Document:

GlowpointEx101GCAppointment8-K

Exhibit 10.1

EMPLOYMENT AGREEMENT
This Employment Agreement, dated August 15, 2012 is between Glowpoint, Inc., a Delaware corporation (the “Company”), and Steven B. Peri ("Employee"), which shall be effective upon September 4, 2012 (the ”Effective Date”).
WHEREAS, the Company and the Employee desire to enter in an agreement with the following provisions as set forth herein. 
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
		
	1.
	POSITION AND RESPONSIBILITIES.   

1.1    Position.  Employee is employed by the Company to render services to the Company in the position of Executive Vice President and General Counsel.  Employee shall perform such duties and responsibilities as are normally related to such position in accordance with the standards of the industry and any additional duties consistent with his position now or hereafter assigned to Employee by the Chief Executive Officer of the Company.  Employee shall abide by the rules, regulations and practices of the Company as adopted or modified from time to time in the Company’s reasonable discretion.
1.2    Other Activities.  Employee shall devote his full business time, attention and skill to perform any assigned duties, services and responsibilities, consistent with the position of Executive Vice President, General Counsel and Corporate Secretary, while employed by the Company, for the furtherance of the Company's business, in a diligent, loyal and conscientious manner.  Except upon the prior written consent of the Board of Directors, Employee will not, during the Term (as defined below):  (a) accept any other employment; or (b) engage, directly or indirectly, in any other business activity (whether or not pursued for pecuniary advantage) that interferes with Employee’s duties and responsibilities hereunder or creates a conflict of interest with the Company. 
1.3    No Conflict.  Employee represents and warrants that Employee’s execution of this Agreement, Employee’s employment with the Company, and the performance of Employee’s proposed duties under this Agreement will not violate any obligations Employee may have to any other employer, person or entity, including any obligations with respect to proprietary or confidential information of any other person or entity.
		
	2.
	COMPENSATION AND BENEFITS.

2.1    Base Salary.  In consideration of the services to be rendered under this Agreement and so long as Employee remains employed by the Company, the Company shall pay Employee a salary of not less than $250,000 per year (as such may be increased by the Company from time to time, the "Base Salary").  The Base Salary shall be paid in accordance with the Company’s regularly established payroll practice.  Employee’s Base Salary will be reviewed from time to time in accordance with the established procedures of the Company.
2.2    Equity.  
(a)    In consideration of the services to be rendered under this Agreement and so long as Employee remains employed by the Company, the Company will issue shares of restricted common stock of the Company ("Restricted Stock ") in the amount of 150,000 shares, and stock options (“Options”) in the amount of 100,000 shares, of which, 50% (50,000 shares) will have a strike price of $3.02 and 50% 

 

(50,000) at $3.47; provided, however, each such strike price shall be adjusted, upon issuance, to be the greater of $3.02 and $3.47, respectively, and the product of 1.0 and 1.15, respectively, of the Fair Market Value, as defined in the 2007 Plan (defined below), on the Effective Date. All equity issuances are governed by the Company’s standard form of Restricted Stock Award Agreement and Stock Option Agreement, as applicable; provided, that, in no way limiting the terms of Section 3.3(c) below, any additional agreements pertaining to new grants of Restricted Stock or Options shall expressly state that such securities shall become unrestricted and fully vested, as applicable, upon the occurrence of a Change in Control or Corporate Transaction (as each is defined in the Glowpoint, Inc. 2007 Stock Incentive Plan (as amended, the “2007 Plan”)).
(b)    Other than as expressly provided herein, the terms and conditions governing the shares of Restricted Stock and Options shall be set forth in the applicable equity award agreement.  
2.3    Incentive Compensation. No later than sixty days after the Effective Date, Employee and the Chief Executive Officer will establish mutually agreed upon appropriate goals and metrics applicable to Employee's performance under this Agreement.  Such goals and metrics will be taken into consideration by the Compensation Committee of the Board of Directors in determining the amount, if any, of incentive compensation to be paid to Employee each year.  Updated goals and metrics will be established no later than 60 days after the start of each new calendar year.  Employee will be eligible to receive incentive compensation with a target of forty percent (40%) of his Base Salary annually.  The determination of the awarding of any incentive compensation to Employee shall be at the sole discretion of the Compensation Committee.  The Company shall pay the incentive compensation no later than March 15 following the calendar year for which the Employee earned the incentive compensation. For the first year of employment, employee will be eligible to receive a minimum of 50% of the target incentive compensation.
2.4    Benefits.  Employee shall be eligible to participate in all benefits made generally available by the Company to similarly-situated employees, in accordance with the benefit plans established by the Company, and as may be amended from time to time in the Company’s sole discretion.  
2.5    Expenses.  The Company shall reimburse Employee for reasonable travel and other business expenses incurred by Employee in the performance of Employee’s duties hereunder in accordance with the Company’s expense reimbursement guidelines, as they may be amended in the Company's sole discretion.  
2.6    Vacation.  Employee will be entitled to accrue four (4) weeks of paid vacation per year.  Such vacation may be carried over from year to year only as permitted by the Company’s then-current employee handbook.
		
	3.
	TERM AND SEVERANCE. 

3.1    Term.  The initial term of this Agreement expires on December 31, 2013 (the “Initial Term”).  If the Company does not provide Employee with written notice of non-renewal of this Agreement at least six (6) months prior to expiration, then this Agreement shall automatically renew for additional one-year periods (each, a “Renewal Term” and, together with the Initial Term, the “Term”).  If the Company does provide Employee with written notice of non-renewal of this Agreement at least six (6) months prior to expiration of the current Term, then this Agreement shall automatically expire as of the expiration date for such Term (an “Expiration Event”).  Notwithstanding the foregoing, either the Company or Employee may terminate Employee’s employment hereunder at any time, for any reason or no reason at all so long as they comply with the terms of this Section 3. 
3.1    Termination for Cause or Voluntary Resignation.  If Employee is terminated for Cause (as defined below) or if Employee voluntarily resigns, Employee will be entitled to his Base Salary and other benefits through the last day actually worked.  Thereafter, all benefits, compensation and perquisites of employment will cease. 

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3.2    Termination Without Cause, Resignation for Good Reason, Expiration or Death.  If (a) Employee is terminated without Cause (as defined below) or Employee resigns for Good Reason (as defined below) or an Expiration Event occurs or Employee dies (each, a “Qualifying Termination Event”), (b) there exists a “separation from service” as defined under the Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), (c) Employee executes the Company’s standard form of release and waiver (the “Release”) and the Release becomes irrevocable and effective in accordance with its terms within thirty (30) days after Employee’s separation from service, and (d) Employee is not in material breach of any of the terms and conditions of this Agreement, then Employee shall be entitled to the following benefits, payable commencing with the payroll period immediately following the effective date of the Release:
(a)    Cash severance payments equal to six (6) months of his current Base Salary, which severance shall be paid as salary continuation in accordance with the Company’s regular payroll practices, plus a lump-sum payment in an amount equal to the prorated portion of the annual bonus for the current fiscal year, as determined at the established target performance levels for Employee and accrued by the Company (collectively, the “Severance Payments”); provided, that notwithstanding the foregoing, in the event that a Change of Control or Corporate Transaction (as each is defined in the 2007 Plan) shall occur, (i) the Base Salary portion of the Severance Payments shall be increased from six (6) months to twelve (12) months and (ii) if such Change of Control or Corporate Transaction constitutes a "change in the ownership", a "change in the effective control" or a "change in the ownership of a substantial portion of the assets" of the Company within the meaning of Section 409A of the Code, the payment of all unpaid Severance Payments will be accelerated and become immediately due and payable (A) upon the consummation of such Change of Control or Corporate Transaction if a Qualifying Termination Event has already occurred or (B) as of the effective date of such Qualifying Termination Event, if the separation from service occurs within the two-year period immediately following the Change of Control or Corporate Transaction;
(b)    If Employee timely elects COBRA coverage, the Company will pay for COBRA coverage on Employee’s behalf (less the employee contribution portion, if any, immediately prior to such separation from service) until the earlier to occur of (i) the date Employee is entitled to receive substantially similar health insurance coverage from another source and (ii) the date that is six (6) months after such separation from service; provided, that notwithstanding the foregoing, in the event that a Change of Control or Corporate Transaction shall occur, the duration of COBRA coverage shall be extended from six (6) months to twelve (12) months; and 
3.3    Definition of Cause.  For purposes of this Agreement, Cause shall mean, in the judgment of the Company: (a) Employee willfully engages in any act or omission which is in bad faith and to the detriment of the Company;  (b) Employee exhibits unfitness for service, dishonesty, habitual neglect, persistent and serious deficiencies in performance, or gross incompetence, which conduct is not cured within fifteen (15) days after receipt by Employee of written notice of the conduct; (c) Employee is convicted of a crime; or (d) Employee refuses or fails to act on any reasonable and lawful directive or order from the Chief Executive Officer, which refusal is not cured within fifteen (15) days after receipt by the Employee of written notice thereof. Notice of any termination for Cause shall be given in writing to the Employee, which notice shall set forth in reasonable detail all acts or omission upon which the Company is relying for such termination prior to the effective date of the termination.
3.4    Definition of Resignation for Good Reason.  For purposes of this Agreement, resigning for “Good Reason” shall mean if Employee resigns because: (a) there has been a material diminution in his Base Salary (with the parties in agreement that for this purpose, a material diminution means a diminution of at least 10% in Employee’s Base Salary); (b) he is required to be based in an office that is more than 50 miles from the current location of the office; (c) he is assigned duties that are materially inconsistent with his position as General Counsel and Corporate Secretary; or (d) there is a material diminution of his status, 

 

office, title, responsibility, or reporting requirements.    Notwithstanding the foregoing, Employee’s resignation shall not be considered to be for Good Reason unless Employee provides written notice to the Company of the condition constituting Good Reason within ninety (90) days of the initial existence of such condition, and the Company fails to remedy such condition within thirty (30) days after receipt of such notice from Employee.
3.5    Excise Tax.  If any benefits paid or distributed to, or realized by, Employee pursuant to this Agreement, together with any other amounts or value otherwise paid or distributed to Employee by Glowpoint (e.g., the lapsing of restrictions on Restricted Stock) in connection with a Change in Control or Corporate Transaction (collectively, the "280G Payments"), would be an "excess parachute payment" as defined in Section 280G of the Code and would thereby subject Employee to the tax imposed under Section 4999 of the Code or any similar tax (the "Excise Tax"), then Glowpoint shall pay to Employee the greater of (a) the total value of the 280G Payments payable if reduced to an amount that avoids the triggering of the Excise Tax or (b) the total value of the 280G Payments payable even if the Excise Tax is triggered, such that the total amount of 280G Payments actually received by Employee, net of all applicable taxes (including, without limitation, the Excise Tax), is maximized.  In the event that Employee's 280G Payments are reduced pursuant to this Section 3.6, such reduction shall be applied to the 280G Payments by first reducing the prorated annual bonus under Section 3.3(a) then reducing the other Severance Payments under Section 3.3(a), then reducing the benefits under Section 3.3(b), then reducing the benefits described in Section 3.3(c).  For purposes of determining the Excise Tax and making any other calculations under this Section 3.6, the determinations of Glowpoint's outside auditing firm will be deemed conclusive and binding on Glowpoint and Employee.   
3.6    Section 409A of the Code.  The parties intend that any payments and benefits under this Agreement shall be exempt from, or comply with, the requirements of Section 409A of the Code, and this Agreement shall be interpreted and administered in accordance with such intent.  In particular, the parties intend that each installment of Severance Payments under this Agreement be treated as a separate payment for purposes of Section 409A of the Code.  Moreover, to the extent required to comply with Section 409A of the Code, then notwithstanding any other provision of this Agreement to the contrary: (a) if, at the time of his separation from service, Employee is not a "specified employee" within the meaning of Section 409A of the Code, payment of any nonqualified deferred compensation provided under this Agreement shall commence within sixty (60) days following the date of Employee’s separation from service, and if such sixty-day period begins in one calendar year and ends in a second calendar, such payment shall commence in the second calendar year; or (b) if, at the time of his separation from service, Employee is a "specified employee" within the meaning of Section 409A of the Code, any nonqualified deferred compensation provided under this Agreement shall be paid on the first business day that is at least six (6) months after Employee's separation from service (such six-month period, the “Tolling Period”) and the first such payment shall include all unpaid amounts that otherwise would have been paid prior to that date pursuant to this Agreement.
		
	4.
	TERMINATION OBLIGATIONS.

4.1    Return of Property.  Employee agrees that all property (including without limitation all equipment, tangible proprietary information, documents, records, notes, contracts and computer-generated materials) furnished to or created or prepared by Employee incident to Employee’s employment belongs to the Company and shall be promptly returned to the Company upon termination of Employee’s employment.
4.2    Cooperation.  Following any termination of employment, Employee shall cooperate with the Company in the winding up of pending work on behalf of the Company and the orderly transfer of work to other employees.  Employee shall also cooperate with the Company in the defense of any action brought by any third party against the Company that relates to Employee’s employment by the Company. 

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	5.
	INVENTIONS AND PROPRIETARY INFORMATION; PROHIBITION ON THIRD PARTY INFORMATION.

5.1    Proprietary Information.  Employee hereby covenants, agrees and acknowledges as follows:
(a)    The Company is engaged in a continuous program of research, design, development, production, marketing and servicing with respect to its business.
(b)    Employee's employment hereunder creates a relationship of confidence and trust between Employee and the Company with respect to certain information pertaining to the business of the Company or pertaining to the business of any customer of the Company which may be made known to the Employee by the Company or by any customer of the Company or learned by the Employee during the period of Employee's employment by the Company.
(c)    The Company possesses and will continue to possess information that has been created, discovered or developed by, or otherwise becomes known to it (including, without limitation, information created, discovered or developed by, or made known to,  Employee during the period of Employee's employment or arising out of Employee's employment and which pertains to the Company’s actual or contemplated business, products, intellectual property or processes) or in which property rights have been or may be assigned or otherwise conveyed to the Company, which information has commercial value in the business in which the Company is engaged and is treated by the Company as confidential.
(d)    Any and all inventions, products, discoveries, improvements, processes, manufacturing, marketing and services, methods or techniques, formulae, designs, styles, specifications, data bases, computer programs (whether in source code or object code), know-how, strategies and data, whether or not patentable or registrable under copyright or similar statutes, made, developed or created by Employee (whether at the request or suggestion of the Company or otherwise, whether alone or in conjunction with others, and whether during regular hours of work or otherwise) during the period of Employee's employment by the Company which pertains to the Company's actual or contemplated business, products, intellectual property or processes (collectively hereinafter referred to as “Developments”), shall be the sole property of the Company and will be promptly and fully disclosed by Employee to the Board without any additional compensation therefor, including, without limitation, all papers, drawings, models, data, documents and other material pertaining to or in any way relating to any Developments made, developed or created by Employee as aforesaid.  The Company shall own all right, title and interest in and to the Developments and such Developments shall be considered “works made for hire” for the Company under applicable law.  If any of the Developments are held for any reason not to be “works made for hire” for the Company or if ownership of all right, title and interest in and to the Developments has not vested exclusively and immediately in the Company upon creation, Employee irrevocably assigns, without further consideration, any and all right, title and interest in and to the Developments to the Company, including any and all moral rights, and “shop rights” in the Developments recognized by applicable law.  Employee irrevocably agrees to execute any document requested by the Company to give effect to this Section 5.1 such as an assignment of invention or other general assignments of intellectual property rights, without additional compensation therefor.  
(e)     Employee will keep confidential and will hold for the Company's sole benefit any Development which is to be the exclusive property of the Company under this Section 5.1 irrespective of whether any patent, copyright, trademark or other right or protection is issued in connection therewith.  
(f)     Employee also agrees that Employee will not, without the prior approval of the Chief 

 

Executive Officer, use for Employee's benefit or disclose at any time during Employee's employment by the Company, or thereafter, except to the extent required by the performance by Employee of Employee's duties, any information obtained or developed by Employee while in the employ of the Company with respect to any Developments or with respect to any customers, clients, suppliers, products, services, prices, employees, financial affairs, or methods of design, distribution, marketing, service, procurement or manufacture of the Company or any confidential matter, except information which at the time is generally known to the public other than as a result of disclosure by Employee not permitted hereunder.  Notwithstanding the foregoing, the following will not constitute confidential information for purposes of this Agreement: (i) information which is or becomes publicly available other than as a result of disclosure by the Employee; (ii) information designated in writing by the Company as no longer confidential; or (iii) information known by Employee as of the date of this Agreement, to the extent Employee can document such prior knowledge.  In addition, Employee may use or disclose Company confidential information to the extent Employee is legally compelled to disclose such information; provided, that prior to any such compelled disclosure, Employee shall give the Company reasonable advance notice of any such disclosure and shall cooperate with the Company in protecting against any such disclosure and/or obtaining a protective order narrowing the scope of such disclosure and/or use of such information.  Employee will comply with all intellectual property disclosure policies established by the Company from time to time with respect to the Company's confidential information, including with respect to Developments.  
5.2    Non-Disclosure of Third Party Information.  Employee represents, warrants and covenants that Employee shall not disclose to the Company, or use, or induce the Company to use, any proprietary information or trade secrets of others at any time, including but not limited to any proprietary information or trade secrets of any former employer, if any; and Employee acknowledges and agrees that any violation of this provision shall be grounds for Employee’s immediate termination and could subject Employee to substantial civil liabilities and criminal penalties.  Employee further specifically and expressly acknowledges that no officer or other employee or representative of the Company has requested or instructed Employee to disclose or use any such third party proprietary information or trade secrets.
5.3    Injunctive Relief.  Employee acknowledges and agrees that a remedy at law for any breach or threatened breach of the provisions of this Section 5 would be inadequate and, therefore, agrees that the Company shall be entitled to injunctive relief in addition to any other available rights and remedies in case of any such breach or threatened breach.
		
	6.
	LIMITED AGREEMENT NOT TO COMPETE OR SOLICIT.

6.1    Non-Competition.  During the Term and also after expiration or termination of the Term if, and only for so long as, Employee is receiving the Severance Payments (collectively, the “Restricted Period”), unless mutually agreed otherwise by the Employee and the Company, Employee shall not, directly or indirectly, work as an employee, consultant, agent, principal, partner, manager, officer, or director for any person or entity who or which engages in a substantially similar business as the Company.  For purposes of this Agreement, the Company is currently engaged in the business of designing, developing, providing and selling video communication services; provided, that the Restricted Period shall run concurrently with, and shall not be extended for, the Tolling Period, if any.
6.2    Non-Solicitation.  Employee shall not, during the Restricted Period, either directly or indirectly: (a) call on or solicit for similar services, or, encourage or take away any of the Company’s customers or potential customers about whom Employee became aware or with whom Employee had contact as a result of Employee’s employment with the Company, either for benefit of Employee or for any other person or entity; or (b) solicit, induce, recruit, or encourage any of the Company’s employees or contractors to leave the employ of the Company or cease providing services to the Company on behalf of the Employee or on behalf of any other person or entity; or (c) hire for himself or any other person or entity any employee who 

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was employed or engaged by the Company within six months prior to the termination of Employee’s employment.
6.3    Limitations; Remedies.  The Employee further agrees that the limitations set forth in this Section 6 (including, without limitation, any time limitation) are reasonable and properly required for the adequate protection of the businesses of the Company.  The Employee agrees that the lack of territorial limit is reasonable given the global reach of the Company.  If any of the restrictions contained in Sections 6.1 and 6.2 are deemed by a court or arbitrator to be unenforceable by reason of the extent, duration or geographic scope thereof, or otherwise, then the parties agree that such court or arbitrator may modify such restriction to the extent necessary to render it enforceable and enforce such restriction in its modified form.  The Employee acknowledges and agrees that a remedy at law for any breach or threatened breach of the provisions of this Section 6 would be inadequate and, therefore, agrees that the Company shall be entitled to injunctive relief in addition to any other available rights and remedies in cases of any such breach or threatened breach.
		
	7.
	ALTERNATIVE DISPUTE RESOLUTION.

7.1    The Company and Employee mutually agree that any controversy or claim arising out of or relating to this Agreement or the breach thereof, or any other dispute between the parties arising from or related to Employee’s employment with the Company, shall be submitted to mediation before a mutually agreeable mediator.  In the event mediation is unsuccessful in resolving the claim or controversy, such claim or controversy shall be resolved by arbitration  
7.2    Company and Employee agree that arbitration shall be held in New Jersey, before a mutually agreed upon single arbitrator licensed to practice law, in accordance with the rules of the American Arbitration Association.  The arbitrator shall have authority to award or grant legal, equitable, and declaratory relief.  Such arbitration shall be final and binding on the parties.  If the parties are unable to agree on an arbitrator, the matter shall be submitted to the American Arbitration Association solely for appointment of an arbitrator.  
7.3    The claims covered by this Agreement (“Arbitrable Claims”) include, but are not limited to, claims for wages or other compensation due; claims for breach of any contract (including this Agreement) or covenant (express or implied); tort claims; claims for discrimination (including, but not limited to, race, sex, religion, national origin, age, marital status, medical condition, or disability); claims for benefits (except where an employee benefit or pension plan specifies that its claims procedure shall culminate in an arbitration procedure different from this one); and claims for violation of any federal, state, or other law, statute, regulation, or ordinance, except claims excluded in the following paragraph.  The parties hereby waive any rights they may have to trial by jury in regard to Arbitrable Claims.  
7.4    This Section 7 does not cover (a) claims that Employee may have for Workers' Compensation State disability or unemployment compensation benefits or (b) either party's right to obtain provisional remedies, or interim relief from a court of competent jurisdiction.
7.5    Arbitration under this Agreement shall be the exclusive remedy for all Arbitrable Claims.  This agreement to mediate and arbitrate survives termination of Employee’s employment.
		
	8.
	AMENDMENTS; WAIVERS; REMEDIES.

This Agreement may not be amended or waived except by a writing signed by Employee and by a duly authorized representative of the Company.  Failure to exercise any right under this Agreement shall not constitute a waiver of such right.  Any waiver of any breach of this Agreement shall not operate as a waiver of any subsequent breaches.  All rights or remedies specified for a party herein shall be cumulative and in addition to all other rights and remedies of the party hereunder or under applicable law.
		
	9.
	ASSIGNMENT; BINDING EFFECT.

9.1    Assignment.  The performance of Employee is personal hereunder, and Employee agrees 

 

that Employee shall have no right to assign and shall not assign or purport to assign any rights or obligations under this Agreement.  This Agreement may be assigned or transferred by the Company; and nothing in this Agreement shall prevent the consolidation, merger or sale of the Company or a sale of any or all or substantially all of its assets.
9.2    Binding Effect.  Subject to the foregoing restriction on assignment by Employee, this Agreement shall inure to the benefit of and be binding upon each of the parties, the affiliates, officers, directors, agents, successors and assigns of the Company, and the heirs, devisees, spouses, legal representatives and successors of Employee.
		
	10.
	SEVERABILITY.

If any provision of this Agreement shall be held by a court or arbitrator to be invalid, unenforceable, or void, such provision shall be enforced to the fullest extent permitted by law, and the remainder of this Agreement shall remain in full force and effect.  In the event that the time period or scope of any provision is declared by a court or arbitrator of competent jurisdiction to exceed the maximum time period or scope that such court or arbitrator deems enforceable, then such court or arbitrator shall reduce the time period or scope to the maximum time period or scope permitted by law.
		
	11.
	TAXES.

All amounts paid under this Agreement (including, without limitation, Base Salary) shall be reduced by all applicable state and federal tax withholdings and any other withholdings required by any applicable jurisdiction.
		
	12.
	GOVERNING LAW.

The validity, interpretation, enforceability, and performance of this Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, without regard to New Jersey conflict of laws principles.  
		
	13.
	INTERPRETATION.

This Agreement shall be construed as a whole, according to its fair meaning, and not in favor of or against any party.  Sections and section headings contained in this Agreement are for reference purposes only, and shall not affect in any manner the meaning or interpretation of this Agreement.  Whenever the context requires, references to the singular shall include the plural and the plural the singular.  
		
	14.
	OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT.

The Parties' rights and obligations that by their nature would extend beyond the termination or expiration of this Agreement, including, without limitation, the confidentiality, non-solicit and non-compete provisions, shall survive such termination or expiration.
		
	15.
	AUTHORITY.

Each party represents and warrants that such party has the right, power and authority to enter into and execute this Agreement and to perform and discharge all of the obligations hereunder and that this Agreement constitutes the valid and legally binding agreement and obligation of such party and is enforceable in accordance with its terms.
		
	16.
	ENTIRE AGREEMENT.

This Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior or contemporaneous representations, discussions, proposals, negotiations, conditions, communications and agreements, whether written or oral, between the parties relating to the subject matter hereof and all past courses of dealing or industry custom, including, 

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without limitation, the Consulting Agreement dated July 13, 2010 between the parties and also the Prior Agreements.  Employee acknowledges Employee has had the opportunity to consult legal counsel concerning this Agreement, that Employee has read and understands the Agreement, that Employee is fully aware of its legal effect, and that Employee has entered into it freely based on Employee’s own judgment and not on any representations or promises other than those contained in this Agreement.

In Witness Whereof, the parties have duly executed this Agreement as of the date first written above.  

	
				
	Glowpoint, Inc.

	Employee
	 

	/s/ Joseph Laezza    
Name:  Joseph Laezza
Title:  President and CEO
	/s/ Steven B. Peri    
Steven B. Periex10_1.htm

 

EXHIBIT 10.1

TETRA Technologies, Inc.

EMPLOYEE EQUITY AWARD AGREEMENT

This Employee Equity Award Agreement (the “Equity Award Agreement”), effective as of and signed by both parties on August 15, 2012 (the “Grant Date”), is between TETRA Technologies, Inc., a Delaware corporation (“TETRA” or the “Company”), and Elijio V. Serrano (“Serrano”).

In connection with the initial employment of Serrano with the Company as an executive officer, in order to provide an equity incentive to Serrano by affording him the opportunity to acquire shares of common stock of the Company, $0.01 par value per share (“Common Stock”), and in consideration of the mutual agreements set forth herein, the Company and Serrano hereby agree as follows:

1. Administration. This Equity Award Agreement shall be administered by the Management and Compensation Committee (the “Compensation Committee”) of the board of directors of the Company (the “Board”), but only if the Compensation Committee shall consist of not less than three members of the Board, each of whom shall qualify as a “non-employee director” (as that term is defined in Rule 16b-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) appointed by and serving at the pleasure of the Board to administer the Equity Award Agreement and if not, then by the Board (and in either such case, the term “Committee” shall refer to the Compensation Committee or the Board, whichever shall be responsible pursuant to the forgoing for administering this Equity Award Agreement). The Committee shall (i) interpret this Equity Award Agreement, (ii) make, amend and rescind such rules as it deems necessary for the proper administration of this Equity Award Agreement, (iii) make all other determinations necessary or advisable for the administration of this Equity Award Agreement, (iv) correct any defect or supply any omission or reconcile any inconsistency in this Equity Award Agreement in the manner and to the extent that the Committee deems desirable to effectuate this Equity Award Agreement and (v) appoint any employee of the Company or other person to be responsible for and to perform all or any portion of the ministerial duties in the administration of this Equity Award Agreement (the “Plan Administrator”), but such employee or other person shall have no other authority or powers of the Committee. Any action or determination made by the Committee pursuant to this and the other sections of this Equity Award Agreement shall be final, binding and conclusive on all affected persons. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to this Equity Award Agreement and the members of the Board and the Committee shall be entitled to indemnification and reimbursement by the Company and its Affiliates in respect of any claim, loss, damage or expense (including legal fees) arising therefrom to the full extent permitted by law.

2. Grant of Option. The Company hereby awards to Serrano the right, privilege and option as herein set forth to purchase up to 79,051 shares of Common Stock (the “Option Shares”), subject to and in accordance with the terms and conditions of this Equity Award Agreement (each individual right to purchase one Option Share hereunder, an “Option,” and the collective right to purchase any or all of the Option Shares hereunder, the “Option”). The Option awarded hereunder is not intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

(a) Option Terms. Subject to earlier termination as provided herein, the Option shall expire on the 10th anniversary of the Grant Date, which anniversary shall be August 15, 2022. The period during which the Option is in effect is referred to as the “Option Period.”

 

  

  

  

 

(b) Option Exercise Price. The exercise price (the “Exercise Price”) of Option Shares subject to the Option shall be $6.60 per Option Share, which is no less than the Fair Market Value (as defined herein) per share of the Common Stock on the Grant Date.

(c) Option Vesting. An Option may be exercised only if (subject to other conditions set forth herein) such Option has vested and has not expired or been forfeited. Subject to the provisions of this Equity Award Agreement, including, without limitation, the following provisions of this Section 2(c), the Options shall vest in accordance with the following schedule:

33.3334% of the total number of Options shall vest on the date that is one year following the Grant Date, and thereafter 2.7778% of such Options shall vest each month, ending on the third anniversary of the Grant Date. If the number of Options vesting on any date is not a whole number, the fractional share shall be carried forward until such time as all fractional shares equal a whole number. On the final vesting date, the number of Options vesting, and the number of Option Shares that may be purchased under such Options on such date shall be adjusted, as necessary, so that the total number of Options Shares that may be purchased hereunder will not exceed the number of Option Shares set forth above in this Section 2.

Option Shares may be purchased by the exercise of all or any portion of the then-vested, unexpired, non-forfeited Options at any time during the Option Period. In addition, the Committee may accelerate the vesting and the time at which all or any portion of the Option may be exercised, (i) upon the occurrence of a Change in Control in accordance with Section 5 below, or (ii) upon the death, Disability or retirement of Serrano in accordance with Section 4 below.

(d) Method of Exercise. To exercise the Option, Serrano shall deliver notice to the Company at its principal executive office, directed to the Plan Administrator, such exercise to be effective at the time of receipt of such notice at the Company’s principal executive office during normal business hours, stating the number of Option Shares with respect to which the Option is being exercised together with payment for such Option Shares and any required withholding taxes, unless other arrangements for withholding tax liability have been made with the Committee. The exercise notice shall be delivered in person, by certified or regular mail, or by such other method (including electronic transmission) as determined from time to time by the Committee or the Plan Administrator. Any exercise of the Option must be for a minimum of 100 Option Shares or, if less, for all remaining Option Shares subject to the Option.

(e) Payment of Exercise Price and Required Withholding. In order to exercise the Options, Serrano or other person or persons entitled to exercise such Options shall deliver to the Company payment in full for (i) the Exercise Price of the Option Shares being purchased and (ii) unless otherwise provided herein or other arrangements have been made with the Committee, any required withholding taxes. The payment of the Exercise Price for the Option Shares purchased shall either be (i) in cash, or by check payable and acceptable to the Company, (ii) by tendering to Company shares of Common Stock owned by the person exercising the Options for more than six months having an aggregate Fair Market Value as of the date of exercise that is not greater than the full Exercise Price for the Option Shares with respect to which the Options are being exercised and by paying any remaining amount of the Exercise Price (and any required withholding taxes) as provided in (i) above, or (iii) in compliance with such instructions as the Committee may specify, by delivering to the Company and to a broker a properly executed exercise notice and irrevocable instructions to such broker to deliver to the Company cash or a check payable and acceptable to the Company to pay the Exercise Price and any applicable withholding taxes. Upon receipt of the cash or check from the broker, the Company will deliver to 

 

  

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the broker the Option Shares for which the Options are exercised. In the event that the person elects to make payment as allowed under clause (ii) above, the Company may, upon confirming that Serrano or other person or persons entitled to exercise such Options owns the number of additional shares being tendered, authorize the issuance of a new certificate for the number of Option Shares being acquired pursuant to the exercise of such Options less that number of shares being tendered upon the exercise and return to the person (or not require surrender of) the certificate for the shares being tendered upon the exercise. The date of sale of the Option Shares by the broker pursuant to a cashless exercise under (iii) above shall be the date of exercise of the Option. If the Committee so requires, such person or persons shall also deliver a written representation that all Option Shares being purchased are being acquired for investment and not with a view to, or for resale in connection with, any distribution of such Option Shares.

(f) Transferability. Except as provided below, the Option granted hereunder shall not be transferable other than by (i) will or by the laws of descent and distribution or (ii) pursuant to a domestic relations order and, during Serrano’s lifetime, it shall be exercisable only by Serrano (or his guardian). Any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of the Option, or to subject the Option to execution, attachment or similar process contrary to the provisions hereof, shall be void and ineffective. Provided, however, that in accordance with rules and procedures established by the Committee from time to time, Serrano (or his guardian) may transfer, for estate planning purposes, all or part of the Option to one or more immediate family members or related family trusts or partnerships or similar entities as determined by the Committee. If the Option is transferred in accordance with the provisions of this Section, it may only be exercised by the person or persons who acquire a proprietary interest in the Option pursuant to the transfer.

(g) Shares Reserved. The Company shall at all times during the Option Period reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of the Option granted hereunder.

3. Grant of Restricted Stock. The Company hereby awards to Serrano all rights, title and interest in the record and beneficial ownership of 46,898 shares of Common Stock (the “Restricted Stock”), subject to and in accordance with the terms and conditions of this Equity Award Agreement.

(a) Escrow of Restricted Stock. The Restricted Stock shall be represented by uncertificated shares designated for Serrano in book-entry registration on the records of the Company’s transfer agent or, at the discretion of the Company, by a stock certificate issued and registered in Serrano’s name, in each case subject to the restrictions set forth in this Equity Award Agreement. Any book-entry uncertificated shares or stock certificates evidencing the Restricted Stock shall be held in custody by the Company until the restrictions thereon have lapsed, and as a condition of this award, Serrano shall deliver to the Company a stock power in substantially the form of Exhibit A attached hereto, endorsed in blank, with respect to any certificated shares of Restricted Stock.

The shares of Restricted Stock which are the subject of this Equity Award Agreement shall be subject to the following legend:

The shares represented by this certificate or book-entry registration have been issued pursuant to the terms of the Equity Award Agreement between TETRA Technologies, Inc. and Elijio V. Serrano and may not be sold, pledged, transferred, assigned or otherwise encumbered in any manner except as is set forth in the terms of this Equity Award Agreement dated August 15, 2012.

 

  

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In addition, the shares of Restricted Stock shall be subject to such stop-transfer orders and other restrictive measures as the Company may deem advisable under applicable securities laws, or to implement the terms, conditions or restrictions hereunder.

Following the vesting of any portion of the shares of the Restricted Stock and the removal of any restrictions thereon in accordance with Section 6 below, the Company will cause all restrictions to be removed from book-entry registrations or, at the Company’s discretion, issue a stock certificate, without such restrictive legend, in each case only with respect to the vested portion of the shares of the Restricted Stock registered on the Company’s books and records in the name of Serrano. Following the expiration of the Restricted Period, the Company will cause all restrictions to be removed from book-entry registrations or, at the Company’s discretion, issue a stock certificate, without such restrictive legend, for any shares of the Restricted Stock that have vested and with respect to which the restrictions imposed thereon have lapsed, in each case only to the extent such action has not previously been taken in accordance with the preceding sentence.

(b) Risk of Forfeiture. Serrano shall immediately forfeit all rights to any shares of the Restricted Stock which have not vested and with respect to which the restrictions thereon have not lapsed in the event of termination, resignation, or removal of Serrano from employment with the Company or any Affiliate (as defined herein) under circumstances that do not cause Serrano to become fully vested, and the restrictions on such shares of Restricted Stock to lapse, under the terms of this Equity Award Agreement.

(c) Restricted Period; Vesting. Subject to the provisions of this Equity Award Agreement including, without limitation, the following provisions of this Section 3(c), the total number of shares of Restricted Stock subject to this Equity Award Agreement shall vest, and the restrictions imposed thereon shall lapse, in accordance with the following schedule:

33.3334% of the total number of shares of Restricted Stock shall vest on the date that is one year following the Grant Date, and thereafter 16.6667% of such shares shall vest once every six months, ending on the third anniversary of the Grant Date. If the number of shares of Restricted Stock vesting on any date is not a whole number, the fractional share shall be carried forward until such time as all fractional shares equal a whole number. On the final vesting date, the number of shares of Restricted Stock vesting on such date shall be adjusted, as necessary, so that the total number of shares vested hereunder will not exceed the number of shares of Restricted Stock set forth above in this Section 3.

The period from the Grant Date until all of the shares of the Restricted Stock have become  vested and/or forfeited shall be referred to as the “Restricted Period.”

The Committee may waive all restrictions and conditions of the Restricted Stock with the result that the shares of Restricted Stock that have not been forfeited shall be fully vested and the restrictions thereon shall have lapsed, (i) upon the occurrence of a Change in Control in accordance with Section 5 below, or (ii) upon the death, Disability or retirement of Serrano in accordance with Section 4 below.

(d) Transferability. Serrano shall not sell, assign, transfer, pledge, exchange, hypothecate, or otherwise dispose of any shares of the Restricted Stock. Following the vesting of any shares of Restricted Stock and the removal of any restrictions thereon in accordance with Section 3(c), Serrano may hold or dispose of such shares of Common Stock subject to 

 

  

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compliance with (i) the terms and conditions of this Equity Award Agreement, (ii) applicable federal or state securities laws or other applicable law, (iii) applicable rules of any exchange on which the Company’s securities are traded or listed, and (iv) the Company’s rules or policies as established by the Company in its sole discretion.

(e) Ownership Rights. Prior to any forfeiture of the shares of Restricted Stock and while such nonvested shares are restricted, Serrano shall, subject to the terms and restrictions of this Equity Award Agreement, have all rights with respect to the shares of Restricted Stock awarded hereunder including the right to vote the shares of Restricted Stock, whether or not vested in accordance with Section 3(c) above, and the right to receive all dividends, cash or stock, paid or delivered thereon from and after the Grant Date in accordance with the following provisions. During the Restricted Period, any dividends, cash or stock, paid or delivered on any of the nonvested, non-forfeited shares of the Restricted Stock, shall be credited to an account for the benefit of Serrano. In the event of the forfeiture of any nonvested shares of the Restricted Stock, Serrano shall have no further rights with respect to such Restricted Stock and shall forfeit any dividends, cash or stock, credited to the account for the benefit of Serrano which are related to the forfeited shares of Restricted Stock. To the extent the shares of Restricted Stock shall become fully vested and the restrictions imposed thereon shall lapse pursuant to Section 3(c) above, all dividends, cash and stock, if any, credited to the account for the benefit of Serrano shall be distributed to Serrano without interest. The account referred to above shall be a notional account only. The Company shall not segregate or set aside cash, shares or other property or assets for, or otherwise secure, the payment of any amounts that may be or become owed under this Section 3(e).

(f) Tax Withholding. Unless other arrangements have been made with the Committee, either (i) Serrano shall deliver to the Company payment in full for any required withholding taxes in connection with the vesting of shares of Restricted Stock, or (ii) Serrano shall surrender, and the Company shall deduct from the number of shares of Restricted Stock otherwise deliverable upon vesting, a number of shares that have an aggregate Fair Market Value per share as of the date of such withholding that is not greater than the sum of all tax amounts to be withheld with respect thereto at the minimum statutory rate, together with payment of any remaining portion of such tax amounts in cash or by check payable and acceptable to the Company.

4. Termination of Employment. Subject to any action by the Committee, if the employment of Serrano is terminated for any reason whatsoever including, without limitation, death, Disability or retirement, (i) any nonvested Option and any nonvested shares of the Restricted Stock outstanding at the time of such termination and all rights thereunder shall be forfeited and no further vesting shall occur, (ii) all nonvested shares of the Restricted Stock shall revert to the Company automatically without any payment or consideration and the Company shall have the right to take all necessary and appropriate actions to recover certificates and other indicia of such shares, and (iii) Serrano shall be entitled exercise any Options that have vested as of the date of termination for a period that shall end on the earlier of (A) the expiration date set forth in Section 2(a) above, or (B) the date that occurs three (3) months after such termination date.

(a) Retirement. Upon the termination of Serrano’s employment under circumstances as shall constitute retirement as determined by the Committee, (i) any nonvested Option and any nonvested shares of the Restricted Stock outstanding at the time of such retirement and all rights thereunder shall be forfeited and no further vesting shall occur, (ii) all nonvested shares of the Restricted Stock shall revert to the Company automatically without any payment or consideration and the Company shall have the right to take all necessary and appropriate actions to recover certificates and other indicia of such shares, and (iii) Serrano shall 

 

  

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be entitled to exercise any Options that have vested as of the date of retirement for a period that shall end on the earlier of (A) the expiration date set forth in Section 2(a) above, or (B) the date that occurs twelve (12) months after such retirement date.

(b) Disability or Death. Upon termination of Serrano’s employment as a result of the death or Disability (as herein defined) of Serrano, or in the event of Serrano’s death during the period described in Section 4(a)(iii), hereinafter the “Applicable Retirement Period,” or in the event of Serrano’s death during the period that expires on the earlier of the expiration date set forth in Section 2(a) above or the first anniversary of Serrano’s termination of employment due to Disability, hereinafter the “Applicable Disability Period,” (i) any nonvested Option and any nonvested shares of the Restricted Stock outstanding at the time of such death or Disability and all rights thereunder that have not previously been forfeited shall then be forfeited and no further vesting shall occur, (ii) all nonvested shares of the Restricted Stock shall revert to the Company automatically without any payment or consideration and the Company shall have the right to take all necessary and appropriate actions to recover certificates and other indicia of such shares, and (iii) Serrano shall be entitled to exercise any Options that have vested as of the date of such termination for a period that shall end on the earlier of (A) the expiration date set forth in Section 2(a) above, or (B) the later of (1) the first anniversary of Serrano’s termination of employment as a result of Disability or death, or (2) the first anniversary of Serrano’s death during the Applicable Retirement Period or the Applicable Disability Period.

(c) Acceleration of Vesting and Lapse of Restrictions. Notwithstanding the above provisions of this Section 4, upon Serrano’s retirement, or upon termination of Serrano’s employment as a result of Disability or death, the Committee, in its discretion, may provide (i) that all or any portion of the Options that are not vested at such time shall become vested and, together with the previously vested Options, shall be exercisable for such period and upon such terms and conditions as may be determined by the Committee, provided that such continuation may not exceed the expiration date set forth in Section 2(a) above; and, (ii) with respect to Restricted Stock, that all or any portion of the shares of Restricted Stock that are not vested at such time shall become vested; provided, however, that no acceleration of vesting and waiver of restrictions will be effective prior to the date of the Committee’s written determination.

(d) Continuation. Notwithstanding any other provision of this Equity Award Agreement, the Committee, in its discretion, may provide that any or all of the vested Options shall remain exercisable for such period and upon such terms and conditions as are determined by the Committee in the event of Serrano’s termination of employment; provided, however, that such continuation may not exceed the expiration date set forth in Section 2(a) above.

5. Change in Control.

 

(a)  A “Change in Control” shall be deemed to have occurred upon any of the following events:

 

(i) any “person” (as defined in Section 3(a)(9) of the Exchange Act, and as modified in Section 13(d) and 14(d) of the Exchange Act) other than (A) the Company or any of its subsidiaries, (B) any employee benefit plan of the Company or any of its subsidiaries, (C) or any Affiliate, (D) a company owned, directly or indirectly, by stockholders of the Company in substantially the same proportions as their ownership of the Company, or (E) an underwriter temporarily holding securities pursuant to an offering of such securities (a “Person”), becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the shares of voting stock of the Company then outstanding;

 

  

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(ii) the consummation of any merger, reorganization, business combination or consolidation of the Company or one of its subsidiaries with or into any other company, other than a merger, reorganization, business combination or consolidation which would result in the holders of the voting securities of the Company outstanding immediately prior thereto holding securities which represent immediately after such merger, reorganization, business combination or consolidation more than 50% of the combined voting power of the voting securities of the Company or the surviving company or the parent of such surviving company;

 

(iii) the consummation of a sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition if the holders of the voting securities of the Company outstanding immediately prior thereto hold securities immediately thereafter which represent more than 50% of the combined voting power of the voting securities of the acquiror, or parent of the acquiror, of such assets;

 

(iv) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company; or

 

(v) individuals who, as of the Grant Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Grant Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board, shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an election contest with respect to the election or removal of directors or other solicitation of proxies or consents by or on behalf of a person other than the Board.

 

Notwithstanding the foregoing, however, in any circumstance or transaction in which compensation resulting from or in respect of this award would be subject to the income tax under Section 409A of the Code if the foregoing definition of “Change in Control” were to apply, but would not be so subject if the term “Change in Control” were defined herein to mean a “change in control event” within the meaning of Treas. Reg. § 1.409A-3(i)(5), then “Change in Control” shall mean a transaction, event or circumstance that constitutes a Change in Control as defined above and that also constitutes a “change in control event” within the meaning of Treas. Reg. § 1.409A-3(i)(5), but only to the extent necessary to prevent such compensation from becoming subject to the income tax under Section 409A of the Code.

 

(b) In the event of a Change in Control described in clauses (ii), (iii) and (iv) of this Section 5, the Committee may:

 

(i) accelerate the vesting and the time at which the Options then outstanding may be exercised so that the Options may be exercised in full for a limited period of time on or before a specified date fixed by the Committee, after which specified date all unexercised Options and all Serrano’s rights thereunder shall terminate, or the Committee may accelerate vesting and the time at which Options may be exercised so that the Options may be exercised in full for their then remaining term; and

 

(ii) waive all restrictions and conditions of all Restricted Stock then outstanding with the result that the shares of Restricted Stock shall be fully vested and all restrictions shall be deemed satisfied, and the Restricted Period shall be deemed to have expired as of the date of the Change in Control or such other date as may be determined by the Committee.

 

  

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Notwithstanding the above, the Committee shall not be required to take any action described in the preceding sentence and any decision made by the Committee, in its sole discretion, not to take some or all of the actions described in the preceding sentence shall be final, binding and conclusive with respect to the Company and all other interested persons.

 

(c) If approved by the Board prior to or within thirty (30) days after such time as a Change in Control shall be deemed to have occurred, the Board shall have the right for a forty-five (45) day period immediately following the date that the Change in Control is deemed to have occurred to require Serrano to transfer and deliver to Company all nonvested Options and shares of Restricted Stock in exchange for an amount equal to the “cash value” (defined below) of such Options and shares of Restricted Stock. Such right shall be exercised by written notice to Serrano. The cash value of such Options shall equal the “market value” (defined below) per share over the exercise price of an Option Share, multiplied by the number of nonvested Options. The cash value of such shares of Restricted Stock shall equal the “market value” (defined below) of the Restricted Stock, multiplied by the number of nonvested shares of Restricted Stock with respect to which the restrictions have not lapsed. For purposes of the preceding sentences, “market value” per share shall mean the higher of (i) the average of the Fair Market Value (as herein defined) per share of Common Stock on each of the five trading days immediately following the date a Change in Control is deemed to have occurred or (ii) the highest price, if any, offered in connection with the Change in Control. The amount payable to Serrano by the Company pursuant to this Section 5(c) shall be paid in cash or by certified check and shall be reduced by any taxes required to be withheld.

6. Reorganization of Company and Subsidiaries. The existence of the awards granted hereunder shall not affect in any way the right or power of Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of Company or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Option Shares or the shares of Restricted Stock, or the rights thereof, or the dissolution or liquidation of Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

7. Adjustment of Shares. In the event that at any time after the date of this Equity Award Agreement the outstanding shares of Common Stock are changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of a merger, consolidation, recapitalization, reclassification, stock split, stock dividend, combination of shares or the like, the Committee shall, in such manner as it may deem equitable, make adjustment to the aggregate number of Option Shares and shares of Restricted Stock which have not vested under this Equity Award Agreement, subject to any required action by the stockholders of the Company.

8. Certain Restrictions. By executing this Equity Award Agreement, Serrano agrees that if at the time of exercise of the Option Shares or delivery of the shares of Restricted Stock issued hereunder any sale of such shares of Common Stock is not covered by an effective registration statement filed under the Securities Act of 1933 (“Act”), the shares resulting from the exercise of Option Shares or the delivery of Restricted Stock may be subject to such stop-transfer orders, legends and other restrictive measures as the Company shall require and Serrano will acquire the Option Shares or shares of Restricted Stock for Serrano’s own account and without a view to resale or distribution in violation of the Act or any other securities law, and upon any such acquisition Serrano will enter into such written representations, warranties and agreements as Company may reasonably request in order to comply with the Act or any other securities law or with this Equity Award Agreement. Serrano agrees that the Company shall not be obligated to take any affirmative action in order to cause the issuance or transfer of shares deliverable 

 

  

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hereunder to comply with any law, rule or regulation that applies to the shares subject to this Equity Award Agreement.

9. Amendment and Termination. The Equity Award Agreement may not be terminated by the Board or the Committee at any time without the written consent of Serrano. This Equity Award Agreement may be amended in writing by the Company and Serrano, provided the Company may amend this Equity Award Agreement unilaterally (i) if the amendment does not adversely affect Serrano’s rights hereunder in any material respect, (ii) if the Company determines that an amendment is necessary to comply with Rule 16b-3 under the Exchange Act, or (iii) if the Company determines that an amendment is necessary to meet the requirements of the Code or to prevent adverse tax consequences to Serrano. No amendment or termination of this Equity Award Agreement will adversely affect the rights and privileges of Serrano to the awards granted hereunder without the written consent of Serrano.

10. No Guarantee of Employment. Neither this Equity Award Agreement nor the awards evidenced hereby shall confer upon Serrano any right with respect to continuance of employment or other service with the Company or any Affiliate, nor shall it interfere in any way with any right Company or any Affiliate would otherwise have to terminate Serrano’s employment or other service at any time.

11. Tax Matters.

(a) The Company shall have the right to require such arrangements and/or take such actions as may be necessary or appropriate to satisfy any withholding of any federal, state or local taxes required by law upon the exercise of Options or the vesting of shares of Restricted Stock and satisfaction of the conditions precedent under this Equity Award Agreement. Such arrangements or actions may include (i) deducting from the number of Option Shares or shares of Restricted Stock otherwise deliverable upon exercise or vesting and satisfaction of the conditions precedent under this Equity Award Agreement a number of shares that have an aggregate Fair Market Value per share as of the date of such withholding that is not greater than the sum of all tax amounts to be withheld with respect thereto at the minimum statutory rate, together with payment of any remaining portion of such tax amounts in cash or by check payable and acceptable to the Company, or (ii) taking such other action as may be necessary or appropriate to satisfy any such tax withholding obligations.

(b) Serrano understands and acknowledges the following: Under Section 83 of the Code, the difference between the purchase price paid, if any, for the shares of Restricted Stock and their Fair Market Value on the date of vesting when any forfeiture restrictions applicable to such shares lapse will be reportable as ordinary income for federal income purposes at that time. For this purpose, “forfeiture restrictions” include the Company’s rights to reacquire the shares of the nonvested Restricted Stock described above. Alternatively, Serrano may elect to be taxed as of the Grant Date, rather than when such shares vest and cease to be subject to such forfeiture restrictions, by filing an election under Section 83(b) of the Code with the Internal Revenue Service within thirty (30) days after the Grant Date. If such an election is made, Serrano will be required to recognize ordinary income for federal income tax purposes to the extent the purchase price, if any, paid by Serrano for such shares is less than the Fair Market Value of the shares (determined without regard to the vesting requirements and forfeiture restrictions hereunder) on the Grant Date.  Making the election under Section 83(b) of the Code will not alter or affect the vesting requirements or  the risk of forfeiture provided for in this Equity Award Agreement.

SERRANO ACKNOWLEDGES THAT IT IS SERRANO’S SOLE RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A TIMELY ELECTION UNDER SECTION 83(b) IF SERRANO ELECTS TO DO SO, EVEN IF SERRANO REQUESTS THE COMPANY OR ITS

 

  

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REPRESENTATIVES TO MAKE THIS FILING ON SERRANO’S BEHALF. SERRANO MUST AND IS RELYING SOLELY ON SERRANO’S OWN ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER OR NOT TO FILE ANY SECTION 83(b) ELECTION.

(c) The parties intend this Equity Award Agreement and the compensation provided hereunder to be exempt from and/or compliant with Section 409A of the Code and will interpret, administer and apply this Equity Award Agreement in accordance with such intentions. Nonetheless, neither Company nor the Board or Committee makes any commitment or guarantee that any federal or state tax treatment will apply or be available to any person eligible for the benefits under this Equity Award Agreement.

(d) Notwithstanding any other provision of this Equity Award Agreement to the contrary, if Serrano is a “key employee,” as defined in Section 416(i) of the Code (without regard to paragraph 5 thereof), except to the extent permitted under Section 409A of the Code, no benefit or payment that is subject to Section 409A of the Code (after taking into account all applicable exceptions to Section 409A of the Code, including but not limited to the exceptions for short-term deferrals and for “separation pay only upon an involuntary separation from service”) shall be made under this Equity Award Agreement on account of Serrano’s “separation from service,” as defined in Section 409A of the Code, with the Company and its Affiliates until the later of the date prescribed for payment in this Equity Award Agreement and the first (1st) day of the seventh (7th) calendar month that begins after the date of Serrano’s separation from service (or, if earlier, the date of his death). Unless otherwise provided in this Equity Award Agreement, any amount that is otherwise payable within the delay period described in the immediately preceding sentence will be aggregated and paid in a lump sum without interest.

12. Definitions. As used herein, the following terms shall have the meanings set forth below:

(a) Affiliate means (i) any entity in which the Company, directly or indirectly, owns 10% or more of the combined voting power, as determined by the Committee, (ii) any “parent corporation” of the Company (as defined in Section 424(e) of the Code), (iii) any “subsidiary corporation” of any such parent corporation (as defined in Section 424(f) of the Code) of the Company and (iv) any trades or businesses, whether or not incorporated which are members of a controlled group or are under common control (as defined in Sections 414(b) or (c) of the Code) with the Company.

(b) Covered Employee means any of the Chief Executive Officer of the Company and the three highest paid officers of the Company other than the Chief Executive Officer or the Chief Financial Officer as described in Section 162(m)(3) of the Code.

(c) Disability means an inability to perform material services for the Company for a period of 90 consecutive days or a total of 180 days, during any 365-day period, in either case as a result of incapacity due to mental or physical illness, which is determined to be total and permanent. A determination of Disability shall be made by a physician satisfactory to both Serrano (or his guardian) and the Company, provided that if Serrano (or his guardian) and the Company do not agree on a physician, Serrano and the Company shall each select a physician and these two together shall select a third physician, whose determination as to Disability shall be final, binding and conclusive with respect to all parties. Notwithstanding the above, eligibility for disability benefits under any policy for long-term disability benefits provided to Serrano by the Company shall conclusively establish the disability. In the case this award is or becomes subject to Section 409A of the Code, “Disability” means a condition that meets the requirements of Treas. Reg. § 1.409A-3(i)(4).

 

  

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(d) Fair Market Value means, as of any given date, the closing price per share on the principal exchange or over-the-counter market on which such shares are trading, if any, or as reported on any composite index which includes such principal exchange, or if no trade of the Common Stock shall have been reported for such date, the closing price quoted on such exchange or market for the most recent preceding date on which such shares were traded. The term “closing price” on any given day shall mean (i) if the shares of Common Stock are listed or admitted for trading on a national securities exchange, the last reported sales price on such day, or (ii) if the shares of Common Stock are not listed or admitted for trading on a national securities exchange, the last transaction price on such day of the shares of Common Stock on the Nasdaq Market, Inc. (“NASDAQ”). If shares of the Common Stock are not listed or admitted to trading on any exchange, over-the-counter market or any similar organization on any given day, the Fair Market Value shall be determined by the Committee in good faith using any fair and reasonable means selected in its discretion.

13. Leave of Absence. If Serrano is on military, sick leave or other bona fide leave of absence, he shall be considered an “employee” for purposes of this Equity Award Agreement during the period of such leave provided it does not exceed 90 days (or such longer period as may be determined by the Committee in its sole discretion), or, if longer, so long as his right to reemployment is guaranteed either by statute or by contract. If the period of leave exceeds 90 days (or such longer period as may be determined by the Committee in its sole discretion), the employment relationship shall be deemed to have terminated on the 91st day (or the first day immediately following any period of leave in excess of 90 days as approved by the Committee) of such leave, unless his right to reemployment is guaranteed by statute or contract.

14. Community Interest of Spouse. The community interest, if any, of any spouse of Serrano in any Restricted Stock shall be subject to all of the terms, conditions and restrictions of this Equity Award Agreement.

15. Consent to Electronic Delivery; Electronic Signature. In lieu of receiving documents in paper format, Serrano agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Company may be required to deliver (including, but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other forms of communications) in connection with this and any other award made or offered by the Company. Electronic delivery may be via a Company electronic mail system or by reference to a location on a Company intranet to which Serrano has access. Serrano hereby consents to any and all procedures the Company has established or may establish for an electronic signature system for delivery and acceptance of any such documents that the Company may be required to deliver, and agrees that his electronic signature is the same as, and shall have the same force and effect as, his manual signature.

16. Clawback/Recoupment Policy. Notwithstanding any provisions in this Equity Award Agreement to the contrary, this Equity Award Agreement, the Option, any Option Shares acquired pursuant to the exercise of the Option, any shares of the Restricted Stock subject to this Equity Award Agreement, including without limitation, shares of Restricted Stock that have vested and with respect to which the restrictions imposed thereon have lapsed, and/or any income realized upon Serrano’s disposition of any such shares shall be subject to potential cancellation, rescission, clawback and recoupment (i) to the extent necessary to comply with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and any regulations or listing requirements promulgated thereunder, and/or (ii) as may be required in accordance with the terms of any clawback/recoupment policy as may be adopted by the Company to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and any regulations or listing requirements promulgated thereunder.

 

  

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17. Severability. In the event that any provision of this Equity Award Agreement shall be held illegal, invalid, or unenforceable for any reason, such provision shall be fully severable, but shall not affect the remaining provisions of this Equity Award Agreement, and this Equity Award Agreement shall be construed and enforced as if the illegal, invalid, or unenforceable provision had never been included herein.

18. Governing Law. This Equity Award Agreement shall be construed in accordance with the laws of the State of Delaware to the extent federal law does not supersede and preempt Delaware law.

COMPANY

TETRA Technologies, Inc.

 

By: /s/Stuart M. Brightman 

      Stuart M. Brightman

      President & Chief Executive Officer

SERRANO

By: /s/Elijio V. Serrano                                                                

      Elijio V. Serrano

 

 

 

 

  

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Exhibit A

Assignment Separate from Certificate

FOR VALUE RECEIVED,                       hereby sells, assigns and transfers unto TETRA Technologies, Inc., a Delaware corporation (the “Company”),                    (           ) shares of common stock of the Company represented by Certificate No.        herewith and does hereby irrevocably constitute and appoint                      , or his designee or successor, attorney to transfer the said stock on the books of the Company with full power of substitution in the premises.

Dated:                             , 20    .

 

 

                                                          

Print Name

                                                          

Signature

Spouse Consent (if applicable)

                      (Purchaser’s spouse) indicates by the execution of this Assignment his or her consent to be bound by the terms of the Employee Equity Award Agreement as to his or her interests, whether as community property or otherwise, if any, in the shares of common stock of the Company.

                                                         

Signature

 

INSTRUCTIONS: PLEASE DO NOT FILL IN ANY BLANKS OTHER THAN THE SIGNATURE LINE. THE PURPOSE OF THIS ASSIGNMENT IS TO ENABLE THE COMPANY TO EXERCISE ITS “REPURCHASE OPTION” SET FORTH IN THE EQUITY AWARD AGREEMENT WITHOUT REQUIRING ADDITIONAL SIGNATURES ON THE PART OF THE PURCHASER.

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