From Reed's employment agreement (included on SEC filings when he started)...
5. Termination of Employment.
(d) Termination by the Company Other Than for Cause. The Company may
terminate the Executive's employment hereunder other than for Cause at any
time upon written notice. In the event of such termination:
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(i) the Company shall pay to the Executive in a lump sum cash
payment at the time of termination the greater of (A) the amount of his
Base Salary for the remainder of the Term of Employment and (B)
$450,000;
(ii) the Company shall either continue to contribute to the cost
of the Executive's participation in the Company's medical and life
insurance arrangements during the remainder of the Term of Employment
or pay to him the present value of such cost in a lump sum;
(iii) the Company shall pay to Executive any other compensation
hereunder, including bonus compensation described in Section 4(c), that
has been earned but not paid; and
(iv) all stock options granted to the Executive will become
immediately exercisable in full and shall remain exercisable for a
period of three years.
(e) Termination by the Executive for Good Reason.
If the Executive terminates his employment during the Term of
Employment because:
(i) the Company has breached this Agreement by failing to pay
Base Salary in accordance with paragraph 4(b) or failing to pay other
compensation as contemplated by paragraph 4 and such failure is not
promptly remedied by the Company after notice to the Company;
(ii) the Company shall have assigned to the Executive any duties
materially inconsistent with Executive's title, position, authorities,
duties or responsibilities as President and chief executive officer, or
any other action by the Company which results in a diminution in such
title, position, authorities, duties or responsibilities, excluding an
isolated, insubstantial and inadvertent action not taken in bad faith
and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive,
(iii) the securities of the Company or a successor or affiliate
of which the Executive is serving as President and Chief Executive
Officer shall no longer be publicly traded,
(iv) the Company requires the Executive to be based at any office
or location in an area or location more than a 100 miles from
Rochester, New Hampshire, or
(v) the Executive shall not be elected or continue as a member of
the Board of Directors of the Company;
the termination shall, for purposes of this Agreement, be treated as a
termination by the Company other than for cause and governed by
paragraph 5(d).
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If the Executive terminates his employment with the Company for any
other reason, the Company shall have no further obligations under this
Agreement other than to pay to the Executive any Base Salary, and any bonus
compensation described in Section 4(c) hereunder, that has been earned but
not paid.
(f) Failure to Renew. If the Company gives notice of termination of
this Agreement pursuant to paragraph 2 hereof, such notice shall be treated
as a termination by the Company of Executive's employment other than for
Cause and shall be governed by the provisions of Section 5(d), except that
in lieu of the lump sum payment provided by Section 5(d)(i), the Company
shall pay to the Executive on the last day of the Term of Employment a lump
sum cash severance payment of $450,000.
(g) Termination Following a Change of Control. (i) Notwithstanding
the provisions of any other subsection of this Section 5, and in lieu of any
payment or benefit provided thereby, if, within 24 months following a Change
of Control Executive's employment with the Company is terminated by the
Company (including a non-renewal of this Agreement) for any reason other than
Cause as provided in Section 5(c), or disability as provided in Section 5(b),
or the Executive terminates his employment for Good Reason as provided in
Section 5(e):
(A) the Company shall pay to the Executive in a lump sum cash
payment at the time of termination in an amount equal to three times
the sum of (1) the Executive's Base Salary at the rate required to be
in effect immediately prior to the termination of employment, plus (2)
the bonus paid or payable to the Executive in respect of the four
fiscal quarters immediately preceding the termination of employment;
(B) the Company shall either continue to contribute to the cost
of the Executive's participation in the Company's medical and life
insurance arrangements for a period of one year from the date of
termination of employment or pay to him the present value of such cost
in a lump sum;
(C) the Company shall pay to Executive any other compensation
hereunder, including bonus compensation described in Section 4(c), that
has been earned but not paid; and
(D) all stock options granted to the Executive will become
immediately exercisable in full and shall remain exercisable for a
period of three years notwithstanding any provision to the contrary of
the options.
(ii) If any payment or benefit received by Executive pursuant to
Section 5(g)(i), but determined without regard to any additional payments
required under this paragraph 5(g)(ii), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), or any interest or penalties are incurred by the Executive with
respect to such excise tax) the Company will pay to Executive an additional
amount in cash (the "Additional Amount") equal to the amount necessary to
cause the aggregate payments and benefits received by Executive, including
such Additional Amount (net of all federal, state, and local income and
payroll taxes and all taxes payable as a result of the application of
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Sections 28OG and 4999 of the Code and including any interest and penalties
with respect to such taxes) to be equal to the aggregate payments and
benefits Executive would have received, excluding such Additional Amount (net
of all federal, state and local income and payroll taxes) as if Sections 28OG
and 4999 of the Code (and any successor provisions thereto) had not been
enacted into law.
Following the termination of Executive's employment, Executive may
submit to the Company a written opinion (the "Opinion") of a nationally
recognized accounting firm, employment consulting firm, or law firm selected
by Executive setting forth a statement and a calculation of the Additional
Amount. The determination of such firm concerning the extent of the
Additional Amount (which determination need not be free from doubt), shall be
final and binding on both Executive and the Company. The Company will pay to
Executive the Additional Amount not later than 10 days after such firm has
rendered the Opinion. The Company agrees to pay the fees and expenses of
such firm in preparing and rendering the opinion.
If, following the payment to Executive of the Additional Amount,
Executive's liability for the excise tax imposed by Section 4999 of the Code
on the payments and benefits received by Executive is finally determined (at
such time as the Internal Revenue Service is unable to make any further
adjustment to the amount of such liability) to be less than the amount
thereof set forth in the Opinion, the Executive shall promptly file for a
refund with respect thereof, and the Executive shall promptly pay to the
Company the amount of such refund when received (together with any interest
paid or credited thereon after taxes applicable thereto). If, following the
payment to Executive of the Additional Amount, Executive's liability for the
excise tax imposed by Section 4999 of the Code on the payments and benefits
received by Executive is finally determined (at such time as the Internal
Revenue Service is unable to make any further adjustment to the amount of
such liability) to be more than the amount thereof set forth in the Opinion
and the Executive thereafter is required to make a further payment of any
such excise tax, the Company shall promptly pay to or for the benefit of the
Executive an additional Additional Amount in respect of such underpayment.
For purposes of this Section 5(g), the term "Change of Control" shall
mean: the occurrence of any of the following events: (a) the Company is a
party to, or the stockholders approve, a merger, consolidation or
reorganization with another corporation (other than a merger, consolidation
or reorganization that would result in the voting power immediately before to
continue to represent either by remaining outstanding or by being converted
into securities of the surviving entity, more than 50% of the voting power
thereafter); (b) a sale of all, or substantially all, of the assets of the
Company; (c) any individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity, or any syndicate or group
deemed to be a person under Section 14(d)(2) of the Exchange Act, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange
Act), directly or indirectly, of shares of Common Stock representing 40% or
more of the voting power of the Company's then outstanding securities
entitled to vote in the election of directors of the Company; (d) during any
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period of two consecutive years, individuals who at the beginning of such
period constituted the Board, and any new directors whose election by the
Board or nomination for election by the Company's stockholders was approved
by a vote of at least three-quarters of the directors then still in office
who either were directors at the beginning of the period or whose selection
or nomination for election was previously so approved, cease for any reason
to constitute a majority thereof; or (e) the Company is dissolved or
liquidated; provided, however, that a change in control under clause (a),
(b), (c), or (e) shall not be deemed to be a Change in Control as a result of
an acquisition of securities of the Company by an employee benefit plan
maintained by the Company for its employees.
(h) There shall be no requirement on the part of Executive to seek
other employment or otherwise mitigate damages in order to be entitled to the
full amount of benefits to which Executive is entitled under this Agreement
and the amount of such benefits shall not be reduced by any compensation or
benefits received by Executive from other employment.
6. Nondisclosure. During the Term of Employment, the Executive may
become aware of information which is nonpublic, confidential or proprietary
in nature with respect to the Company or with respect to other companies,
persons, entities, ventures or business opportunities in which the Company
has, or, if it were disclosed to the Company, the Company might have, an
interest ("Confidential Information"). All Confidential Information will be
kept strictly confidential by the Executive and the Executive shall not: (a)
copy, reproduce, distribute or disclose any Confidential Information to any
third party except in the course of his employment by the Company; (b) use
any Confidential Information for any purpose other than in connection with
his employment by the Company; or (c) use any Confidential Information in any
way that is detrimental to the Company. The term Confidential Information
shall not include any information that is generally available to the public
other than as a result of disclosure by the Executive.
Upon termination of the Executive's employment, he shall immediately
return or destroy all Confidential Information, including all notes, copies,
reproductions, summaries, analyses, or extracts thereof, then in his
possession. Such return or destruction shall not abrogate the continuing
obligations of the Executive under this Agreement.
In the event that the Executive is requested or required (by
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process) to disclose any Confidential
Information, he shall provide the Company with prompt written notice so that
it may seek a protective order or other appropriate remedy.
The obligations of Executive stated in this paragraph 6 shall, except
where expressly limited as to time, continue without limit as to time and
without regard to the employment status of Executive. |
