executives annual target bonus ($150,000) for a particular calendar year will be based upon the DMV Portfolios achievement of the Adjusted EBITDA Target for that calendar year. For this purpose, Adjusted EBITDA means DMV Portfolio earnings before interest, taxes, depreciation and amortization, adjusted for (adding back) severance-related expenses, acquisition costs and expenses, litigation and litigation settlement costs and expenses, and stock-based compensation expenses to the extent applicable to DMV or, for periods after the consolidation of the DMV Portfolio, the DMV Portfolio. For 2017, Adjusted EBITDA shall be equal to the sum of (A) the Adjusted EBITDA for DMV for the period prior to the date of the consolidation of the DMV Portfolio and (B) the consolidated Adjusted EBITDA for the DMV Portfolio for the remainder of that year from and after the date of such consolidation. For 2018 and each subsequent year, the Adjusted EBITDA for each particular calendar year will be based on the consolidated Adjusted EBITDA for the DMV Portfolio for that calendar year. |
If the DMV Portfolio (or, with respect to calendar year 2017, DMV for the period prior to the date of the consolidation of the DMV Portfolio, and the DMV Portfolio for the remainder of that year from and after the date of such consolidation) achieves between (i) 85% and 100% or (ii) 100% and 200% of the Adjusted EBITDA Target, then the bonus amount earned and payable will be determined using a straight line interpolation. |
For 2017, the TCV Target is $21,474,350.For 2018 and each subsequent year, the TCV Target for each particular calendar year will be based on the Total Contract Value for that calendar year. The Total Contract Value metric summarizes the contractual value of new, fully executed contracts during the measurement period. For purposes of the calculation, pass-through revenue, as part of a contract, with the exception of Marketing FX contracts, does not qualify in the calculation of Total Contract Value. |
For each calendar year after 2017, the Company and Executive will mutually agree upon a recommendation to the Companys Board of Directors as to the Adjusted EBITDA Target for the DMV Portfolio and the TCV Target for the TCV Entities as a part of the annual DMV Portfolio operating plan for such calendar year, and such performance targets will be established by the final approval by the Board of Directors of the Company as part of the Companys annual |
If the DMV Portfolio achieves between 95% and 100% (or more) of the Adjusted EBITDA Target for the applicable calendar year within one of the tranches set forth in the chart above, then the number of PBRSUs earned for such calendar year will be determined using a straight line interpolation within such tranche. By way of example, if the DMV Portfolio achieves 95.5% of the Adjusted EBITDA Target for the applicable calendar year, then $275,000 of PBRSUs would be earned for such calendar year. The number of PBRSUs earned will be capped at 100% of the Adjusted EBITDA Target. |
Any PBRSUs that are earned as a result of the achievement of the Adjusted EBITDA Target for 2017 will vest on the later of (i) the first anniversary of the date of grant or (ii) within three (3) business days of the Companys 2017 earnings release (in 2018) (the date on which the PBRSUs vest, the 2018 Vesting Date). ---|--- Payment Date: |
Executive will be entitled to receive with respect to each vested PBRSU (i) a number of shares of the Companys Series A Common Stock having an aggregate Market Value per Share (as defined in the Plan) on the 2018 Vesting Date equal to 60% of the value of the vested PBRSUs and (ii) a cash payment in an amount equal to 40% of the value of the vested PBRSUs on the 2018 Vesting Date. |
In the event of a Change in Control, as defined in the Plan, all outstanding PBRSUs then held by Executive that are subject to performance-based vesting criteria will automatically become fully vested and earned at a deemed performance level equal to the greater of the target performance level or the performance level determined by actual performance through the date ending on the date of the Change in Control. Vested PBRSUs will be paid at the earliest practicable date that payment may be made without violating any applicable provision of Section 409A of the Internal Revenue Code. |
Notwithstanding the general payment rules described in this ExhibitB and ExhibitD, if the Company makes a good faith determination that a payment of Executives PBRSUs (i)constitutes a deferral of compensation for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, and the rules, regulations and guideline thereunder (Section 409A), (ii)is made to Executive by reason of Executives separation from service within the meaning of Section409A, and (iii)at the time such payment would otherwise be made Executive is a specified employee within the meaning of Section 409A (using the identification methodology selected by the Company from time to time), the payment will be delayed until the earlier of (x) the first business day of the seventh month following Executives separation from service or (y) Executives death.Furthermore, if Executives PBRSUs are no longer subject to a substantial risk of forfeiture prior to a Change in Control, and the Change in Control does not constitute a |
change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company (within the meaning of Section 409A), the payment date of the PBRSUs will be determined without regard to the occurrence of the Change in Control. Each payment of a portion of Executives PBRSUs will be considered, and is hereby designated as, a separate payment for purposes of Section 409A. |
It is the Companys intention that the PBRSUs will either be exempt from, or will satisfy the requirements of, Section 409A, and this Exhibit B and Executives Evidence of Award will be construed in a manner to give effect to such intention.Notwithstanding any other provision of this ExhibitB and Executives Evidence of Award, the Company is not obligated to guarantee any particular tax result for Executive with respect to any payment provided to Executive hereunder or thereunder, and Executive will be responsible for any taxes imposed on Executive with respect to any such payment. |
The Company will withhold from any payment to Executive all federal, state, city or other taxes (the Applicable Taxes) as may be required to be withheld pursuant to any law or governmental regulation or ruling.In the event the Applicable Taxes exceed the value of the cash payment received by Executive upon vesting of any portion of the PBRSUs, Executive agrees to provide to the Company a cash payment, in the form of a check or wire transfer of immediately available funds, in an amount equal to difference between the amount of Applicable Taxes and the amount of the cash payment.This amount shall be paid to the Company no later than close of business on the 2018 Vesting Date for such vested PBRSUs. |
Executives right to receive a PBRSU grant or any payment with respect thereto will not be transferrable or assignable by Executive, other than with respect to a transfer upon Executives death by will or the laws of descent and distribution if Executive is entitled to payment of a vested portion of Executives PBRSUs that has not been paid as of the date of Executives death. |
Under the terms of the Companys 2008 Incentive Compensation Plan or any successor to such plan (the Plan), Executive will qualify for the following TBRSU grants each calendar year from 2018 through 2021 if (i)Executive continues to be employed by the Company on the date of grant and (ii) the DMV Portfolios (as defined in Exhibit A) actual results for the prior calendar year are at least 95% of the Adjusted EBITDA Target (as defined in Exhibit A) for that prior calendar year.Subject to the foregoing, grants will be made each such calendar year at the same time that RSU grants are generally made to other executives under the Plan. All grant(s) are effective on the date of grant and are subject to the applicable terms and conditions of the Plan.TBRSUs will be granted, vest and pay out in accordance with the Companys standard timing cycle and the terms and conditions of the Plan. Executives TBRSU opportunity is described below. Executives participation in the Plan is subject to the fully executed binding arbitration agreement that the Company has on file for Executive. |
If the DMV Portfolio achieves between 95% and 100% (or more) of the Adjusted EBITDA Target for the prior calendar year within one of the tranches set forth in the chart above, then the number of TBRSUs subject to this award will be determined using a straight line interpolation within such tranche. By way of example, if the DMV Portfolio achieves 95.5% of the Adjusted EBITDA Target for the applicable calendar year, then $275,000 of TBRSUs would be earned for such calendar year. The number of TBRSUs awarded will be capped at 100% of the Adjusted EBITDA Target. ---|--- Vesting: |
Subject to Executives continuous employment with the Company through the applicable vesting dates described above, Executive will be entitled to receive with respect to each vested TBRSU (i) a number of shares of the Companys Series A Common Stock having an aggregate Market Value per Share (as defined in the Plan) on the vesting date equal to 60% of the value of the vested TBRSUs and (ii) a cash payment in an amount equal to 40% of the value of the vested TBRSUs on the vesting date. |
Notwithstanding the general payment rules described in this ExhibitC and ExhibitD, if the Company makes a good faith determination that a payment of Executives TBRSUs (i)constitutes a deferral of compensation for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, and the rules, regulations and guideline thereunder (Section 409A), (ii)is made to Executive by reason of Executives separation from service within the meaning of Section409A, and (iii)at the time such payment would otherwise be made Executive is a specified employee within the meaning of Section 409A (using the identification methodology selected by the Company from time to time), the payment will be delayed until the earlier of (x) the first business day of the seventh month following Executives separation from service or (y) Executives death.Furthermore, if Executives TBRSUs are no longer subject to a substantial risk of forfeiture prior to a Change in Control, and the Change in Control does not constitute a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company (within the meaning of Section 409A), the payment date of the TBRSUs will be determined without regard to the occurrence of the Change in Control. Each payment of a portion of Executives TBRSUs will be considered, and is hereby designated as, a separate payment for purposes of Section 409A. |
It is the Companys intention that the TBRSUs will either be exempt from, or will satisfy the requirements of, Section 409A, and this Exhibit C and Executives Evidence of Award will be construed in a manner to give effect to such intention.Notwithstanding any other provision of this ExhibitC and Executives Evidence of Award, the Company is not obligated to guarantee any particular tax result for Executive with respect to any payment provided to Executive hereunder or thereunder, and Executive will be responsible for any taxes imposed on Executive with respect to any such payment. |
received by Executive upon vesting of any portion of the TBRSUs, Executive agrees to provide to the Company a cash payment, in the form of a check or wire transfer of immediately available funds, in an amount equal to difference between the amount of Applicable Taxes and the amount of the cash payment.This amount shall be paid to the Company no later than close of business on the applicable vesting date for such vested TBRSUs. |
Executives right to receive a TBRSU grant or any payment with respect thereto will not be transferrable or assignable by Executive, other than with respect to a transfer upon Executives death by will or the laws of descent and distribution if Executive is entitled to payment of a vested portion of Executives TBRSUs that has not been paid as of the date of Executives death. |
The following guidelines will determine the effect of a Participants termination of employment on the Participants outstanding stock options and restricted stock units (RSUs).For purposes of these guidelines, a year of service will be determined in the same manner as a year of service under the A.H. Belo Savings Plan as amended from time to time. |
1Retirement means that you have incurred a separation from service within the meaning of Section 409A of the Internal Revenue Code, other than due to death, long-term disability or discharge for cause, after attaining age 55 and completing three years of service as determined under the A. H. Belo Savings Plan. |
1.The parties consent to the final and binding resolution by arbitration of all claims and disputes which may arise between the parties including, but not limited to, disputes arising from the Employees employment and the termination of the Employees employment.Such claims and disputes will include any claims or disputes that the Company may have against the Employee, as well as those that the Employee might have against the Company, its parent corporation, owners, affiliates, officers, directors, employees and/or agents.Claims and disputes covered by this Agreement include, but are not limited to:(i) contract disputes, if any, including breaches of express or implied covenants; (ii) wage and compensation disputes; (iii) tort claims; (iv) claims of discrimination including, but not limited to, discrimination based on race, religion, color, national origin, gender, sexual orientation, pregnancy, age, harassment of any type, handicap or disability; (v) benefit disputes; (vi) all disputes arising from or based upon any federal, state, or local statute, law, ordinance, or regulation and (vii)any claims that could be tried to a jury in the absence of this Agreement. |
2. Disputes over workers compensation benefits or unemployment compensation benefits are specifically excluded from coverage under this Agreement. ---|--- 3.If a Company benefit or pension plan specifies that its claims procedure shall culminate in an arbitration procedure different from this one or is underwritten by a commercial insurer which decides claims, disputes over such plan are specifically excluded from coverage under this Agreement. |
10.The arbitrator selected to hear and decide the dispute shall have authority to hear and decide all pre-hearing disputes, including motions to dismiss or for summary judgment, by any party and, in so doing, shall apply the standards applicable to such motions under the Federal Rules of Civil Procedure.The arbitrator shall apply the substantive law (including the conflict of law rules) and the law of remedies of the state in which Employee was employed when the claim arose, or federal law, or both, depending upon and as applicable to the claim(s) asserted.The arbitrator has the same (but not more) authority to order remedies, including monetary damages, as the court or agency which would have had jurisdiction to adjudicate the claim(s) absent this Agreement.The arbitrator has no authority to order any remedy which a court or agency would not be authorized to order.The arbitration shall be final and binding upon the parties. |
16.Limited civil discovery shall be permitted through the use of requests for production of documents and the taking of depositions.Each party may notice up to, but no more than, four depositions and may submit up to fifteen (15) Requests for Production.The use of interrogatories shall not be permitted.Such limited civil discovery shall be governed by the Federal Rules of Civil Procedure.All issues raised in connection with discovery shall be decided by the arbitrator. |
For purposes of the Agreement, Severance Amount means an amount in cash equal to the sum of (A) with respect to each completed calendar year preceding the effective date of termination pursuant to Section 5(b) or Section 5(f) of the Agreement, to the extent not already paid to Executive under the Agreement and the ICP, all Annual Bonuses, PBRSUs and TBRSUs that would be paid to Executive for such completed calendar years, but for the termination of his employment by the Company, as if Executive remained employed by the Company on each date on which such payments would otherwise have been made pursuant to the Agreement and the ICP, based on the performance results for the completed calendar years preceding the calendar year in which such termination occurs; plus (B) with respect to a partial calendar year, if any, in which such termination pursuant to Section 5(b) or Section 5(f) of the Agreement occurs, a pro rata portion of the Annual Bonus, PBRSUs and TBRSUs for which Executive would be eligible to receive, but for such termination, as if Executive remained employed by the Company throughout the entire calendar year in which such termination occurred and he remained employed by the Company on each date on which such payments would otherwise have been made pursuant to the Agreement and the ICP. All forgoing payments shall be based on the performance results measured in accordance with Exhibits A, B and C through and including the effective date of such termination; provided, however, that for purposes of subclause (B) above for the calendar year in which such termination occurs, the achievement of the performance targets for such calendar year as established pursuant to Exhibits A, B and C shall be measured as of the end of the calendar month in which such termination occurs (such period, the Measurement Period and the level of performance achieved through the Measurement Period, the Measured Performance) applied as follows: |
The Measured Performance shall be multiplied by a ratio (x) the numerator of which is the number of days in such calendar year Executive was employed by the Company through and including the effective date of such termination (the Number of Days Employed) and (y) the denominator of which is the number of days in such calendar year through and including the last day of the calendar month in which such termination occurs (the resulting product, the Achieved Performance Level). ---|---|---|--- | |
Each performance target established pursuant to Exhibits A, B and C for such calendar year shall be multiplied by a ratio (x) the numerator of which is the Number of Days Employed and (y) the denominator of which is 365 or 366, as applicable (such ratio, the Pro Rata Ratio and the resulting product, the Pro Rata Performance). ---|---|---|--- | |
This Employment Agreement (the Agreement), entered into on April17, 2013, with employment effective as of March4, 2013 (the Effective Date), is made by and between Jeffrey Smith (the Executive) and ProPetro Holding Corp., a Texas corporation (together with any of its subsidiaries and Affiliates as may employ the Executive from time to time, and any successor(s)thereto, the Company). |
(f) The Company shall have Cause to terminate the Executives employment hereunder upon: (i)the Executives willful failure to substantially perform the duties set forth herein (other than any such failure resulting from the Executives Disability); (ii)the Executives willful failure to carry out, or comply with, in any material respect any lawful directive of the Board; (iii)the Executives commission at any time of any act or omission that results in, or may reasonably be expected to result in, a conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony or crime involving moral turpitude; (iv)the Executives unlawful use (including being under the influence) or possession of illegal drugs on the Companys premises or while performing the Executives duties and responsibilities hereunder; (v)the Executives commission at any time of any act of fraud, embezzlement, misappropriation, misconduct, conversion of assets of the Company, or |
breach of fiduciary duty against the Company (or any predecessor thereto or successor thereof); or (vi)the Executives material breach of this Agreement, the Shareholders Agreement or any other agreements with the Company (including, without limitation, any breach of the restrictive covenants of any such agreement); and which, in the case of clauses (i), (ii)and (vi), continues beyond thirty (30) days after the Company has provided the Executive written notice of such failure or breach (to the extent that, in the reasonable judgment of the Board, such failure or breach can be cured by the Executive). Whether or not an event giving rise to Cause occurs will be determined by the Board in its sole discretion. |
(k) Date of Termination shall mean (i)if the Executives employment is terminated due to the Executives death, the date of the Executives death; (ii)if the Executives employment is terminated due to the Executives Disability, the date determined pursuant to Section4(a)(ii); (iii)if the Executives employment is terminated pursuant to Section4(a)(iii)-(vi), either the date indicated in the Notice of Termination or the date specified by the Company pursuant to Section4(b), whichever is earlier; or (iv)if the Executives employment is terminated pursuant to Section4(a)(vii)-(viii), the date immediately following the expiration of the then-current Term. |
(q) The Executive shall have Good Reason to terminate the Executives employment hereunder within six (6)months after the occurrence of one or more of the following conditions without the Executives consent: (i)a material diminution in the Executives authority, duties, or responsibilities, as described herein; (ii)a material diminution in the Executives base compensation, as described herein; or (iii)any other action or inaction that constitutes a material breach of this Agreement by the Company; and which, in the case of any of |
the foregoing, continues beyond thirty (30) days after the Executive has provided the Company written notice that the Executive believes in good faith that such condition giving rise to such claim of Good Reason has occurred, so long as such notice is provided within ninety (90) days after the initial existence of such condition. |
(y) Person shall mean any individual, natural person, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any company limited by shares, limited liability company or joint stock company), incorporated or unincorporated association, governmental authority, firm, society or other enterprise, organization or other entity of any nature. |
(b) Term of Employment. The initial term of employment under this Agreement (the Initial Term) shall be for the period beginning on the Effective Date and ending on the second (2nd) anniversary thereof, unless earlier terminated as provided in Section4; provided that, notwithstanding anything to the contrary herein, the Effective Date shall not occur, and the Initial Term shall not begin, unless and until the Executive has successfully completed a background check and has completed all necessary employment documentation, in each case in accordance with the Companys hiring policies. The Initial Term shall automatically be extended for successive one (1)year periods (each, an Extension Term and, collectively with the Initial Term, the Term), unless either party hereto gives notice of non- extension to the other no later than ninety (90) days prior to the expiration of the then-applicable Term. |
(c) Position and Duties. During the Term, the Executive: (i)shall serve as the Chief Financial Officer of the Company, with responsibilities, duties and authority customary for such positions, subject to direction by Chief Executive Officer of the Company; (ii)shall report to the Chief Executive Officer of the Company; (iii)shall devote substantially all the Executives working time and efforts to the business and affairs of the Company and its subsidiaries; and (iv)agrees to observe and comply with the Companys rulesand policies as adopted by the Company from time to time. |
(b) Annual Bonus. With respect to each calendar year that ends during the Term, commencing with calendar year 2013, the Executive shall be eligible to receive an annual cash bonus (the Annual Bonus) in an amount up to fifty percent (50%) of Executives Annual Base Salary, based upon individual and Company annual performance targets (the Performance Targets) established by the Board in its sole discretion. The amount of the Annual Bonus shall be based upon the Executives and the Companys attainment of the Performance Targets, as determined by the Board (or any authorized committee of the Board) in its sole discretion. Each such Annual Bonus shall be payable on such date as is determined by the Board in its sole discretion, but in any event on or prior to March15 of the calendar year immediately following |
(c) Stock Options. As soon as practicable following the Effective Date, the Company shall grant the Executive a non-qualified stock option (Option) to purchase a number of shares of Common Stock equal to the product of (i)77,758,274.11 and (ii)the Adjustment Percentage (as defined below), at an exercise price per share of Common Stock equal to the fair market value per share of Common Stock on the date of grant of such Option, and pursuant to the terms and conditions of the Stock Option Plan of the Company and a non- qualified stock option agreement substantially in the form attached hereto as ExhibitB. For purposes of this Section3(c)the Adjustment Percentage shall mean the ratio of (i)the number of shares of Common Stock issued to the Purchasers (as defined in the Transaction Agreement) after adjustment pursuant to Section1.04(d)of the Transaction Agreement to (ii)the number of such shares prior to such adjustment. The Executive and the Company acknowledge and agree that any shares of Common Stock or other equity securities of the Company acquired by the Executive upon exercise of such Option or otherwise shall be subject to the terms and conditions of the Shareholders Agreement. |
(e) Vacation; Holidays. During the Term, the Executive shall be entitled to four (4)weeks paid vacation each full calendar year. Any vacation shall be taken at the reasonable and mutual convenience of the Company and the Executive and in accordance with Company policy. Holidays shall be provided in accordance with Company policy, as in effect from time to time. |
terminate, effective on the later of the thirtieth (30th) day after receipt of such notice by the Executive or the date specified in such notice; provided that within the thirty (30) day period following receipt of such notice, the Executive shall not have returned to full-time performance of the Executives duties hereunder. |
(a) In General. Upon a termination of the Executives employment for any reason, the Executive (or the Executives estate) shall be entitled to receive: (i)any portion of the Executives Annual Base Salary through the Date of Termination not theretofore paid, (ii)any expenses owed to the Executive under Section3(f), (iii)any accrued but unused vacation pay owed to the Executive pursuant to Section3(e), and (iv)any amount arising from the Executives participation in, or benefits under, any employee benefit plans, programs or arrangements under Section3(d), which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements. Any Annual Bonus earned for any calendar year completed prior to the Date of Termination, but unpaid prior to such date, shall be paid on or prior to March15 of the calendar year immediately following such completed calendar year with respect to which such Annual Bonus was earned. Any equity awards granted to the Executive, including stock options, shall continue to be governed by the terms and conditions of the applicable plans and agreements. Except as otherwise set forth in Section5(b)below, the payments and benefits described in this Section5(a)shall be the only payments and benefits payable in the event of the Executives termination of employment for any reason. |
(i) In the event of the Executives termination of employment (1)by the Company without Cause pursuant to Section4(a)(iv)or (2)by the Executives resignation for Good Reason pursuant to Section4(a)(v), then, in addition to the payments and benefits described in Section5(a)above, the Company shall, during the period beginning on the Date of Termination and ending on the first (1st) anniversary of the Date of Termination (the Severance Period), pay to the Executive an amount (the Severance Payment) equal to the sum of (A)the Annual Base Salary for the year in which the Date of Termination occurs, and (B)the Annual Bonus paid to the Executive in respect of the calendar year immediately preceding the year in which the Date of Termination occurs; provided that, in the case of such a termination prior to January1, 2014, the amount in the foregoing clause (B)shall instead be the target Annual Bonus for calendar year 2013, prorated based on the number of days that the Executive is employed by the Company during the period beginning on the Effective Date and ending on December31, 2013, and in the case of such a termination in 2014, the amount in the foregoing clause (B)shall be annualized. The Company shall subsidize the Executives COBRA premiums with respect to continued coverage under the Companys health plans so that the Executive will pay the same premium as that of an active employee of the Company for health coverage for the duration of the Severance Period; provided that such subsidies will cease as of the date, if any, that the Executive becomes covered under the group health plans of another employer. |
unless, on or prior to the thirtieth (30th) day following the Date of Termination, the Executive timely executes a general waiver and release of claims agreement in the Companys customary form (which release shall be delivered by the Company to the Executive within seven (7)days after the Date of Termination and shall not require the Executive to release or waive any vested benefits or claims that arise for the first time after the Effective Date), and such release shall not have been revoked by the Executive prior to the expiration of the period (if any) during which any portion of such release is revocable under applicable law, and (B)as of the first date on which the Executive violates any covenant contained in Section6, any remaining unpaid portion of the Severance Payment shall thereupon be forfeited. Subject to the provisions of Section8, the Severance Payment shall be paid in equal installments during the Severance Period, at the same time and in the same manner as the Annual Base Salary would have been paid had the Executive remained in active employment during the Severance Period, in accordance with the Companys normal payroll practices in effect on the Date of Termination; provided that any installment that would otherwise have been paid prior to the first normal payroll payment date occurring on or after the thirtieth (30th) day following the Date of Termination (such payroll date, the First Payment Date) shall instead be paid on the First Payment Date. For purposes of Section409A (including, without limitation, for purposes of Section1.409A-2(b)(2)(iii)of the Department of Treasury Regulations), the Executives right to receive the Severance Payment in the form of installment payments (the Installment Payments) shall be treated as a right to receive a series of separate payments and, accordingly, each Installment Payment shall at all times be considered a separate and distinct payment. |
(a) The Executive hereby agrees that the Executive shall not, at any time during the Noncompetition Restricted Period, directly or indirectly engage in, have any interest in (including, without limitation, through the investment of capital or lending of money or property), or manage, operate or otherwise render any services to, any Person (whether on his own or in association with others, as a principal, director, officer, employee, agent, representative, partner, member, security holder, consultant, advisor, independent contractor, owner, investor, participant or in any other capacity) that engages in (either directly or through any subsidiary or Affiliate thereof) any business or activity, within any of the states or territories within the United States or any other country, territory or state in which the Company or any of its subsidiaries operate, (i)that creates, designs, invents, engineers, develops, sources, markets, manufactures, distributes or sells any product or provides any service that may be used as a substitute for or otherwise competes with any product or service of the Company or any entity owned by the Company, or (ii)which the Company or any of its Affiliates has taken active steps to engage in or acquire, but only if the Executive directly or indirectly engages in, has any interest in (including, without limitation, through the investment of capital or lending of money or property), or manages, operates or otherwise renders any services in connection with, such business or activity (whether on his own or in association with others, as a principal, director, |
officer, employee, agent, representative, partner, member, security holder, consultant, advisor, independent contractor, owner, investor, participant or in any other capacity). Notwithstanding the foregoing, the Executive shall be permitted to acquire a passive stock or equity interest in such a business; provided that such stock or other equity interest acquired is not more than five percent (5%) of the outstanding interest in such business. |
(b) The Executive hereby agrees that the Executive shall not, at any time during the Nonsolicitation Restricted Period, directly or indirectly, either for himself or on behalf of any other Person, (i)recruit or otherwise solicit or induce any employee, customer or supplier of the Company to terminate its employment or arrangement with the Company, or otherwise change its relationship with the Company, or (ii)hire, or cause to be hired, any person who was employed by the Company at any time during the twelve (12)-month period immediately prior to the Date of Termination or who thereafter becomes employed by the Company. |
(c) Except as the Executive reasonably and in good faith determines to be required in the faithful performance of the Executives duties hereunder or in accordance with Section6(e), the Executive shall, during the Term and after the Date of Termination, maintain in confidence and shall not directly or indirectly, use, disseminate, disclose or publish, for the Executives benefit or the benefit of any other Person, any confidential or proprietary information or trade secrets of or relating to the Company, including, without limitation, information with respect to the Companys operations, processes, protocols, products, inventions, business practices, finances, principals, vendors, suppliers, customers, potential customers, marketing methods, costs, prices, contractual relationships, regulatory status, compensation paid to employees or other terms of employment (Proprietary Information), or deliver to any Person, any document, record, notebook, computer program or similar repository of or containing any such Proprietary Information. The Executives obligation to maintain and not use, disseminate, disclose or publish, or use for the Executives benefit or the benefit of any other Person, any Proprietary Information after the Date of Termination will continue so long as such Proprietary Information is not, or has not by legitimate means become, generally known and in the public domain (other than by means of the Executives direct or indirect disclosure of such Proprietary Information) and continues to be maintained as Proprietary Information by the Company. The parties hereby stipulate and agree that as between them, the Proprietary Information identified herein is important, material and affects the successful conduct of the businesses of the Company (and any successor or assignee of the Company). |
(f) The Executive agrees not to disparage the Company, any of its products or practices, or any of its directors, officers, agents, representatives, partners, members, equity holders or Affiliates, either orally or in writing, at any time; provided that the Executive may confer in confidence with the Executives legal representatives and make truthful statements as required by law. |
(g) Prior to accepting other employment or any other service relationship during the Noncompetition Restricted Period, the Executive shall provide a copy of this Section6 to any recruiter who assists the Executive in obtaining other employment or any other service relationship and to any employer or other Person with which the Executive discusses potential employment or any other service relationship. |
(h) In the event the terms of this Section6 shall be determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, over the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action. Any breach or violation by the Executive of the provisions of this Section6 shall toll the running of any time periods set forth in this Section6 for the duration of any such breach or violation. |
(b) Separation from Service under Section409A; 409A Compliance. Notwithstanding anything herein to the contrary: (i)no termination or other similar payments and benefits hereunder shall be payable unless the Executives termination of employment constitutes a separation from service within the meaning of Section1.409A-1 (h)of the Department of Treasury Regulations; (ii)if the Executive is deemed at the time of the Executives separation from service to be a specified employee for purposes of Section409A(a)(2)(B)(i)of the Code, to the extent delayed commencement of any portion of any termination or other similar payments and benefits to which the Executive may be entitled hereunder (after taking into account all exclusions applicable to such payments or benefits under Section409A) is required in order to avoid a prohibited distribution under Section409A(a)(2)(B)(i)of the Code, such portion of such payments and benefits shall not be provided to the Executive prior to the earlier of (x)the expiration of the six (6)-month period measured from the date of the Executives separation from service with the Company (as such term is defined in the Department of Treasury Regulations issued under Section409A) or (y)the date of the Executives death; provided that upon the earlier of such dates, all payments and benefits deferred pursuant to this Section8(b)(ii)shall be paid in a lump sum to the Executive, and any remaining payments and benefits due hereunder shall be provided as otherwise specified herein; (iii)the determination of whether the Executive is a specified employee for purposes of Section409A(a)(2)(B)(i)of the Code as of the time of the Executives separation from service shall be made by the Company in accordance with the terms of Section409A (including, without limitation, Section1.409A-1(i)of the Department of Treasury Regulations and any successor provision thereto); (iv)to the extent that any installment payments under this Agreement are deemed to constitute nonqualified deferred compensation within the meaning of Section409A, for purposes of Section409A (including, without limitation, for purposes of Section1.409A-2(b)(2)(iii)of the Department of Treasury Regulations), each such payment that the Executive may be eligible to receive under this Agreement shall be treated as a separate and distinct payment; (v)to the extent that any reimbursements or corresponding in-kind benefits provided to the Executive under this Agreement are deemed to constitute deferred compensation under Section409A, such reimbursements or benefits shall be provided reasonably promptly, but in no event later than December31 of the year following the year in which the expense was incurred, and in any event in accordance with Section1.409A-3(i)(1)(iv)of the Department of Treasury Regulations; and (vi)the amount of any such payments or expense reimbursements in one calendar year shall not affect the expenses or in-kind benefits eligible for payment or reimbursement in any other calendar year, other than an arrangement providing for the reimbursement of medical expenses referred to in Section105(b)of the Code, and the Executives right to such payments or reimbursement of any such expenses shall not be subject to liquidation or exchange for any other benefit. |
9. Assignment and Successors. The Company may assign its rights and obligations under this Agreement to any entity, including any successor to all or substantially all the assets of the Company, by merger or otherwise, and may assign or encumber this Agreement and its rights hereunder as security for indebtedness of the Company and its Affiliates. The Executive may not assign the Executives rights or obligations under this Agreement to any individual or entity. This Agreement shall be binding upon and inure to the benefit of the Company, the Executive and their respective successors, assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. |
10. Governing Law. This Agreement shall be governed, construed, interpreted and enforced in accordance with the substantive laws of the State of Texas, without giving effect to any principles of conflicts of law, whether of the State of Texas or any other jurisdiction, and where applicable, the laws of the United States, that would result in the application of the laws of any other jurisdiction. |
12. Notices. Any notice, request, claim, demand, document and other communication hereunder to any party hereto shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by telex, telecopy, or certified or registered mail, postage prepaid, to the following address (or at any other address as any patty hereto shall have specified by notice in writing to the other party hereto): |
14. Entire Agreement. The terms of this Agreement (together with any other agreements and instruments contemplated hereby or referred to herein) are intended by the parties hereto to be the final expression of their agreement with respect to the employment of the Executive by the Company and may not be contradicted by evidence of any prior or contemporaneous agreement (including, without limitation, any term sheet or offer letter). The terms of this Agreement supersede all prior agreements, oral and written between the parties hereto with respect to the subject matter hereof, which the parties acknowledge and agree are hereby terminated and canceled. The parties hereto further intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement. |
15. Amendments; Waivers. This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed by the Executive and a duly authorized officer of the Company and approved by the Board, which expressly identifies the amended provision of this Agreement. By an instrument in writing similarly executed and approved by the Board, the Executive or a duly authorized officer of the Company may waive compliance by the other party or parties hereto with any provision of this Agreement that such other party was or is obligated to comply with or perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure to comply or perform. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity. |
17. Construction. This Agreement shall be deemed drafted equally by both of the parties hereto. Its language shall be construed as a whole and according to its fair meaning. Any presumption or principle that the language is to be construed against any party hereto shall not apply. The headings in this Agreement are only for convenience and are not intended to affect construction or interpretation. Any references to paragraphs, subparagraphs, sections or subsections are to those parts of this Agreement, unless the context clearly indicates to the contrary. Also, unless the context clearly indicates to the contrary, (a)the plural includes the singular and the singular includes the plural; (b)and and or are each used both conjunctively and disjunctively; (c)any, all, each, or every means any and all, and each and every; (d)includes and including are each without limitation; (e)herein, hereof, hereunder and other similar compounds of the word here refer to the entire Agreement and not to any particular paragraph, subparagraph, section or subsection; and (f)all pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the entities or persons referred to may require. |
single neutral arbitrator in Dallas, Texas in accordance with the Employment Arbitration Rulesand Mediation Procedures of the American Arbitration Association (the AAA) then in effect. Arbitration may be compelled, and judgment may be entered on the arbitration award in any court having jurisdiction; provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any continuation of any violation of the provisions of Section6, and the Executive hereby consents that such restraining order or injunction may be granted without requiring the Company to post a bond. Only individuals who are (a)lawyers engaged full-time in the practice of law and (b)on the AAA roster of arbitrators shall be selected as an arbitrator. Within twenty (20) days of the conclusion of the arbitration hearing, the arbitrator shall prepare written findings of fact and conclusions of law. Each party shall bear its own costs and attorneys fees in connection with an arbitration; provided that the Company shall bear the cost of the arbitrator and the AAAs administrative fees. |
19. Enforcement. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable. |
20. Withholding. The Company shall be entitled to withhold from any amounts payable under this Agreement, any federal, state, local or foreign withholding or other taxes or charges which the Company is required to withhold. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise. |
21. Absence of Conflicts; Executive Acknowledgement; Confidentiality. The Executive hereby represents that from and after the Effective Date the performance of the Executives duties hereunder will not breach any other agreement to which the Executive is a party. The Executive acknowledges that the Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on the Executives own judgment. The Executive agrees not to disclose the terms or existence of this Agreement to any Person unless the Company agrees to such disclosure in advance and in writing; provided that the Executive may, without such permission, make such disclosures as are required by applicable law, including disclosures to taxing agencies, and disclose the terms of this Agreement to the Executives attorney(s), accountant(s), tax advisor(s), and other professional service provider(s), and to members of the Executives immediate family, as reasonably necessary; provided, further, that the Executive instructs such person(s)that the terms of this Agreement are strictly confidential and are not to be revealed to anyone else except as required by applicable law. |
(a) Base Salary. During the Employment Period, the Employee shall receive a base salary at a rate of $300,000 per annum, which shall be paid in accordance with the customary payroll practices of the Company, and shall be subject to review on an annual basis as determined by the Board or a committee thereof (the Base Salary). The Employees Base Salary shall not be subject to decrease, other than a reduction which is part of a general cost reduction approved by the Board affecting other similarly situated employees and which does not exceed ten percent (10%)of the Employees then Base Salary when combined with any such prior reductions. |
(b) Annual Bonus. With respect to each calendar year ending during the Employment Period, in addition to the Base Salary, the Employee may be eligible to earn an annual cash performance bonus based upon the achievement of performance targets established by the Board (or a committee thereof). The target amount for such annual cash performance bonus shall be no less than 100% of Base Salary (the Target Bonus), and any actual bonus shall be determined in accordance with the terms of the annual cash performance bonus plan as in effect from time to time. Except as otherwise provided in Section3, in order to receive payment of any such annual cash performance bonus, the Employee must be continuously employed by the Company or any of its subsidiaries through the date of actual payment. |