Exhibit 10.1

 

 

 

CERTAIN INFORMATION INDICATED BY [***] HAS BEEN DELETED FROM THIS EXHIBIT AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.

 

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”), entered into on August 1, 2016 (the
“Effective Date”), is made by and between Richard Danforth (“Executive”) and
LRAD Corporation, a Delaware corporation (together with any of its subsidiaries
and affiliates as may employ Executive from time to time, and any successor(s)
thereto, the “Company”).

 

RECITALS

 

 

A.

The Company and the Executive desire to enter into this Agreement pertaining to
the employment of the Executive by the Company.

 

 

B.

The Company desires to employ Executive as Chief Executive Officer of the
Company, and Executive desires to accept employment with the Company, on the
terms and conditions set forth below, effective as of the Effective Date.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below the parties hereto agree as follows:

 

 

1.

Certain Definitions. Capitalized terms used herein shall have the meanings
provided in Exhibit A.

 

 

2.

Employment.

 

(a)           In General.  The Company shall employ Executive and Executive
shall enter the employment of the Company, for the period set forth in Section
2(b), in the position set forth in Section 2(c), and upon the other terms and
conditions herein provided. The terms and conditions herein provided supersede
in their entirety any contradictory terms and conditions in any employee manual,
plan, policy, program or other arrangement maintained by the Company. To the
extent a term or condition is not detailed herein, the employee manuals, plans,
policies, programs or other arrangements maintained by the Company shall govern.

 

(b)           Term of Employment.  The term of employment under this Agreement
shall commence on August 1, 2016 (the “Start Date”) and continue until
terminated in accordance with Section 4 (the “Term”).

 

(c)           Position and Duties.  During the Term, Executive: (i) shall serve
as Chief Executive Officer of the Company, with responsibilities, duties and
authority customary for such position, subject to direction by the Board; (ii)
shall report directly to the Chairman of the Board of the Company; (iii) shall
devote substantially all Executive’s working time and efforts to the business
and affairs of the Company and its subsidiaries, provided that Executive may (A)
serve on civic, charitable, industry or professional association boards or
committees, subject to the Board’s prior written consent in the case of any such
board or committee that relates directly or indirectly to the business of the
Company and (B) manage his personal investments, so long as none of such
activities meaningfully interferes with the performance of Executive’s duties
and responsibilities hereunder, or involves a conflict of interest with
Executive’s duties or responsibilities hereunder or a breach of the covenants
contained in Section 7; and (iii) agrees to observe and comply with the
Company’s rules and policies as adopted by the Company from time to time, which
have been or are made available to Executive.

 

 
 

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 3.             Compensation.

 

(a)           Annual Base Salary.  During the Term, Executive shall receive a
base salary at a rate of $325,000 per annum, which shall be paid in accordance
with the payroll practices of the Company, subject to review and increase (but
not decrease) by the Compensation Committee of the Board (the “Committee”) in
its reasonable discretion (the “Annual Base Salary”).

 

(b)           Annual Cash Bonus. During the Term, Executive shall be eligible to
receive an annual cash bonus based upon Executive’s level of performance and the
overall success of the Company (the “Annual Cash Bonus”). The decision to
provide any Annual Cash Bonus and the amount and terms of any Annual Cash Bonus
shall be in the reasonable discretion of the Committee. Executive shall be
eligible to receive a base target Annual Cash Bonus equal to 75% of Executive’s
then current Annual Base Salary and a maximum target Annual Cash Bonus equal to
150% of Executive’s then current Annual Base Salary based on achievement of the
performance objectives established on an annual basis by the Committee. Unless
otherwise agreed by Executive in writing, any Annual Cash Bonus that is earned
shall be paid in a lump sum cash payment within one hundred twenty (120) days
following the end of the fiscal year to which it relates, concurrent with
payment of annual cash bonuses to other senior executive officers of the Company
and within the time period specified in Treasury Regulation 1.409A-1(b)(4),
except as otherwise provided in Sections 5(b) and 6(a) below.

 

(c)            Signing Bonus. In addition to the Annual Base Salary and Annual
Cash Bonus, Executive shall receive a one-time signing bonus in the amount of
$150,000 (“Signing Bonus”), to be paid on the next regular payday after the
Start Date. The Signing Bonus is wages, is treated as such, and is subject to
customary tax and other withholdings. Should Executive choose to terminate his
employment with the Company for any reason other than Good Reason (but excluding
termination due to Executive’s death or Disability) or should Executive’s
employment with the Company be terminated for Cause within twelve (12) months
following the Start Date, Executive agrees to reimburse the Company an amount
equal to the cash payment actually received by Executive, after tax and other
withholdings in accordance with the Company’s standard practices, within ten
(10) days following the applicable Date of Termination.

 

(d)           Hiring Grants. As an inducement to enter into this Agreement and
to provide the services hereunder, subject to approval of the Committee,
Executive will be granted on the Start Date: (i) an option to purchase 375,000
shares of the Company’s common stock, vesting over a three year period measured
from the Start Date, with 33% vesting on the one year anniversary of the Start
Date and the remainder vesting quarterly thereafter (the “Time-Based Options”)
and (ii) an option to purchase 750,000 shares of the Company’s common stock,
vesting based upon achievement of the performance criteria set forth on Exhibit
B hereto (the “Performance-Based Options” and, together with the Time-Based
Options, the “Options”). The Options granted under this Section 3(d) shall be
granted pursuant to the Company’s 2015 Equity Incentive Plan (the “Plan”), with
an exercise price per share equal to the fair market value per share of the
Company’s common stock as required by the Plan, shall expire on the seventh
anniversary of the grant date, shall be granted as “incentive stock options”
within the meaning of Section 422 of the Code, to the maximum extent permitted
by the Code and shall be subject to the terms of the Plan and the award
agreement approved by the Board thereunder.

 

(e)           Other Benefits and Perquisites. Executive shall be eligible to
participate in such other non-duplicative employee benefits and perquisites in
accordance with their terms as the Company may have in effect from time to time
for its senior executive officers.

 

 
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(f)            Health, Welfare and Retirement Plans; Vacation. To the extent
Executive meets the eligibility requirements for such arrangements, plans or
programs, Executive shall be entitled to: (i) participate in such health
(medical, hospital and/or dental) insurance (“Medical and Health Benefits”),
retirement, life insurance, disability insurance, flexible benefits arrangements
and accident insurance plans and programs as are maintained in effect from time
to time by the Company for its senior executive officers; (ii) participate in
other non-duplicative benefit programs which the Company may from time to time
offer generally to senior executive officers of the Company; and (iii) take
vacations and personal time in accordance with the Company’s Paid Time Off
(“PTO”) policy, except that Executive will accrue 120 hours of PTO per year;
provided however, that the total amount of PTO that Executive may have accrued
during any one year shall be capped at 200 hours, with any hours in excess of
200 paid out in the first pay period of December of each year during the Term.
In the event of short-term illness, Executive will be provided time to
convalesce at home and will be paid Executive’s regular salary for this time.
Sick time is not accrued but rather is taken as needed.

 

(g)          Modifications. For the sake of clarity, the Company may modify its
health, welfare, retirement and other benefit plans and vacation and sick leave
policies from time to time and Executive’s rights under these plans are subject
to change in the event of any such modifications, provided that he will receive
the benefits generally provided to other senior executive officers of the
Company.

 

(h)           Business Expenses.  During the Term, the Company shall reimburse
Executive for all reasonable travel and other business expenses incurred by
Executive in the performance of Executive’s duties to the Company in accordance
with the Company’s applicable expense reimbursement policies and procedures.

 

4.             Termination.

 

(a)           Basis for Termination. Executive’s employment hereunder is
“at-will” and may be terminated by the Company or Executive, as applicable,
without any breach of this Agreement upon the death or Disability of Executive,
with or without Cause, and with or without Good Reason. Executive’s “at-will”
status cannot be modified by oral agreement; any modification to this Agreement
must be in writing and approved by the Board and Executive.

 

(b)           Notice of Termination.  Any termination of Executive’s employment
by the Company or by Executive under this Section 4 (other than a termination by
reason of Executive’s death) shall be communicated by a written notice to the
other party hereto: (i) indicating in reasonable detail the basis for the
termination, and (ii) specifying a Date of Termination which, if submitted by
Executive, shall be at least 30 days following the date of such notice (a
“Notice of Termination”); provided, however, that in the event that Executive
delivers a Notice of Termination to the Company, the Company may, in its sole
discretion, accelerate the Date of Termination to any date that occurs following
the date of Company’s receipt of such Notice of Termination (even if such date
is prior to the date specified in such Notice of Termination). A Notice of
Termination submitted by the Company may provide for a Date of Termination on
the date Executive receives the Notice of Termination, or any date thereafter
elected by the Company in its sole discretion, subject to Executive’s right to
resign for Good Reason in accordance with Section 5(b) and 6(b), as applicable.
The failure by the Company or Executive to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Cause or
Good Reason shall not waive any right of the Company or Executive hereunder or
preclude the Company or Executive from asserting such fact or circumstance in
enforcing the Company’s or Executive’s rights hereunder.

 

 
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5.              Company Obligations upon Termination of Employment.

 

(a)            In General.  Upon a termination of Executive’s employment for any
reason, Executive (or Executive’s estate) shall be entitled to receive: (i) any
portion of Executive’s Annual Base Salary earned through the Date of Termination
not theretofore paid, (ii) any expenses owed to Executive under Section 3(h),
and (iii) any amount arising from Executive’s participation in, or benefits
under, any employee benefit plans, programs or arrangements under Section 3(e)
or 3(f) (including accrued PTO), which amounts shall be payable in accordance
with the terms and conditions of any such incentive compensation plans, employee
benefit plans, programs, arrangements, or applicable law. Except as otherwise
set forth in Section 5(b) or 6(a) below, the payments and benefits described in
this Section 5(a) shall be the only payments and benefits payable in the event
of Executive’s termination of employment for any reason.

 

(b)           Severance Payment.

 

(i)     In the event Executive’s employment shall be terminated by the Company
without Cause or by Executive for Good Reason, then, in addition to the payments
and benefits described in Section 5(a) above, (A) the Company shall, during the
Severance Period, pay to Executive in equal installments, an amount equal to 12
months of Executive’s Annual Base Salary in effect at the Date of Termination,
ignoring any reduction in Annual Base Salary which forms the basis of
Executive’s termination for Good Reason, if applicable (the “Severance
Payment”); and (B) the Company shall pay to Executive a pro-rata share of the
Annual Cash Bonus to which Executive would have become entitled had Executive
remained employed through the end of the fiscal year in which the Date of
Termination occurs (i.e., calculated based on the extent to which the Company
performance goals for such Annual Cash Bonus have been achieved for such fiscal
year), paid in a lump sum no later than one hundred twenty (120) days following
the end of the fiscal year in which Executive’s termination occurs and in any
event concurrent with payment of annual cash bonuses to other senior executive
officers of the Company; (C) if the Date of Termination occurs in fiscal year
2019 or later, the Performance-Based Options that are outstanding and unvested
as of immediately prior to the Date of Termination, if any, shall accelerate
vesting and exercisability based on the extent to which the free cash flow
margin and revenue goals specified in Exhibit B are achieved for the fiscal year
in which the Date of Termination occurs, pro rated based on the period of time
Executive was employed during such fiscal year prior to the Date of Termination
(the “Performance Acceleration”) and (D) for a period of 12 months following the
Date of Termination, the Company shall continue to provide, at the Company’s
expense, or pay the cost of Medical and Health benefits to Executive and/or
Executive’s family. If Executive becomes reemployed with another employer during
such period and is eligible to receive employee medical and health benefits
under another employer provided plan, the Company shall not be obligated to
continue to provide the Medical and Health benefits, to the extent that
reasonably similar medical and health benefits are available to Executive
pursuant to such employer-provided plan. The Company may satisfy its obligations
under this Section 5(b)(i), by paying the applicable premiums for continuation
coverage pursuant to COBRA for Executive and/or his family, for as long as such
COBRA coverage is available under the law, but not to exceed the Severance
Period. The Performance-Based Options shall remain outstanding after the Date of
Termination as necessary to give effect to the potential vesting acceleration
described in (C) above and, to the extent that any such vesting acceleration
occurs, Performance-Based Options shall remain exercisable until at least the
earlier of (1) the date three (3) months from the date of Performance
Acceleration and (2) the date on which the Performance-Based Options would have
expired by their original terms (disregarding any early termination due to
Executive’s separation from service).

 

 
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(ii)     The Severance Payment shall be in lieu of notice or any other severance
benefits to which Executive might otherwise be entitled. Notwithstanding
anything herein to the contrary, (A) no portion of the Severance Payment shall
be paid unless, on or prior to the 30th day following the Date of Termination,
Executive timely executes a general waiver and release of claims agreement
substantially in the form attached hereto as Exhibit C (the “Release”), which
Release shall not have been revoked by 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 Executive violates any
covenant contained in Section 7, any remaining unpaid portion of the Severance
Payment shall thereupon be forfeited. Subject to the provisions of Section 9,
the Severance Payment shall be paid in equal installments during the Severance
Period in accordance with the Company’s 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 30th day following the Date of Termination (such payroll date, the “First
Payment Date”) shall instead be paid on the First Payment Date. In no event
shall any Severance Payment be made prior to the 30th day following the Date of
Termination. For purposes of Section 409A (including, without limitation, for
purposes of Section 1.409A-2(b)(2)(iii) of the Department of Treasury
Regulations), Executive’s 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.

 

(c)           The provisions of this Section 5 shall supersede in their entirety
any severance payment provisions in any severance plan, policy, program or other
arrangement maintained by the Company.

 

6.             Change of Control.

 

(a)          Termination in the Event of a Change of Control. If, during the 15
month period beginning three months prior to a Change of Control and ending 12
months after such Change of Control, the Company terminates Executive’s
employment without Cause or Executive terminates his employment for Good Reason,
then the Company shall pay or provide the benefits set forth in Section 5(a) and
subsections (i), (ii), and (iii) below, in lieu of any amounts payable to
Executive pursuant to Section 5(b), and any amounts previously paid to Executive
pursuant to Section 5(b) shall be deemed to have been paid under this Section 6.

 

(i)     The Company shall pay to Executive in a lump sum in cash, within thirty
days after the Date of Termination, the aggregate of the following amounts: (1)
two times the sum of (A) Executive’s Annual Base Salary in effect on the Date of
Termination plus (B) the base target Annual Cash Bonus for the fiscal year in
which the Date of Termination occurs plus (2) a pro rata portion of the base
target Annual Cash Bonus for the fiscal year in which the Date of Termination
occurs. For purposes of the benefits set forth in this subsection 6(a)(i),
amounts calculated by reference to Executive’s Annual Base Salary shall ignore
any reduction in Annual Base Salary which forms the basis of Executive’s
termination for Good Reason, if applicable, and, if the Date of Termination
occurs following the Change of Control, shall use the higher of Executive’s
Annual Base Salary in effect immediately prior to the Change of Control or
immediately prior to the Date of Termination.

 

(ii)     For a period of eighteen months following the Date of Termination, the
Company shall continue to provide, at the Company’s expense, or pay the cost of
all employee Medical and Health Benefits to Executive and/or Executive’s family.
If Executive becomes reemployed with another employer during such period and is
eligible to receive employee medical and health benefits under another employer
provided plan, the Company shall not be obligated to continue to provide the
Medical and Health benefits to the extent that new employer’s plan provides
reasonably similar medical and health benefits. If applicable, the Company may
satisfy its obligations under this Section 6(a)(ii), in part, by paying the
applicable premiums for continuation coverage pursuant to COBRA for Executive
and/or his family, for as long as such COBRA coverage is available under the
law; provided however, that if any COBRA coverage cannot be extended the full
eighteen months required by this Section 6(a)(ii), the Company shall pay for
reasonably similar medical and health benefits during the period beginning when
COBRA coverage ceases and the end of the eighteen month period as set forth in
this Section 6(a)(ii).

 

 
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(iii)     As of the Date of Termination, the Time-Based Options that are
outstanding and unvested as of immediately prior to the Date of Termination
shall become fully vested and exercisable in full, except that if the Date of
Termination is prior to the one-year anniversary of the Start Date, the
Time-Based Options that are outstanding and unvested as of immediately prior to
the Date of Termination shall accelerate vesting and exercisability as to the
number of shares that were scheduled to vest on the one-year anniversary of the
Start Date, pro rated for the period of time Executive was employed during such
one-year period prior to the Date of Termination. In addition, as of the Date of
Termination, 375,000 shares subject to the Performance-Based Options shall
become fully vested and exercisable and, if the Date of Termination occurs in
fiscal year 2019 or later, then Executive shall also receive the Performance
Acceleration, if applicable. All other equity compensation awards held by
Executive shall vest on the Date of Termination to the extent that the
resolutions granting such awards provide that such awards shall vest pursuant to
this Section 6(a)(iii) upon a Change of Control or as otherwise provided under
the Plan or in the terms of such awards. All Options that are outstanding as of
immediately prior to the Date of Termination (including those accelerated
pursuant to this Section 6(a)(iii)) shall remain exercisable until the earlier
of: (1) one year anniversary of the Date of Termination; or (2) the date on
which the Option would have expired by its original terms (disregarding any
early termination due to Executive’s separation from service). To the extent
necessary to give effect to this Section 6(a)(iii), if the Date of Termination
occurs prior to a Change of Control, all of the Options that Executive holds as
of immediately prior to the Date of Termination shall remain outstanding after
the Date of Termination at least until the earlier of (x) three months after the
Date of Termination, (y) the effective date of the Change of Control and (z) the
date on which the Option would have expired by its original terms (disregarding
any early termination due to Executive’s separation from service).

 

(b)           Limitation on Change of Control Payments and Benefits.
Notwithstanding anything in this Agreement to the contrary, if any of the
payments or benefits to be made or provided in connection with the Agreement,
together with any other payments or benefits which Executive has the right to
receive from the Company or any entity which is a member of an “affiliated
group” (as defined in section 1504(a) of the Code without regard to section
1504(b) of the Code) of which the Company is a member constitute an “excess
parachute payment” (as defined in section 280G(b) of the Code) and would be
subject to the excise tax imposed by Section 4999 of the Code, then such
benefits shall either be (i) delivered in full, or (ii) delivered as to such
lesser extent necessary to prevent any portion of such payments or benefits from
becoming nondeductible by the Company pursuant to section 280G of the Code or
subject to the excise tax imposed under section 4999 of the Code, whichever of
the foregoing amounts, taking into account the applicable federal, state and
local income and employment taxes and the excise tax imposed by Section 4999,
results in the receipt by Executive, on an after-tax basis, of the greatest
amount of benefits, notwithstanding that all or some portion of such benefits
may be taxable under Section 4999 of the Code. Unless the Company and Executive
otherwise agree in writing, the determination as to whether any such decrease in
the payments or benefits to be made or provided in connection with this
Agreement is necessary must be made in good faith by a nationally recognized
accounting firm (the “Accounting Firm”), and such determination will be
conclusive and binding upon Executive and the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, the Company shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Executive will have the right to review and comment on
any calculations prepared by the Accounting Firm and the Accounting Firm will
make its determination with input from Executive (or his counsel) and provide
its calculations, together with detailed supporting documentation, to the
Company and Executive no later than thirty (30) calendar days after the date on
which Executive’s right to a parachute payment is triggered (if requested at
that time by the Company or Executive) or such other time as reasonably
requested by the Company or Executive. In addition, if and to the extent such
right would not cause any payment or benefit to be subject to any adverse tax
consequences under section 409A of the Code (including as a result of any
“substitution” within the meaning of Treas. Reg. §1.409A-3(f)), Executive will
have the right to designate the particular payments or benefits that are to be
reduced or eliminated.

 

 
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(c)           Treatment of Unvested Stock in Stock Acquisition. For avoidance of
doubt, in the event Executive is terminated in connection with a Change of
Control transaction in which the Company’s stock is acquired for cash or cash
equivalents, Executive shall have the same right to participate in the Change of
Control transaction with respect to any unvested shares held by Executive as the
Company’s stockholders have generally with respect to shares of stock that are
not subject to vesting.

 

7.             Restrictive Covenants. In consideration of Executive’s employment
or continued employment with the Company and the Severance Payment, Executive
agrees to comply with the following restrictive covenants:

 

(a)           Executive shall not, at any time during the Restricted Period,
directly or indirectly engage in, have any equity interest in, or manage, assist
or operate any person, firm, corporation, partnership, business or entity
(whether as director, officer, employee, agent, representative, partner,
security holder, consultant or otherwise) that engages in (either directly or
through any subsidiary or Affiliate thereof) any business or activity (i)
relating to the design, manufacture, marketing, sale or distribution of directed
or omnidirectional sound technologies and products that competes with the
business of the Company or (ii) that the Company or any of its Affiliates has
taken steps toward engaging in or acquiring. Notwithstanding the foregoing,
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 3% of the outstanding interest in such business.

 

(b)           Executive shall not, at any time during the Restricted Period,
directly or indirectly, either for himself or on behalf of any other entity, (i)
recruit or otherwise solicit or induce any employee, customer, subscriber 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 12-month period immediately prior to the Date of Termination or who
thereafter becomes employed by the Company.

 

(c)           The provisions contained in Sections 7(a) and 7(b) may be altered
and/or waived to be made less restrictive on Executive only with the prior
written consent of the Board.

 

(d)           Except as Executive reasonably and in good faith determines to be
required in the faithful performance of Executive’s duties hereunder or in
accordance with Section 7(f), 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, or use for Executive’s
benefit or the benefit of any person, firm, corporation or other entity, any
confidential or proprietary information or trade secrets of or relating to the
Company, including, without limitation, information with respect to the
Company’s 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, firm, corporation or
other entity, any document, record, notebook, computer program or similar
repository of or containing any such Proprietary Information. Executive’s
obligation to maintain and not use, disseminate, disclose or publish, or use for
Executive’s benefit or the benefit of any person, firm, corporation or other
entity, 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
Executive’s 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).

 

 
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(e)           Upon termination of Executive’s employment with the Company for
any reason, Executive will promptly deliver to the Company all correspondence,
drawings, manuals, letters, notes, notebooks, reports, programs, plans,
proposals, financial documents, or any other documents concerning the Company’s
customers, business plans, marketing strategies, products or processes.

 

(f)            Executive may respond to a lawful and valid subpoena or other
legal process but shall give the Company (if lawfully permitted to do so) the
earliest possible notice thereof, and shall, as much in advance of the return
date as possible, make available to the Company and its counsel the documents
and other information sought, and shall assist such counsel in resisting or
otherwise responding to such process. Executive may also disclose Proprietary
Information if: (i) in the reasonable written opinion of counsel for Executive
furnished to the Company, such information is required to be disclosed for
Executive not to be in violation of any applicable law or regulation or (ii)
Executive is required to disclose such information in connection with the
enforcement of any rights under this Agreement or any other agreements between
Executive and the Company.

 

(g)           Executive agrees not to disparage the Company, any of its products
or practices, or any of its directors or executive officers, either orally or in
writing, at any time; provided that Executive may confer in confidence with
Executive’s legal representatives, make truthful statements to any government
agency in sworn testimony, or make truthful statements as otherwise required by
law. The Company agrees that, upon the termination of Executive’s employment
hereunder, it shall advise its directors and executive officers not to disparage
Executive, either orally or in writing, at any time; provided that they may
confer in confidence with the Company’s and their legal representatives and make
truthful statements as required by law.

 

(h)           Prior to accepting other employment or any other service
relationship during the Restricted Period, Executive shall provide a copy of
this Section 7 to any recruiter who assists Executive in obtaining other
employment or any other service relationship and to any employer or person with
which Executive discusses potential employment or any other service
relationship.

 

(i)            In the event the terms of this Section 7 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.

 

8.             Injunctive Relief.  Executive recognizes and acknowledges that a
breach of the covenants contained in Section 7 may cause irreparable damage to
the Company and its goodwill, the exact amount of which will be difficult or
impossible to ascertain, and that the remedies at law for any such breach will
be inadequate. Accordingly, Executive agrees that in the event of a breach of
any of the covenants contained in Section 7, in addition to any other remedy
which may be available at law or in equity, the Company will be entitled to seek
specific performance and injunctive relief.

 

 
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9.              Section 409A.

 

(a)           General.  The parties hereto acknowledge and agree that, to the
extent applicable, this Agreement shall be interpreted in accordance with, and
incorporate the terms and conditions required by, Section 409A. It is intended
that all of the benefits and payments under this Agreement satisfy, to the
greatest extent possible, the exemptions from the application of Section 409A
provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(5) and
1.409A-1(b)(9), and this Agreement will be construed to the greatest extent
possible as consistent with those provisions and any ambiguities herein shall be
interpreted accordingly. Notwithstanding any provision of this Agreement to the
contrary, in the event that the Company determines that any amounts payable
hereunder will be taxable to Executive under Section 409A, the Company reserves
the right to (without any obligation to do so or to indemnify Executive for
failure to do so) (i) adopt such amendments to this Agreement or adopt such
other policies and procedures (including amendments, policies and procedures
with retroactive effect) that it determines to be necessary or appropriate to
preserve the intended tax treatment of the benefits provided by this Agreement,
to preserve the economic benefits of this Agreement and to avoid less favorable
accounting or tax consequences for the Company and/or (ii) take such other
actions it determines to be necessary or appropriate to exempt the amounts
payable hereunder from Section 409A or to comply with the requirements of
Section 409A and thereby avoid the application of penalty taxes thereunder.
Notwithstanding anything herein to the contrary, no provision of this Agreement
shall be interpreted or construed to transfer any liability for failure to
comply with the requirements of Section 409A from Executive or any other
individual to the Company or any of its Affiliates, employees or agents.

 

(b)           Separation from Service under Section 409A; Section 409A
Compliance. Notwithstanding anything herein to the contrary:  (i) no termination
or other similar payments and benefits hereunder shall be payable unless
Executive’s termination of employment constitutes a “separation from service”
within the meaning of Section 1.409A-1(h) of the Department of Treasury
Regulations; (ii) if Executive is deemed at the time of Executive’s separation
from service to be a “specified employee” for purposes of Section
409A(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 Executive may
be entitled hereunder (after taking into account all exclusions applicable to
such payments or benefits under Section 409A) is required in order to avoid a
prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion
of such payments and benefits shall not be provided to Executive prior to the
earlier of (x) the expiration of the six-month period measured from the date of
Executive’s “separation from service” with the Company (as such term is defined
in the Department of Treasury Regulations issued under Section 409A) or (y) the
date of Executive’s death; provided that upon the earlier of such dates, all
payments and benefits deferred pursuant to this Section 9(b)(ii) shall be paid
in a lump sum to Executive, and any remaining payments and benefits due
hereunder shall be provided as otherwise specified herein; (iii) the
determination of whether Executive is a “specified employee” for purposes of
Section 409A(a)(2)(B)(i) of the Code as of the time of Executive’s separation
from service shall be made by the Company in accordance with the terms of
Section 409A (including, without limitation, Section 1.409A-1(i) of the
Department of Treasury Regulations and any successor provision thereto); (iv) to
the extent that any installment payments under this Agreement (whether severance
payments, reimbursements or otherwise) are deemed to constitute “nonqualified
deferred compensation” within the meaning of Section 409A, for purposes of
Section 409A (including, without limitation, for purposes of Section
1.409A-2(b)(2)(iii) of the Department of Treasury Regulations), each such
payment that 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 Executive under
this Agreement are deemed to constitute “deferred compensation” under Section
409A, such reimbursements or benefits shall be provided reasonably promptly, but
in no event later than December 31 of the year following the year in which the
expense was incurred, and in any event in accordance with Section
1.409A-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 Section 105(b) of the
Code, and Executive’s right to such payments or reimbursement of any such
expenses shall not be subject to liquidation or exchange for any other benefit. 

 

 
9

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10.           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. This Agreement shall be binding
upon any entity or person who is a successor by merger, acquisition,
consolidation or otherwise to the business formerly carried on by the Company
without regard to whether or not such entity or person actively assumes the
obligations hereunder and without regard to whether or not a Change of Control
occurs. Executive may not assign Executive’s 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, Executive and their respective successors,
assigns, personnel and legal representatives, executors, administrators, heirs,
distributees, devisees, and legatees, as applicable.

 

11.           Governing Law.  This Agreement shall be governed, construed,
interpreted and enforced in accordance with the substantive laws of the State of
California, without reference to the principles of conflicts of law of
California or any other jurisdiction, and where applicable, the laws of the
United States.

 

12.           Validity.  The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

 

13.           Entire Agreement.  This Agreement (together with any other
agreements and instruments contemplated hereby or referred to herein) is
intended by the parties hereto to be the final expression of their agreement
with respect to the employment of 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 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.

 

14.           Amendments; Waivers.  This Agreement may not be modified, amended,
or terminated except by an instrument in writing, signed by 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, 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.

 

15.           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 party hereto shall have
specified by notice in writing to the other party hereto):

 

If to Executive, at the address set forth on the signature page hereto.

 

If to the Company:

LRAD Corporation

16990 Goldentop Road Suite A

San Diego, California 92127

Attn: Chairman of the Board

Facsimile: (858) 676-1080

with a copy to:

Durham Jones & Pinegar, P.C.

192 East 200 North, Third Floor

St. George, Utah 84770

Attn: Joshua E. Little

Facsimile: (435) 628-1610

 

 

 
10

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16.           Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.

 

17.           No Inconsistent Actions.  The parties hereto shall not voluntarily
undertake or fail to undertake any action or course of action inconsistent with
the provisions or essential intent of this Agreement. Furthermore, it is the
intent of the parties hereto to act in a fair and reasonable manner with respect
to the interpretation and application of the provisions of this Agreement.

 

18.           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.

 

19.           Arbitration.  Any dispute or controversy based on, arising under
or relating to this Agreement shall be settled exclusively by final and binding
arbitration, conducted before a single neutral arbitrator in San Diego,
California in accordance with the rules and procedures of JAMS, by a neutral
arbitrator who is mutually agreeable to the parties hereto, or appointed by JAMS
if the parties cannot agree. 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 Section 7, and Executive hereby consents that
such restraining order or injunction may be granted without requiring the
Company to post a bond. The arbitrator shall be entitled to award any relief
available in a court of law. Each party shall bear its own costs and attorneys’
fees in connection with arbitration; provided that the parties shall bear
equally the cost of the arbitrator and JAMS’ administrative fees.

 

20.           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.

 

21.           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.

 

 
11

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22.           Absence of Conflicts; Executive Acknowledgement.  Executive hereby
represents that from and after the Start Date the performance of Executive’s
duties hereunder will not breach any other agreement to which Executive is a
party. Executive acknowledges that 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
Executive’s own judgment.

 

23.           Survival.  The expiration or termination of the Term shall not
impair the rights or obligations of any party hereto which shall have accrued
prior to such expiration or termination.

 

 
12

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
and year first above written.

 

COMPANY

EXECUTIVE         LRAD Corporation         /s/ Richard Danforth     Richard
Danforth By:    /s/ John G.
Coburn                                                                                     
Address:   Name: General John G. Coburn     Title: Chairman Facsimile:  

 

 

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Exhibit 10.1

 

EXHIBIT A

 

Definitions

 

(a)     “Accounting Firm” has the meaning set forth in Section 6(b).

 

(b)     “Affiliate” means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with, such
Person where “control” has the meaning given such term under Rule 405 of the
Securities Act of 1933, as amended from time to time.

 

(c)     “Agreement” has the meaning set forth in the preamble hereto.

 

(d)     “Annual Base Salary” has the meaning set forth in Section 3(a).

 

(e)     “Annual Cash Bonus” has the meaning set forth in Section 3(b).

 

(f)     “Board” means the Board of Directors of the Company or any successor
body.

 

(g)     The Company shall have “Cause” to terminate Executive’s employment
hereunder upon:  (i) Executive’s willful failure to substantially perform the
material duties set forth herein (other than any such failure resulting from
Executive’s Disability); (ii) Executive’s willful failure to carry out, or
comply with, in any material respect, any lawful directive of the Board; (iii)
Executive’s 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) Executive’s unlawful use (including being
under the influence) or possession of illegal drugs on the Company’s premises or
while performing Executive’s duties and responsibilities hereunder;
(v) Executive’s commission at any time of any act of fraud, embezzlement,
misappropriation, material misconduct, conversion of assets of the Company, or
breach of fiduciary duty against the Company (or any predecessor thereto or
successor thereof); or (vi) Executive’s material breach of this Agreement or
other written agreements Executive has entered into with the Company; and which,
in the case of clauses (i), (ii) and (vi), continues beyond 20 days after the
Company has provided 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 Executive).

 

(h)     “Change of Control” means: (i) the acquisition by any Person of
beneficial ownership (within the meaning of Rule 13d–3 promulgated under the
Exchange Act) of 50% or more of the stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of the
Company (irrespective of whether at the time stock of any class or classes of
the Company shall have or might have voting power by reason of the happening of
any contingency); provided, however, that for purposes of this subsection (i),
the following acquisitions will not constitute a Change of Control: (A) any
acquisition directly from the Company; (B) any acquisition by the Company or a
subsidiary of the Company; or (C) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company; (ii) the consummation of a merger or consolidation
involving the Company if the stockholders owning the capital and profits
(“ownership interests”) of the Company immediately before such merger or
consolidation do not, as a result of such merger or consolidation, own, directly
or indirectly, more than 50% of the combined voting power or ownership interests
of the Company, or the entity resulting from such merger or consolidation, in
substantially the same proportion as their ownership of the combined voting
power or ownership interests outstanding immediately before such merger or
consolidation,;(iii) there shall occur (A) any sale, lease, exchange or other
transfer (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of the
assets of the Company, other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by Persons in
substantially the same proportion as their ownership of the Company immediately
prior to such sale or (B) the approval by stockholders of the Company of any
plan or proposal for the liquidation or dissolution of the Company and (iv) the
dissolution or the complete or partial liquidation of the Company. In all cases,
the determination of whether a Change of Control has occurred shall be made in
accordance with Section 409A.

 

 

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(i)     “Code” means the Internal Revenue Code of 1986, as amended.

 

(j)     “Committee” has the meaning set forth in Section 3(a).

 

(k)     “Company” has the meaning set forth in the preamble hereto.

 

(l)     “Date of Termination” means (i) if Executive’s employment is terminated
due to Executive’s death, the date of Executive’s death; (ii) if Executive’s
employment is terminated for any other reason, the date indicated in the Notice
of Termination (or the date specified by the Company pursuant to Section 4(b) in
connection with a termination by Executive).

 

(m)     “Disability” means any medically determinable physical or mental
impairment that renders Executive physically or mentally unable regularly to
perform his duties hereunder for a period in excess of 120 consecutive days or
more than 180 days in any consecutive 12 month period, as determined by a
physician jointly selected by the Company and Executive.

 

(n)     “Effective Date” has the meaning set forth in the preamble hereto.

 

(o)     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(p)     “Executive” has the meaning set forth in the preamble hereto.

 

(q)     “First Payment Date” has the meaning set forth in Section 5(b)(ii).

 

(r)     “Free Cash Flow” means operating cash flow less capital expenditures,
each as reported in the Company’s financial statements for any applicable
period.

 

(s)     “Installment Payments” has the meaning set forth in Section 5(b)(ii).

 

(t)     Executive shall have “Good Reason” to terminate Executive’s employment
hereunder after the occurrence of one or more of the following conditions
without Executive’s written consent:  (i) a material diminution in Executive’s
authority, duties, or responsibilities; (ii) a material diminution in
Executive’s Annual Base Salary; ; 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 30 days after Executive has
provided the Company written notice that 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 90 days after the initial existence of such
condition, and Executive resigns from employment effective within the six months
following the initial existence of such condition.

 

(u)     “Medical and Health Benefits” has the meaning set forth in Section 3(f).

 

(v)     “Net Revenues” means “Total revenues” as reported in the Company’s
Statement of Operations for any applicable period.

 

(w)     “Notice of Termination” has the meaning set forth in Section 4(b).

 

 

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(x)      “Options” has the meaning set forth in Section 3(d).

 

(y)      “Performance Acceleration” has the meaning set forth in Section 5(b).

 

(z)      “Performance-Based Options” has the meaning set forth in Section 3(d).

 

(aa)    “Person” means 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.

 

(bb)   “Plan” has the meaning set forth in Section 3(d).

 

(cc)    “Proprietary Information” has the meaning set forth in Section 7(d).

 

(dd)   “PTO” has the meaning set forth in Section 3(f).

 

(ee)    “Release” has the meaning set forth in Section 5(b)(ii).

 

(ff)     “Restricted Period” means the period from the Start Date through the
end of the Severance Period.

 

(gg)    “Section 409A” means Section 409A of the Code and the Department of
Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be
issued after the Effective Date.

 

(hh)   “Severance Payment” has the meaning set forth in Section 5(b)(i).

 

(ii)      “Severance Period” means if Executive’s employment shall be terminated
by the Company without Cause or by Executive for Good Reason, the period
beginning on the Date of Termination and ending on the first anniversary of the
Date of Termination.

 

(jj)      “Signing Bonus” has the meaning set forth in Section 3(c).

 

(kk)    “Start Date” has the meaning set forth in Section 2(b).

 

(ll)      “Term” has the meaning set forth in Section 2(b).

 

(mm)  “Time-Based Options” has the meaning set forth in Section 3(d).

 

 

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Exhibit 10.1

 

EXHIBIT B

 

Performance-Based Options Award Vesting Criteria

 

Vesting of the Performance-Based Options granted pursuant to Section 3(d)(ii)
shall be tied to achievement of certain long-term financial goals as follows,
subject to acceleration as set forth in the Agreement:

 

If (a) Executive is employed on the vesting date on September 30, 2019 (the
“2019 Vesting Date”) and (b) the Company maintains a [***]% Free Cash Flow
margin for Fiscal Year 2019 (Free Cash Flow divided by Net Revenues) (the “FY
2019 FCF Goal”) while achieving the following Net Revenues targets for Fiscal
Year 2019 (the “FY 2019 Revenue Goals”), then effective as of the 2019 Vesting
Date, but subject to certification by the Committee that the Company achieved
the specified performance criteria (which certification shall occur no later
than the date that the Company shall have filed its Annual Report on Form 10-K
for its fiscal year ending September 30, 2019), the Performance-Based Options
shall become vested and exercisable with respect to the number of shares in the
following table corresponding to the Company’s fiscal year 2019 Net Revenues:

 

Fiscal Year 2019 Net

Revenues

Shares Vesting

$[***]

93,750

$[***]

187,500

$[***]

281,250

$[***]

375,000

 

 

If (a) Executive is employed on the vesting date on September 30, 2020 (the
“2020 Vesting Date”), (b) the Company has met the FY 2019 FCF Goal and one of
the FY 2019 Revenue Goals, (c) the Company maintains a [***]% Free Cash Flow
margin for Fiscal Year 2020 (Free Cash Flow divided by Net Revenues) while
achieving the following Net Revenues targets for Fiscal Year 2020 (which are
[***]% of the FY 2019 Revenue Goals), then effective as of the 2020 Vesting
Date, but subject to certification by Committee that the Company achieved the
specified performance criteria (which certification shall occur no later than
the date that the Company shall have filed its Annual Report on Form 10-K for
its fiscal year ending September 30, 2020), the Performance-Based Options shall
become vested and exercisable with respect to the number of shares in the
following table corresponding to the Company’s fiscal year 2020 Net Revenues:

 

Fiscal Year 2020 Net

Revenues

Shares Vesting

$[***]

93,750

$[***]

187,500

$[***]

281,250

$[***]

375,000

 

 

Financial performance and achievement of financial performance criteria will be
determined based upon the audited financial statements for the Company for the
respective periods.

 

CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.

 

 

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Exhibit 10.1

 

EXHIBIT C

 

Form of Release

 

____________________ (the “Executive”) agrees for Executive, Executive’s spouse
and child or children (if any), Executive’s heirs, beneficiaries, devisees,
executors, administrators, attorneys, personal representatives, successors and
assigns, hereby forever to release, discharge, and covenant not to sue LRAD
Corporation, a Delaware corporation (the “Company”), and any of its past,
present, or future parent, affiliated, related, and/or subsidiary entities, and
all of the past and present directors, shareholders, officers, general or
limited partners, employees, agents, and attorneys, and agents and
representatives of such entities, (collectively, the “Releasees”), from any and
all claims, debts, demands, accounts, judgments, rights, causes of action,
equitable relief, damages, costs, charges, complaints, obligations, promises,
agreements, controversies, suits, expenses, compensation, responsibility and
liability of every kind and character whatsoever (including attorneys’ fees and
costs), whether in law or equity, known or unknown, asserted or unasserted,
suspected or unsuspected, which Executive has or may have had against such
Releasees based on any events or circumstances arising or occurring on or prior
to the date this release (the “Release”) is executed, arising directly or
indirectly out of, relating to, or in any other way involving in any manner
whatsoever, (a) Executive’s employment with the Company or its subsidiaries or
the termination thereof or (b) Executive’s status at any time as a holder of any
securities of the Company, and any and all claims arising under federal, state,
or local laws relating to employment, or securities, including without
limitation claims of wrongful discharge, breach of express or implied contract,
fraud, misrepresentation, defamation, or liability in tort, claims of any kind
that may be brought in any court or administrative agency, any claims arising
under Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Americans with Disabilities Act, the Fair Labor Standards
Act, the Employee Retirement Income Security Act, the Family and Medical Leave
Act, the Securities Act of 1933, the Securities Exchange Act of 1934, the
Sarbanes-Oxley Act, and similar state or local statutes, ordinances, and
regulations; provided, however, notwithstanding anything to the contrary set
forth herein, that this Release shall not extend to (i) benefit claims under
employee pension or welfare benefit plans in which Executive is a participant by
virtue of his employment with the Company or its subsidiaries, (ii) any rights
of indemnification Executive may have under any written agreement between
Executive and the Company (or its affiliates), the Company’s Articles of
Incorporation, its Bylaws, any applicable statute or common law, or pursuant to
any applicable insurance policy, (iii) unemployment compensation, (iv)
contractual rights to vested equity awards, (v) COBRA benefits and (vii) any
rights that may not be waived as a matter of law.

 

Executive understands that this Release includes a release of claims arising
under the Age Discrimination in Employment Act (ADEA). Executive understands and
warrants that he has been given a period of 21 days to review and consider this
Release. Executive further warrants that he understands that he may use as much
or all of his 21-day period as he wishes before signing, and warrants that he
has done so. Executive further warrants that he understands that, with respect
to the release of age discrimination claims only, he has a period of seven days
after executing on the second signature line below to revoke the release of age
discrimination claims by notice in writing to the Company.

 

Executive is hereby advised to consult with an attorney prior to executing this
Release. By his signature below, Executive warrants that he has had the
opportunity to do so and to be fully and fairly advised by that legal counsel as
to the terms of this Release.

 

 

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ACKNOWLEDGEMENT (AS TO ALL CLAIMS
OTHER THAN AGE DISCRIMINATION CLAIMS)

 

The undersigned, having had full opportunity to review this Release with counsel
of his choosing, signifies his agreement to the terms of this Release (other
than as it relates to age discrimination claims) by his signature below.

 

 

 

 

 

 

[Employee]

  Date

 

 

ACKNOWLEDGEMENT (AGE DISCRIMINATION CLAIMS)

 

The undersigned, having had full opportunity to review this Release with counsel
of his choosing, signifies his agreement to the terms of this Release (as it
relates to age discrimination claims) by his signature below.

 

 

 

 

 

 

[Employee]

 

Date