1. | Services. |
2. | Term. |
3. | Compensation. |
(a) | Base Salary. During the Term, the Company shall pay to Employee an annual base salary equal to $350,000 per annum for 2019, and, for subsequent years, as determined by the Board upon the recommendation of the Compensation Committee (the “Committee”) thereof (“Base Salary”). Base Salary may be adjusted from time to time in accordance with Employee’s annual performance review. Base Salary shall be subject to all required withholdings of taxes and other applicable amounts, which payments will be paid to Employee in accordance with the Company’s regular payroll practices. |
(b) | Equity. The Company and the Employee acknowledge that the Company will recommend to the Board, upon recommendation of the Committee, that the Employee be granted 290,000 restricted stock units (“RSUs”). The grant date (“Grant Date”) to be established upon approval from the Compensation Committee with the individual share price determined at the most recent market closing price. Vesting for this equity grant will occur over 3 years with one-third vesting on the first anniversary of the Employee Start Date. Additional vesting will occur at a rate of 8.3333% every three calendar months (i.e. quarterly) thereafter until the grant is fully vested. All other terms and conditions shall be set out in the Amended and Restated 2014 Incentive Compensation Plan, as may be amended, as well as the Employee’s award agreement (“Award Agreement”) specifically defining the equity grant. |
(c) | Bonus. During the Term, Employee shall be eligible to receive a bonus (the “Bonus”) based on the achievement of certain financial and strategic objectives and performance goals, as determined by the Board’s Compensation Committee from time to time. Payments of a Bonus will be determined by the Compensation Committee and recommended to the Board. Except as provided in Section 7 of this Agreement, Employee must remain employed by the Company and be in good standing as of the date of any Bonus payment for any right to receive such payment. |
(d) | Sign-on Bonus. The Company will pay to Employee a sign-on bonus equal to $100,000 (the “Sign-on Bonus”). The Sign-on Bonus will be paid [e.g., on the first payroll date following the Start Date] but is conditioned on Employee remaining employed by the Company for one full year. If Employee’s employment is terminated by Employee without Good Reason or by the Company for Cause before the one year anniversary of the Start Date, Employee will be required to repay the Sign-on Bonus on the termination date. |
(e) | Withholding. All payments made by Company to Employee shall be subject to withholding and to such other deductions as shall at the time of such payment be required under any income tax or other law, whether of the United States or any other jurisdiction. In connection therewith, Company shall have the right to withhold and deduct applicable federal, state, or local income or other taxes from any payment, in whatever form, made to Employee. |
(f) | Long-Term Incentive Compensation. During the Term, Employee will continue to be eligible to participate in the Company’s 2014 Incentive Compensation Plan or any such successor plan that may be in effect from time to time in accordance with its terms then in effect. |
4. | Benefits. |
5. | Time Off. |
6. | Expenses. |
7. | Termination of Employment. |
(a) | Termination without Cause, Company Non-Renewal, or Termination for Good Reason. Subject to the terms and conditions of this Section 7, if Employee’s |
1. | "Release Condition" means Employee’s execution and nonrevocation of a separation agreement and release, in a form provided to, and reasonably agreeable to, Employee by the Company, within sixty (60) days following the date of termination. In the event that any review period for such separation agreement and release spans two calendar years, such separation agreement and release will be deemed effective (subject to it being executed and not revoked) in the latter of the two calendar years and Employee will not be permitted to choose the effective date of any such separation agreement and release, except as would not result in a violation of Code Section 409A. Any payments due and payable prior to the satisfaction of the Release Condition will be accumulated and paid upon the first payroll following satisfaction of the Release Condition. Notwithstanding anything to the contrary in this Agreement, the Continuation Coverage Benefit shall be limited as necessary, to the extent that Employee’s participation in one or more of the Company’s or its affiliates’ welfare plans, or the Company’s contribution in respect thereof, would result in adverse tax or other consequences to the Company |
2. | “Cause” means: (A) Employee's substantial failure to perform Employee’s duties (other than any such failure resulting from incapacity due to physical or mental illness); (B) Employee's failure to comply with any valid and legal written directive of the CEO or the Board; (C) Employee's material violation of a material policy of the Company; (D) Employee's engagement in dishonesty, illegal conduct, or gross misconduct, which is or could reasonably be expected to be, in each case, materially injurious to the Company or its affiliates; (E) Employee's embezzlement, misappropriation, or fraud, whether or not related to Employee's employment with the Company; (F) Employee's conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent) or a crime that constitutes a misdemeanor involving moral turpitude, if such felony or other crime is work-related, materially impairs Employee's ability to perform services for the Company or results in harm to the Company or its affiliates; (G) Employee's willful unauthorized disclosure of Confidential Information (defined below) resulting or which could reasonably be expected to result in material harm to the Company; (H) Employee's material breach of any material obligation under this Agreement or any other written agreement between Employee and the Company; or (I) any material failure by Employee to comply with the Company's written policies or rules, as they may be in effect from time to time during the Term. Except for (D)-(G) above, Employee will have thirty (30) days from the delivery of written notice by the Company within which to cure any acts constituting Cause; provided however, that, if the Company reasonably expects irreparable injury from a delay of fifteen (15) days, the Company may give Employee notice of such shorter period within which to cure as is reasonable under the circumstances, which may include the termination of Employee's employment without notice and with immediate effect. |
3. | “Good Reason” means the occurrence of any of the following, in each case during the Term without Employee's written consent: (A) a material reduction |
(b) | Termination due to Death or Disability. Employee’s employment hereunder shall terminate automatically upon Employee’s death during the Term, and the Company may terminate Employee’s employment on account of Employee’s Disability. If Employee’s employment is terminated during the Term on account of Employee’s death or Company-initiated termination due to Disability, Employee (or Employee’s estate and/or beneficiaries, as the case may be) shall be entitled to receive the Termination Benefits, subject to nonduplication under any Company disability program that Employee receives benefits. For purposes of this Agreement, “Disability” shall mean Employee is entitled to receive long-term disability benefits under the Company’s long-term disability plan, or if there is no such plan, Employee’s inability, due to physical or mental incapacity, to perform the essential functions of his job, with or without reasonable accommodation, for one hundred eighty (180) days out of any three hundred sixty-five (365) day period; provided however, in the event that the Company temporarily replaces Employee, or transfers Employee’s duties or responsibilities to another individual on account of Employee’s inability to perform such duties due to a mental or physical incapacity which is, or is reasonably expected to become, a Disability, then Employee’s employment shall not be deemed terminated by the Company and Employee shall not be able to resign with Good Reason as a result thereof. Any question as to the existence of Employee’s Disability as to which Employee and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to Employee and the Company. If Employee and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability |
(c) | Change in Control Termination. |
1. | Change in Control Approved by Incumbent Directors. In the event of a Change in Control approved by a majority of Incumbent Directors, provided that Employee’s employment is terminated by the Company without Cause (or is terminated due to death or Disability) or by Employee with Good Reason, or the Company’s non-renewal of this Agreement (pursuant to Section 2), on or within ninety (90) days following such Change in Control, then Employee shall, subject to the Release Condition, be entitled to receive: (A) the Termination Benefits; and (B) 100% accelerated vesting with respect to Employee’s then outstanding, unvested equity awards. |
2. | Change in Control Not Approved by Incumbent Directors. In the event of a Change in Control not approved by Incumbent Directors, and Employee’s employment is terminated by the Employee or the Company for any or no reason on or within ninety (90) days following such Change in Control, then Employee shall, subject to the Release Condition, be entitled to receive: (A) the Termination Benefits; (B) 100% accelerated vesting with respect to Employee’s then outstanding, unvested equity awards; and (C) an additional amount, payable in a single lump sum payment within 30 days following termination of employment, equal to eight times the Average Quarterly Comp Bonus or such greater amount that when combined with the Average Quarterly Comp Bonus payable pursuant to clause (A) above equals twelve times the Average Quarterly Comp Bonus. |
3. | Change in Control. For purposes of this Agreement, “Change in Control” means any of the following events: (i) the consummation by the Company of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; (ii) the consummation of a sale or disposition by the Company of all or substantially all of the Company’s assets; (iii) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becoming the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more |
(d) | Other Termination. If the Employment Period is terminated (i) by the Company for Cause at any time or (ii) by Employee other than for Good Reason (except under Section 7(c)(2)), Employee shall be entitled to only his Accrued Amounts and the Company’s obligation to make any other payments or provide any other benefits under this Agreement shall cease as of the date of termination. |
(e) | Other Benefits. Except (i) as required by law, (ii) as specifically provided in this Section 7, (iii) for the payment of earned but unpaid Base Salary through the date of termination or vested employee benefits under Company benefit plans (other than severance plans), and (iv) the payment of any incurred but unreimbursed business expenses ((i)-(iv) are collectively referred to as “Accrued Amounts”), the Company’s obligation to make any payments or provide any other benefits hereunder shall terminate automatically as of the date of termination. |
(f) | No Mitigation. Amounts and benefits payable under this Section 7 shall not be subject to mitigation, other than with respect to the Continuation Coverage Benefit. |
8. | Confidential Information. |
(a) | Employee acknowledges that, during the term of Employee’s employment with the Company, Employee will have access to unpublished and otherwise confidential information (“Confidential Information”), both of a technical and non-technical nature, relating to the business of the Company its actual or anticipated business, research or development, its technology or the implementation or exploitation thereof. Confidential Information includes, but is not limited to, the Company’s business plans (both current and under development), data, investor and client list and contact information, promotional and marketing programs and strategies, |
(b) | During the Term or at any time thereafter, Employee covenants and agrees that Employee will not use for Employee’s personal benefit or for the benefit of any third party, nor will Employee disclose any Confidential Information unless authorized to do so by the Company in writing, except that Employee may disclose and use such Confidential Information when necessary in the performance of Employee’s duties hereunder, or as required to be disclosed by order of a proper legal authority. |
(c) | Upon termination of his employment with the Company for any reason, Employee covenants and agrees that Employee will promptly deliver to the Company all documents, records, files, notebooks, manuals, letters, notes, reports, customer and supplier lists, cost and profit data, e-mail, and any other material of Company, including all materials pertaining to Confidential Information, whether developed by Employee or others, and all copies of such materials, whether of a technical, business or fiscal nature and whether on hard copy, tape, disk or any other format, which are in Employee’s possession, custody or control. |
(d) | Nothing in this Agreement or any other arrangement with the Company shall prohibit Employee from reporting possible violations of federal law or regulation to any governmental agency or entity, or making other disclosures, that are protected under the whistleblower provisions of federal law or regulation (or similar state laws) or receipt of awards thereunder. Employee will not need the prior authorization of the Board to make any such reports or disclosures, and Employee will not be required to notify the Company that Employee has made such reports or disclosures; provided that no such reports or disclosures shall waive any attorney-client or similar privilege of the Company or its affiliates. Employee will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of Confidential Information (including trade secrets) that is made: (a) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and |
9. | Non-Competition; Non-Solicitation of Employees; Non-Interference with Business Relationships. |
(a) | During the Term, Employee shall not render any services to or engage in any activity on behalf of any Competitive Enterprise, directly or indirectly, for himself or on behalf of or in conjunction with any person, partnership, corporation or other entity, whether as an employee, consultant, agent, officer, director, shareholder, partner, joint venturer, investor or otherwise; provided, that passive ownership of less than 5% of the equity securities of a Competitive Enterprise (including all such securities beneficially owned, directly or indirectly, by affiliates of Employee or any person with whom Employee may be deemed to have formed a “group” for purposes of Rule 13d-1 under the Exchange Act) shall not be treated as a breach of this Section 9(a). A “Competitive Enterprise” shall mean any entity, person, partnership, corporation or otherwise which engages as its principal business in network security, intellectual property rights or patent litigation or licensing. |
(b) | During the Term, and for a period of twelve (12) months thereafter, Employee will not, directly or indirectly, either for himself or any other person or entity, (i) induce or attempt to induce any employee of Company to leave the employ of Company or (ii) in any way interfere with the relationship between Company and any employee of Company. During the Term, Employee will not, directly or indirectly, either for himself or any other person or entity, induce or attempt to induce any customer, client, supplier or licensee of Company to cease doing business with Company, or in any way interfere with the relationship between Company and any customer, client, supplier or licensee of Company. |
10. | Mutual Non-Disparagement. |
11. | Remedies. |
12. | [Intentionally omitted] |
13. | Representations. |
14. | Section 409A Compliance. |
15. | Section 280G. |
16. | Miscellaneous. |
(a) | Arbitration. Any dispute or controversy arising under or in connection with this Agreement that cannot be mutually resolved by the parties hereto shall be settled exclusively by arbitration in San Mateo County or Santa Clara County, State of California conducted in accordance with the rules of the American Arbitration Association. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. The costs and expenses of the arbitrator shall be shared equally between the Company and Employee. |
(b) | Transfer and Assignment. This Agreement is personal as to Employee and shall not be assigned or transferred by Employee. This Agreement may be assigned by the Company to any entity which is a successor in interest or operator of the Company’s business. |
(c) | Severability. Nothing contained herein shall be construed to require the commission of any act contrary to law. Should there be any conflict between any provisions hereof and any present or future statute, law, ordinance, regulation or other pronouncement having the force of law, the latter shall prevail, but the provision of this Agreement affected thereby shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law, and the remaining provisions of this Agreement shall remain in full force and effect. |
(d) | Governing Law. This Agreement is made under and shall be construed pursuant to the laws of the State of California, without reference to its choice of law rules. |
(e) | Company Policies. Employee as a condition of his employment shall be subject to all generally applicable policies of the Company, including, but not limited any employee handbook, insider trading policy, disclosure policy or code of ethics instituted by the Company prior to or during the Term. |
(f) | Counterparts. This Agreement may be executed in counterparts and all documents so executed shall constitute one agreement, binding on all the parties hereto. |
(g) | Entire Agreement. This Agreement contains the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior oral and written agreements, arrangements, or understandings with respect thereto, specifically including, but not limited to, the Prior Agreement. No representation, promise, inducement, statement or intention has been made by any party hereto that is not embodied herein and no party shall be bound or be liable for any alleged representation, promise, inducement, or statement not so set forth herein. Finjan, Inc. shall be deemed a third party beneficiary of this Section 16(g) and the Company shall cause Finjan, Inc. to execute such additional documents and take such further action as may be necessary to give effect to the provisions of this Section 16(g). |
(h) | Indemnification. Subject to applicable law, Employee will be provided indemnification to the maximum extent permitted by the Company’s Certificate of Incorporation or Bylaws, including, if applicable, any directors and officers insurance policies, with such indemnification to be on terms determined by the Board or any of its committees, but on terms no less favorable than provided to any other Company executive officer or director and subject to the terms of any separate written indemnification agreement. Any such indemnification right shall survive termination of this Agreement. |
(i) | Modification. This Agreement may be modified, amended, superseded or cancelled, and any of the terms, covenants, representations, warranties and conditions hereof may be waived, only by a written instrument executed by the party or parties to be bound by any such modification, amendment, cancellation, or waiver. |
(j) | Waiver. Neither this Agreement nor any term or condition hereof or right hereunder may be waived or shall be deemed to have been waived or modified in whole or in part by any party or by the forbearance of any party to exercise any of its rights hereunder, except by written instrument executed by or on behalf of that party. The waiver by either party of a breach by the other party of any of the provisions of this Agreement shall not operate or be construed as a waiver of any subsequent breach by the other party. |
(k) | Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning and interpretation of this Agreement. |
(l) | Notices. Any notices required under this Agreement or during the Term shall be sent to Employee at the last address on file and to Company at the address set forth below (or as otherwise updated): |
FINJAN HOLDINGS, INC. By: /s/ Philip Hartstein Name: Philip Hartstein Title: President & Chief Executive Officer Date: 5/20/19 |
/s/ Jevan Anderson Jevan Anderson Date: 5/19/19 |