Document:

EX-10.6

Exhibit 10.6

INDEMNIFICATION AGREEMENT

     THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of                      ___,
2007, by and between Vuzix Corporation (the “Company”), and                                          (the “Indemnitee”).

RECITALS:

     WHEREAS, the Board of Directors of the Company (the “Board of Directors”) has reviewed and
analyzed the protection from liability available to Directors and Officers of the Company and its
subsidiaries under the Company’s existing corporate documents, applicable law and liability
insurance;

     WHEREAS, the Board of Directors has determined that the risks of litigation and possible
liability for Directors and Officers arising out of the performance of their duties have
substantially increased, and that the protection offered by the Company’s existing corporate
documents, applicable law, and liability insurance is not sufficient to fully protect Directors and
Officers from liability;

     WHEREAS, the Board of Directors has determined that highly competent persons will be difficult
to attract and retain as Directors and/or Officers unless they are adequately protected against
liabilities incurred in performance of their duties in such capacity;

     WHEREAS, the Board of Directors has determined that the use of indemnification agreements will
allow the Company to offer some protection from liability to its Directors and Officers;

     WHEREAS, the Indemnitee is a Director and/or Officer of the Company;

     WHEREAS, Article Ten of the Company’s Certificate of Incorporation and Article 6 of the
Company’s By-laws provide for indemnification of Directors and Officers acting on behalf of the
Company; and

     WHEREAS, Section 145 of the Delaware General Corporation Law (the “Statute”) specifically
provides that the indemnification provided by the Statute is not exclusive;

     NOW THEREFORE, in consideration of the Indemnitee’s past and continued services to the
Company, the mutual agreements and covenants contained herein, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

     1. Indemnification. The Company agree to indemnify the Indemnitee to the fullest extent now or
hereafter permitted by applicable law (including, without limitation, the indemnification permitted
by the Statute) in the event that the Indemnitee was or is
made or is threatened to be made a party to or a witness in any threatened, pending or
completed action, suit, proceeding or appeal, whether civil, criminal, administrative or
investigative, by reason of

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the fact that the Indemnitee was or is a Director and/or Officer of the Company or any of its
subsidiaries, partnerships, joint ventures, trusts, or other enterprises, both as to any action or
inaction in his official capacity and as to any action or inaction by him in another capacity
(including his service as an officer or director of another entity,, where he acts or acted in that
capacity at the Company’s request), against all reasonable expenses (including attorneys’ fees and
disbursements), judgments, fines (including excise taxes and penalties) and amounts paid in
settlement actually and reasonably incurred by the Indemnitee in connection with such action, suit,
proceeding or appeal. This Agreement is intended to cover all actions, suits, proceedings and
appeals arising out of or connected with the Indemnitee’s service as a Director and/or Officer of
the Company and Indemnitee’s service in another capacity at the request or direction of the Company
which are currently pending or threatened or which arise in the future, even if the Indemnitee is
no longer a Director and/or Officer or is no longer serving in such other capacity when such
action, suit, proceeding or appeal arises or is threatened.

     2. Advance Payment of Expenses. Expenses incurred by the Indemnitee in connection with any
action, suit, proceeding or appeal, as described herein, shall be paid by the Company in advance of
the final disposition of such action, suit, proceeding or appeal within thirty (30) days of
Company’s receipt of any invoice for reasonable and actual expenses incurred by Indemnitee;
provided however, Indemnitee has within fifteen (15) days after the Company’s request, executed a
written agreement reasonably satisfactory to the Company’s counsel to repay all such amounts it if
is ultimately determined that he is not entitled to be indemnified by the Company under applicable
law.

     3. Changes in the Law; Partial Indemnification.

          (a) In the event of any changes after the date of this Agreement in any applicable law,
statute or rule (including judicial interpretation thereof) which expand the right of the Company
to indemnify its Directors and Officers, the Indemnitee’s rights and the Company’s obligations
under this Agreement shall be expanded to include such changes in applicable law, statute or rule.
In the event of any changes in any applicable law, statute or rule (including judicial
interpretation thereof) which narrow the right of the Company to indemnify its Directors and
Officers, such changes, to the extent not otherwise required by such law, statute or rule to be
applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and
obligations hereunder.

          (b) The indemnification provided by this Agreement shall not be deemed exclusive of any rights
to which the Indemnitee may be entitled under the Company’s Certificate of Incorporation, its
By-laws, any agreement, any vote of shareholders or Directors, applicable law or otherwise, both as
to action or inaction in the Indemnitee’s official capacity and as to his action or his inaction in
another capacity while holding such directorship or office, where he acts or acted in that capacity
at the Company’s request.

          (c) If the Indemnitee is entitled under any provision of this Agreement to indemnification by
the Company for some or a portion of the expenses, judgments, fines or penalties actually or
reasonable incurred by the Indemnitee in the preparation, investigation defense, appeal or
settlement of any civil or criminal action, suit, proceeding or appeal, but not,

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however, for the total amount thereof, the Company shall nevertheless indemnify the Indemnitee for
the portion of such expenses, judgments, fines or penalties to which the Indemnitee is entitled.

     4. Contribution. If the indemnification provided in Section 1 hereof may not be paid to the
Indemnitee under applicable law, then in any threatened, pending or completed action, suit,
proceeding or appeal in which the Company is jointly liable with the Indemnitee, the Company shall
contribute to the amount of reasonable expenses (including attorneys’ fees and disbursements),
judgments, fines (including expense taxes and penalties) and amounts paid in settlement actually
and reasonably incurred and paid or payable by the Indemnitee in such proportion as is appropriate
to reflect (a) the relative benefits received by the Company on the one hand and the Indemnitee on
the other hand from the transaction from which such action, suit, proceeding or appeal arise, and
(b) the relative fault of the Company on the one hand and of the Indemnitee on the other in
connection with the events which resulted in such expenses, judgments, fines or settlement amounts,
as well as any other relevant equitable considerations. The relative fault of the Company on the
one hand and of the Indemnitee on the other shall be determined by reference to, among other
things, the parties’ relative intent, knowledge, access to information and opportunity to correct
or prevent the circumstances resulting in such expenses, judgments, fines or settlement amounts.
The Company agrees that it would not be just and equitable if contribution pursuant to this Section
4 were determined by pro rata allocation or any other method of allocation which does not take
account of the foregoing equitable considerations.

     5. Exclusions.

          (a) The Company shall not be liable to make any payment hereunder (whether in the nature of
indemnification or contribution) to the extent payment is actually made to the Indemnitee under an
insurance policy (an “Insurance Policy”) or any other method outside of this Agreement. Before
payment is reasonably expected to be made under an Insurance Policy or such other method, if the
Indemnitee is required to pay any amount that the Company would otherwise be obligated to pay
except for the exclusion in this subparagraph (a), the Company shall promptly advance the amount
the Indemnitee is required to pay for which the Company would otherwise be liable hereunder. In the
event that the Company makes any advance to the Indemnitee under this subparagraph (a), the
Indemnitee shall promptly execute an assignment, in a form reasonably satisfactory to the Company’s
counsel, under which the funds the Indemnitee later receives under such Insurance Policy or such
other method are assigned to the Company in an amount not to exceed the amount which the Company
advanced pursuant to this subparagraph (a).

          (b) The Company shall not be liable hereunder for any amounts paid in settlement of a
proceedings effected without its prior written consent, which shall not be unreasonably withheld.

     6. Term. All obligations of the Company contained herein shall continue during the period the
Indemnitee is a Director and/or Officer of the Company or any of its subsidiaries, partnerships,
joint ventures, trusts or other enterprises and shall continue thereafter (a) until

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both parties agree in writing to terminate this Agreement, or (b) as long as the Indemnitee remains
subject to any possible claim or threatened, pending or completed action, suit, proceeding or
appeal, whether civil, criminal, administrative or investigative, arising out of the Indemnitee’s
service as a Director or Officer or in any other capacity in which he served at the Company’s
request while a Director or Officer.

     7. Enforcement. In the event the Indemnitee is required to bring any action to enforce rights
or to collect funds due under this Agreement and is successful in such action, the Company shall
reimburse the Indemnitee for all of the Indemnitee’s reasonable expenses (including attorneys’ fees
and disbursements) in bringing and pursuing such action. The burden of proving that indemnification
or advancement of expenses are not reasonable shall be on the Company.

     8. Obligations of the Indemnitee.

          (a) Promptly after receipt by the Indemnitee of notice of the commencement of any action,
suit, proceeding or appeal in which the Indemnitee is made or is threatened to be made a part or a
witness, the Indemnitee shall notify the Company in writing of the commencement of such action,
suit, proceeding or appeal, but the Indemnitee’s failure to notify the Company shall not relieve
the Company from any obligation to indemnify or advance expenses to the Indemnitee under this
Agreement, except to the extent such delay in providing notice has caused actual material damages
to the Company through prejudice to the Company’s rights or its ability to defend the action, suit,
proceeding or appeal.

          (b) The Indemnitee shall reimburse the Company for all or an appropriate portion of the
expenses advanced to the Indemnitee pursuant to Section 2 above if it is finally judicially
adjudicated that the Indemnitee is not entitled to be indemnified, or not entitled to be fully
indemnified because of indemnification in the particular circumstances is not permitted under
applicable law.

          (c) The Indemnitee shall not settle any claim or action in any manner which would impose on
the Company any penalty, constraint, or obligation to hold harmless or indemnify the Indemnitee
pursuant to this Agreement without the Company’s prior written consent, which shall not be
unreasonably withheld.

     9. Defense of Claim.

          (a) Except as otherwise provided below, in the case of any action, suit, proceeding or appeal
commenced against the Indemnitee, the Company shall be entitled to participate therein at its own
expense and, to the extent that it may wish, to assume the defense thereof. If the Company wishes
to assume the defense of any action, suit, proceeding or appeal hereunder, the Company must give
written notice to the Indemnitee of such assumption of defense and of its choice of counsel. Such
choice of counsel must be approved in writing by the Indemnitee in his sole discretion, which will
not be unreasonably withheld, before the Company’s assumption of defense hereunder may
proceed. After notice from the Company to Indemnitee of its election to assume the defense of
any action, suit, proceeding or appeal and the Indemnitee’s approval of the

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Company’s choice of counsel, the Company shall not be obligated to the Indemnitee under this
Agreement for any legal or other expenses subsequently incurred by the Indemnitee in connection
with the defense thereof other than reasonable costs of investigation, travel and lodging expenses
arising out of the Indemnitee’s participation in such action, suit, proceeding or appeal, except as
otherwise provided herein. The Indemnitee shall have the right to employ the Indemnitee’s own
counsel in such action, suit, proceeding or appeal, but the fees and expenses of such counsel
incurred after notice from the Company to the Indemnitee of its assumption of the defense thereof
shall be a the Indemnitee’s expense (i) unless the employment of such counsel has been requested by
the Indemnitee and authorized in writing by the Company, or (ii) unless the Company shall have
employed counsel to assume the defense of such action, suit, proceeding or appeal, in which case
the reasonable fees and expenses of the Indemnitee’s counsel shall be at the expense of the
Company, or (iii) unless counsel for the Indemnitee shall have provided a written opinion to
Company in accordance with applicable standards of professional conduct that there may be a
conflict of interest between the Company and the Indemnitee in the defense of such action, suit,
proceeding or appeal; and (iv) except for reasonable costs and expenses for counsel for Indemnitee
to monitor proceedings (provided, however, that such counsel for will not appear as counsel of
record in any such proceeding).

          (b) In the event that counsel for the Indemnitee concludes that there may be a conflict of
interest between the Company and the Indemnitee in the defense of an action, suit, proceeding or
appeal, (i) the Company shall not have the right to assume and direct the defense of such action,
suit, proceeding or appeal on behalf of the Indemnitee, and (ii) the Company shall indemnify the
Indemnitee for all reasonable legal fees and other reasonable expenses, but the Company shall not
be liable for any settlement or negotiated disposition of such action, suit, proceeding or appeal
or any part thereof effected without the written consent of the Company, which shall not be
unreasonably withheld.

     10. Severability. If any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining provisions of this
Agreement.

     11. Notices. Any notices or other communications required or desired hereunder shall be
written and shall be given by (a) certified mail, return receipt requested, (b) overnight courier
service, or (c) personal delivery. Such notice or communication shall be deemed to be given upon
receipt or on the date of courier or personal delivery, as applicable, and shall be given at the
following addresses:

	 	 	 	 	 	 
	 

	the Company:
	 	Vuzix Corporation	 	 
	 

	 	 	75 Town Centre Drive	 	 
	 

	 	 	Rochester, NY 14623	 	 
	 

	 	 	Attn:      Chief Financial Officer	 	 
	 
	 	 	 	 	 
	 

	Indemnitee:
	 	 	 	 
	 

	 	 	 

	 	 
	 
	 	 	 	 	 
	 

	 	 	 

	 	 
	 
	 	 	 	 	 
	 

	 	 	 

	 	 
	 
	 	 	 	 	 
	 

	 	 	 

	 	 

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or to such other address as either party may specify by written notice to the other party.

     12. Miscellaneous.

          (a) This Agreement shall be governed by and construed in accordance with the laws of the State
of Delaware.

          (b) This Agreement shall be binding upon the Indemnitee, his heirs, personal representatives
and permitted assigns, and upon the Company, its successors and assigns. This Agreement shall inure
to the benefit of the Indemnitee, his heirs, personal representatives and permitted assigns, and to
the benefit of the Company, its successors and assigns. No assignment of this Agreement or of any
duty or obligation hereunder shall be made by the Indemnitee without the prior written consent of
the Company, which shall not be unreasonably withheld.

          (c) This Agreement supersedes any other oral or written agreements between the Company and the
Indemnitee which would restrict or lessen any of the rights granted to the Indemnitee hereunder.

          (d) No amendment, modification, termination or claimed waiver of any of the provisions hereof
shall be valid unless in writing and signed by the party or an authorized representative of the
party against whom such modification is sought to be enforced.

          IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement
as of the date first above written.

	 	 	 	 	 	 	 
	 	 	VUZIX CORPORATION	 	 
	 

	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 
	 	 	 	 
	 	 
	 	 	INDEMNITEE:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 

 - 6 -EX-10.7

 Exhibit 10.7

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made as of this 1st day of
August  , 2007 between Icuiti Corporation, a Delaware corporation with its principal office at 75
Town Centre Drive, Rochester, New York, 14623 (the “Company”) and Paul Travers, having an
address at 91 Boughton Hill Road, Honeoye Falls, New York (the “Executive”).

     WHEREAS, the parties hereto wish to enter into an employment agreement to employ the
Executive as the Company’s President and Chief Executive Officer and to set forth certain
additional agreements between the Executive and the Company.

     NOW, THEREFORE, in consideration of the mutual covenants and representations
contained herein, the parties hereto agree as follows:

     1. Employment Period.

     The Company hereby employs the Executive, and the Executive hereby accepts employment with
the Company, on the terms and conditions contained in this Agreement. .

     2. Duties and Status.

     (a) Engagement. The Company hereby engages the Executive as the Company’s President
and Chief Executive Officer, on the terms and conditions set forth in this Agreement; it being
understood that Executive’s service as an officer of the Corporation is subject to his election
and reelection as such by the Company’s Board of Directors (the “Board”); provided, however, that
if Executive is not so reelected, he may terminate his employment with the Company for “good
reason” in accordance with the provisions of Section 4(c) of this Agreement.

     (b) Duties. During the Employment Period, the Executive shall exercise such authority,
perform such executive duties and functions and discharge such responsibilities as are consistent
with the position held by him, including those commensurate duties assigned to him by Board. During
the Employment Period, the Executive shall devote his full business time, skill and efforts to the
business of the Company. Notwithstanding the foregoing, the Executive may make and manage passive
personal business investments and engage in personal business activities, provided that such
activities do not either interfere with the business of the Company or affect his ability to render
the services to the Company required of him under this Agreement. Executive may serve in any
capacity with any civic, educational or charitable organization, or any trade association, without
seeking or obtaining approval by the Board, provided such activities and service do not materially
interfere or conflict with the performance of his duties hereunder. Executive may serve on the
Board of Directors of any entity, whether or not for profit, provided that such service is
permitted by policies and procedures approved by the Board or is specifically approved by the
Board; it being understood that any fees or other

 

 

compensation received for such service shall be retained by the Executive, without any oblation
to account therefor to the Company.

     3. Compensation and Benefits.

     (a) Salary. During the Employment Period, the Company shall pay to the Executive, as
compensation for the performance of his duties and obligations under this Agreement, a base
salary (which shall be paid in accordance with the normal payroll practices of the Company) (the
“Base Salary”), as follows:

     (i) Executive’s Base Salary shall initially be at the rate of
$200,000.00 per annum,

     (ii) On or before the date upon which the initial offering of
shares of the common stock of the Company to the public, (the
“IPO”), the
Executive’s then existing Base Salary shall be increased by to $300,000 or
such greater amount as shall be determined by the Board, from the Base
Salary in effect immediately preceding the effectiveness of the IPO.

     (iii) Executive’s Base Salary may be increased by the Board at
any time. Executives’ Base Salary may not be decreased from the amount in
effect at any time without the consent of the Executive.

     (iv) Executive’s base salary shall be subject to review each year for possible
increase by the Board of Directors in its sole discretion.

     (b) Bonuses.

     (i) During the Employment Period, the Board may, at its sole
discretion, but shall not be obligated to, award Executive such periodic,
annual or other bonuses as it shall determine. The foregoing does not
constitute an agreement or representation by the Company that the Executive
will be considered for or awarded any bonus.

     (ii) During the Employment Period, the Executive shall participate in all bonus plans
established by the Board for senior executives, on a basis that is consistent with the
level of participation by other senior executives of the Company. Such bonus plans shall
in all cases have reasonably achievable objectives that are agreed to in advance by the
Executive and the Board, acting in each case in good faith.

     (c) Equity Participation.

          (i) During the Employment Period, the Executive shall retain all rights, in accordance
with the terms of each respective award, under stock options outstanding and held by the
Executive on the date of this Agreement.

 

 

          (ii) In addition to the options described in the foregoing clause (i), the Board in its sole
discretion may determine to grant the Executive additional awards under any other stock option or
equity based incentive compensation plan or arrangement adopted by the Company during the
Employment Period for which the Company’s senior executives are eligible. The level of the
Executive’s participation in any such plan or arrangement, if any, shall be determined by the Board
in its sole discretion.

          (iii) To the greatest extent permissible in accordance with applicable IRS regulations,
options to acquire Company stock which may be granted to the Executive shall be in the form of
qualified options. Any options which cannot be granted in the form of qualified options will be
granted to the Executive as non-qualified options.

     (d) Other Benefits. During the Employment Period, the Executive shall be entitled to
participate in all of the employee benefit plans, programs and arrangements of the Company in
effect during the Employment Period which are generally available to senior executives of the
Company. Such participation shall be subject to and on a basis consistent with the terms,
conditions and overall administration of such plans, programs and arrangements. In addition,
during the Employment Period, the Executive shall be entitled to fringe benefits and perquisites
comparable to those of other senior executives of the Company. Such fringe benefits shall include,
but not be limited to, 4 weeks of vacation pay per year, to be used in accordance with the
Company’s vacation pay policy for senior executives.

     (e) Automobile Allowance. During the Employment Period, the Company will
reimburse the Executive for the costs of an automobile at the rate of $750.00 per month.

     (f) Business Expenses. During the Employment Period, the Company shall promptly pay
or reimburse the Executive for all actual, reasonable and customary expenses incurred by the
Executive in the course of his employment including but not limited to travel, entertainment,
subscriptions and dues associated with the Executive’s membership in professional, business and
civic organizations; provided that such expenses are incurred and accounted for in accordance
with the Company’s policies as then in effect.

     4. Term and Termination of Employment.

     (a) Executive’s employment with the Corporation shall continue until terminated by either
Executive or the Company, with the consequences of any such termination being as set forth in the
following provisions of this Agreement. The period commencing on the date of this Agreement and
ending on the effective date of such termination is referred to in this Agreement as the
“Employment Period”.

     (b) Termination for Cause. The Company may terminate the Executive’s employment
hereunder for cause. For purposes of this Agreement and subject to the

 

 

Executive’s opportunity to cure as provided in Section 4(d) hereof, the Company shall have “cause”
to terminate the Executive’s employment hereunder if such termination shall be the result of the
Executive’s:

          (i) willfully engaging in conduct which is materially injurious to the Company;

          (ii) willful fraud or material dishonesty in connection with his performance
hereunder;

          (iii) deliberate or intentional failure to substantially perform his duties hereunder that
results in material harm to the Company; or

          (iv) the conviction for, or plea of nolo contendere to a charge of, commission of a
felony.

     (c) Termination for Good Reason. The Executive shall have the right at any time to
terminate his employment with the Company for “good reason”. For purposes of this Agreement and
subject to the Company’s opportunity to cure as provided in Section 4(d) hereof, the Executive
shall have “good reason” to terminate his employment hereunder in the following cases:

          (i) a material diminution during the Employment Period in the Executive’s duties,
responsibilities, position, office or title as set forth in Section 2 hereof;

          (ii) a breach by the Company of the compensation and benefits provisions set forth in
Section 3 hereof;

          (iii) a material breach by the Company of any of the terms of this Agreement, other
than as specifically provided herein; or

          (iv) the relocation of Executive’s principal place of business at the request of the
Company beyond 30 miles from its current location

     (d) Notice and Opportunity to Cure. Notwithstanding the foregoing, the Company may not
terminate the Executive’s employment for “cause” pursuant to Section 4(b)(i), Section 4(b)(ii) or
Section 4(b)(iii),,and the Executive may not terminate his employment for “good reason” unless (1)
the party seeking to terminate the Executive’s employment shall have first provided the other party
with written notice of the intended termination and the reason for such termination (“breach”) and
(2) if such breach is susceptible of cure or remedy, a period of thirty (30) days shall have
elapsed between the delivery of such notice and the termination of this Agreement without the
breaching party having, in the reasonable opinion of the party alleging a breach, effectively cured
or remedied such breach.

 

 

     (e) Termination Upon Death or Permanent and Total Disability. The Employment Period
shall be terminated by the death of the Executive. The Employment Period may be terminated by the
Board of Directors if the Executive shall be rendered incapable of performing his duties to the
Company by reason of any medically determined physical or mental impairment that can be expected
to result in death or that can reasonably be expected to last for a period of either (i) six or
more consecutive months from the first date of the Executive’s absence due to the disability or
(ii) nine months during any twelve-month period (a “Permanent and Total Disability”). If the
Employment Period is terminated by reason of Permanent and Total Disability of the Executive, the
Company shall give 30 days’ advance written notice to that effect to the Executive.

     5. Consequences of Termination.

     (a) Without Cause or for Good Reason. In the event of a termination of the
Executive’s employment during the Employment Period (i) by the Company other than for “cause”
(as provided for in Section 4(b) hereof), (ii) by the Executive for “good reason” (as provided
for in Section 4(c) hereof) or (iii) due to death or disability (as provided for in Section 4(e)
hereof) the Company shall pay the Executive and provide him with the following:

          (i) Payments.

               (A) Salary. The Executive’s then current base salary payable for the Non-Compete
Period (as defined in Section 8 hereof); plus

               (B) Bonuses The entire bonus that would have been payable pursuant to any agreement,
understanding, arrangement or plan (“Bonus Arrangement”) in which Executive is entitled to
participate in accordance with the provisions of Section 3(b) for the year in which the
termination of his employment occurred as if he had been employed for the entire year, provided
that, in the opinion of the Board the Executive is likely to have met any bonus plan goals for the
relevant period had he not been terminated; plus

               (C) Earned but Unpaid Amounts. Any previously earned but unpaid salary through the
Executive’s final date of employment with the Company, and any previously earned but unpaid
bonus amounts pursuant to any Bonus Arrangement for any completed fiscal year prior to the date
of the Executive’s termination of employment.

     Payments of the amounts described above will be made in accordance with the timetable and
schedule contemplated for such payments, as though such termination had not occurred.

     As a condition to its obligation to make any of the payments required of it under this Section
5(a), the Company, in its sole discretion, may require Executive to execute a

 

 

release, in such form as it may reasonably require, releasing the Company and its officers,
directors, employees, and agents, from any and all claims and causes of action, including, but not
limited to those arising form Executive’s employment and the termination of his employment with the
Company.

          (ii) Equity. Any existing stock options, restricted stock grants, stock appreciation
rights and other similar awards outstanding at the date of termination shall immediately vest and
will, in all other respects, continue to be governed by, and continued in accordance with, their
applicable plan and grant documents; provided, however, that the period during which any options or
right relating to such grants may be exercised by Executive shall be the longer of the date
specified in such grants or the date that is thirty (30) days after the end of the Non-Compete
Period (as defined in Section 8 of this Agreement). If the extension of any such exercise period
shall cause any Incentive Stock Option (as defined in Section 422 of the Internal Revenue Code of
1954, as amended) (an “ISO”) to cease be treated as an ISO, then the Executive shall have the right
to elect whether to treat such stock option as a non-qualified stock option having the extended
exercise period provided for in this Section or to continue to treat such stock option as an ISO
having the original expiration date.

          (iii) Other Benefits. Continued coverage under all health, life, disability and
similar employee benefit plans and programs of the Company on the same basis as the Executive was
entitled to participate immediately prior to such termination for the Non-Compete Period; provided
that the Executive’s continued participation is possible under the general terms and provisions of
such plans and programs. In the event that the Executive’s participation in any such plan or
program is barred, the Company shall arrange to provide the Executive with benefits substantially
similar to those which the Executive would otherwise have been entitled to receive under such
plans and programs from which his continued participation is barred. If Executive is covered under
substitute benefit plans of another employer prior to the expiration of the Non-Compete Period,
the Company will no longer be required to continue the respective coverage described in this
Section 5(a)(iii).

     ` (b) Other Termination of Employment. In the event that the Executive’s employment with
the Company is terminated during the Employment Period (i) by the Company for “cause” (as provided
for in Section 4(b) hereof),or (ii) by the Executive other than for “good reason” (as provided for
in Section 4(c) hereof) (except as otherwise provided in Section 6(c)(i)), the Company shall pay
the Executive (or his legal representative) any earned but unpaid salary and annual bonus amounts
for any completed fiscal year prior to the date of the Executive’s termination of employment, but
only to the extent such amounts are payable in accordance with the terms of any such plan, through
the Executive’s final date of employment with the Company, and the Company shall have no further
obligations to the Executive.

     (c) Withholding of Taxes. All payments required to be made by the Company to the
Executive under this Agreement shall be subject to the withholding of such amounts, if any,
relating to tax, social security, excise tax and other payroll deductions as

 

 

the Company may reasonably determine it should withhold pursuant to any applicable law or
regulation.

     (d) No Other Obligations. The benefits payable to the Executive under this Agreement
are not in lieu of any benefits payable under any employee benefit plan, program or arrangement of
the Company, except as provided specifically herein, and upon termination the Executive will
receive such benefits or payments, if any, as he may be entitled to receive pursuant to the terms
of such plans, programs and arrangements. Except for the obligations of the Company provided by
the foregoing and this Section 5, the Company shall have no further obligations to the Executive
upon his termination of employment.

     (e) No Mitigation or Offset. If the Executive’s employment is terminated pursuant
to the provisions of Sections 4(b), 4(c) or 4(e), the Executive shall not be required to
mitigate the damages provided by this Section 5 by seeking substitute employment or otherwise.

     6. Change of Control.

     (a) Definition. For purposes of this agreement, a “Change of Control” shall mean:

               (i) the approval by the stockholders of the Company, and the completion of the transaction
resulting from such approval, of (A) the sale or other disposition of all or substantially all
the assets of the Company or (B) a complete liquidation or dissolution of the Company;

               (ii) The sale, in a single transaction or in a series of related transactions, of all or
substantially all of the outstanding shares of the capital stock of the Company; (iii) the
approval by the stockholders of the Company, and the completion of the transaction resulting from
such approval, of a merger, consolidation, reorganization or similar corporate transaction,
whether or not the Company is the surviving corporation in such transaction, in which the
outstanding shares of common stock of the Company are converted into (A) shares of stock of
another company, other than a conversion into shares of voting common stock of the successor
corporation (or a holding company thereof) representing fifty percent (50%) or more of the voting
power of all capital stock thereof outstanding immediately after the merger or consolidation or
(B) other securities (of either the Company of another company) or cash or other property;

               (iv) pursuant to an affirmative vote of a holder or holders of seventy five percent (75%) of
the capital stock of the Company entitled to vote on such a matter, the removal of a majority of
the individuals who are at that time members of the Board of Directors; or

               (v) the acquisition by any entity or individual of one hundred percent of the capital stock
of the Company.

 

 

     Notwithstanding the foregoing, it is understood by the parties to this Agreement that a
“Change of Control” shall not include any transaction the purpose of which is to reorganize the
Company’s corporate structure, reincorporate the Company in another jurisdiction or undertake any
other action which does not materially affect the ownership and control of the Company at the time
of such transaction.

     (b) Vesting of options upon a Change of Control. Notwithstanding anything to the
contrary in any stock option contract between the Company and the Executive or in any stock option
plan or similar plan of the Company, upon the occurrence of a Change of Control, all options held
by the Executive which shall not yet have vested will vest and become immediately exercisable.
After such a Change of Control, the Executive’s options shall remain exercisable for the period
remaining under the relevant stock option contract and shall not have a shortened period of
exercisability as a result of the Change of Control, except for statutory stock options which
shall, at the election of the Executive made at the time of the Change of Control, (i) expire 90
days after his termination (or 1 year if the Executive’s termination results from his death or
permanent and total disability) or (ii) be converted into non-qualified stock options expiring at
the end of the entire term of such option under the relevant stock option contract.

     (c) Severance upon a Change of Control.

          (i) If the Executive’s employment is terminated within one year
of a Change of Control for any reason other than by the Company for “cause”,
or if tbe Executive elects to terminate his employment by Company (whether or
not for “good reason”) after the expiration of 120 days after and on or
before the two-year anniversary date of the Change of Control, the Executive
shall be entitled to the payments described in the preceding Section 5(a),
except that the Non-Compete Period (as defined in Section 8 hereof)
applicable for the purposes of Sections 5(a) and 8 hereof shall be doubled
and all payments and benefits that are stated as a function of the
Non-Compete Period shall be adjusted accordingly.

          (ii) If the Executive’s employment is terminated within one year of a Change of Control for
any reason other than by the Company for “cause”, the Executive shall be not be required to
mitigate the damages provided by this Section 6 of this Agreement by seeking substitute employment
or otherwise and there shall be no offset by the Executive with respect to the payments and
benefits set forth in this Section 6 of this Agreement, except as otherwise qualified in Section
5(a)(iii).

     7. Indemnification and Insurance.

     (a) Indemnification. The Company shall, to the fullest extent permitted by law and by
its Certificate of Incorporation and Bylaws, indemnify Executive and hold him harmless for any acts
or decisions made by him in good faith while performing his duties pursuant to this Agreement. The
Company shall advance to Executive all costs and expenses incurred by him in connection with any
such proceeding or claim within 20

 

 

days after receiving written notice requesting such an advance. Such notice shall include, to the
extent required by applicable law, an undertaking by Executive to repay the amount advanced if he
ultimately is determined not to be entitled to indemnification against such costs and expenses. The
indemnification provided for in this Section 7(a) shall be in addition to, and not in diminution
of, any indemnification to which the Executive may be entitled pursuant any other Agreement
between him and the Company and, if this Agreement shall conflict with any others such agreement,
then the provisions that provide the Executive with the greater rights to indemnification shall
control.

     (b) Directors and Officers Liability Insurance. On or before the effective date of the
IPO, the Company (which, for these purposes, shall include any successor company), shall obtain and
maintain in effect during the Employment Period and thereafter for the statute of limitations
applicable to any claim that could be made against the Executive for actions or failure to act
during the Employment Period a policy of directors’ and officers’ liability insurance providing
coverage to Executive to the extent that it provides such coverage for any other senior executive
officer or director.

     8. Restrictive Covenants.

     (a) Obligations of the Parties. In the event that the Executive’s employment with the
Company is terminated for any reason (would this still applied if fired for cause?) (the effective
date of such termination being referred to as the “Termination Date ”), the Executive and
the Company shall negotiate in good faith the terms and conditions under which the Executive may
seek future employment. If a good faith agreement thereon cannot be reached, the terms of this
Section 8 shall govern. In any event,

          i. For up to a 4 month period after the Termination Date, Executive will cooperate with and
assist the Company to make a smooth transition in management and, if requested by the Company, will
be available to consult during regular business hours at mutually agreed upon times.

          ii. After the Termination Date, Executive will provide such information as the Company may
reasonably request with respect to any matter that relates to the Company or its business in which
the Executive was involved while employed by Company.

          iii. After the Termination Date, Executive will assist and cooperate with Company in
connection with the defense or prosecution of any claim that may be made by or against the Company
or any affiliate that relates to any matter in which Executive was involved or as to which
Executive has knowledge, including providing testimony in any proceeding before any arbitral,
administrative, judicial, legislative or other body or agency.

          iv. Executive shall be entitled to reimbursement for all properly documented expenses incurred
in connection with rendering services under this Section,

 

 

including, but not limited to, reimbursement for all reasonable travel, lodging, meal expenses, and
legal fees, and Executive shall be entitled to a per diem amount for his services equal to 1.5
times his then most recent annualized Base Salary under this Agreement, divided by 240 (business
days).

     (b) Non-Compete Covenant. Subject to 8(a) herein, the Executive covenants and agrees
that for the period of twenty-four (24) months from the date the Executive is no longer an employee
of the Company (the “Non-Compete Period”) for any reason other than because of a
termination by the Executive for “good reason” or a termination by the Company without cause, the
Executive will not, directly or indirectly, compete with the Company by carrying on anywhere in the
United States of America (the “Territory”) a line of business substantially similar to the
business and activities of the Company as conducted at the time of termination (the
“Business”). All of the foregoing of this Section 8(b) shall be qualified by Section 6(c)
of this Agreement. For the avoidance of doubt, if there has been a Change of Control, the term
“Business” shall not include the business of the acquiring entity involved in such Change of
Control, except to the extent that the business of such entity is the same or substantially the
same business as that conducted by the Company immediately prior to such Change of Control.
Executive shall continue to be bound by the restrictions and obligations arising under this Section
8 for the duration of the Non-Compete Period, notwithstanding the fact that such Non-Compete Period
shall extend beyond the Term of this Agreement.

     (c) Definition of Compete. For purposes of this Agreement, the term
“compete” shall mean (a) calling on, soliciting or taking away, as a client or customer any
individual, partnership, corporation or association that was a client or customer of the Company
during the 12-calendar month period immediately preceding any such act for the purpose of competing
with the Company; (b) hiring, soliciting, taking away or attempting to hire, solicit or take away
any employee of the Company either on behalf of himself or any other person or entity for the
purpose of competing with the Company; or (c) for the period of this Agreement, entering into or
attempting to enter into any business offering goods and services which are substantially similar
to or competing in any way with the goods and services which are then being offered by the Company.

     (d) Direct or Indirect Competition. For purposes of this Agreement, the words
“directly or indirectly” as they modify the word “compete” shall mean: (a) acting as an agent,
representative, consultant, officer, director, independent contractor or employee of any entity or
enterprise, which is competing (as defined in Section 2, above) with the Business; (b)
participating in any such competing entity or enterprise, or the Affiliate of such entity or
enterprise, as an owner, partner, limited partner, joint venturer, creditor or stockholder (except
as a stockholder holding less than a five percent interest in a corporation whose shares are
actively traded on a regional or a national securities exchanged or in the over-the-counter
market); or (c) communicating to any such competing entity or enterprise the names or addresses or
any other information concerning any past, present or identified prospective client or customer of
the Company or any entity having title to the goodwill of the Company with respect to the
Business.

 

 

     (e) Confidential Data. For purposes of this Agreement, “Trade Secrets” shall
mean any scientific or technical information, design, process, procedure, formula or improvement,
or any portion or phase thereof, whether or not patentable, that is owned by, or that has, at the
time of determination of its status, been used by the Company and that is not generally known to
competitors of the Company, and information concerning proposed new products, software and
marketing processes, market feasibility studies, and proposed or existing marketing techniques or
plans relating to the Business that are not generally known to competitors of the Company. The term
“Confidential Information” shall mean any data or information, other than Trade Secrets, that is
owned by, or that has, at the time of termination of its status, been used by the Company relating
to the Business and is not generally known to competitors of the Company, including, but not
limited to, Proprietary Customer Information (as defined below), information relating to the
Business, the identity of suppliers, customers, subscribers, advertisers, sales methodology,
software and information about the personnel of the Company. The term “Proprietary Customer
Information” shall mean all information concerning the identity and purchasing habits of customers
of the Company with respect to the Business to the extent that such information is a valuable
component of the Business and is not generally ascertainable by parties unaffiliated with the
Company. The terms Trade Secrets, Confidential Information and Proprietary Customer Information are
hereinafter sometimes collectively referred to as “Confidential Data.”

     The Executive agrees that, during the period set forth in 8(b), above, and thereafter for so
long as such information remains Confidential Data, he will keep confidential and not directly or
indirectly divulge, furnish, make accessible to anyone or appropriate for his own use any
Confidential Information, and that at no time will he or it divulge, furnish and make accessible to
anyone or appropriate for his own use any Trade Secrets. Executive further acknowledges and agrees
that the Company has a legitimate interest in protecting Proprietary Customer Information from
misappropriation or diversion by Executive or any competitor. Executive hereby acknowledges and
agrees that the prohibitions against disclosure of Confidential Data recited herein are in addition
to, and not in lieu of, any rights or remedies which the Company may have available pursuant to the
laws of any jurisdiction or at common law to prevent the disclosure of trade secrets and other
confidential proprietary data, and the enforcement by the Company of their rights and remedies
pursuant to this Agreement shall not be construed as a waiver of any other rights or available
remedies which it may possess in law or equity absent this Agreement.

     (f) Reasonableness of Restrictions. Executive recognizes that the territorial and time
limitations set forth in Section 8(b), above, are reasonable, not burdensome and are properly
required by law for the adequate protection of the Company, and in the event that such territorial
or time limitations are deemed to be unreasonable by a court of competent jurisdiction, then
Executive agrees and submits to the reduction of either said territorial or time limitation, or
both, to such an area or period as said court shall deem reasonable.

 

 

     (g) Injunctive Relief. Executive acknowledges that Executive’s expertise in the
Business is of a special, unique, unusual, extraordinary and intellectual character, which gives
said expertise a peculiar value, and that a breach of the provisions of this Agreement cannot be
reasonably or adequately compensated in damages in an action at law and that such breach will cause
the Company irreparable injury and damage. Executive further acknowledges that Executive possesses
unique skills, knowledge and ability and that competition in violation of this Agreement would be
extremely detrimental to the Company. By reason thereof, Executive agrees that the Company shall be
entitled, in addition to any other remedies they may have under this Agreement or otherwise, to
temporary, preliminary and/or permanent injunctive and other equitable relief to prevent or curtail
any breach of this Agreement, without proof of actual damages that have been or may be caused to
the Company by such breach or threatened breach; provided, however, that no specification in this
Agreement of a specific legal or equitable remedy shall be construed as a waiver or prohibition
against the pursuing of other legal or equitable remedies in the event of a breach.

     (h) Meaning of “Company”. For purposes of this Section 8, the term
“Company” shall mean the Company and/or any present or future subsidiary, parent or
affiliate.

     9. Notices.

          All notices, requests and other communications pursuant to this
Agreement shall be in writing and shall be deemed to have been duly given, if delivered in person
or by courier, telegraphed, telexed or by facsimile transmission or sent by express, registered
or certified mail, postage prepaid, addressed as follows:

If to the Executive:

Paul Travers

91 Boughton Hill Road

Honeoye Falls, New York 14472

If to the Company:

Icuiti Corporation

75 Town Centre Drive

Rochester, New York, 14623

Attn: Chief Financial Officer

     Either party may, by written notice to the other, change the address to which notices
to such party are to be delivered or mailed.

     10. Arbitration.

 

 

     Except as specifically provided herein, any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration, conducted before a
single arbitrator in the State of New York, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any
court having jurisdiction. The Company shall bear the expense of any such arbitration proceeding
and shall reimburse the Executive for all of his reasonable costs and expenses relating to such
arbitration proceeding, including, without limitation, reasonable attorneys’ fees and expenses;
provided, however, that if the Company shall prevail in any such proceeding then the Executive
shall reimbursement for all expenses paid by the Company on his behalf in connection with such
proceeding..

     11. Waiver of Breach.

     Any waiver of any breach of this Agreement shall not be construed to be a continuing waiver or
consent to any subsequent breach on the part either of the Executive or of the Company.

     12. Non-Assignment; Successors.

     Neither party hereto may assign his or its rights or delegate his or its duties under this
Agreement without the prior written consent of the other party; provided, however, that the parties
hereto hereby agree in advance that (i) this Agreement may be assigned to, and shall inure to the
benefit of and be binding upon, the successors and assigns of the Company upon any sale of all or
substantially all of the Company’s assets, or upon any merger, consolidation or reorganization of
the Company with or into any other corporation, all as though such successors and assigns of the
Company and their respective successors and assigns were the Company; and (ii) this Agreement shall
inure to the benefit of and be binding upon the heirs, assigns or designees of the Executive to the
extent of any payments which may become due to them hereunder. For avoidance of doubt, all payments
due or to become due from the Company to Executive pursuant to the terms of this Agreement shall
continue to be made after the death of the Executive. As used in this Agreement, the term “Company”
shall be deemed to refer to any such successor or assign of the Company referred to in the
preceding sentence.

     13. Severability.

     To the extent any provision of this Agreement or portion thereof shall be invalid or
unenforceable, it shall be considered deleted therefrom and the remainder of such provision and
of this Agreement shall be unaffected and shall continue in full force and effect.

     14. Captions. Captions and headings in this Agreement are for convenience of reference
only and do not constitute a part of the Agreement.

     15. Counterparts.

 

 

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

     16. Governing Law.

     This Agreement shall be construed, interpreted and enforced in accordance with the laws of
the State of New York, without giving effect to the choice of law principles thereof.

     17. Survivability.

     Any covenant or agreement of the parties which by its term contemplates performance after the
Expiration of this Agreement shall survive and remain in full force and effect notwithstanding the
fact that the Employment Period has lapsed or that this Agreement or Executive’s employment
hereunder, has been terminated.

     18. Entire Agreement.

     This Agreement constitutes the entire agreement by the Company and the Executive with respect
to the subject matter hereof and except as specifically provided herein, supersedes any and all
prior agreements or understandings between the Executive and the Company with respect to the
subject matter hereof, whether written or oral. This Agreement may be amended or modified only by
a written instrument executed by the Executive and the Company.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

	 	 	 	 	 	 	 
	 	 	EXECUTIVE:	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Paul Travers	 	 
	 	 	 	 	 
	 	 	Paul Travers	 	 
	 
	 	 	 	 	 	 
	 	 	ICUITI CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Grant Russell
 

	 	 
	 

	 	Name:
	 	Grant Russell	 	 
	 

	 	Title:
	 	Executive Vice President and	 	 
	 

	 	 	 	Chief Financial Officer

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