Document:

Exhibit 10.2

 

AGREEMENT

 

This Agreement is made and
entered into as of the 7th day of May, 2009 by and between MathStar, Inc.,
a Delaware corporation (the “Company”), and Douglas M. Pihl (“Pihl” or “Employee”)
(collectively, the “Parties”).

 

RECITALS

 

WHEREAS, at a meeting of the
Board of Directors of the Company (the “Board”) on May 20, 2008, and in
connection with the curtailment of the Company’s operations, the Board approved
severance payments for the Company’s employees, including Pihl;

 

WHEREAS, the Company and
Pihl entered into a Severance Agreement effective July 14, 2008 (the “Severance
Agreement”);

 

WHEREAS, severance payments
subsequently were made to all of the Company’s employees, including Pihl, who
received $216,286.00 on July 31, 2008 (the “Severance Payment”);

 

WHEREAS, because it was not
the intent of the Company’s Board to pay Pihl a severance payment until his
employment with the Company was severed, the Parties wish to rescind, cancel
and revoke the Severance Agreement in its entirety, including, without
limitation, all rights and obligations the Parties may have, respectively, as
set forth in the Severance Agreement;

 

WHEREAS, Employee shall be
entitled to receive severance pay in the future unless (1) the Company
terminates Employee’s employment with the Company for “Cause,” as the term “Cause”
is hereinafter defined, or (2) Employee dies while employed by the
Company, and in exchange for Employee’s signature to and agreement to be bound
by the terms and conditions of the Severance and Release Agreement
substantially in the form attached hereto as Exhibit A; and

 

WHEREAS, the Parties intend
the WHEREAS clauses to be incorporated herein as terms of this Agreement.

 

NOW,
THEREFORE, the Parties
hereby agree as follows:

 

1.                                       Definitions.  The Parties intend all words used in this
Agreement to have their plain meanings in ordinary English.  Specific terms we use in this Agreement have
the following meanings:

 

A.                                   Employee,
as used herein, shall include the undersigned Employee and anyone who has obtained
any legal rights or claims through the undersigned Employee.

 

B.                                     Cause, as
used herein, shall mean Employee’s (i) theft or embezzlement of Company
property or property of Company’s customers, (ii) gross negligence,
willful misconduct or insubordination in the performance of Employee’s job
duties, (iii) conviction of a felony or of any crime involving
misrepresentation, moral turpitude or fraud, or (iv) habitual neglect of
Employee’s job duties.

 

 

C.                                     Company,
as used herein, shall at all times mean MathStar, Inc., its parent company
(if applicable), its subsidiaries, successors and assigns, its affiliated and
predecessor companies, their successors and assigns, their affiliated and
predecessor companies, and the present or former directors, officers,
employees, representatives, and agents (including, without limitation, its
accountants and attorneys) of any of them, whether in their individual or
official capacities, and the current and former trustees or administrators of
any pension or other benefit plan applicable to employees or former employees
of the Company, in their official or individual capacities.

 

2.                                       Rescission and Waiver.  The Parties hereby rescind, cancel and revoke
all rights and obligations under the Severance Agreement, including, without
limitation, payment of the Severance Payment to Pihl.

 

3.                                       Repayment of Severance.  On the date of this Agreement, Pihl shall
repay to the Company the Severance Payment, net of federal and state
withholding taxes and medical insurance premiums, consisting of a payment of
$118,112.00, plus interest accruing on such amount from July 31, 2008 to
the date of this Agreement, for a total repayment amount of $119,441.00 (the “Repayment
Amount”).  The Company hereby
acknowledges receipt of the Repayment Amount.

 

4.                                       Acknowledgments By Pihl.  Pihl acknowledges and represents that:  (a) he has read this Agreement and
understands its consequences; (b) he has received adequate opportunity to
read and consider this Agreement; (c) he has been given the opportunity to
consult with legal counsel prior to executing this Agreement; and (d) he
has determined to execute this Agreement of his own free will and acknowledges
that he has not relied upon any statements or explanations made by Company
regarding this Agreement.

 

5.                                       Entire Agreement.  This Agreement, including any exhibits
attached hereto or documents expressly referred to herein, contains the entire
agreement between Company and Employee and supersedes and cancels any and all
other agreements, whether oral or in writing, between Company and Employee with
respect to the matters referred to herein, including without limitation, the
Severance Agreement.

 

6.                                       Governing Law.  This Agreement shall be construed and
enforced in accordance with the laws of the State of Oregon.

 

(The remainder of this page intentionally
left blank.)

 

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7.                                       Counterparts.  This Agreement may be executed in
counterparts with an executed counterpart to be delivered to the other
party.  Each such executed counterpart
shall be deemed an original but shall constitute one and the same instrument.

 

	
   

  	
  MATHSTAR, INC.

  
	
   

  	
   

  
	
  Dated:
  May 7, 2009

  	
  By:

  	
  /s/
  Benno G. Sand

  
	
   

  	
   

  	
  Benno
  G. Sand

  
	
   

  	
   

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:
  May 7, 2009

  	
  /s/
  Douglas M. Pihl

  
	
   

  	
  Douglas
  M. Pihl

  

 

3

 

Exhibit A

 

SEVERANCE AND RELEASE
AGREEMENT

 

In exchange for the promises
and covenants contained herein, MathStar, Inc., a Delaware corporation
(the “Company”), and Douglas M. Pihl (“Employee”) hereby agree as follows:

 

1.                                       Definitions.  We intend all words used in this Severance
and Release Agreement (“Agreement”) to have their plain meanings in ordinary
English.  Specific terms we use in this
Agreement have the following meanings:

 

A.                                   Employee,
as used herein, shall include the undersigned Employee and anyone who has
obtained any legal rights or claims through the undersigned Employee.

 

B.                                     Company,
as used herein, shall at all times mean MathStar, Inc., its parent
company, its subsidiaries, successors and assigns, its affiliated and
predecessor companies, their successors and assigns, their affiliated and
predecessor companies, and the present or former directors, officers,
employees, representatives, and agents (including, without limitation, its
accountants and attorneys) of any of them, whether in their individual or
official capacities, and the current and former trustees or administrators of
any pension or other benefit plan applicable to employees or former employees
of the Company, in their official or individual capacities.

 

C.                                     Employee’s Claims,
as used herein, means all of the rights Employee has now to any relief of any
kind from the Company, whether or not Employee now knows about those rights,
arising out of his employment with the Company and his separation from
employment with the Company, including, without limitation, claims arising
under the Age Discrimination in Employment Act, as amended by the Older Worker
Benefit Protection Act; the Oregon civil rights laws codified in Oregon Revised
Statute sections 659A.100, et seq.;
the Americans with Disabilities Act; Title VII of the Civil Rights Act of 1964,
as amended; The Family Medical and Leave Act; or other federal, state or local
civil rights laws; all claims for alleged breach of fiduciary duty under Section 409
of the Employee Retirement Income Security Act allegedly impairing the value of
Employee’s accounts under any qualified retirement plan sponsored by MathStar, Inc.;
claims for breach of contract; fraud or misrepresentation; defamation, intentional
or negligent infliction of emotional distress; breach of covenant of good faith
and fair dealing; promissory estoppel; negligence; wrongful termination of
employment; and any other claims for unlawful employment practices.

 

2.                                       Separation Date.  Employee’s last day of work for Company was                  
(“Separation Date”).

 

3.                                       Company’s Obligations and Severance Agreements.  In consideration
for Employee’s promises contained herein, specifically including, but not
limited to, the release of all claims by Employee and Employee’s promises to
refrain from disclosing confidential information of the Company, the Company
agrees as follows:

 

 

A.                                   Severance Payment.  The Company agrees to pay to Employee a
Severance payment of $            
(“Severance Payment”), which is equal to twelve (12) months of Employee’s base
salary calculated at Employee’s regular rate of pay as of the Separation
Date.  This Severance Payment will be
payable in one lump sum  after the
expiration of the Rescission Period, as hereinafter defined.  The Severance Payment shall be subject to all
federal and state withholding taxes and FICA.

 

B.                                     Medical
Insurance Benefits.  The
Company, pursuant to federal and state law, will provide, for a period of
eighteen (18) months following the effective date of Employee’s termination (“COBRA
Period”), a continuation of the group medical insurance coverage previously
provided to Employee by the Company or comparable medical insurance coverage,
the terms and conditions of which shall comply with the American Recovery and
Reinstatement Act of 2009, if applicable.

 

4.                                       Employee Obligations.  As material inducement to Company in entering
into this Agreement and providing the consideration described in Section 3,
Employee hereby agrees as follows:

 

A.                                   Release.  Employee agrees to release all Employee’s
Claims.  Employee acknowledges that the
money and promises received and to be received by Employee are in exchange for
the release of Employee’s Claims.

 

B.                                     Covenant Not To Sue.  Employee agrees that he will not initiate any
litigation to pursue claims which Employee released in Section 4.A.  This covenant does not apply to litigation
challenging the validity of Section 4.A. 
Excluded from this covenant are any claims which cannot be waived by
law, including, without limitation, the right to file a charge with or
participate in any investigation conducted by the Equal Employment Opportunity
Commission (“EEOC”) or any state or local agency.  Employee agrees to waive, however, his right
to any monetary recovery should the EEOC or any state or local agency pursue
any claims on Employee’s behalf. 
Further, employee agrees to pay Company’s attorneys fees if Employee
breaches the covenant not to sue contained in this Section 4.B.

 

C.                                     Company Property.  Employee will return all property belonging
to Company to Company immediately upon the execution of this Agreement, whether
such property is currently on or off the premises of Company, including,
without limitation, any and all computer hardware or computer software.

 

D.                                    Confidentiality.  For all time hereafter forever, Employee will
not use or make available or divulge to any person, firm, corporation or other
entity any information of or regarding Company including, without limitation,
trade secrets, customer lists, business policies, financial information,
technical information, methods of operation, marketing programs, customer price
lists or any other confidential or secret information concerning the business
and affairs of Company or any of its affiliates.

 

E.                                      Confidentiality of Agreement.  Employee agrees that he will keep the terms
and conditions of this Agreement strictly confidential except that Employee may
disclose the

 

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terms
and conditions of this Agreement to his spouse, if any, attorney, tax preparer,
government agencies, or as required by law. 
Employee agrees that in the event that Employee discloses any of the
terms of this Agreement, including the fact of payment other than as set forth
above, he shall be liable to Company as set forth in Section 4.G. of this
Agreement and for any and all injuries or damages sustained by Company
including costs, disbursements and attorneys’ fees incurred by Company as a
direct result of Employee’s disclosure.

 

F.                                      Non-Disparagement.  Employee agrees that he shall not disparage
or defame Company in any respect.

 

G.                                     Remedies.  Employee acknowledges that any breach of any
of the promises set forth in Sections 4.C, 4.D., 4.E., and 4.F. will cause
Company irreparable harm for which there is no adequate remedy at law and
Employee therefore consents to the issuance of any injunction in favor of
Company enjoining the breach of any of those promises by any court of competent
jurisdiction.  If any promise made by
Employee in this Section 3 should be held to be unenforceable because of
its scope or duration, or the area or subject matter covered thereby, Employee
agrees that the court making such determination shall have the power to reduce
or modify the scope, duration, subject matter or area of that promise to the
extent that allows the maximum scope, duration, subject matter or area
permitted by applicable law.  Employee
further agrees that the remedies provided for herein are in addition to, and
are not to be construed as replacements for, or a limitation of, rights and
remedies otherwise available to Company.

 

5.                                       Employee’s Understandings.  Employee acknowledges and represents that:

 

A.                                   Employee understands that he has the right to consult with
an attorney regarding the meaning and effect of this Agreement.

 

B.                                     Employee also understands that he has a period of at least
forty-five (45) calendar days from the date on which he receives an unsigned
copy of this Agreement in which to consider whether or not to sign this
Agreement and that, having been advised of that entitlement, he may elect to
sign this Agreement at any time prior to the expiration of that time
period.  Employee understands that any
revisions to this that are not material will not restart the forty-five day
period.  However, Employee understands
that he shall not execute this Agreement at any time before the Separation
Date.

 

C.                                     Employee understands that he may rescind (that is, cancel)
within seven (7) calendar days of signing the Agreement the provisions of Section 4.A.
of this Agreement with respect to claims arising under the Age Discrimination
in Employment Act (the “Rescission Period”). 
To be effective, rescission must be in writing, delivered to Company at                         ,
Attn:                        ,
within the Rescission Period, or sent to Company, at such address, by certified
mail, return receipt requested, postmarked within the applicable rescission
period.

 

6.                                       Cancellation of Agreement By Company.  If Employee
exercises his right of rescission under Section 5.C. of this Agreement,
Company will have the right, exercisable by written notice

 

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delivered
to Employee, to terminate this Agreement in its entirety, in which event
Company will have no obligation whatsoever to Employee hereunder.  If Employee exercises his right of rescission
under Section 5.C. of this Agreement, and Company does not exercise its
right to terminate this Agreement hereunder, the remaining provisions of this
Agreement (including specifically the remaining provisions of Section 4 of
this Agreement) shall remain valid and continue in full force and effect.

 

7.                                       Performance By Employee.  Nothing contained herein shall operate as a
waiver or an election of remedies by Company should Employee fail to perform
any duty or obligation imposed upon him hereunder.  Notwithstanding anything contained herein to
the contrary, this Agreement and the duties and obligations of Employee
hereunder shall continue in full force and effect irrespective of any violation
of any term or provision of this Agreement by Employee.

 

8.                                       No Admission Of Liability.  The parties agree that this Agreement shall
not be considered an admission of liability by Company.  Company expressly denies that it is in any
way liable to Employee or that it has engaged in any wrongdoing with respect to
Employee.

 

9.                                       Employee Acknowledgments.  Employee acknowledges and represents
that:  (a) he has read this
Agreement and understands its consequences; (b) he has received adequate
opportunity to read and consider this Agreement; (c) he has determined to
execute this Agreement of his own free will and acknowledges that he has not
relied upon any statements or explanations made by Company regarding this
Agreement; and (d) the promises of Company made in this Agreement
constitute fair and adequate consideration for the promises, releases and
agreements made by Employee in this Agreement.

 

10.                                 Entire Agreement.  This Agreement , including any exhibits
attached hereto or documents expressly referred to herein, contains the entire
agreement between Company and Employee and supersedes and cancels any and all
other agreements, whether oral or in writing, between Company and Employee with
respect to the matters referred to herein; provided, however, that this
Agreement does not supersede, cancel or otherwise void that certain Employee
Confidentiality, Non-Disclosure and Intellectual Property Agreement and that
certain Agreement between Employee and Company dated May         ,
2009 regarding Employee’s repayment of severance pay, both of which shall
remain in full force and effect.

 

11.                                 Governing Law.  This Agreement shall be construed and
enforced in accordance with the laws of the State of Oregon.

 

12.                                 Effective Date.  This Agreement was originally offered to
Employee on or about                   .  Employee shall have until the latter of the
close of business on                    
or the Separation Date, to accept this Agreement, which Employee acknowledges
is at least 45 days from the date Employee received this Agreement, but
Employee shall not sign this Agreement at any time before the Separation
Date.  If Employee desires to accept this
Agreement, Employee shall execute the Agreement and return the same to Company
at the address set forth in Section 5.C. hereof.  If Employee does not so accept this
Agreement, this Agreement, and the offer contained herein, shall be null and
void as of the close of business on                              .

 

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13.                                 Counterparts.  This Agreement may be executed in
counterparts with an executed counterpart to be delivered to the other
party.  Each such executed counterpart
shall be deemed an original but shall constitute one and the same instrument.

 

 

	
   

  	
  MATHSTAR, INC.

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name Typed or Printed

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
  Title Typed or Printed

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  Douglas M. Pihl

  

 

5Exhibit 10.2

 

PHASE
FORWARD INCORPORATED

 

NON-EMPLOYEE DIRECTORS’

DEFERRED COMPENSATION PROGRAM

 

I.              INTRODUCTION

 

The Phase Forward
Incorporated Non-Employee Directors’ Deferred Compensation Program (the “Program”),
effective April 15, 2009, is established pursuant to the Phase Forward
Incorporated 2004 Stock Option and Incentive Plan (the “Plan”) and permits a
Director of Phase Forward Incorporated (the “Company”) who is not an employee
of the Company (a “Non-Employee Director”) to defer the receipt of shares of
the Company’s common stock, par value $0.01 per share (“Stock”), payable in
connection with the settlement of Restricted Stock Units (“RSUs”) granted to
him under the Plan.

 

II.            ADMINISTRATION

 

The Program shall
be administered by the Compensation Committee of the Board of Directors of the
Company (the “Committee”).  The Committee
shall have complete discretion and authority with respect to the Program and
its application, except as expressly limited by the Program.

 

III.           ELIGIBILITY

 

All Non-Employee
Directors are eligible to participate in the Program.

 

IV.           DEFERRAL OF SETTLEMENT OF RESTRICTED STOCK UNITS

 

A.            Election to Defer.  A Non-Employee
Director may elect in advance to defer the receipt of shares of Stock that are
payable upon settlement of his RSU grant until “separation from service” (as
such term is defined in Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”) and as determined in accordance with the presumptions
set forth in 

 

 

Treasury Regulation Section 1.409A-1(h)).  To make an election to defer such settlement
of RSUs, the Non-Employee Director must execute and deliver to the Committee an
election form indicating his intent to defer the receipt of shares of
Stock.  Except with respect to (x) a
newly elected or appointed Non-Employee Director or (y) in connection with
the establishment of this Program, any election under this paragraph shall
apply only to RSUs that are granted with respect to services to be performed
beginning on or after the start of the next calendar year after such receipt
and acceptance.  A Non-Employee Director
who is serving as a director on the Effective Date may, within 30 days of the
Effective Date, file a deferral election which shall apply to RSUs granted with
respect to services performed subsequent to the election.  A newly elected or appointed Non-Employee
Director, may, prior to becoming a Non-Employee Director, file a deferral
election which shall apply only to RSUs granted with respect to services to be
performed subsequent to the election.  An
election shall remain in effect from year to year, until a new election becomes
effective with respect to RSUs payable in the next calendar year.  A Non-Employee Director may revoke his
deferral election with respect to RSUs that are granted to the Non-Employee
Director in the calendar year beginning after receipt and acceptance by the
Company of his written revocation.

 

B.            Deferred Account.  As of the
date of settlement of a Non-Employee Director’s RSUs, in lieu of his receipt of
shares of Stock, a Non-Employee Director’s deferred account (“Account”) shall
be credited with a number of whole and fractional stock units equal to the
number shares of Stock payable to the Non-Employee Director upon settlement of
his grant of RSUs.

 

C.            Dividend Equivalent Amounts. 
Whenever dividends (other than dividends payable only in shares of
Stock) are paid with respect to Stock, each Account shall be credited 

 

2

 

with a number of whole and fractional stock units
determined by multiplying the dividend value per share by the stock unit
balance of the Account on the record date and dividing the result by the fair
market value of a share of Stock on the dividend payment date.

 

D.            Designation of Beneficiary. 
A Non-Employee Director may designate one or more beneficiaries to
receive payments from his Account in the event of his death.  A designation of beneficiary shall apply to a
specified percentage of a Non-Employee Director’s entire interest in his
Account.  Such designation, or any change
therein, must be in writing and shall be effective upon receipt by the
Company.  If there is no effective
designation of beneficiary, or if no beneficiary survives the Non-Employee
Director, the estate of the Non-Employee Director shall be deemed to be the
beneficiary.  All payments to a
beneficiary or estate shall be made in a lump sum in shares of Stock, with any
fractional share paid in cash.

 

E.             Payment.  A Non-Employee
Director’s Account shall be paid in shares of Stock to the Non-Employee
Director, or his designated beneficiary (or beneficiaries) or estate, in a lump
sum; provided, however, that fractional shares shall be paid in cash.  Such payment shall be made as soon as
practicable after the Non-Employee Director’s “separation from service” (as
such term is defined in Section 409A of the Code and as determined in
accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h)).  Notwithstanding the foregoing, in the event
of an Acquisition (as defined in Section 7(e)(ii) of the Plan) which
also constitutes a change in the ownership or effective control of the Company
or a change in the ownership of a substantial portion of the assets of the
Company (as such terms are defined in Section 409A of the Code and the
regulations and guidance promulgated thereunder), all Accounts under the
Program shall become immediately payable in a lump-sum.

 

3

 

V.            ADJUSTMENTS

 

In the event of a
stock dividend, stock split or similar change in capitalization affecting the
Stock, the Committee shall make appropriate adjustments in the number of stock
units credited to Non-Employee Directors’ Accounts.

 

VI.           AMENDMENT OR TERMINATION OF PROGRAM

 

The Company
reserves the right to amend or terminate the Program at any time, by action of
its Board of Directors, provided that no such action shall adversely affect a
Non-Employee Director’s right to receive compensation earned before the date of
such action or his rights under the Program with respect to amounts credited to
his Account before the date of such action. 
In no event shall the distribution of Accounts to Non-Employee Directors
be accelerated by virtue of any amendment or termination of the Program, except
to the extent permitted by Section 409A of the Code.

 

VII.         MISCELLANEOUS PROVISIONS

 

A.            Notices.  Any notice
required or permitted to be given by the Company or the Committee pursuant to
the Program shall be deemed given when personally delivered or deposited in the
United States mail, registered or certified, postage prepaid, addressed to the
Non-Employee Director at the last address shown for the Non-Employee Director
on the records of the Company.

 

B.            Nontransferability of Rights. 
During a Non-Employee Director’s lifetime, any payment under the Program
shall be made only to him.  No sum or
other interest under the Program shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, and any attempt by a Non-Employee Director or any beneficiary under the
Program to do so shall be void.  No
interest under the Program shall in any manner be 

 

4

 

liable for or subject to the debts, contracts,
liabilities, engagements or torts of a Non-Employee Director or beneficiary
entitled thereto.

 

C.            Company’s Obligations to Be Unfunded and Unsecured. 
The Accounts maintained under the Program shall at all times be entirely
unfunded, and no provision shall at any time be made with respect to
segregating assets of the Company (including Stock) for payment of any amounts
hereunder.  No Non-Employee Director or
other person shall have any interest in any particular assets of the Company
(including Stock) by reason of the right to receive payment under the Program,
and any Non-Employee Director or other person shall have only the rights of a
general unsecured creditor of the Company with respect to any rights under the
Program.

 

D.            Section 409A.  This Program
is intended to be a deferred compensation plan that complies with the
requirements of  Section 409A of the
Code and should be construed as such.

 

E.             Governing Law.  The terms of
the Program shall be governed, construed, administered and regulated in
accordance with the laws of the State of Delaware.  In the event any provision of this Program
shall be determined to be illegal or invalid for any reason, the other
provisions shall continue in full force and effect as if such illegal or
invalid provision had never been included herein.

 

F.             Effective Date of Program. 
The Program shall become effective as of April 15, 2009.

 

5

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