Document:

EX10.1 AMENDED EMPLOYMENT AGREEMENT

Exhibit 10.1
AMENDED EMPLOYMENT AGREEMENT
This Amended Employment Agreement (this “Agreement”) is entered into as of January 15, 2015 by and between AutoNation, Inc. (together with its subsidiaries and affiliates, the “Company”), and Michael J. Jackson (the “Executive”), an individual resident of the State of Florida. 
RECITALS 
WHEREAS, the Executive currently serves as the Chairman and Chief Executive Officer of the Company pursuant to an Employment Agreement dated as of July 25, 2013 (the “Prior Employment Agreement”), which is scheduled to expire by its terms on September 24, 2016; and 
WHEREAS, the Company and the Executive desire to amend and restate the Prior Employment Agreement with this Agreement, effective as of the date hereof, and desire to set forth herein amended terms and conditions of the Executive’s employment with the Company, including certain non-competition covenants applicable to the Executive. 
TERMS OF AGREEMENT 
In consideration of the mutual representations, warranties, covenants and agreements contained in this Agreement, the parties hereto agree as follows: 
		
	1.
	Employment. 

(a)Employment Period. The Executive shall serve as Chairman and Chief Executive Officer of the Company. Effective as of February 4, 2015, the Executive shall also serve as President of the Company until the Board determines otherwise.  The period during which the Executive shall serve as Chairman and Chief Executive Officer of the Company (the “Employment Period”) pursuant to the terms of this Agreement shall commence on the date hereof and shall continue until the close of business on December 31, 2019, unless earlier terminated pursuant to Paragraph 2 of this Agreement. The parties hereto agree that the Prior Employment Agreement shall terminate and be of no further force and effect as of the execution and delivery of this Agreement. 
(b)Duties and Responsibilities. During the Employment Period, the Executive shall have such authority and responsibility and perform such duties as are customary to the offices the Executive holds or as may be assigned to him from time to time at the direction of the Company’s Board of Directors. During the Employment Period, the Executive’s employment shall be full time and the Executive shall perform his duties honestly, diligently, competently, in good faith and in what he believes to be the best interests of the Company and shall use his best efforts to promote the interests of the Company. 
(c)Base Salary. In consideration for the Executive’s services hereunder and the restrictive covenants contained herein, the Executive shall be paid a base salary during the Employment Period at an annual rate of $1,250,000 (the “Salary”). The Salary will be payable in accordance with the Company’s customary payroll practices and will be subject to annual review and adjustment by the Compensation Committee (the “Committee”) of the Company’s Board of Directors (or such other duly authorized committee or subcommittee, as applicable); provided, however, that the Salary shall not be reduced during the Employment Period. 
(d)Bonus. During the Employment Period, the Executive shall participate in the Company’s Senior Executive Incentive Bonus Plan (the “Plan”), or any successor or substitute to the Plan, at such target award levels and upon such terms and conditions as are determined in the discretion of the Committee (or such other duly authorized committee or subcommittee, as applicable); provided, however, that the target award level for annual incentive bonuses under the Plan, or any successor or substitute to the Plan, will be no less than the existing target award level of 150% of the Executive’s Salary at such time. A portion of the Executive’s annual bonus will be deferred in accordance with the existing 3-year deferred bonus program for the Executive adopted by the Executive Compensation Subcommittee in 2013. Upon expiration of the existing 3-year deferred bonus program at the end of 2015, a new 3-year deferred bonus program similar to the current program will be established for the Executive.  
(e)Benefits. During the Employment Period, the Executive shall be entitled to (i) participate in any retirement plans, insurance programs and other fringe benefit plans and programs as are from time to time established and maintained for the benefit of executives of the Company, subject to the provisions of such plans and programs, (ii) participate in the 

AutoNation, Inc. CEO and President Vehicle Program (or successor program), and (iii) use of the Company’s corporate aircraft for personal travel for up to 70 hours per year (provided that the value of such travel will be included in the Executive’s annual income subject to tax in accordance with the applicable regulations of the Internal Revenue Service and Company policy). 
(f)Expenses. In addition to the compensation and benefits described above, the Executive shall be reimbursed for all out-of-pocket expenses reasonably incurred by him on behalf of or in connection with the business of the Company during the Employment Period, upon delivery of receipts and pursuant to the reimbursement standards and guidelines of the Company. 
(g)Equity-Based Awards. The Executive shall be entitled to participate in any annual stock option or other equity-based awards during the Employment Period (or other broad-based stock option or other equity-based awards that include senior executives of the Company) at an appropriate level as determined by the Committee (or such other duly authorized committee or subcommittee, as applicable). 
2.Termination. 
(a)Cause, Death and Disability. At any time during the Employment Period, the Company shall have the right to terminate the Employment Period and to discharge the Executive for “Cause” (as defined below). Upon any such termination by the Company for Cause, the Executive or his legal representatives shall be entitled to that portion of the Salary prorated through the date of termination, and the Company shall have no further obligations hereunder. Termination for Cause shall mean termination because of: (i) the Executive’s breach of his covenants contained in this Agreement; (ii) the Executive’s failure or refusal to perform the duties and responsibilities required to be performed by the Executive under the terms of this Agreement; (iii) the Executive willfully engaging in illegal conduct or gross misconduct in the performance of his duties hereunder (provided, that no act or failure to act shall be deemed “willful” if done, or omitted to be done, in good faith and with the reasonable belief that such action or omission was in the best interests of the Company); (iv) the Executive’s commission of an act of fraud or dishonesty affecting the Company or the commission of an act constituting a felony; or (v) Executive’s violation of Company policies in any material respect. 
The Company acknowledges that the Executive may resign or otherwise terminate the Employment Period and his employment with the Company without Good Reason (as defined below), provided that (a) the Company shall have no further obligations hereunder from and after the end of the Employment Period in such event and the Executive’s rights with respect to any employee stock options or other grants held by him shall be as set forth in the applicable equity or other incentive plan and any stock option or other grant agreements and (b) Executive shall provide reasonable written notice to the Company (in no event less than twenty (20) business days) of such resignation or termination, shall provide a reasonable transition of his duties and responsibilities with the Company and shall coordinate with the Company as to the public communication of the resignation or termination in order to ensure an orderly transition. 
In addition, in the event that during the Employment Period the Executive (i) dies, the Employment Period shall automatically terminate, or (ii) is unable to perform his duties and responsibilities as provided herein due to his physical or mental disability or sickness (a) for more than ninety (90) days (whether or not consecutive) during any period of twelve (12) consecutive months or (b) reasonably expected to extend for greater than three (3) months, the Company may at its election terminate the Employment Period and Executive’s employment. In the case of clause (i) or clause (ii) above, the Company shall have no further obligations hereunder from and after such termination date and the Executive’s rights with respect to any employee stock options or other grants held by him shall be as set forth in the applicable equity or other incentive plan and any stock option or other grant agreements. 
(b)Without Cause by the Company or by Executive for Good Reason. At any time during the Employment Period, the Company shall have the right to terminate the Employment Period and to discharge the Executive without Cause effective upon delivery of written notice to the Executive. At any time during the Employment Period, the Executive shall have the right to terminate the Employment Period for Good Reason if, after delivery of written notice to the Company, the Company has not cured the circumstances constituting “Good Reason” within ten (10) business days. Upon such termination of the Employment Period by the Company without Cause or by the Executive for Good Reason, as long as the Executive is in compliance with the provisions of Paragraphs 3 and 4 below and within thirty (30) days of termination of Executive’s employment the Executive executes a reasonable and mutually acceptable severance agreement with the Company that includes a release of the Company and a covenant of reasonable cooperation on matters Executive is involved with pertaining to the Company (a “Severance Agreement”), the Executive will be entitled to an amount equal to (i) the sum of the Executive’s then-current Salary plus annual bonus awarded to the Executive for the calendar year prior to such termination of the Executive’s employment plus (ii) the pro rata portion (based on the portion of the calendar year actually served by the Executive) of the annual bonus to which the Executive would have been entitled had the Executive not been terminated, to the extent applicable 

performance targets are met. Payment of the amount due under clause (i) above will be made by the Company within thirty (30) days following termination of the Executive. Payment of the amount due under clause (ii) above will be made by the Company at the same time as annual bonuses are paid to the Company’s other executives under the Plan for the year in which the Executive is terminated, but in no event later than March 15 of the following year. 
In addition, upon such termination of the Employment Period by the Company without Cause or by the Executive for Good Reason, as long as the Executive is in compliance with the provisions of Paragraphs 3 and 4 below and the Executive executes a Severance Agreement within thirty (30) days of termination of Executive’s employment: 
(1)the Executive and his dependents will be entitled to continue to participate in the Company’s group health and welfare benefit plans (as such plans are in effect at such time) for a period of 18 months following such termination at the same cost to the Executive as such benefits were provided prior to such termination (or the Company will procure and pay for comparable benefits during such time period); 
(2)all vested employee stock options or other grants carrying a right to exercise held by the Executive as of such termination will survive and be exercisable until the expiration of their initial term, at which time such stock options or other grants carrying a right to exercise, if not exercised, will terminate and be void; and 
(3)all unvested employee stock options or other grants held by the Executive will immediately vest on such termination, and employee stock options or other grants carrying a right to exercise will survive and be exercisable until the first anniversary of such termination, at which time such stock options or other grants carrying a right to exercise, if not exercised, will terminate and be void. 
At all times during the Employment Period, unless otherwise elected by the Executive with respect to all outstanding equity-based awards, the foregoing provisions of clause (2) and clause (3) of this paragraph shall govern in the event of any conflict between such provisions and the provisions of any stock option or other grant agreement to which the Executive is a party or the provisions of any equity or other incentive plan pursuant to which the Executive’s employee stock options or other grants were granted. 
“Good Reason” shall mean the occurrence of any of the following: (i) a material change by the Company in the Executive’s duties or responsibilities which would cause Executive’s position with the Company to become of materially and substantially less responsibility and importance than those associated with his duties or responsibilities as of the date hereof; provided, however, that removal of the Executive from the position of President shall not constitute Good Reason; or (ii) a material breach of this Agreement by the Company, which breach is not cured within ten (10) days after written notice thereof is received by the Company. 
(c)Upon termination of the Employment Period hereunder, at the Company’s request the Executive shall resign from the Company’s Board of Directors. 
(d)Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), (i) no amounts shall be paid to the Executive under Section 2 of this Agreement until the Executive would be considered to have incurred a separation from service from the Company within the meaning of Section 409A of the Code, and (ii) amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s separation from service shall instead be paid within 30 days following the date that is six months following the Executive’s separation from service (or death, if earlier). Each amount to be paid or benefit to be provided to the Executive pursuant to this Agreement, which constitutes deferred compensation subject to Section 409A, shall be construed as a separate identified payment for purposes of Section 409A. To the extent required to avoid accelerated or additional tax under Section 409A, amounts reimbursable to Executive under this Agreement shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in-kind benefits provided to Executive) during any one year may not effect amounts reimbursable or provided in any subsequent year. 
3.Restrictive Covenants. The Executive hereby acknowledges that the Company is as of the date hereof engaged primarily in the sale, leasing, financing and servicing of new and used vehicles, as well as the provision of related services and products, such as the sale of parts and accessories, extended service contracts, aftermarket automotive products and collision repair services (the “Auto Business”). The Executive further acknowledges that: (i) the Company may engage in additional related businesses or in separate and distinct businesses from time to time, (ii) the Company currently engages in its businesses by means of traditional retail establishments, the Internet and otherwise and the Company may in the future engage in its 

businesses by alternative means, and (iii) the Executive’s position with the Company is such that he will be privy to specific trade secrets, confidential information, confidential business lists, confidential records, customer goodwill, specialized training and employees, any or all of which have great and competitive value to the Company. 
The Executive hereby agrees that, during the Executive’s employment with the Company and for a period of one (1) year following the termination of the Executive’s employment with the Company (by the Company or the Executive for any reason), the Executive shall not, directly or indirectly, anywhere in the United States (or in any other geographic area outside the United States where the Company conducts business at any time during Executive’s employment with the Company): 
(a)participate or engage in or own an interest in, directly or indirectly, any individual proprietorship, partnership, corporation, joint venture, trust or other form of business entity, whether as an individual proprietor, partner, joint venturer, officer, director, member, employee, consultant, independent contractor, stockholder, lender, landlord, finder, agent, broker, trustee, or in any manner whatsoever (except for an ownership interest not exceeding 1% of a publicly-traded entity), if such entity or its affiliates is engaged, directly or indirectly, in the Auto Business or any other business of the type and character engaged in or competitive with any business conducted by the Company at any time during the Executive’s employment by the Company on or after the date hereof; 
(b)employ, or knowingly permit any company or business directly or indirectly controlled by him to employ, any person who was employed by the Company or any subsidiary or affiliate of the Company at or within the prior six (6) months, or in any manner seek to induce any such person to leave his or her employment (including, without limitation, for or on behalf of a subsequent employer of the Executive);  
(c)solicit any customers to patronize any business directly or indirectly in competition with the businesses conducted by the Company or any subsidiary or affiliate of the Company at any time during the Executive’s relationship with the Company; or 
(d)request or advise any Person who is a customer or vendor of the Company or any subsidiary or affiliate of the Company or its successors to withdraw, curtail or cancel any such customer’s or vendor’s business with any such entity. 
4.Confidentiality. The Executive acknowledges that he previously entered into, and will continue to abide by, the Employee Confidentiality Agreement dated July 24, 2002. The Executive hereby also agrees that, without the prior approval of the Company, he shall not at any time during his employment with the Company and for a period of five (5) years thereafter: (1) give any interviews or speeches, write any books or articles, make any public statements (whether through the press, at automobile trade conferences or meetings or through similar media), or make any disparaging or negative statements: (x) concerning the Company or any of its businesses or reputation or the personal or business reputations of its directors, officers, shareholders or employees, (y) concerning any matter he has participated in while an employee of the Company, or (z) in relation to any matter concerning the Company or any of its businesses occurring after the Employment Period; or (2) in any way impede, disrupt or interfere with the contracts, agreements, understandings, communications or relationships of the Company with any third party. 
5.Acknowledgments of the Parties. The parties agree and acknowledge that the restrictions contained in Paragraphs 3 and 4 are reasonable in scope and duration and are necessary to protect the Company. If any provision of Paragraphs 3 or 4 as applied to any party or to any circumstance is adjudged by a court to be invalid or unenforceable, the same shall in no way affect any other circumstances or the validity or enforceability of any other provisions of this Agreement. If any such provision, or any part thereof, is held to be unenforceable because of the duration of such provision or the area covered thereby, the parties agree that the court making such determination shall have the power to reduce the duration and/or area of such provision and/or to delete specific words or phrases and in its reduced form, such provision shall then be enforceable and shall be enforced. The Executive agrees and acknowledges that the breach of Paragraph 3 or 4 will cause irreparable injury to the Company, and upon breach of any provision of such Paragraphs, the Company shall be entitled to injunctive relief, specific performance or other equitable relief, provided, however, that such remedies shall in no way limit any other remedies which the Company may have (including, without limitation, the right to seek monetary damages). 
6.Notices. All notices, requests, demands, claims or other communications hereunder shall be in writing and shall be deemed given if delivered by certified or registered mail (first class postage pre-paid), hand delivery, guaranteed overnight delivery or facsimile transmission, if such transmission is confirmed by certified or registered mail (first class postage pre-paid) or guaranteed overnight delivery, to the following addresses and telecopy numbers (or to such other addresses or telecopy numbers which such party shall designate in writing to the other parties): 

To the Company: 

AutoNation, Inc. 
200 SW 1st Ave, Ste 1600 
Fort Lauderdale, Florida 33301 
Attention: General Counsel 
Telecopy: (954) 769-6340 
To Executive: 

Michael J. Jackson 
AutoNation, Inc. 
200 SW 1st Ave, Ste 1600 
Fort Lauderdale, Florida 33301 
Telecopy: (954) 769-6402 
7.Amendment, Waiver, Remedies. This Agreement may not be modified, amended, supplemented, extended, canceled or discharged, except by written instrument executed by all parties. No failure to exercise, and no delay in exercising, any right, power or privilege hereunder preclude the exercise of any other right, power or privilege. No waiver of any breach of any provision shall be deemed to be a waiver of any preceding or succeeding breach of the same or other provision, nor shall any waiver be implied from any course of dealing between the parties. No extension of time for performance of any obligations or other acts hereunder or under any other agreement shall be deemed to be an extension of the time for performance of any other obligations or any other acts. The rights and remedies of the parties under this Agreement are in addition to all other rights and remedies, at law or in equity, that they may have against each other. 
8.Assignment. This Agreement, and the Executive’s rights and obligations hereunder, may not be assigned by him. The Company may assign its rights, together with its obligations hereunder, to any of its affiliates or subsidiaries, or any successor thereto. 
9.Severability; Survival; Term. In the event that any provision of this Agreement is found to be void and unenforceable by a court of competent jurisdiction, then such unenforceable provision shall be deemed modified so as to be enforceable (or if not subject to modification then eliminated herefrom) for the purpose of those procedures to the extent necessary to permit the remaining provisions to be enforced. The provisions of this Agreement (other than Paragraph 1 and, except for obligations in Paragraph 2 resulting from a termination of the Employment Period, Paragraph 2) will survive the termination for any reason of the Employment Period and Executive’s relationship with the Company. If the Employment Period has not been terminated in accordance with Paragraph 2 of this Agreement prior to December 31, 2019, (i) the respective obligations of the parties under Paragraphs 1 and 2 hereof shall terminate on December 31, 2019, and (ii) the provisions of Paragraphs 3-11 under this Agreement shall survive. 
10.Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original but all of which together shall constitute one and the same instrument. 
11.Governing Law. This Agreement shall be construed in accordance with and governed for all purposes by the laws of the State of Florida applicable to contracts executed and to be wholly performed within such State. 
12.Agency. Nothing herein shall imply or shall be deemed to imply an agency relationship between the Executive and the Company. 
* * * *

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

	AUTONATION, INC., a Delaware corporation

	 

	 

	 

	/s/ Jonathan P. Ferrando

	Jonathan P. Ferrando

	Executive Vice President

	 

	 

	 

	/s/ Michael J. Jackson

	MICHAEL J. JACKSON, individuallyUnassociated Document

 

AMENDED & RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED & RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of January 14, 2015 and effective as of January 1, 2015 (the “Effective Date”), by and between Finjan Holdings, Inc., a Delaware corporation (together with its successors and assigns, the “Company”), and Philip Hartstein (“Employee”).

 

W I T N E S S E T H:

WHEREAS, Company wishes to continue to employ Employee, and Employee wishes to continue such employment, in accordance with the terms and conditions set forth herein; and

 

WHEREAS, this Agreement amends and restates that certain Employment Agreement by and between the Company and Employee entered into on or about July 8, 2013 (the “Prior Agreement”).

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement, it is agreed as follows:

 

1.           Services.

 

Effective as of the Effective Date, Company hereby agrees to continue to employ Employee, and Employee hereby accepts such continued employment, as Chief Executive Officer and President for the Company reporting to the Company’s Board of Directors (the “Board”).  Employee shall have the general duties as requested by the Board in its discretion. Employee will perform his duties in a manner consistent with applicable regulatory requirements and sound business practices.  Employee represents, warrants and covenants that, during the Term, Employee (i) has and shall maintain all registrations and memberships necessary for Employee to perform his duties to the Company, if any, and (ii) has not been (and currently is not) statutorily disqualified under any federal or state securities law or the regulations thereunder or the subject of (x) any disciplinary or enforcement action, suit, claim, complaint, investigation, inquiry or proceeding by any governmental, regulatory or self-regulatory authority or (y) any action, suit, claim, complaint, investigation, inquiry or proceeding by any person (including any governmental, regulatory or self-regulatory authority) alleging fraud, misappropriation or dishonesty or barring or suspending Employee’s right to be associated with a broker, investment adviser, commodity pool operator or commodity trading advisor.

 

During the Term, Employee shall perform his duties faithfully and shall devote his full business time, attention and energies to businesses of the Company, and while employed, shall not engage in any other business activity that is in conflict with his duties and obligations to the Company.

 

2.           Term.

 

Employee’s employment began on July 1, 2013 (the “Start Date”) on an “at will” basis and shall continue until terminated in accordance with Section 7 or 8, as applicable (the “Term”).

 

  

  

  

 

3.           Compensation.

 

a.           Base Salary. During the Term, the Company shall pay to Employee an annual base salary equal to $350,000 per annum, which may be adjusted from time to time in accordance with Employee’s annual performance review and subject to all required withholdings of taxes and other applicable amounts, which payments will be paid to Employee in accordance with the Company’s regular payroll practices (“Base Salary”).

 

b.           Equity.  The Company shall recommend to the Compensation Committee (the “Committee”)  and the Board a current equity-based grant to Employee of 200,000 restricted stock units (“RSUs”), to be made as of the date approved by the Committee and the Board (the “Grant Date”).  Subject to Employee’s continued employment with the Company, vesting for this grant of RSUs will occur over four years with one-quarter vesting on January 1, 2016 and the remainder vesting ratably on a quarterly basis for the following three years so that, subject to Employee’s continued employment, the RSUs granted pursuant to this Section 3(b) shall be fully vested on January 1, 2019. All other terms and conditions of the RSUs granted pursuant to this Section 3(b) shall be set out in the Company’s 2014 Incentive Compensation Plan (as defined below), as well as award agreement specifically relating to the RSU grant contemplated by this Section 3(b) (the “Award Agreement”).

 

c.           Performance Equity.   The Company shall also recommend to the Committee and the Board a future equity-based grant to Employee of 100,000 RSUs, to be made effective as of the date the daily trading average price of shares of the Company’s common stock has been at least $12.50 for a period of twenty full consecutive trading days (such twenty-first day, the “Performance Equity Grant Date”).   Subject to Employee’s continued employment with the Company, this grant of RSUs will fully vested immediately upon grant.  All other terms and conditions of the RSUs granted pursuant to this Section 3(c) shall be set out in the Company’s 2014 Incentive Compensation Plan, as well as award agreement specifically relating to the RSU grant contemplated by this Section 3(c) (the “Performance Equity Award Agreement”).

 

d.           Bonus.  During the Term, Employee shall be eligible to receive a bonus (the “Bonus”) at the end of each calendar year to be based on Employee’s individual performance and the overall progress of the Company.  Employee is initially eligible to receive a cash bonus in the amount of $200,000, the amount of which may be adjusted by the Board based on the result of Employee’s annual performance review.  Additionally, each year, new targets will be set for Employee at the sole discretion of the Board but not without conversation with Employee.  Specific performance targets for 2015 shall be communicated by the Board to the Employee.  Employee must remain employed by the Company and be in good standing as of the date of any Bonus payment for any right to receive such payment.

 

e.           Withholding.  All payments made by Company to Employee shall be subject to withholding and to such other deductions as shall at the time of such payment be required under any income tax or other law, whether of the United States or any other jurisdiction.  In connection therewith, Company shall have the right to withhold and deduct applicable federal, state, or local income or other taxes from any payment, in whatever form, made to Employee.

 

  

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f.           Long-Term Incentive Compensation.  During the term of this Agreement, Employee will continue to be eligible to participate in the Company’s 2014 Incentive Compensation Plan, as amended, or any such successor plan that may be in effect from time to time (the “2014 Incentive Compensation Plan”) in accordance with its terms then in effect.

 

4.           Benefits.

 

Employee shall be eligible to receive benefits comparable to those provided to other similarly-titled employees of the Company during the Term, subject to the provisions of the applicable plan documents. Nothing stated herein shall require the Company to establish or thereafter maintain any benefit plan.

 

5.           Time Off.

 

Employee shall be entitled to paid vacation or other personal time per calendar year, in accordance with the Company’s policies and procedures, provided that Employee shall be entitled to at least 20 days of paid vacation per annum, in addition to Company-designated holidays.

 

6.           Expenses.

 

Company shall reimburse Employee for travel and other business expenses reasonably incurred by Employee, subject to the submission by Employee of receipts or other appropriate documentation as required by the Company.

 

7.           Termination by the Company or Employee.

 

Employee acknowledges and understands that his employment relationship with the Company is “at will,” which means that either Employee or the Company may terminate the employment relationship at any time for any reason, subject to any applicable notice periods set forth herein.

 

8.           Notice Periods.

 

a.       The Company may terminate Employee’s employment at any time and for any reason upon at least 90 days advance written notice of the Company’s election to terminate Employee’s employment during the Term (the “Company Notice Period”).

 

b.       In order to protect the Confidential Information of the Company, Employee must provide 90 days advance written notice of his election to voluntary terminate his employment during the Term (the “Employee Notice Period”).

 

c.       During the Company Notice Period or Employee Notice Period, as applicable, Employee shall remain an employee of the Company, and Employee shall continue to receive Base Salary and benefits, but no other compensation, except that, during the Company Notice Period, any Bonus or vesting of any deferred compensation to which Employee is entitled that is due to be paid on a date that occurs during the Company Notice Period shall be paid when due.  For the sake of clarity, Employee shall not be eligible for any Bonus or vesting of any deferred compensation, if any, during the Employee Notice Period.  The Company may elect to have Employee not report to work for all or any portion of such Company Notice Period or Employee Notice Period, as applicable, at the Company’s sole discretion.  The Company shall have the right, at its sole discretion, to accelerate Employee’s termination date to any date subsequent to receiving the written notice from Employee, and thus conclude the Employee Notice Period.

 

  

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9.           Confidential Information.

 

Employee acknowledges that, during the term of Employee’s employment with the Company, Employee will have access to unpublished and otherwise confidential information (“Confidential Information”), both of a technical and non-technical nature, relating to the business of the Company its actual or anticipated business, research or development, its technology or the implementation or exploitation thereof.  Confidential Information includes, but is not limited to, the Company’s business plans (both current and under development), data, investor and client list and contact information, promotional and marketing programs and strategies, research or development, information pertaining to trading, processes, codes, system designs, system specifications, techniques, computer programs, applications developed by or for Company, projections, financial information, costs, revenues, profits, investments, analysis, potential investors and clients, personal information concerning employees of the Company, business methods and models, trade secrets, databases, simulation software, trading systems, mathematical models and programs, algorithms, numerical techniques, procedural guidelines, knowledge of the Company’s facilities, supervisory and risk control techniques and procedures, fee and compensation structures, or other confidential, secret or proprietary information and any other Confidential Information relating to the business affairs of Company or its clients.  However, Confidential Information does not include any information that is generally known to the public or the financial services industry, other than as a result of Employee’s unauthorized disclosure.

 

a.           During the Term or at any time thereafter, Employee covenants and agrees that Employee will not use for Employee’s personal benefit or for the benefit of any third party, nor will Employee disclose any Confidential Information unless authorized to do so by the Company in writing, except that Employee may disclose and use such Confidential Information when necessary in the performance of Employee’s duties hereunder, or as required to be disclosed by order of a proper legal authority.

 

b.           Upon termination of his employment with the Company for any reason, Employee covenants and agrees that Employee will promptly deliver to the Company all documents, records, files, notebooks, manuals, letters, notes, reports, customer and supplier lists, cost and profit data, e-mail, and any other material of Company, including all materials pertaining to Confidential Information, whether developed by Employee or others, and all copies of such materials, whether of a technical, business or fiscal nature and whether on hard copy, tape, disk or any other format, which are in Employee’s possession, custody or control.

 

10.           Non-Competition; Non-Solicitation of Employees; Non-Interference with Business Relationships.

 

a.           During the Term, Employee shall not render any services to or engage in any activity on behalf of any Competitive Enterprise, directly or indirectly, for himself or on behalf of or in conjunction with any person, partnership, corporation or other entity, whether as an employee, consultant, agent, officer, director, shareholder, partner, joint venturer, investor or otherwise. A “Competitive Enterprise” shall mean any entity, person, partnership, corporation or otherwise which engages as its principal business in network security, intellectual property rights or patent litigation or licensing.

 

  

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b.           During the Term, and for a period of twelve (12) months thereafter, Employee will not, directly or indirectly, either for himself or any other person or entity, (i) induce or attempt to induce any employee of Company to leave the employ of Company, (ii) in any way interfere with the relationship between Company and any employee of Company, or (iii) induce or attempt to induce any customer, client, supplier or licensee of Company to cease doing business with Company, or in any way interfere with the relationship between Company and any customer, client, supplier or licensee of Company.

 

11.           Non-Disparagement.

 

Employee agrees that he will not, at any time after the date hereof, disparage Company (including any of its shareholders or affiliates or its or their respective directors, officers, employees, or agents) or the business of Company.

 

12.           Remedies.

 

Any breach or threatened breach of paragraphs 9 through 11 of this Agreement will irreparably injure Company, and money damages will not be an adequate remedy.  Therefore, Company may obtain and enforce an injunction, to the extent allowed by applicable law, prohibiting Employee from violating or threatening to violate these provisions.  This is not Company’s only remedy, it is in addition to any other remedy available and is without prejudice to Company’s right to seek additional remedies, where applicable.

 

13.           Work Authorization.

 

Employee must also be able to satisfy the requirements of the Immigration Reform and Control Act of 1986, or successor statute, which requires documents to prove Employee’s identity and demonstrate that Employee is authorized to work in the U.S., and to complete an Employment Eligibility Verification form (Form I-9).  A further condition of this offer and employment with Company hereunder is that Employee has not been convicted of a felony or certain misdemeanors which would disqualify Employee from employment with Company under federal securities law and under New York Stock Exchange or Financial Industry Regulatory Authority rules.

 

14.           Representations.

 

Employee hereby represents and warrants to the Company as follows:  (i) Employee has the legal capacity and unrestricted right to execute and deliver this Agreement and to perform all of his obligations; (ii) the execution and delivery of this Agreement by Employee and the performance of his obligations will not violate or be in conflict with any fiduciary or other duty, instrument, agreement, document, arrangement, or other understanding to which Employee is a party or by which he is or may be bound or subject; and (iii) Employee is not a party to any instrument, agreement, document, arrangement, including, but not limited to, confidential information agreement, non-competition agreement, non-solicitation agreement, or other understanding with any person (other than the Company) requiring or restricting the use or disclosure of any confidential information or the provision of any employment, consulting or other services; or, if Employee is a party to any such instrument, agreement, document or arrangement, it has fully disclosed same to the Company.  Employee further represents and warrants that Employee has not improperly removed, copied, reproduced or maintained (in paper or electronic form) any confidential or proprietary information of any prior employer.

 

  

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15.           Section 409A Compliance.

 

 If any provision of this Agreement fails to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) or any regulations or Treasury guidance promulgated thereunder, or would result in Employee’s recognizing income for United States federal income tax purposes with respect to any amount payable under this Agreement before the date of payment, or to incur interest or additional tax pursuant to Section 409A, the Company reserves the right to reform such provisions provided that the Company shall maintain, to the maximum extent practicable, the original intent of the applicable provision without violating the provisions of Section 409A.  To the extent any payment of “non-qualified deferred compensation” subject to Section 409A of the Code becomes due to Employee hereunder at the time of his termination of employment (or terms of similar effect), such amount shall only be paid to Employee to the extent such termination also constitutes his “separation from service” (as defined in Treasury Regulations § 1.409A-1(h)) with the Company.  Notwithstanding anything in this Agreement to the contrary, in the event that Employee is a “specified employee” (within the meaning of Treasury Regulations § 1.409A-1(i)), then, to the extent necessary to avoid penalties under Section 409A, no payment of any amount that constitutes “non-qualified deferred compensation” subject to Section 409A of the Code shall be made to Employee in connection with his “separation from service” (as defined in Treasury Regulations §1.409A-1(h)) with the Company prior to the earlier of (a) the date of Employee’s death, and (b) the first day of the seventh month following the date of such separation from service. Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to the preceding sentence (whether they would have otherwise been paid in a single sum or in installments) shall be paid or reimbursed to Employee in a lump-sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.  To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Code Section 409A, (i) all such expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Employee, (ii) any right to such reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.  For purposes of Code Section 409A, Employee’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Company.  Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes “nonqualified deferred compensation” for purposes of Code Section 409A be subject to offset by any other amount unless otherwise permitted by Code Section 409A.

 

  

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16.           Miscellaneous.

 

a.           Arbitration.  Any dispute or controversy arising under or in connection with this Agreement that cannot be mutually resolved by the parties hereto shall be settled exclusively by arbitration in San Mateo County, State of California conducted in accordance with the rules of the American Arbitration Association.  Judgment may be entered on the arbitrator’s award in any court having jurisdiction.  The costs and expenses of the arbitrator shall be shared equally between the Company and Employee.

 

b.           Transfer and Assignment.  This Agreement is personal as to Employee and shall not be assigned or transferred by Employee.  This Agreement may be assigned by the Company to any entity which is a successor in interest or operator of the Company’s business.

 

c.           Severability.  Nothing contained herein shall be construed to require the commission of any act contrary to law.  Should there be any conflict between any provisions hereof and any present or future statute, law, ordinance, regulation or other pronouncement having the force of law, the latter shall prevail, but the provision of this Agreement affected thereby shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law, and the remaining provisions of this Agreement shall remain in full force and effect.

 

d.           Governing Law.  This Agreement is made under and shall be construed pursuant to the laws of the State of California, without reference to its choice of law rules.

 

e.           Company Policies.  Employee as a condition of his employment shall be subject to all generally applicable policies of the Company, including, but not limited any employee handbook, insider trading policy, disclosure policy or code of ethics instituted by the Company prior to or during the Term.

 

f.           Counterparts.  This Agreement may be executed in counterparts and all documents so executed shall constitute one agreement, binding on all the parties hereto.

 

g.           Entire Agreement.  This Agreement contains the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior oral and written agreements, arrangements, or understandings with respect thereto, specifically including, but not limited to, the Prior Agreement.  Notwithstanding the foregoing, the RSUs granted pursuant hereto shall be subject to the terms of the 2014 Incentive Compensation Agreement as well as the Award Agreement and the Performance Equity Award Agreement, as applicable.  No representation, promise, inducement, statement or intention has been made by any party hereto that is not embodied herein and no party shall be bound or be liable for any alleged representation, promise, inducement, or statement not so set forth herein.  Finjan, Inc. shall be deemed a third party beneficiary of this Section 16(g) and the Company shall cause Finjan, Inc. to execute such additional documents and take such further action as may be necessary to give effect to the provisions of this Section 16(g).

 

  

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h.           Modification.  This Agreement may be modified, amended, superseded or cancelled, and any of the terms, covenants, representations, warranties and conditions hereof may be waived, only by a written instrument executed by the party or parties to be bound by any such modification, amendment, cancellation, or waiver.

 

i.           Waiver.  Neither this Agreement nor any term or condition hereof or right hereunder may be waived or shall be deemed to have been waived or modified in whole or in part by any party or by the forbearance of any party to exercise any of its rights hereunder, except by written instrument executed by or on behalf of that party.  The waiver by either party of a breach by the other party of any of the provisions of this Agreement shall not operate or be construed as a waiver of any subsequent breach by the other party.

 

j.           Headings.  The section and other headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning and interpretation of this Agreement.

 

k.           Notices.  Any notices required under this Agreement or during the Term shall be sent to Employee at the last address on file and to Company at the address set forth below (or as otherwise updated):

 

Finjan Holdings, Inc.

122 East 42nd Street

Suite 1512

New York, New York 10168

Attn: Executive Management or Board of Directors 

[Signature page follows]

 

  

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

 

	 	 
FINJAN HOLDINGS, INC.

By:  /s/ Daniel Chinn

Date:  January 14, 2015

PHILIP HARTSTEIN

/s/ Philip Hartstein

(Signature)

Date:  January 14, 2015

   

[Signature page to Employment Agreement]

 

 

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