Document:

Ex-10.15 Moody Executive Employment Agreement

 

EXHIBIT 10.15

EXECUTIVE EMPLOYMENT AGREEMENT

     This Executive Employment Agreement effective as of June 7, 2007 is between AuthenTec, Inc., a
Delaware corporation (the “Company”), and F. Scott Moody (“Player”).

	1.	 	Employment. The Company hereby continues to employ Player and Player hereby accepts
continued employment with the Company, upon the terms and conditions hereinafter set forth:

	 	(a)	 	Position. Player will continue to serve as Chief Executive Officer of
the Company, reporting to the Board of Directors of the Company (the “Board”). In such
capacity, Player will be ultimately responsible for setting the policies and directions
of the Company and will have full strategic planning and profit and loss responsibility
for the Company’s world-wide operations, subject to such direction from the Board as is
common for public companies. During his service hereunder, Player will at all times
provide his full working time and best efforts to the performance of his obligations
and duties hereunder; provided, however, that nothing herein contained will be deemed
to prevent or limit the right of Player to (i) invest his funds in the capital stock or
other securities of any corporation except a competitor in the biometrics industry
(other than as permitted in Section 2(c)(iii)(A) hereof) or (ii) serve on the boards of
directors or advisory committees of charitable organizations, trade organizations or
other companies that are not competitors in the biometrics industry and that are
disclosed to the Board. Player shall provide his services at the Company’s corporate
headquarters in Melbourne, Florida, subject to an obligation of reasonable travel for
business.
	 
	 	(b)	 	Base Compensation. During the term of his employment hereunder, Player
will be paid an annual base salary at the rate of Two Hundred and Eighty Thousand
Dollars ($280,000.00) (as adjusted upwards from time to time, “Base Compensation”),
payable in accordance with the Company’s normal payroll cycles (but no less frequently
than monthly). At least annually, the Board will review and, in its discretion, may
increase Player’s Base Compensation.
	 
	 	(c)	 	Bonus Plan; Annual Bonus. No later than the first Board meeting of each
calendar year during the term hereof, the Compensation Committee of the Board shall
convey to Player a bonus plan for such fiscal year and each quarter thereof (a “Bonus
Plan”). Player’s “Target Bonus Opportunity” under the Bonus Plan, assuming
satisfaction of the pre-determined performance standards, will be a minimum of fifty
percent (50%) of Base Compensation, but he may earn a higher bonus based on higher
performance as determined by the Compensation Committee.

 

 

     (i) Following the publication to the Board of the results for each of the first
three fiscal quarters in the Company’s fiscal year, the Board shall determine
whether Player has achieved the milestones set forth in the Bonus Plan for such
quarter (the “Quarterly Milestones”). In the event that Player has achieved the
Quarterly Milestones, the Company shall make a payment with respect to an amount up
to twelve and one-half percent (12.5%) of the Target Bonus Opportunity (the “Earned
Quarterly Bonus”). Any Earned Quarterly Bonus shall be paid to Player not later
than five (5) days following the date of the filing of the quarterly report on Form
10-Q related to such quarter.

     (ii) Following the publication to the Board of the results for the fourth
fiscal quarter in the Company’s fiscal year and for the completed fiscal year, the
Board shall determine whether Player has achieved the milestones set forth in the
Bonus Plan for such quarter and year (the “Annual Milestones”). In the event that
Player has achieved the Annual Milestones, the Company shall make a payment with
respect to an amount up to the Target Bonus Opportunity less the aggregate Earned
Quarterly Bonuses (the “Earned Annual Bonus”). Any Earned Annual Bonus shall be
paid to Player not later than the earlier of (i) fifteen (15) days following the
date of the filing of the annual report on Form 10-K related to such fiscal year or
(ii) the March 15 that next follows such fiscal year.

	 	(d)	 	Other Benefits.

	 	(i)	 	Insurance and other Benefits. Player shall be entitled
to participate in, and shall receive the maximum benefits available under the
Company’s insurance programs (including health and life insurance), and any
ERISA or other benefit plans, as the same may be adopted and/or amended from
time to time, and shall receive all other fringe benefits that are provided by
the Company to other senior players; provided that the Company will provide a
term life insurance policy covering Player and providing for death benefits to
Player’s named beneficiaries in an aggregate amount of at least 3.5 times
Player’s Base Compensation.
	 
	 	(ii)	 	Vacation. Player shall be entitled to an annual
vacation of such duration as may be determined by the Board but not less than
four weeks per year. Unused vacation shall be accrued (up to the Company’s
general policy on accruals) and paid out when Player’s employment ends.
	 
	 	(iii)	 	Reimbursement of Expenses. The Company shall reimburse
Player for all reasonable travel, entertainment and other expenses incurred or
paid by Player in connection with or related to the performance of his duties
or responsibilities under this Agreement (including reasonable home office
equipment, supplies, and communication expenses directly related to Player’s
performance of his duties), provided that Player submits to the Company
substantiation of such expenses sufficient to satisfy the

-2-

 

	 	 	 	Company’s expense reimbursement policies and the record keeping guidelines
promulgated from time to time by the Internal Revenue Service.
	 
	 	(iv)	 	Membership and Service Fees. The Company shall pay the
professional legal and financial advisory fees and costs incurred by Player up
to $7,500 on an annual basis. The Company will also pay for Player’s annual
membership in an airline travel club. The amount of expenses eligible for
reimbursement, or in-kind benefits provided, during Player’s taxable year will
not affect the amount of expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other taxable year. The reimbursement will be
made on or before the last day of Player’s taxable year following the taxable
year in which the expense was incurred.
	 
	 	(v)	 	Car Allowance. The Company shall pay a car allowance,
the cost of which will be approved by the Board annually, but never to be less
than $600 per month, or, if more, the standard allowance for the Company’s
senior sales representatives.
	 
	 	(vi)	 	Parachute Tax Grossup. The Company shall provide the
benefits in Annex A hereto, without regard to whether this Agreement has
terminated.

	2.	 	Term of Employment; Termination.

	 	(a)	 	Term. Subject to termination under Section 2(b), the term of Player’s
employment under this Agreement shall commence on the day before the effective date of
the Company’s registration statement on Form S-1 for the initial public offering of its
common stock (“Common Stock”) and terminate three (3) years from the date thereof;
provided that this Agreement shall be automatically extended for successive one year
terms upon the expiration of the initial or any renewal term unless terminated by the
Company or Player upon not less than nine (9) months’ prior written notice to the other
party. The Company’s notice of nonrenewal of the term under this Section 2(a) will be
a termination Without Cause for purposes of Section 2(b)(ii)(C) of this Agreement, with
payments and benefits made thereunder even if after the end of the term.
	 
	 	(b)	 	Termination; Post-Termination Matters.

	 	(i)	 	Termination.

	 	(A)	 	Termination by the Company for Player’s
Death or Disability. In the event Player becomes permanently
disabled during employment with the Company, the Company may terminate
this Agreement by giving thirty (30) days’ notice to Player of its
intent to terminate, and unless Player resumes performance of the
duties

-3-

 

	 	 	 	set forth in Section 1(a) within five (5) days of the date of the
notice and continues performance for the remainder of the notice
period, this Agreement shall terminate at the end of the thirty (30)
day period. “Permanently disabled” for the purposes of this
Agreement means if Player (I) is unable to work for 120 consecutive
days within a one year period not including any period specifically
excepted from this provision by the Board, or (II) has a
permanent or long-term physical or mental impairment, disease, or
loss, or combination thereof, that substantially precludes him from
engaging in useful occupations within his competence. For purposes
hereof, “permanent” means that the condition is or appears likely to
continue to affect Player for the foreseeable future. In the event
of any dispute under this Section 2(b)(i)(A), Player shall submit to
a physical examination by a licensed physician mutually satisfactory
to the Company and Player, the cost of such examination to be paid by
the Company, and the determination of such physical shall be
determinative.
	 
	 	(B)	 	Voluntary Termination By Player.
Player will give the Company at least thirty (30) days’ prior written
notice as to the date of any voluntary termination by Player,
specifying therein the date of termination; any failure of Player to
provide such timely notice will result in a forfeiture, for the year in
which the termination occurs, of any bonus which Player otherwise had
accrued as at the date of his voluntary termination, but not of any
prior year bonus earned but as then unpaid.
	 
	 	(C)	 	Termination By the Company For Cause.
The Company may terminate Player’s employment hereunder at any time for
Cause. The Company will give Player written notice of any termination
for Cause, specifying therein in reasonable detail the basis for such
termination for Cause and the date of such termination, but may give
such written notice at any time.
	 
	 	(D)	 	Termination By the Company Without
Cause. The Company may terminate Player’s employment at any time
Without Cause.
	 
	 	(E)	 	Constructive Termination of Player.
Player may terminate his employment upon written notice to the Company
of one of the following events, specifying such event in detail within
ninety (90) days after they occur (1) Player’s compensation and
benefits are materially reduced below those in effect immediately prior
to the effective date of such notice, (2) Player’s title and/or role
are changed to a title/role outside the title/role of Chief Executive
Officer and Chairman of the Board, (3) Player’s removal as or

-4-

 

	 	 	 	failure to be elected or re-elected to the Board of Directors, (4)
the Company’s relocation of its principal offices by more than fifty
(50) miles from Melbourne, Florida, or (5) any material breach by the
Company of any of its obligations under this Agreement, and the
Company shall have not reversed in full such event within thirty (30)
days of such notice (a “Constructive Termination Event”), unless
prior to such time Player has otherwise agreed in writing.

	 	(ii)	 	Severance.

	 	(A)	 	Voluntary Termination by Player or
Termination for Cause. If Player’s employment is terminated
pursuant to Sections 2(b)(i)(B) or (C), the Company shall pay Player
his Base Compensation through his actual day of termination and any
amounts earned, accrued or owing to the Player but not yet paid under
Section 1(c) and (d) above (collectively with the Base Compensation,
the “Accrued Obligations”).
	 
	 	(B)	 	Disability or Death. If the Company
terminates Player’s employment pursuant to Section 2(b)(i)(A), the
Company shall pay Player or his heirs the Accrued Obligations and an
amount equal to twelve (12) months (not including accrued vacation) of
Player’s Base Compensation, payable in accordance with the Company’s
payroll practices (except in instances in which the disability would
qualify Player for long-term disability benefits). Player and his
family or heirs, as applicable, shall receive the benefits provided
under Section 2(b)(ii)(C)(III) for the period provided therein as
though his employment had ended on a Termination Without Cause.
	 
	 	(C)	 	Termination Without Cause or Constructive
Termination. If the Company terminates Player’s employment Without
Cause pursuant to Section 2(b)(i)(D) or Player terminates his
employment pursuant to Section 2(b)(i)(E), upon the receipt by the
Company of the release from the Player as set forth in Annex B, the
Company shall provide Player with the following:

	 	(I)	 	The Accrued Obligations;
	 
	 	(II)	 	Payment of an amount equal to 1.5
multiplied by the sum of (A) Player’s then-applicable Base
Compensation (or, if greater, Player’s highest Base Compensation
during the preceding calendar year) and (B) the greater of (i)
the Target Bonus Opportunity projected for the year in which

-5-

 

	 	 	 	the termination occurs (assuming satisfaction of all
Quarterly and Annual Milestones) and (ii) the actual bonus
paid for the preceding fiscal year, with payment in a single
lump sum within ten (10) days after employment terminates;
	 
	 	(III)	 	Payment of all costs associated
with COBRA health continuation benefits for Player and his
family for a period of up to eighteen (18) months, payable
monthly following the date of termination of Player’s employment
while Player remains eligible for COBRA coverage; and a
continuation of any other insurance and fringe benefits
described herein for an eighteen (18) month period at Company
expense, to the extent such continuation is not prohibited by
the terms of an insurance contract or third party agreement (or,
if so prohibited, an amount in cash reasonably determined to
suffice to permit Player to purchase replacement coverage at
comparable levels, grossed up as necessary for any differential
tax effect);
	 
	 	(IV)	 	A pro-rata payment of the amount
Player would have received as a bonus payable under the Bonus
Plan, then in effect, payable when determined in accordance with
the terms of the Bonus Plan and without regard to any continuous
employment requirement in the Bonus Plan and on the assumption
that all Bonus criteria had been fully achieved for the quarter
in which his employment ends and with the pro-ration based on
the portion of the fiscal year for which he was employed,
reduced by any payments actually received before employment ends
with respect to the Quarterly Milestones;
	 
	 	(V)	 	Subject to Section 2(b)(ii)(d),
vesting and exercisability of all outstanding unvested
restricted stock, stock options, stock appreciation rights,
tandem options, tandem stock appreciation rights, performance
            shares, performance units, or any other equity compensation held
by Player to the extent such vesting or exercisability would
have occurred by the eighteen (18) month anniversary of the date
of termination, with any options or exercisable awards having or
being amended to have a minimum exercise period of one (1) year
from the date of termination, subject to any equity plan
provisions relating to a change in control or similar event and
to the initial ten (10) year term of the awards; provided,
further, that, if necessary, such one-year

-6-

 

	 	 	 	exercise period shall be extended if permitted by Section
409A of the Internal Revenue Code of 1986, as amended
(“Section 409A” of the “Code”) until the exercise of the
options or other exercisable awards would cease to violate
any federal or state securities laws (but not beyond the
initial ten (10) year term of the awards); and
	 
	 	(VI)	 	The assignment, at Player’s
option, of insurance policies insuring Player, provided that
Player shall thereafter be responsible for any premium payments
and transfer of any vested funds or other benefits under any of
the Company’s ERISA or other benefit plans.

	 	(D)	 	Change in Control. If a Change in
Control occurs while Player is employed, he will receive additional
vesting credit with respect to any equity compensation as follows:

	 	(I)	 	If Player’s employment ends on a
termination without Cause or for Constructive Termination under
Sections 2(b)(i)(D) or (E) before the six (6) month anniversary
of the effective date of a Change in Control, his service for
vesting and exercisability purposes with respect to equity
compensation shall be increased to equal the service that would
have accrued if he had worked until the second anniversary of
the Change in Control (such that awards that would have vested
or become exercisable within the twenty-four (24) months
following the Change in Control shall instead become immediately
vested and exercisable and the remainder of any vesting or
exercise schedule shall be moved two years earlier). This
vesting shall be in lieu of the vesting set forth in Section
2(b)(ii)(C)(V).
	 
	 	(II)	 	If Player’s employment ends under
Sections 2(b)(i)(D) or (E) on or after the six (6) month
anniversary of the effective date of a Change in Control but
before the twelve (12) month anniversary of a Change in Control,
he will receive the acceleration under Section 2(b)(ii)(C)(V)
but no additional acceleration under this Section 2(b)(ii)(D).
	 
	 	(III)	 	If Player remains employed until
the twelve (12) month anniversary of the effective date of the
Change in Control, upon the date of such anniversary, he will
receive credit while serving until such point and credit at that
anniversary for an additional twelve (12) months of service with
respect to any equity compensation (such that awards that would

-7-

 

	 	 	 	have vested or become exercisable within the twelve (12)
months following the first anniversary shall instead become
immediately vested and exercisable and the remainder of any
vesting or exercise schedule shall be moved one year
earlier), even though his employment is continuing. This
additional credit under Section 2(b)(ii)(D)(III) is in
addition to and not in replacement of any benefits under
Section 2(b)(ii)(C) on a termination Without Cause or a
Constructive Termination that may occur after this
accelerated vesting.

	 	(iii)	 	Definitions. As used in this Agreement.

	 	(A)	 	A “voluntary termination” of employment by
Player, means any termination at the will of Player, other than by
reason of a Constructive Termination Event.
	 
	 	(B)	 	“Cause” means a good faith finding by the Board
of: (i) Player’s willful refusal to render services to the Company in
accordance with his material obligations under this Agreement or other
lawful and commercially reasonable directions of the Board; (ii) the
commission by Player of an act of fraud or embezzlement against the
Company; (iii) Player’s conviction of a felony; (iv) intentional
material damage to the tangible or intangible property of the Company
by Player; or (v) drug or alcohol abuse materially adversely impacting
Player’s ability to perform his duties. Notwithstanding the foregoing,
Player may not be terminated for Cause unless and until the Board has
given him reasonable written notice of its intended actions and
specifically described the alleged events, activities or omissions
giving rise thereto and with respect to those events, activities or
omissions for which a cure is possible, thirty (30) days to cure such
breach; and provided further that for purposes of determining whether
any such Cause is present, no act or failure to act by Player shall be
considered “willful” if done or omitted to be done by Player in good
faith and in the reasonable belief that such act or omission was in the
best interest of the Company and/or required by applicable law.
	 
	 	(C)	 	A termination “Without Cause” means a
termination at the will of the Company other than for (i) Cause or (ii)
Disability.
	 
	 	(D)	 	“Change in Control” means

	 	(I)	 	an acquisition subsequent to the
date hereof by any person, entity or group (within the meaning
of Section 13(d)(3) or

-8-

 

	 	 	 	14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”), of beneficial ownership
(within the meaning of Rule 13d-3 issued under the Exchange
Act) of at least thirty percent (30%) of either (A) the then
outstanding shares of the Company’s Common Stock or (B) the
combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors; excluding, however, the following: (1)
any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion
privilege unless the security being so converted was itself
acquired directly from the Company, (2) any acquisition by
the Company and (3) any acquisition by an Player benefit plan
(or related trust) sponsored or maintained by the Company;
	 
	 	(II)	 	The date a majority of members of
the Board is replaced during any twelve (12) month period by
directors whose appointment or election is not endorsed by a
majority of the members of the Board before the date of the
appointment or election;
	 
	 	(III)	 	a merger, consolidation,
reorganization or similar corporate transaction, whether or not
the Company is the surviving corporation in such transaction, in
which outstanding shares of Common Stock 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 eighty percent (80%) of
the voting power of all capital stock thereof outstanding
immediately after the merger or consolidation or (B) other
securities (of either the Company or another company) or cash or
other property;
	 
	 	(V)	 	(A) the sale or other
disposition of all or substantially all of the assets of the
Company or (B) a complete liquidation or dissolution of the
Company;

	 	 	 	provided that the Change in Control qualifies as such under Section
409A.

	 	(c)	 	Post-Termination Matters.

	 	(i)	 	Return of Materials. Upon any termination of Player’s
employment, Player will promptly return to the Company all personal property of
the

-9-

 

	 	 	 	Company and all copies and originals of documents and other tangible
impressions, in any medium, containing confidential or proprietary
information of the Company.
	 
	 	(ii)	 	Expenses. The Company will pay to Player all expenses
permitted to be reimbursed hereunder within ten (10) days after appropriate
documentation has been submitted by Player.
	 
	 	(iii)	 	Noncompete; Nonsolicitation. During the term hereof
and for the period specifically indicated in subsections (A), (B), (C) and (D)
below, following termination of Player’s employment for any reason, Player will
not, directly or indirectly, on behalf of himself or on behalf of anyone else:

	 	(A)	 	for a period of twelve (12) months, as an
individual proprietor, partner, stockholder, officer, Player, director,
joint venturer, investor, lender, or in any other capacity whatsoever
(other than as the holder of not more than five percent (5%) of the
total outstanding stock of a publicly-held company), engage in any
business activity that directly competes with the kind or type of
products or services of developed or being developed, produced,
marketed, distributed, planned, furnished or sold by the Company at the
time of the Player’s termination of employment with the Company;
	 
	 	(B)	 	for a period of twelve (12) months, call upon
any of the customers of the Company who are such at the time of
Player’s termination of employment hereunder, for the purpose of
soliciting or providing any product or service the same as that
provided by the Company or for the purpose of providing customers to
any person or entity conducting a biometric sensors business in direct
competition with the business of the Company, as conducted at the date
of Player’s termination (a “Competitive Business”); and
	 
	 	(C)	 	for a period of twelve (12) months, communicate
with any of the other Players, consultants or representatives of the
Company for the purpose of inducing such Players, consultants or
representatives to discontinue their relationship with the Company or
to establish a relationship with any Competitive Business, provided
that this restriction is not intended to apply to any general
solicitation or advertisement for employment that is not specifically
directed to Players, consultants or representatives employed or
retained by the Company.

	 	(iv)	 	Reasonableness of Covenants. Player covenants and
agrees with the Company that, if Player violates any of his covenants or
agreements under

-10-

 

	 	 	 	Section 2(c)(iii), the Company will be entitled, subject to any limitations
of Florida law, to any injunctive relief or other rights or remedies that
the Company is or may be entitled at law or in equity or under this
Agreement. In the event that, notwithstanding the foregoing, any part of
the covenants set forth in Section 2(c)(iii) are held by a court of
competent jurisdiction to be invalid or unenforceable, the remaining parts
thereof will nevertheless continue to be valid and enforceable as though the
invalid or unenforceable parts had not been included therein. In the event
that any provision of Section 2(c)(iii) is held by a court of competent
jurisdiction to exceed the restrictions that such court deems reasonable and
enforceable, such restrictions will be deemed to become and thereafter be
the maximum restrictions that such court deems reasonable and enforceable.
Section 2(c)(iii) is intended solely to preclude Player from working in and
investing in the biometric sensors industry during the period provided in
Section 2(c)(iii).

	 	(d)	 	No Mitigation; No Offset. If Player’s employment terminates for any
reason, Player shall be under no obligation to seek other employment and there shall be
no offset against amounts due Player under this Agreement or any other compensatory
plan or arrangement applicable to Player on account of any compensation attributable to
any subsequent employment or other service providing relationship that he may have or
may obtain.

	3.	 	Life Insurance. The Company may, at its election and expense, obtain and maintain a
term life insurance policy on the life of Player, with the Company named as beneficiary of
such policy.
	 
	4.	 	Proprietary Information and Inventions. Player will execute and deliver such
customary confidentiality and invention assignment agreements during the term hereof as the
Company requests of its Players. Player represents and warrants to the Company that Player
will not use in the course of his employment with Company, any proprietary rights or
intellectual property rights that he does not lawfully possess.
	 
	5.	 	Board of Directors. For so long as Player is serving as an employee of the Company
hereunder in the role of Chief Executive Officer, Chief Operating Officer or President, the
Nominating Committee of the Board shall use its best efforts to nominate Player for election
as a member of the Board at the Company’s annual meeting of stockholders.
	 
	6.	 	Indemnification. The Company agrees that if Player is made a party, or is threatened
to be made a party or witness, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), by reason of the fact that he is or was a
director, officer or Player of the Company or is or was serving at the request of the Company
as a director, officer, member, Player or agent of another corporation, partnership, joint
venture, trust or other enterprise, including service with respect to Player benefit plans,
whether or not the basis of such Proceeding is Player’s alleged action in an

-11-

 

	   	 	official capacity while serving as a director, officer, member, Player or agent, Player shall
be indemnified and held harmless by the Company to the fullest extent legally permitted or
authorized by the Company’s certificate of incorporation or bylaws or resolutions of the
Board, or if greater, by the laws of the State of Delaware, against all costs, expenses,
liabilities and losses (including without limitation attorneys’ fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid or to be paid in settlement) incurred or suffered
by Player in connection therewith, and such indemnification shall continue as to Player even
if he has ceased to be a director, officer, member, Player or agent of the Company or other
entity and shall inure to the benefit of Player’s heirs, successors, personal
representatives, assigns, executors and administrators. The Company shall advance to Player
all reasonable costs and expenses incurred by him in connection with a Proceeding within ten
(10) days after receipt by the Company of a written request for such advance. Such request
shall include an undertaking by Player to repay the amount of such advance if it shall
ultimately be determined that he is not entitled to be indemnified against such costs and
expenses. The Company further agrees to establish and maintain a directors and officers’
liability insurance policy covering, without limitation, Player and remaining in place
through all applicable statutes of limitations. The rights to indemnification shall survive
any termination of this Agreement.
	 
	7.	 	Miscellaneous.

	 	(a)	 	Governing Law. This Agreement will be subject to and governed by the
laws of the State of Florida, without regard to its conflict of laws provisions.
	 
	 	(b)	 	No Waiver; Amendment. Failure to insist upon strict compliance with any
provision hereof will not be deemed a waiver of such provision of any other provision
hereof. This Agreement may not be modified except by a written agreement executed by
the parties hereto.
	 
	 	(c)	 	Severability; Context. The provisions of this Agreement will be deemed
severable, and the invalidity or unenforceability of any one or more of the provisions
hereof will not affect the validity or enforceability of the other provisions hereof.
Whenever required by the context, the singular number will include the plural and the
masculine or neuter gender will include all genders.
	 
	 	(d)	 	Survival and Priority. Provisions herein which by their terms so provide
will survive any termination of this Agreement or of termination of Player’s employment
by the Company. Each of the parties hereto acknowledges and agrees that this Agreement
supersedes any agreements entered into before the date hereof to which the Company and
Player are parties or relating to the subject matter contained herein, other than equity
compensation plans and arrangements, the indemnification agreements or similar
provisions running in his favor (except to the extent that the terms herein are more
favorable to him) and the Employee Proprietary Information and Inventions Agreement
dated as of June 7, 2007 between Player and the Company.

-12-

 

	 	(e)	 	Equitable Relief; Arbitration.

	 	(i)	 	In the event of a breach or threatened breach by Player of the
provisions of this Agreement, the Company will, in addition to any other rights
and remedies available to it, at law or otherwise, be entitled to an injunction
to be issued by any court of competent jurisdiction enjoining and restraining
Player from committing any present violation or future violation of this
Agreement.
	 
	 	(ii)	 	The parties agree that any controversy, claim or dispute
arising out of or relation to this Agreement, or the breach thereof, except as
discussed herein or arising out of or relating to the employment of the Player,
or the termination thereof, including any statutory or common law claims under
federal, state or local law, including all laws prohibiting discrimination in
the workplace, shall be resolved by arbitration in Melbourne, Florida, in
accordance with the employment dispute resolution rules of the American
Arbitration Association. The parties agree that any award rendered by the
arbitrator shall be final and binding, and that judgment upon the award may be
entered in any court having jurisdiction thereof. The parties further
acknowledge and agree that, due to the nature of the confidential information,
trade secrets, and intellectual property belonging to the Company to which
Player has or will be given access, and the likelihood of significant harm that
the Company would suffer in the event that such information was disclosed to
third parties, nothing in this Section 7(e) shall preclude the Company from
going to court to seek injunctive relief to prevent Player from violating the
obligations established in Section 2(c) of this Agreement. Each party shall
bear its own costs in any such arbitration, but the Company shall bear the
direct and indirect expenses of the arbitrator.

	 	(f)	 	No Assignment; Binding Nature. Player may not assign his rights or
obligations hereunder and any attempted assignment will be null and void. This
Agreement will be binding upon and inure to the benefit of the successors and assigns of
the Company and upon the heirs, administrators and executors of Player. Player shall be
entitled, to the extent permitted under any applicable law, to select and change a
beneficiary or beneficiaries to receive any compensation or benefit payable hereunder
following the Player’s death by giving the Company written notice thereof. In the event
of Player’s death or a judicial determination of his incompetence, reference in this
Agreement to Player shall be deemed, where appropriate, to refer to his beneficiary,
estate or other legal representative.
	 
	 	(g)	 	Compliance with Section 409A. If and to the extent any portion of any
payment, compensation or other benefit provided to Player in connection with his
employment termination is determined to constitute “nonqualified deferred

-13-

 

	 	 	 	compensation” within the meaning of Section 409A and Player is a specified employee
as defined in Section 409A(2)(B)(i), as determined by the Company in accordance with
its procedures, by which determination the Player hereby agrees that he is bound,
such portion of the payment, compensation or other benefit shall not be paid before
the day that is six (6) months plus one (1) day after the Date of Termination (the
“New Payment Date”), except as Section 409A may then permit. The aggregate of any
payments that otherwise would have been paid to Player during the period between the
Date of Termination and the New Payment Date shall be paid to Player in a lump sum
on such New Payment Date. For purposes of this Agreement, each amount to be paid or
benefit to be provided shall be construed as a separate identified payment for
purposes of Section 409A.
	 
	 	(h)	 	Attorneys’ Fees. The Company will pay Player’s attorneys’ fees and
expenses in connection with the consideration, drafting and negotiation of this
Agreement. In addition, the Company agrees that, if a dispute arises that concerns this
Agreement, any related separation agreement, or other compensation for Player and Player
is the prevailing party in the dispute, he shall be entitled to recover all of his
attorney’s fees and expenses incurred in connection with the dispute. For this purpose,
Player will be the “prevailing party” if he is successful on any significant substantive
issue in the action and achieves either a judgment in his favor or some other
affirmative recovery.
	 
	 	(i)	 	Notices. Unless otherwise herein provided, notice required or permitted
to be given to a party pursuant to the provisions of this Agreement will be in writing
and will be effective and deemed given under this Agreement on the earliest of: (i) the
date of personal delivery; (ii) the date of delivery by facsimile; or (iii) the next
business day after deposit with a nationally-recognized courier or overnight service,
including FedEx or Express Mail, for United States deliveries or three (3) business days
after such deposit for deliveries outside of the United States. All notices not
delivered personally or by facsimile will be sent with postage and other charges prepaid
and properly addressed to the party to be notified at the address as provided herein or
as set forth on the signature page of this Agreement, or at such other address as such
party may designate by ten (10) days’ advance written notice to the other party hereto.
All notices for delivery outside the United States will be sent by facsimile, or by
nationally recognized courier or overnight service, including Express Mail. Notices to
the Company by Player will be provided to the Chairman of the Compensation Committee, at
his or her address, with a copy to the Company’s general counsel at the address of the
Company.
	 
	 	(j)	 	Counterparts. This Agreement may be executed in counterparts, each of
which will be an original and both of which together will constitute one instrument.

-14-

 

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

THE COMPANY

AuthenTec, Inc.

PLAYER:

 

	 	 	 	 
	 	 
	By:  	/s/
Lawrence J. Ciaccia, Jr.
 	 
	 	Name: 	Lawrence J. Ciaccia, Jr. 	 
	 	Title: 	President 	 
	 

/s/ F. Scott Moody 

F. Scott Moody

			
	Address:	 	
 

 

-15-

 

Annex A

PARACHUTE TAX INDEMNITY

	(A)	 	If it shall be determined that any amount paid, distributed or treated as paid or
distributed by the Company to or for Player’s benefit (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or otherwise) (a
“Payment”) would be subject to the excise tax imposed by Section 4999 of the Code, or
any interest or penalties are incurred by Player with respect to such excise tax (such
excise tax, together with any such interest and penalties, being hereinafter
collectively referred to as the “Excise Tax”), then Player shall be entitled to receive
an additional payment (a “Gross-Up Payment”) in an amount such that after payment by
Player of all federal, state and local taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income taxes
(and any interest and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, Player retains an amount of the Gross- Up Payment equal to
the Excise Tax imposed upon all the Payments.
	 
	(B)	 	All determinations required to be made under this Annex A, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by a
nationally recognized accounting firm as may be designated by Player (the “Accounting
Firm”) which shall provide detailed supporting calculations both to the Company and
Player within fifteen (15) business days of the receipt of notice from Player that there
has been a Payment, or such earlier time as is requested by the Company. In the event
that the Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the change in control, Player 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 by the Company. Any Gross-Up
Payment, as determined pursuant to this Annex A, shall be paid by the Company to Player
within five days of the receipt of the Accounting Firm’s determination and shall, in any
event be made prior to the end of the Player’s taxable year next following the taxable
year in which the taxes are remitted to the taxing authority. Any determination by the
Accounting Firm shall be binding upon the Company and Player. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments
which will not have been made by the Company should have been made (“Underpayment”),
consistent with the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to this Annex A and Player thereafter is required
to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred and any such Underpayment shall be promptly paid by
the Company to or for Player’s benefit.

-16-

 

	(C)	 	Player shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of the Gross-Up
Payment. Such notification shall be given as soon as practicable but no later then ten
business days after Player is informed in writing of such claim and shall apprise the
Company of the nature of such claim and the date on which such claim is requested to be
paid. Player shall not pay such claim prior to the expiration of the thirty (30) day
period following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies Player in writing prior to the expiration of such period that it
desires to contest such claim, Player shall:

	 	(i)	 	give the Company any information reasonably requested by the
Company relating to such claim,
	 
	 	(ii)	 	take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
	 
	 	(iii)	 	cooperate with the Company in good faith in order to effectively
contest such claim, and
	 
	 	(iv)	 	permit the Company to participate in any proceeding relating to
such claim; provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold Player harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expense. Without limitation on the foregoing provisions of
this Annex A, the Company shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
Player to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and Player agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs Player to pay such
claim and sue for a refund, the Company shall advance the amount of such payment
to Player, on an interest-free basis, and shall indemnify and hold Player
harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect

-17-

 

	 	 	 	to such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for Player’s taxable year with
respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company’s control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Player shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

	(D)	 	If, after Player’s receipt of an amount advanced by the Company pursuant to this
Annex A, Player becomes entitled to receive any refund with respect to such claim,
Player shall (subject to the Company’s complying with the requirements of this Annex A)
promptly pay to the Company the amount of such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If, after Player’s receipt of an
amount advanced by the Company pursuant to this Annex A, a determination is made that
Player shall not be entitled to any refund with respect to such claim and the Company
does not notify Player in writing of its intent to contest such denial of refund prior
to the expiration of thirty (30) days after such determination, then such advance shall
be forgiven and shall not be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

-18-

 

Annex A

RELEASE

In consideration of the severance and related benefits being provided to Player and
contingent upon their payment or other satisfaction in full, Player releases the
Company of and from any and all claims, causes of action, demands, obligations,
agreements, promises, liability, damages, costs and/or fees arising out of or
relating to Player’s employment, including Player’s termination of employment. By
this paragraph, Player waives any claims that may exist against the Company and its
directors, officers, employees and agents relating to such employment. This
includes all rights and obligations under any federal, state or local laws
pertaining to employment, including, but not limited to, all employment
discrimination laws, such as the Age Discrimination in Employment Act, the Older
Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act, the Civil Rights Act of 1866, the Civil Rights Act
of 1991, the Employee Retirement Income Security Act of 1974 (“ERISA”), the National
Labor Relations Act, retaliatory discharge, breach of employment contract,
conspiracy, fraud, negligence (including negligent hiring and retention), prima
facie tort, defamation, negligent or intentional infliction of emotional distress,
implied contracts or implied covenants of good faith and fair dealing, and any and
all other federal, state and local statutes, authorities or laws (including common
law) providing a cause of action that can be the subject of a release under
applicable law. THIS IS A GENERAL RELEASE. Nothing in this release shall be
construed to waive any claims that cannot be waived as a matter of law or to waive
any right to file, cooperate or participate in any proceeding before the Equal
Employment Opportunity Commission or a state fair employment practices agency or
other administrative body or to waive any claims in his capacity as a stockholder in
the Company. This general release does not waive any rights or claims that may
arise after the date the waiver is executed. Furthermore, nothing in this paragraph
will affect the ability of either party to enforce rights or entitlements
specifically provided for under Section 2(b)(ii)(C) of the Executive Employment
Agreement dated June 7, 2007, between the Company and the Player.

The Company agrees that Player is not releasing any claims he may have for
indemnification under state or other law or the charter, articles, or by-laws of the
Company and its affiliated companies, or under any insurance policy providing
directors’ and officers’ coverage for any lawsuit or claim relating to the period
when the Player was a director or officer of the Company or any affiliated company.

-19-EX-4.2

 

Exhibit 4.2

OLYMPIC STEEL, INC

AMENDED AND RESTATED CODE OF REGULATIONS

Adopted: January 6, 1994

Amended and Restated: April 27, 2007

ARTICLE I

SHAREHOLDERS

     Section 1. Annual Meeting. The annual meeting of the shareholders of the Company for
the election of directors, the consideration of reports to be laid before the meeting, and the
transaction of such other business as may properly be brought before the meeting shall be held in
the place described in the Articles of Incorporation, as amended (the “Articles”), as the place
where the principal office of the Company is or is to be located, or at such other place either
within or without the State of Ohio as may be designated by the Board of Directors, the Chairman of
the Board, if any, or the President and specified in the notice of the meeting, at 10:00 o’clock
a.m., on the second Tuesday in May of each year, or at such other time and on such other date as
the Board of Directors may determine.

     Section 2. Special Meetings. Special meetings of the shareholders of the Company may
be held on any business day when called by the Chairman of the Board, if any, the President, the
Board of Directors acting at a meeting, a majority of the directors acting without a meeting, or
the persons who hold twenty-five percent of all the shares outstanding and entitled to vote at the
meeting. Upon request in writing delivered either in person or by registered mail to the President
or the Secretary by any person entitled to call a meeting of the shareholders, that officer shall
forthwith cause to be given to the shareholders entitled thereto notice of a meeting to be held on
a date not less than fourteen (14) or more than sixty (60) days after receipt of the request as
that officer may fix. If the notice is not given within twenty (20) days after the delivery or
mailing of the request, the person calling the meeting may fix the time of the meeting and give
notice thereof in the manner provided by law or as provided in these Regulations or cause the
notice to be given by any designated representative. Each special meeting shall be held at the
principal office of the Company unless the meeting is called by the Chairman of the Board, if any,
the President, the directors, in which case the meeting may be held at any place either within or
without the State of Ohio as designated by the party calling the meeting and specified in the
notice of the meeting.

     Section 3. Notice of Meetings. Not less than fourteen (14) or more than sixty (60)
days before the date fixed for a meeting of the shareholders, written notice stating the time,
place, and purposes of the meeting shall be given by or at the direction of the Secretary or an
Assistant Secretary. The notice shall be given by personal delivery or by mail to each shareholder
entitled to notice of the meeting who is of record as of the day next preceding the date on which
notice is given or, if a record date therefore is duly fixed, of record as of that date. If
mailed, the notice shall be addressed to the shareholders at their respective addresses as they
appear on the records of the Company. Notice of the time, place, and purposes of any meeting of
the shareholders may be waived in writing, either before or after the holding of the meeting, by
any shareholder, which writing shall be filed with or entered upon the records of the Company.
Attendance of any shareholder at any meeting without protesting, prior to or at

 

 

the commencement of the meeting, the lack of proper notice shall be deemed to be a waiver by such
shareholder of notice of the meeting.

     Section 4. Quorum; Adjournment. Except as may be otherwise provided by law or by the
Articles, at any meeting of the shareholders, the holders of shares entitled to exercise a majority
of the voting power of the Company present in person or by proxy shall constitute a quorum for the
meeting, except that no action required by law, the Articles, or these Regulations to be authorized
or taken by a designated proportion of the shares of any particular class or of each class of the
Company may be authorized or taken by a lesser proportion and except that the holders of a majority
of the voting shares represented at the meeting, whether or not a quorum is present, may adjourn
the meeting from time to time. If any meeting is adjourned, notice of adjournment need not be given
if the time and place to which the meeting is adjourned are fixed and announced at the meeting.

       Section 5. Action Without a Meeting. Except as provided in Article X with
respect to the amendment of these Regulations or the adoption of new Regulations by written
consent, any other action that may be authorized or taken at a meeting of the shareholders may be
authorized or taken without a meeting with the affirmative vote or approval of, and in a writing or
writings signed by or on behalf of, all of the shareholders who would be entitled to notice of a
meeting of the shareholders held for the purpose, which writing or writings shall be filed with or
entered upon the records of the Company.

     Section 6. Inspectors of Election. Inspectors of Election may be appointed to act at
any meeting of shareholders in accordance with the provisions of the Ohio General Corporation Law.

     Section 7. List of Shareholders. At any meeting of shareholders, an alphabetically
arranged list, or classified lists, of the shareholders of record as of the applicable record date
who are entitled to vote, showing their respective addresses and the number of classes of shares
held by each, shall be produced on the request of any shareholder.

     Section 8. Proxies. Persons entitled to vote shares or to act with respect to shares
may vote or act in person or by proxy. The person appointed as proxy need not be a shareholder.
Unless the writing appointing a proxy otherwise provides, the presence at a meeting of the person
who appointed a proxy shall not automatically operate to revoke the appointment. Notice to the
Company, in writing or in open meeting, of the revocation of the appointment of a proxy shall not
affect any vote or act previously taken or authorized.

     Section 9. Approval and Ratification of Acts of Officers and Directors. Except as
otherwise provided by the Articles or by law, any contract, action, or transaction, prospective or
past, of the Company or of the Board of Directors or of any director or officer may be approved or
ratified by the affirmative vote in person or by proxy of the holders of record of a majority of
the shares held by persons not interested in the contract, action, or transaction and entitled to
vote in the election of directors (without regard to voting powers that may thereafter exist upon a
default, failure, or other contingency), which approval or ratification shall be as valid and
binding as though affirmatively voted for or consented to by every shareholder of the Company.

2

 

ARTICLE II

BOARD OF DIRECTORS

     Section 1. Classes and Election. The Board of Directors shall be divided into two
classes. The number of directors in each class may be fixed or changed: (a) by the shareholders, at
any annual or special meeting called for the purpose of electing directors at which a quorum is
present, by the affirmative vote of the holders of a majority of the shares that are represented at
the meeting and entitled to vote on the proposal, or (b) by the directors at any meeting of the
Board of Directors by the vote of a majority of the directors then in office. Notwithstanding the
foregoing, after the number of directors in any class has been fixed by the shareholders, the
directors may not increase or decrease the number of directors in that class by more than one. No
class shall consist of less than three directors. Unless so determined by the shareholders or by
the directors, one class (the initial term of which will expire in 1995) shall consist of four
directors and the second class (the initial term of which will expire in 1996) shall consist of
three directors. A separate election shall be held for each class of directors at any meeting of
shareholders at which a member or members of more than one class of directors is being elected. At
each annual meeting, the directors elected to the class whose term shall expire in that year shall
hold office for a term of two (2) years and until their respective successors are elected. In case
of any increase in the number of directors of any class, any additional directors elected to such
class shall hold office for a term that coincides with the full term or the remainder of the term,
as the case may be, of such class. At a meeting of shareholders at which directors are to be
elected, only persons nominated as candidates shall be eligible for election as directors and the
candidates receiving the greatest number of voters shall be elected.

       Section 2. Nominations for Directors. A shareholder entitled to vote for
the election of directors who intends to nominate a person for election as a director must deliver
written notice to the Secretary of the Company no later than: (a) with respect to an election to be
held at an annual meeting of shareholders, 90 days in advance of the anniversary of the date on
which the notice of the annual meeting for the prior year was given to shareholders, and (b) with
respect to an election to be held at a special meeting of shareholders, the close of business on
the seventh (7th) day following the date on which notice of such special meeting is
first given to shareholders. The notice from the shareholder must contain the following:

(a) the name and address of the shareholder and each director nominee;

(b) a representation that the shareholder is entitled to vote and intends to
appear in person or by proxy at the meeting;

(c) a description of any and all arrangements or understandings between the
shareholder and each nominee;

(d) such other information regarding the nominee that would have been required to
be included by the Securities and Exchange Commission in a proxy statement had
the nominee been named in a proxy statement;

(e) a brief description of the nominee’s qualifications to be a director; and

(f) the written consent of the nominee to serve as a director if so elected.

3

 

     Section 3. Vacancies. In the event of the occurrence of any vacancy in the Board of
Directors, however caused, the remaining directors, though less than a majority of the whole
authorized number of directors, may fill the vacancy for the unexpired term by the vote of a
majority of their number.

     Section 4. Resignations. Any director may resign at any time by providing a written
notice to that effect delivered to the Secretary, such resignation to take effect immediately or at
such future date as the director may specify in the director’s notice of resignation.

     Section 5. Regular Meetings. Upon notice duly given regular meetings of the Board of
Directors may be held at such times and places within or without the State of Ohio (or through use
of telephone or other communications equipment if all persons participating can hear each other) as
may be provided for in bylaws or resolutions adopted by the Board of Directors. Unless otherwise
indicated in the notice of a regular meeting, any business may be transacted at that regular
meeting.

     Section 6. Special Meetings. Special meetings of the Board of Directors may be held
at any time within or without the State of Ohio (or through use of telephone or other
communications equipment if all persons participating can hear each other) upon call by the
Chairman of the Board, the President, or any two directors.

     Section 7. Notice of Meeting and Waiver of Notice. Written notice of the time and
place of each regular or special meeting shall be given to each director either by personal
delivery (which, for purposes of these Regulations, includes notice by facsimile transmission of a
written notice) or by mail, telegram, or cablegram at lease forty-eight (48) hours before the
meeting. The notice need not specify the purposes of the meeting. The attendance of any director
at any meeting (and participation in a meeting employing telephone or other communications
equipment) without, prior to or at the commencement of the meeting, protesting the lack of proper
notice shall be deemed to be a waiver by the director of notice of the meeting. Further, notice of
a meeting may be waived in writing, either before or after the holding of the meeting, by any
director, which writing shall be filed with or entered upon the records of the Company. Unless
otherwise indicated in the notice of a meeting, any business may be transacted at that meeting.

     Section 8. Quorum: Adjournment. A quorum of the Board of Directors at any meeting
shall consist of a majority of the directors then in office, except that a majority of the
directors present at the meeting duly held, whether or not a quorum is present, may adjourn the
meeting from time to time. If any meeting is adjourned, notice of adjournment need not be given if
the time and place to which the meeting is adjourned are fixed and announced at the meeting. At
each meeting of the Board of Directors at which a quorum is present, unless otherwise provided by
law, the Articles or these Regulations, all matters requiring the approval of the Board of
Directors shall be determined by a majority vote of those present.

     Section 9. Action Without a Meeting. Any Action that may be authorized or taken at a
meeting of the Board of Directors may be authorized or taken without a meeting with the affirmative
vote or approval of, and in a writing or writings signed by, all of the directors, which writing or
writings shall be filed with or entered upon the records of the Company.

4

 

     Section 10. Committees. The Board of Directors may at any time appoint from its
members an Executive, Compensation, Audit, Nominating or other committee or committees, consisting
of such number of members, not less than three, as the Board of Directors may deem advisable,
together with such alternates as the Board of Directors may deem advisable, to take the place of
any absent member or members at any meeting of the committee. Each member and each alternate may
be appointed or removed, at any time, by the Board of Directors. Any committee shall act only in
the intervals between meetings of the Board of Directors and shall have such of the Board’s
authority (other than the authority to fill vacancies in the Board of Directors or in any committee
of the Board of Directors) as may, from time to time, be delegated by the Board of Directors.
Subject to these exceptions, any person dealing with the Company shall be entitled to rely upon any
act or authorization of an act by any committee to the same extent as an act or authorization of
the Board of Directors. Unless otherwise ordered by the Board of Directors, any committee may
prescribe its own rules of procedure and may act at a meeting, by a majority of its members, or
without a meeting by writing or writings signed by all of its members.

ARTICLE III

OFFICERS

     Section 1. Election and Designation of Officers. The Board of Directors shall elect a
President, a Secretary, and a Treasurer and, in its discretion, may elect a Chairman of the Board,
one or more Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers,
and such other officers as the Board of Directors may deem necessary. The Chairman of the Board,
if any, shall be a director, but no one of the other officers need be a director. Any two or more
offices may be held by the same person, but no officer shall execute, acknowledge, or verify any
instrument in more than one capacity if the instrument is required to be executed, acknowledged, or
verified by two or more officers.

     Section 2. Term of Office: Vacancies. Each officer of the Company shall hold office
until the officer’s successor is elected or until the officer’s earlier resignation, removal from
office, or death. The Board of Directors may remove any officer at any time with or without cause
by a majority vote of the directors then in office. Any vacancy in any office may be filled by the
Board of Directors.

     Section 3. Chairman of the Board. The Chairman of the Board, if any, shall preside at
all meetings of the Board of Directors and all meetings of the shareholders. The Chairman may have
such additional authority and shall perform such other duties as may be determined by the Board of
Directors.

     Section 4. President. If there is no Chairman of the Board or in the event of the
Chairman’s absence, the President shall preside at all meetings of the shareholders and, if a
director, at all meetings of the Board of Directors. Subject to directions of the Board of
Directors and to the delegation by the Board of Directors to the Chairman of the Board of specific
or general executive supervision, the President shall have general executive supervision over the
property, business, and affairs of the Company. The President may execute all authorized deeds,
mortgages, bonds, contracts, and other obligations in the name of the Company and shall have such
other authority and shall perform such other duties as may be determined by the Board of Directors.

5

 

     Section 5. Vice Presidents. The Vice Presidents, if any, shall, respectively, have
such authority and perform such duties as may be determined by the Board of Directors.

     Section 6. Secretary. The Secretary shall keep the minutes of meetings of the
shareholders and of the Board of Directors. The Secretary shall keep such additional corporate
records as may be required by the Board of Directors, shall give notices of meetings of the
shareholders and of meetings of the Board of Directors required by law or by these Regulations or
otherwise, and shall have such authority and shall perform such other duties as may be determined
by the Board of Directors.

     Section 7. Treasurer. Unless the authority is granted by the Board of Directors to
another financial officer, the Treasurer shall receive and have control over all money, notes,
bonds, securities of other corporations, and similar property belonging to the Company, and shall
accurate financial accounts and hold them open for the inspection and examination of the directors
and shall have such authority and shall perform such other duties as may be determined by the Board
of Directors.

     Section 8. Other Officers. The Assistant Secretaries and Assistant Treasurers, if
any, and any other officers whom the Board of Directors may elect shall, respectively, have such
authority and perform such duties as may be determined by the Board of Directors.

     Section 9. Delegation of Authority and Duties. The Board of Directors is authorized
to delegate the authority and duties of any officer to any other officer and generally to control
the action of the officers and to require the performance of duties in addition to those mentioned
herein.

ARTICLE IV

COMPENSATION OF THE TRANSACTIONS WITH

DIRECTORS, OFFICERS AND EMPLOYEES

     Section 1. Directors and Members of Committees. Members of the Board of Directors and
members of any committee of the Board of Directors shall, as such, receive such compensation, which
may be either a fixed sum for attendance at each meeting of the Board of Directors or Board
committee or a stated amount payable at intervals, or shall otherwise be compensated as may be
determined by, or pursuant to authority conferred by, the Board of Directors, which compensation
may be in different amounts for various members of the Board of Directors or of any committee. No
member of the Board of Directors and no member of any committee of the Board of Directors shall be
disqualified from being counted in the determination of the presence of a quorum or from acting at
any meeting of the Board of Directors or of a committee of the Board of Directors by reason of the
fact that matters affecting the director’s own compensation as a director, member of a committee of
the Board of Directors, officer, or employee are to be determined.

     Section 2. Officers and Employees. The compensation of officers and employees of the
Company, or the method of fixing their compensation, shall be determined by, or pursuant to
authority conferred by, the Board of Directors. Compensation may include pension, disability, and
death benefits, and may be by way of fixed salary, on the basis of earnings of the Company, any
combination thereof, or otherwise, as may be so determined or authorized.

6

 

ARTICLE V

INDEMNIFICATION

     Section 1. Third Party Actions. The Company shall indemnify any person (the
“Indemnified Party”) who was or is a party or is threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or
investigative (other than an action, suit, or proceeding by or in the right of the Company), by
reason of the fact that the Indemnified Party is or was director, officer, employee, or agent of
the Company, or is or was serving at the request of the Company as a director, trustee, officer,
employee, or agent of another corporation (profit or non-profit), partnership, joint venture,
trust, or other enterprise, against expenses (including professional fees, eg. attorneys’ fees and
accountants’ fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by the Indemnified Party in connection with the action, suit, or proceeding if the
Indemnified Part acted in good faith and in a manner the Indemnified Party reasonably believed to
be in or not opposed to the best interests of the Company and, with respect to any criminal action
or proceeding, had no reasonable cause to believe the Indemnified Party’s conduct was unlawful.
The termination of any action, suit, or proceeding by judgment, order, settlement, or conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption
that the Indemnified Party did not act in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the Company or that, with respect to any
criminal action or proceeding, such person had reasonable cause to believe that their conduct was
unlawful.

     Section 2. Derivative Actions. Other than in connection with an action or suit in
which the liability of a director under Section 1701.95 of the Ohio Revised Code is the only
liability asserted, the Company shall indemnify any person (the “Indemnified Party”) who was or is
a party or is threatened to be made a party to any threatened, pending, or completed action or suit
by or in the right of the Company to procure a judgment in its favor by reason of the fact that the
Indemnified Party is or was a director, officer, employee, or agent of the Company, or is or was
serving at the request of the Company as a director, trustee, officer, employee, or agent of
another corporation (profit or non-profit) partnership, joint venture, trust, or other enterprise,
against expenses (including professional fees, eg. attorneys’ fees and accountants’ fees) actually
and reasonably incurred by the Indemnified Party in connection with the defense or settlement of
the action or suit if the Indemnified Party acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the Company, except that:

(a) no indemnification of a director shall be made if its is proved by clear and
convincing evidence in a court of competent jurisdiction that the director’s
action or failure to act involved an act or omission undertaken with deliberate
intent to cause injury to the Company or undertaken with reckless disregard for
the best interests of the Company; and

(b) no indemnification of an officer, employee, or agent, regardless of such
person’s status as a director, shall be made in respect of any claim, issue, or
matter as to which such person is adjudged to be liable for negligence or
misconduct in the performance of their duty to the Company; unless and only to
the extent that a court of common pleas or the court in which the action or

7

 

suit was brought determines that, notwithstanding the adjudication of liability,
in view of all the circumstances of the case, the Indemnified Party is fairly and
reasonably entitled to indemnity for such expenses as the court deems proper.

     Section 3. Rights after Successful Defense. To the extent an Indemnified Party has
been successful on the merits or otherwise in defense of any action, suit, or proceeding referred
to in Section 1 or Section 2 of this Article V, or in defense of any claim, issue, or matter
therein, the Indemnified Party shall be indemnified against expenses (including professional fees,
eg. attorney’s fees and accountants’ fees) actually and reasonable incurred in connection with the
action, suit or proceeding.

     Section 4. Other Determinations of Rights. Other than in a situation governed by
Section 3 of this Article V, any indemnification under Section 1 or Section 2 of this Article V
(unless ordered by a court) shall be made by the Company only as authorized in the specific case
upon a determination that indemnification of the director, officer, employee, or agent is proper in
the circumstances because such person has met the applicable standard of conduct set forth in
Section 1 or Section 2. The determination shall be made:

(a) by a majority vote of those directors who, in number, constitute a quorum of
the directors and who also were not and are not parties to or threatened with any
such action, suit, or proceeding;

(b) if such a quorum is not obtainable or a majority of disinterested directors
requests, in a written opinion by Independent Counsel;

(c) by the affirmative vote of a majority of the shares held by persons who were
not and are not parties to or threatened with any such action, suit, or
proceeding and entitled to vote in the election of directors, without regard to
voting power that may thereafter exist upon a default, failure, or other
contingency; or

(d) by the Court of Common Pleas or the court in which the action, suit, or
proceeding was brought.

For purposes of this Section 4, “Independent Counsel” shall mean any attorney or firm other than an
attorney, or a firm having associated with it an attorney, who has been retained by or who has
performed services for the Company or the proposed Indemnified Party within the past five (5)
years.

     Section 5. Advances of Expenses. Unless the action or suit is one in which liability
under Section 1701.95 of the Ohio Revised Code is the only liability asserted:

(a) expenses (including professional fees, eg. attorneys’ or accountants’ fees)
incurred by a director in defending any action, suit, or proceeding referred to
in Section 1 or Section 2 of this Article V shall be paid by the Company, as they
are incurred, in advance of final disposition of the action, suit, or proceeding
upon receipt of an undertaking by or on behalf of the director in which the
director agrees both: (i) to repay the amount if it is proved by clear and
convincing evidence in a court of competent jurisdiction

8

 

that the director’s action or failure to act involved as act or omission
undertaken with deliberate intent to cause injury to the Company or undertaken
with reckless disregard for the best interests of the Company, and (ii) to
cooperate with the Company concerning the action, suit, or proceeding; and

(b) expenses (including professional fees, eg. attorneys’ or accountants’ fees)
incurred by an officer, employee, or agent in defending any action, suit, or
proceeding referred to in Section 1 or Section 2 of this Article V may be paid by
the Company, as they are incurred, in advance of final disposition of the action,
suit, or proceeding, as authorized by the Board of Directors in the specific
case, upon receipt of an undertaking by or on behalf of the director, officer,
employee, or agent to repay the amount if it is ultimately determined as provided
in this Article V that such party is not entitled to be indemnified by the
Company.

     Section 6. Purchase of Insurance. The Company may purchase and maintain insurance or
furnish similar protection, including trust funds, letters of credit, and self insurance, on behalf
of or for any person who is or was a director, officer, employee, or agent of the Company, or is or
was serving at the request of the Company as a director, trustee, officer, employee, or agent of
another corporation (profit or non-profit), partnership, joint venture, trust, or other enterprise,
against any liability asserted against such person and incurred by such party in any capacity, or
arising out of such status, whether or not the Company would have the power to indemnify the
individual against liability under the provisions of this Article V or the Ohio General Corporation
Law. Insurance may be purchased from or maintained with a person in which the Company or any of
its directors, officers, employees or shareholders has a financial interest.

     Section 7. Mergers. Unless otherwise provided in the applicable agreement of merger,
if a constituent corporation (other than the Company) would have been required to indemnify
directors, officers, employees, or agents in specified situations, any person who served as a
director, officer, employee, or agent of the constituent corporation, or served at the request of
the constituent corporation as a director, trustee, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, shall be entitled to
indemnification by this Company (as the surviving corporation) to the same extent the individual
would have been entitled to indemnification by the constituent corporation had the constituent
corporation’s separate existence continued.

     Section 8. Heirs: Non-Exclusivity. The indemnification provided by this Article shall
continue as to a person who has ceased to be a director, officer, employee, or agent of the Company
to indemnify a director, officer, employee, or agent of the Company, and shall insure to the
benefit of the heirs, executors, and administrators of such a person and shall not be deemed
exclusive of, and shall be in addition to, any other rights granted to a person seeking
indemnification as a matter of law or under the Articles, these Regulations, any agreement, a vote
of shareholders or disinterested directors, any insurance purchased by the Company, any action by
the directors to take into account amendments to the Ohio General Corporation Law that expand the
authority of the Company to indemnify a director, officer, employee or agent of the Company, or
otherwise, both as to actions in their official capacity and as to actions in another capacity
while holding an office.

9

 

ARTICLE VI

RECORD DATES

     For any lawful purpose, including the determination of the shareholders who are entitled to
receive notice of or to vote at a meeting of the shareholders, the Board of Directors may fix a
record date in accordance with the provisions of the Ohio General Corporation Law. The record date
for the purpose of determining shareholders who are entitled to receive notice of or to vote at a
meeting of the shareholders shall continue to be the record date for all adjournments of the
meeting unless the Board of Directors or the persons who shall have fixed the original record date
shall, subject to the limitations set forth in the Ohio General Corporation Law, fix another date
and shall cause notice thereof and of the date to which the meeting shall have been adjourned to be
given to shareholders of record as of the newly fixed date in accordance with the same requirements
as those applying to a meeting newly called. The Board of Directors may close the share transfer
books against transfers of shares during the whole or any part of the period provided for in this
Article, including the date of the meeting of the shareholders and the period ending with the date,
if any, to which adjourned. If no record date is fixed therefor, the record date for determining
the shareholders who are entitled to receive notice of and to vote at a meeting of the shareholders
shall be the date next preceding the day on which notice is given.

ARTICLE VII

CERTIFICATES FOR SHARES

Section 1. Form of Certificates, Share Records and Signatures.

(a) Subject to Section 1(b) hereof, each holder of shares shall be entitled to
one or more certificates, signed by: (a) the Chairman of the Board, if any, the
President, or a Vice President and (b) the Secretary, an Assistant Secretary, the
Treasurer, or an Assistant Treasurer of the Company. Each certificate shall set
forth the number and class of shares held by the holder of shares in the Company,
but no certificate for shares shall be executed or delivered until the shares are
fully paid. When a certificate is countersigned by an incorporated transfer
agent or registrar, the signature of any officer of the Company may be facsimile,
engraved, stamped, or printed. Although an officer of the Company whose manual
or facsimile signature is affixed to a certificate ceases to hold that office
before the certificate is delivered, the certificate nevertheless shall be
effective in all respects when delivered.

(b) The Board of Directors, subject to the immediately succeeding paragraph, may
provide by resolution that some or all of any or all classes and series of shares
of the Company shall be non-certificated shares, provided that the resolution
shall not apply to shares represented by a certificate until the certificate is
surrendered to the Company and the resolution shall not apply to
certificated shares issued in exchange for non-certificated shares. Within a reasonable time
after the issuance or transfer of non-certificated shares, the Company shall send
to the registered owner of the shares a written notice containing the information
required to be set forth or stated on certificates for shares in accordance with
all applicable laws. Except as expressly provided by law, the rights and
obligations of the holders of non-certificated shares and

10

 

the rights and obligations of the holders of certificates representing shares of
the same class and series shall be identical.

Notwithstanding the foregoing provisions of this Section 1(b), a shareholder of
record shall at all times have the right, so long as it may be required by
applicable law, to receive one or more certificates for some or all of the shares
held of record by such shareholder in accordance with Section 1(a) hereof by
making a written request therefor to the Company or any transfer agent for the
applicable class of shares, accompanied by such assurances as the Company or such
transfer agent may require as to the genuineness of such request; provided,
however, that shareholders holding shares of the Company under one or more of the
Company’s benefit plans for officers, directors and/or employees shall have no
such right to have certificates issued unless such a right is provided for under
the applicable benefit plan, required by applicable law or otherwise ordered by
the Board of Directors or a Committee thereof.

     Section 2. Transfer of Shares. Subject to the restriction on transfers of shares
hereinafter contained or contained in the Articles, shares of the Company shall be transferable,
upon the books of the Company by the holders thereof, in person, or by a duly authorized attorney,
upon written request in form and substance acceptable to the Company or its agents, accompanied by
a duly endorsed stock power and/or such other assurances as to the genuineness and effectiveness
thereof as the Company or its agents may reasonably require.

     Section 3. Lost, Stolen, or Destroyed Certificates. Subject to the provisions of
Section 1(b) of this Article VII, the Company may issue a new certificate for shares in place of
any certificate theretofore issued by it and alleged to have been lost, stolen, or destroyed. The
Board of Directors, however, in its discretion, may require the owner, or the owner’s legal
representatives, to give the Company a bond containing such terms as the Board of Directors may
require to protect the Company or any person injured by the execution and delivery of a new
certificate.

     Section 4. Transfer Agent and Registrar. The Board of Directors may appoint, or
revoke the appointment of, transfer agents and registrars and may require all certificates for
shares to bear the signatures of the transfer agents and registrars, or any of them

ARTICLE VIII

AUTHORITY TO TRANSFER AND VOTE SECURITIES

     The Chairman of the Board, if any, the President, and Vice President, the Secretary,
and the Treasurer of the Company, and each such officer, are authorized to sign the name of the
Company and to perform all acts necessary to effect on behalf of the Company a sale, transfer,
assignment, or other disposition of any shares, bonds, other evidences of indebtedness or
obligations, subscription rights, warrants, or other securities of another corporation and to issue
the necessary powers of attorney. Each officer is authorized, on behalf of the Company, to vote
the securities, to appoint proxies with respect thereto, to execute consents, waivers, and releases
with respect thereto, or to cause any such action to be taken.

11

 

ARTICLE IX

CORPORATE SEAL

     The Ohio General Corporation Law provides that the absence of a corporate seal from
any instrument executed on behalf of the Company does not affect the validity of the instrument.
If, in spite of such provision, a seal is imprinted on or attached, applied, or affixed to an
instrument by embossment, engraving, stamping, printing, typing, adhesion, or other means, the
impression of the seal on the instrument shall be circular in form and shall contain the words
“Corporate seal.”

ARTICLE X

AMENDMENTS

     These Regulations may be amended, or new Regulations may be adopted, by the shareholders at a
meeting held for that purpose, by the affirmative vote of the holders of shares entitling them to
exercise a majority of the voting power on that proposal or without a meeting by the written
consent of the holders of shares entitling them to exercise a majority of the voting power on that
proposal. If the Regulations are amended, or new regulations are adopted, without a meeting of the
shareholders, the Secretary of the Company shall mail a copy of the amendment or the new
Regulations to each shareholder who would have been entitled to vote thereon but did not
participate in the adoption thereof.

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}]]