Document:

Exhibit 10.31

 

 

May 14, 2002

 

 

Andrew Nash

924 Towlston Road

McLean, VA 22102

 

Dear Andrew:

 

BroadVision, Inc. ("BroadVision" or

"the Company") is pleased to confirm its offer to you of the position

of Executive Vice President and Chief Operating Officer within the Executive

Team at BroadVision, effective May 14, 2002. 

We are extremely pleased to have you join as a new BroadVision executive

and look forward to the challenges and successes in our path.  Your leadership, past successes and style

demonstrated throughout the recruitment process will allow us to achieve new

and far-reaching dimensions to our business and Worldwide Organization.  As Executive Vice President and Chief

Operating Officer reporting directly Chief Executive Officer of the Company, you

will lead the Worldwide Sales, Business Development, Marketing and Professional

Services organizations.

 

The following outlines the terms of our

employment offer to you (the "Agreement").

 

Compensation and  Benefits

 

Your starting Base Salary will be

$29,166.66 per month ($350,000.00 per year), paid on a semi-monthly basis and

subject to standard deductions and withholding.  [If the Company achieves its revenues targets as stated in its

business plan, you will be eligible for an annual bonus of sixty percent (60%)

of your Base Salary, payable as soon as it can be determined that such revenue

targets have been met and subject to standard deductions and withholding.]  You will receive a signing bonus of $50,000

$12,500 increments over the next four (4) quarters.  You also will be eligible for salary and stock adjustments at the

next annual review, although no increases are assured.  Your salary will not be reduced unless by

mutual agreement.

 

You will be eligible for the

standard BroadVision employee benefits which include: medical, dental, vision,

and prescription package, long-term disability insurance, group life insurance,

participation in our 401(k) Savings Plan, participation in the Employee Stock

Purchase Plan (ESPP), and two weeks accrued vacation per year (vacation accrued

according to length of service).

 

While BroadVision pays for the

majority of your medical insurance, should you choose to participate in the

plan, your financial contribution currently will be approximately 10% of your

monthly insurance premium, depending on your benefit selection.  Benefits start the first of the calendar

month after your date of hire.  You

should also note that BroadVision may modify salaries and benefits from time to

time as it deems necessary.

 

 

Relocation

 

You will be eligible for a relocation package

as described in Exhibits C and D.

 

Stock Option

 

In addition to the above, you will be

recommended to a grant of an option to purchase 3,375,000 shares of BroadVision

common stock at a fair market value to be determined at the next meeting of the

option committee.  The Option will be an

incentive stock option to the extent permitted by law, the remaining portion of

the Option will be a nonstatutory stock option.  The options vest over four years based on your continued service

with BroadVision: twenty-five percent (25%) of the shares will vest after the

first year of employment and the balance over the remaining three years on a

monthly basis (2.083% of the original grant amount per month).  The Option will be subject to the terms and

conditions of the BroadVision stock option plan and the form of stock option

agreement pursuant to which the Option is granted.

 

Involuntary Termination Without Cause

 

In the event your employment with BroadVision

is terminated due to an Involuntary Termination Without Cause (as defined

below) at any time, you agree to provide consulting services to BroadVision

pursuant to the Consulting Terms set forth in Exhibit A, and on the Separation

Date (as defined in Exhibit A) to execute a general release substantially in

the form attached hereto as Exhibit B (the "Release").  On the eighth day after you execute the

Release, provided you have not revoked the Release, you will be paid that

portion of your bonus under the Variable Compensation Plan which would have

been earned, and become due and payable, had you been employed for the entire

quarter during which the Separation Date occurs.

 

Change of Control

 

In addition to the foregoing, in the event

your employment with BroadVision is terminated by reason of an Involuntary

Termination Without Cause or a Voluntary Termination for Good Reason (as

defined below) within thirteen (13) months following a Change of Control (as

defined below), and subject to your valid execution of the Release, fifty percent

(50%) of the unvested shares subject to your outstanding stock options and

other stock awards granted to you by BroadVision will become vested and

exercisable on the effective date of your termination of employment.

 

For purposes of this Agreement, Involuntary Termination Without

Cause shall mean your dismissal or discharge for reasons other

than Cause.  For this purpose,

"Cause" means the

 

 

2

 

occurrence of any one or more of the

following: (i) your conviction of, or plea of no contest with respect to, any

crime involving fraud, dishonesty or moral turpitude; (ii) your attempted

commission of or participation in a fraud or act of dishonesty against

BroadVision that results in (or might have reasonably resulted in) material

harm to the business of BroadVision; (iii) your intentional, material violation

of any contract or agreement between you and the Company or any statutory duty

you owe to BroadVision; (iv) your conduct that constitutes gross misconduct, insubordination,

incompetence or habitual neglect of duties that results in (or might have

reasonably resulted in) material harm to the business of BroadVision; and (v)

persistent unsatisfactory performance of your job duties; provided, however, that the action or

conduct described in clause (iii), (iv) and (v) above will constitute

"Cause" only if such action or conduct has not been cured by you

following BroadVision's written notice thereof and fifteen (15) days to cure

the same.

 

For purposes of this Agreement, Voluntary Termination for Good

Reason shall mean your resignation resulting because one or more

of the following are undertaken by the Company without your express written

consent: (i) the assignment to you of any duties or responsibilities that results

in a material diminution in your function, a material change in your title or a

change in your reporting relationships, as in effect immediately prior to the

effective date of the Change of Control; (ii) material reduction by the Company

in your annual base salary, as in effect on the effective date of the Change of

Control or as increased thereafter; (iii) any failure by the Company to

continue in effect any benefit plan or program, including incentive plans or

plans with respect to the receipt of securities of the Company, in which you

were participating immediately prior to the effective date of the Change of

Control (hereinafter referred to as "Benefit Plans"), or the taking

of any action by the Company that would adversely affect your participation in

or reduce your benefits under the Benefit Plans or deprive you of any fringe

benefit that you enjoyed immediately prior to the effective date of the Change

of Control; provided, however,

that Good Reason shall not be deemed to have occurred if the Company provides

for your participation in benefit plans and programs that, taken as a whole,

are comparable to the Benefit Plans; (iv) a relocation of your business office

to a location more than thirty (30) miles from the location at which you

performed your duties as of the effective date of the Change of Control, except

for required travel by you on the Company's business to an extent substantially

consistent with your business travel obligations prior to the effective date of

the Change of Control; or (v) a material breach by the Company of any provision

of any material agreement between you and the Company concerning the terms and

conditions of your employment.

 

 

3

 

For purposes of this Agreement, a Change of Control

means the occurrence, in a single transaction or in a series of related

transactions, of any one or more of the following events:

 

                (1)           any person (within the meaning of

Section 13(d) or 14(d) of the Exchange Act of 1934, as amended (the

"Exchange Act") becomes the owner, directly or indirectly, of

securities of the Company representing more than fifty percent (50%) of the

combined voting power of the Company's then outstanding securities other than

by virtue of a merger, consolidation or similar transaction;

 

                (2)           there is consummated a merger,

consolidation or similar transaction involving (directly or indirectly) the

Company and, immediately after the consummation of such merger, consolidation

or similar transaction, the stockholders of the Company immediately prior

thereto do not own, directly or indirectly, outstanding voting securities

representing more than fifty percent (50%) of the combined outstanding voting

power of the surviving entity in such merger, consolidation or similar transaction

or more than fifty percent (50%) of the combined outstanding voting power of

the parent of the surviving entity in such merger, consolidation or similar

transaction;

 

                (3)           the stockholders of the Company

approve or the Board of Directors approves a plan of complete dissolution or

liquidation of the Company, or a complete dissolution or liquidation of the

Company shall otherwise occur; or

 

                (4)           there is consummated a sale, lease,

license or other disposition of all or substantially all of the consolidated assets

of the Company and its subsidiaries, other than a sale, lease, license or other

disposition of all or substantially all of the consolidated assets of the

Company and its subsidiaries to an entity, more than fifty percent (50%) of the

combined voting power of the voting securities of which are owned by

stockholders of the Company in substantially the same proportions as their

ownership of the Company immediately prior to such sale, lease, license or

other disposition.

 

Once a Change of Control has occurred for

purposed of this Agreement, no future events will constitute a Change of

Control for purposes of this Agreement.

 

Parachute Payments

 

If any payment or benefit you would receive

pursuant to a Change of Control from BroadVision or otherwise ("Payment")

would (i) constitute a "parachute payment" within the meaning of

 

 

4

 

Section 280G of the Internal Revenue Code of

1986, as amended (the "Code"), and (ii) but for this sentence, be

subject to the excise tax imposed by Section 4999 of the Code (the "Excise

Tax"), then such Payment shall be equal to the Reduced Amount.  The "Reduced Amount" shall be

either (x) the largest portion of the Payment that would result in no portion

of the Payment being subject to the Excise Tax or (y) the largest portion, up

to and including the total, of the Payment, whichever amount, after taking into

account all applicable federal, state and local employment taxes, income taxes,

and the Excise Tax (all computed at the highest applicable marginal rate),

results in your receipt, on an after-tax basis, of the greater amount of the

Payment not withstanding that all or some portion of the Payment may be subject

to the Excise Tax.  If a reduction in

payments or benefits constituting "parachute payments" is necessary

so that the Payment equals the Reduced Amount, reduction shall occur in the

following order unless you elect in writing a different order (provided, however, that such election

shall be subject to Company approval if made on or after the date on which the

event that triggers the Payment occurs): reduction of cash payments;

cancellation of accelerated vesting of stock awards; reduction of employee

benefits.  In the event that acceleration

of vesting of stock award compensation is to be reduced, such acceleration of

vesting shall be cancelled in the reverse order of the date of grant of your

stock awards unless you elect in writing a different order for cancellation.

 

The accounting firm engaged by BroadVision

for general audit purposes as of the day prior to the effective date of the

Change of Control shall perform the foregoing calculations.  If the accounting firm so engaged by

BroadVision is serving as accountant or auditor for the individual, entity or

group effecting the Change of Control, BroadVision shall appoint a nationally

recognized accounting firm to make the determinations required hereunder.  BroadVision shall bear all expenses with

respect to the determinations by such accounting firm required to be made

hereunder.

 

The accounting firm engaged to make the

determinations hereunder shall provide its calculations, together with detailed

supporting documentation, to BroadVision and you within fifteen (15) calendar

days after the date on which your right to a Payment is triggered (if requested

at that time by BroadVision or you) or such other time as requested by

BroadVision or you.  If the accounting

firm determines that no Excise Tax is payable with respect to a Payment, either

before or after the application of the Reduced Amount, it shall furnish

BroadVision and you with an opinion reasonably acceptable to you that no Excise

Tax will be imposed with respect to such Payment.  Any good faith determinations of the accounting firm made

hereunder shall be final, binding and conclusive upon BroadVision and you.

 

 

5

 

Amendment

 

This Agreement may be modified at any time by

BroadVision; provided, however,

that this Agreement may not be amended for thirteen (13) months following a

Change of Control in a manner which reduces the amount of any benefit that may

be provided upon on an Involuntary Termination Without Cause or a Voluntary

Termination for Good Reason or adversely modifies the types of events that will

constitute an Involuntary Termination Without Cause or a Voluntary Termination

for Good Reason for purposes of this Agreement.

 

Other Provisions

 

As a BroadVision employee, you will be

required to sign an acknowledgement that you have read and understand the

company rules as described in the company handbook and intend to abide by these

rules and regulations.  You will be

expected to sign and comply with BroadVision's Proprietary Information and

Inventions Agreement.  You will also be

required to submit a Form I-9 and satisfactory documentation regarding your

identification and right to work in the United States no later than three (3)

days after your employment begins.

 

In your work for BroadVision, you will be

expected not to use or disclose any confidential information, including trade

secrets, of any former employer or other person to whom you have an obligation

of confidentiality.  Rather, you will be

expected to use only that information which is generally known and used by

persons with training and experience comparable to your own, which is common

knowledge in the industry or otherwise legally in the public domain, or which

is otherwise provided or developed by BroadVision.  During our discussions about your proposed job duties, you

assured us that you would be able to perform those duties within the guidelines

just described.

 

You agree that you will not bring onto

BroadVision premises any unpublished documents or property belonging to any

former employer or other person to whom you have an obligation of

confidentiality.

 

You shall receive indemnification as a

corporate officer of BroadVision to the maximum extent extended to the other

officers of BroadVision.  You will be

required to enter into the BroadVision's standard form of indemnification

agreement, pursuant to which BroadVision agrees to advance any expenses for

which indemnification is available to the extent allowed by applicable law

("Indemnification Agreement").

 

 

6

 

You may terminate your employment with BroadVision

at any time and for any reason whatsoever simply by notifying BroadVision.  Likewise, BroadVision may terminate your

employment at any time, with or without cause or advance notice.  BroadVision requests that in the event of

your resignation, you provide notice of your resignation two (2) weeks in

advance.

 

This Agreement including its Exhibits,

together with your stock option agreement(s), your Proprietary Information and

Inventions Agreement, and your Indemnification Agreement, forms the complete and

exclusive statement of your employment agreement with BroadVision.  It supersedes any other agreements or

promises made to you by anyone, whether oral or written, and it can only be

modified in a written agreement signed by an officer of BroadVision.

 

If you wish to accept employment at

BroadVision under the terms set out above and the Exhibits, please sign and

date this letter, and return it to me by May 14, 2002.

 

I look forward to your favorable reply and to

a productive and exciting working relationship.

 

Sincerely,

 

 

	

  /s/ Pehong Chen

  
	

  Pehong Chen

  
	

  Chief Executive Officer,

  BroadVision, Inc.

  

 

Approved and Accepted by:

 

 

 

	

  /s/ Andrew Nash

  	

   

  	

  May 14, 2002

  
	

  Signature

  	

   

  	

  Date

  
	

   

  	

   

  	

   

  
	

  ###-##-####

  	

   

  	

   

  
	

  Social Security Number

  	

   

  	

   

  

 

 

	

  Exhibit

  A:

  	

  Consulting

  Terms

  
	

  Exhibit B:

  	

  General

  Release

  
	

  Exhibit

  C:

  	

  Summary

  of Relocation Package

  
	

  Exhibit

  D:

  	

  Relocation

  Package Overview

  

 

 

7

 

EXHBIT A

 

CONSULTING TERMS

 

 

As part of the Agreement, you agree that in

the event of an Involuntary Termination Without Cause (as defined in the

Agreement to which this Exhibit A is attached), you will serve as a consultant

to BroadVision under the terms specified below.  The consulting relationship commences on the date your employment

with BroadVision is terminated (the "Separation Date") and continues

for one year from the Separation Date (the "Consulting Period").

 

                Consulting Services.  You agree to provide consulting services to

BroadVision in any area of your expertise upon request by the Chief Executive

Officer (the "CEO") of BroadVision. 

During the Consulting Period, you will report directly to the CEO, or as

otherwise specified by the CEO.  You

agree to exercise the highest degree of professionalism and utilize your

expertise and creative talents in performing these services.  You agree to make yourself available to

perform such consulting services throughout the Consulting Period, up to a

maximum of forty (40) hours per month.

 

                Consulting Fees and Benefits.

 

Consulting Fees.  Provided that you have signed and not revoked the general release

set forth in Exhibit B to the Agreement, the Company will pay you as consulting

fees $$29,166.66 per month (the "Consulting Fees") during the

Consulting Period.

 

Taxes and Withholding.  BroadVision will not withhold from the Consulting Fees any amount

for taxes, social security or other payroll deductions.  BroadVision will issue you a Form 1099 with

respect to your Consulting Fees.  You

acknowledge that you will be entirely responsible for payment of any such

taxes, and you hereby indemnify and hold harmless BroadVision from any

liability for any taxes, penalties or interest that may be assessed by any

taxing authority with respect to all compensation you receive pursuant to the

consulting relationship described herein, with the exception of the employer's

share of social security, if any.

 

Stock Options.  Your outstanding stock options (the "Options") will

continue to vest during the Consulting Period in accordance with the terms and

conditions of the stock option plan and stock option agreement(s) pursuant to

which the Options were granted.  You

will have three (3) months to exercise any vested portion of the Options

following the end of the Consulting Period. 

If the Options were incentive stock options under section 422 of the

Internal Revenue Code of 1986, as amended, at the time of grant, such options

will cease being incentive stock options to the extent such options are

exercised more than three (3) months following your termination of employment

with BroadVision.

 

Health Insurance.  As provided by the federal COBRA law and by BroadVision's current

group health insurance policies, you will be eligible to continue your health

insurance benefits at your own expense for up to eighteen (18) months following

the Separation Date and, later, to convert to an individual policy if you

wish.  On the Separation Date, you will

be provided with a separate notice of your COBRA rights.

 

 

1

 

Other Compensation or Benefits.  You acknowledge that, except as expressly

provided herein, you will not receive from BroadVision any additional

compensation (including but not limited to salary or bonuses), severance or

benefits after the Separation Date.

 

                Limitations on Authority.  You will have no responsibilities or

authority as a consultant to BroadVision other than as provided above.  You agree not to represent or purport to

represent BroadVision in any manner whatsoever to any third party unless

authorized by BroadVision, in writing, to do so.

 

                Other Work Activities.  Throughout the Consulting Period, you retain

the right to engage in employment, consulting, or other work relationships in

addition to your work for BroadVision. 

BroadVision will make reasonable arrangements to enable you to perform

your work for BroadVision at such times and in such a manner so that it will

not interfere with other activities in which you may engage.  In order to protect the trade secrets and

confidential and proprietary information of BroadVision, you agree that, during

the Consulting Period, you will notify BroadVision, in writing, before you

obtain employment with a competitor of BroadVision, perform services for any

business entity competitive with BroadVision, or engage in any other work activity

that is competitive with BroadVision (collectively, "Competitive

Activity").  If you engage in

Competitive Activity without BroadVision's express written consent,

BroadVision's obligation to pay you Consulting Fees will cease immediately,

vesting of your Options will cease immediately, and the Consulting Period will

end immediately.  BroadVision will not

seek to recover any fees or benefits provided to you prior to your engagement

in Competitive Activity.

 

[End of Exhibit A]

 

 

2

 

EXHIBIT B

 

GENERAL RELEASE

 

 

I understand that my position with

BroadVision, Inc. (the "Company") terminated effective

                                     ,

                

(the "Separation Date").  The

Company has conditioned its payment of Consultant Fees, and payment of a

quarterly installment of my bonus under the Variable Compensation Plan, and

accelerated vesting pursuant to the terms of the May 14, 2002, offer letter

agreement (the "Agreement") between myself and the Company, and any

agreements incorporated therein by reference, on my signing this Release.  I understand that, regardless of whether I

sign this Release, the Company will pay me all of my accrued salary and

vacation through the Separation Date, to which I am entitled by law.

 

In consideration of the benefits I am

receiving under the Agreement, I hereby release the Company and its officers,

directors, agents, attorneys, employees, shareholders, parents, subsidiaries,

and affiliates from any and all claims, liabilities, demands, causes of action,

attorneys' fees, damages, or obligations of every kind and nature, whether they

are now known or unknown, suspected or unsuspected, discovered or undiscovered,

arising at any time prior to and including the date I sign this General Release

("Release").  This general

release includes, but is not limited to: all federal and state statutory and

common law claims, claims related to my employment or the termination of my

employment or related to breach of contract, tort, wrongful termination,

discrimination, wages or benefits, claims for any form of equity or

compensation, or claims under the BroadVision, Inc. Severance Benefit Plan.

 

In releasing claims unknown to me at present,

I am waiving all rights and benefits under Section 1542 of the California Civil

code, and any law or legal principle of similar effect in any jurisdiction:

Section 1542 provides: "A general

release does not extend to claims which the creditor does not know or suspect

to exist in his favor at the time of executing the release, which if known by

him must have materially affected his settlement with the debtor."

 

If I am forty (40) years of age or older as

of the Separation Date, I acknowledge that I am knowingly and voluntarily

waiving and releasing any rights I may have under the federal Age

Discrimination in Employment Act of 1967, as amended ("ADEA").  I also acknowledge that the consideration

given for the waiver in the above paragraphs is in addition to anything of

value to which I was already entitled.  I have been advised by this writing, as required by the ADEA,

that:  (a) my waiver and release do not

apply to any claims that may arise after my signing of this Release; (b) I

should consult with my attorney prior to executing this release; (c) I have twenty-one

(21) days within which to consider this Release (although I may choose to

voluntarily execute this Release earlier); (d) I have seven (7) days following

the execution of this release to revoke the Release; and (e) this Release will

not be effective until the eighth day after this Release has been signed by me

("Effective Date").

 

Agreed:

 

Andrew Nash

 

 

 

	

   

  	

   

  	

  Date:

  	

   

  

 

 

3

 

EXHIBIT C

 

SUMMARY OF RELOCATION PACKAGE

 

 

The decision to relocate presents an exciting

and challenging opportunity both for you and the Company.  The Company recognizes that relocating may

produce some unexpected expenses and challenges.  To assist in meeting these challenges, we provide professional

assistance to guide you and financial assistance to help with reasonable

expenses associated with your move.  As

part of the hiring package, you are eligible for the greater of all benefits

provided under Tier 3 of the BroadVision relocation package, or what is listed

below.

 

In addition to the benefits set forth under

the Tier 3 policy, BroadVision will also provide the following:

 

Cash

Resettlement Allowance — $4,000 to cover all moving expenses, to be

grossed up for federal and state income taxes and FICA and medicare

 

Pre-move

House-hunting Trip — Four house hunting trips for a total of twelve

days

 

New Home

Purchase Closing Costs — pursuant to the terms set forth in the

policy, the company will reimburse the greater of $2,000 or actual closing

costs to be grossed up for federal and state income taxes and FICA and medicare

 

Shipping

Your Household Goods — pursuant to the terms set forth in the policy,

the company will pay for the shipment of household goods from old location to

new location.  BroadVision will also pay

for the insurance of your household goods up to a value of $250,000.

 

Temporary Storage — actual costs associated

with the storage of personal household goods.

 

Home Sale — Customary

seller costs including real estate agent selling expenses.

 

The Tier Three package is designed to provide

for the fair and uniform treatment of all employees.  If, for whatever reason, exceptions to this policy or the terms

set forth in this letter are granted, they must be pre-approved in writing.

 

Because of the extensive cost to the company

resulting from relocation, you will be required to sign the Relocation Repayment Agreement before any

expenses are incurred.  By executing

this Agreement, you are agreeing to repay the Company the cost of relocation if

you voluntarily reign, or are terminated for cause, within twenty-four (24)

months of the effective move date.  Upon

termination, any outstanding amounts due for salary, bonuses, commissions,

reimbursement,. vacation pay, etc. will be applied to the amount owed for

relocation expenses.  If withholding

compensation does not cover the total amount owed, a repayment program will be

designed for the remainder of the expenses due the Company.  If there is a change in control as

previously defined in this

 

 

4

 

amount owed for relocation expenses.  If withholding compensation does not cover

the total amount owed, a repayment program will be designed for the remainder

of the expenses due the Company.  If

there is a change in control as previously defined in this letter and your role

or employment is affected as a result of a CIC, you are not required to repay

these moving expenses.  The repayment

schedule is as follows:

 

	

  Month 1-12

  	

   

  	

  100%

  repayment

  
	

  Month 13-24

  	

   

  	

  50%

  repayment

  

 

 

5

 

EXHIBIT D

 

RELOCATION PACKAGE OVERVIEW

 

 

BROADVISION

INC.

ANDREW NASH

Relocation

Package Overview

 

May 9, 2002

 

	

  Policy

  Element

  	

   

  	

  Tier Three

  (Director level or above)

  
	

  Cash Resettlement

  Allowance

  	

   

  	

  $4,000 to cover all other

  moving expenses (and those not specifically reimbursed).  Paid in advance, with no receipts

  required.

  
	

  Pre-move House-hunting

  Trip

  	

   

  	

  Four house hunting trips

  for up to 12 days for employee and dependents.  Reimbursement for airfare (economy class) and normal business

  travel expenses.

  
	

  Travel to new location

  	

   

  	

  Airfare for employee and

  dependents OR reimbursement for mileage (most direct route) and en-route

  lodging.

  
	

  Household Goods shipment

  	

   

  	

  Through Company preferred

  vendor.

  
	

  Car shipment

  	

   

  	

  Up to 2 cars

  
	

  Temporary Lodging

  	

   

  	

  60 days maximum

  
	

  Meals

  	

   

  	

  Not reimbursed

  
	

  Car Rental

  	

   

  	

  Until car arrives or 30

  days — whichever occurs soonest

  
	

  Home Sale

  	

   

  	

  Buyer Value Option program

  through third party provider (tax effective home sale program).

  Dual housing assistance — reimbursement of the lesser of two mortgages, for

  up to three months.  This includes

  customary seller's costs including real estate agent selling expenses.

  
	

  Tax Assistance?  If so, which items?

  	

   

  	

  Relocation expenses

  grossed up.

  
	

  Repayment Terms

  	

   

  	

  100% within one year, 50%

  within 2 years

  
	

  Other benefits?

  	

   

  	

  Third party relocation

  company to assist with relocation

  
	

  Rental Assistance

  	

   

  	

  Yes, through third party

  vendor

  
	

  New Home Purchase Closing

  Costs

  (Best Practice)

  	

   

  	

  Reimbursement of the

  greater of $2,000 or actual closing costs.

  

 

 

6Exhibit 10.25

GENVEC, INC.

2002 STOCK INCENTIVE PLAN

        1.    Definitions.    In

this Plan, except where the context otherwise indicates, the following

definitions shall apply:

        1.1.

“Affiliate” means a corporation, partnership, business trust, limited liability

company or other form of business organization at least a majority of the total

combined voting power of all classes of stock or other equity interests of

which is owned by the Company, either directly or indirectly, and any other entity

designated by the Committee in which the Company has a significant interest.

        1.2.

“Agreement” means a written agreement or other document evidencing an Award

that shall be in such form as may be specified by the Committee and that may,

but need not, be signed by a Participant, as determined by the Committee in its

discretion.

        1.3.

“Award” means a grant of an Option or Restricted Stock.

        1.4.

“Board” means the Board of Directors of the Company.

        1.5.

“Code” means the Internal Revenue Code of 1986, as amended.

        1.6.

“Committee” means the Compensation Committee of the Board or such other

committee(s), subcommittee(s) or person(s) appointed to administer this Plan or

to make and/or administer specific Awards hereunder. If no such appointment is

in effect at any time, “Committee” shall mean the Board.

        1.7.

“Common Stock” means the common stock, par value $.001 per share, of the

Company.

        1.8.

“Company” means GenVec, Inc., and any successor thereto.

        1.9.

“Date of Exercise” means the date on which the Company receives notice of the

exercise of an Option in accordance with the terms of Section 7 hereof.

        1.10.

“Date of Grant” means the date on which an Award is granted under this Plan.

        1.11.

“Eligible Person” means any person who is (a) an Employee (b) hired

to be an Employee, (c) a Non-Employee Director, or (d) a consultant

or independent contractor to the Company or an Affiliate, as determined by the

Committee.

        1.12.

“Employee” means any person determined by the Committee to be an employee of

the Company or an Affiliate.

        1.13.

“Exercise Price” means the price per Share at which an Option may be exercised.

        1.14.

“Fair Market Value” means, unless otherwise determined by the Committee, if the

Common Stock is traded on a securities exchange or quoted on an automated

dealer quotation system, the last sale price for a Share, as of the relevant

date, on such securities exchange or automated dealer quotation system as

reported by such source as the Committee may select, or if the Common Stock is

not traded on a securities exchange or automated dealer quotation system, an

amount equal to the then fair market value of a Share as determined by the

Committee pursuant to a reasonable method adopted in good faith for such

purpose.

        1.15.

“Incentive Stock Option” means an Option granted under this Plan that the

Company designates as an incentive stock option under Section 422 of the

Code.

 

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        1.16.

“Non-Employee Director” means any member of the Company’s or an Affiliate’s

Board of Directors who is not an Employee.

        1.17.

“Nonstatutory Stock Option” means an Option granted under this Plan that is not

an Incentive Stock Option.

        1.18.

“Option” means an option to purchase Shares granted under this Plan in

accordance with the terms of Section 6 hereof.

        1.19.

“Option Period” means the period during which an Option may be exercised.

        1.20.

“Participant” means an Eligible Person who has been granted an Award hereunder.

        1.21.

“Performance Goals” means performance goals established by the Committee which

may be based on earnings or earnings growth, sales, return on assets, cash

flow, total shareholder return, equity or investment, regulatory compliance,

satisfactory internal or external audits, improvement of financial ratings,

achievement of balance sheet or income statement objectives, implementation or

completion of one or more projects or transactions, or any other objective

goals established by the Committee, and may be absolute in their terms or

measured against or in relationship to other companies comparably, similarly or

otherwise situated. Such performance goals may be particular to an Eligible

Person or the department, branch, Affiliate, or division in which the Eligible

Person works, or may be based on the performance of the Company, one or more

Affiliates, or the Company and one or more Affiliates, and may cover such

period as may be specified by the Committee.

        1.22.

“Plan” means the GenVec, Inc. 2002 Stock Incentive Plan, as amended from

time to time.

        1.23.

“Prior Plans” means the Company’s 1993 Stock Incentive Plan and the 2000

Director Option Plan.

        1.24.

“Restricted Stock” means Shares granted under the Plan pursuant to the

provisions of Section 8 hereof.

        1.25.

“Section 422 Employee” means an Employee who is employed by the Company or

a “parent corporation” or “subsidiary corporation” (both as defined in Sections

424(e) and (f) of the Code) with respect to the Company.

        1.26.

“Share” means a share of Common Stock.

        1.27.

“Ten-Percent Stockholder” means a Section 422 Employee who (applying the

rules of Section 424(d) of the Code) owns stock possessing more than ten

percent (10%) of the total combined voting power of all classes of stock of the

Company or a “parent corporation” or “subsidiary corporation” (both as defined

in Sections 424(e) and (f) of the Code) with respect to the Company.

        1.28.

“Unissued Shares” means (i) any available shares under the Prior Plans as

of the date of termination of the Prior Plans, (ii) shares subject to

options under the Prior Plans that expired or terminated for any reason without

having been fully exercised and (iii) shares of Restricted Stock that are

forfeited under the Prior Plans.

        2.    Purpose.    This

Plan is intended to assist the Company and its Affiliates in attracting and

retaining Eligible Persons of outstanding ability and to promote the

identification of their interests with those of the stockholders of the Company

and its Affiliates.

        3.    Administration.    The

Committee shall administer this Plan and shall have plenary authority, in its

discretion, to grant Awards to Eligible Persons, subject to the provisions of

this Plan. The Committee shall have plenary authority and discretion, subject

to the provisions of this

 

2

 

 

Plan, to determine the Eligible Persons to whom Awards

shall be granted, the terms (which terms need not be identical) of all Awards,

including without limitation the Exercise Price of Options, the time or times

at which Awards are granted, the number of Shares covered by Awards, whether an

Option shall be an Incentive Stock Option or a Nonstatutory Stock Option, any

exceptions to nontransferability, any Performance Goals applicable to Awards,

any provisions relating to vesting, and the period during which Options may be

exercised and Restricted Stock shall be subject to restrictions. In making

these determinations, the Committee may take into account the nature of the

services rendered or to be rendered by Award recipients, their present and

potential contributions to the success of the Company and its Affiliates, and

such other factors as the Committee in its discretion shall deem relevant.

Subject to the provisions of the Plan, the Committee shall have plenary

authority to interpret the Plan and Agreements, prescribe, amend and rescind

rules and regulations relating to them, and make all other determinations

deemed necessary or advisable for the administration of this Plan and Awards

granted hereunder. The determinations of the Committee on the matters referred

to in this Section 3 hereof shall be binding and final.

        4.    Eligibility.    Awards

may be granted only to Eligible Persons.

        5.    Stock Subject to Plan.

        5.1.

Subject to adjustment as provided in Section 9 hereof, (a) the

maximum number of Shares that may be issued under this Plan is 1,000,000

Shares, plus any Unissued Shares, (b) the maximum number of Shares with

respect to which an Employee may be granted Awards under this Plan during a

calendar year is 150,000 Shares, (c) the maximum number of Shares that may

be issued pursuant to the exercise of Incentive Stock Options is 1,250,000

Shares, and (d) the maximum number of Shares that may be issued as

Restricted Stock during the term of the Plan is 100,000 Shares.

        5.2.

If an Option expires or terminates for any reason without having been fully

exercised or if shares of Restricted Stock are forfeited, then the unissued

Shares that had been subject to the Award shall be available for the grant of

additional Awards.

        6.    Options.

        6.1.

Options granted under this Plan to Eligible Persons shall be either Incentive

Stock Options or Nonstatutory Stock Options, as designated by the Committee;

provided, however, that Incentive Stock Options may only be granted to Eligible

Persons who are Section 422 Employees on the Date of Grant. Each Option

granted under this Plan shall be identified either as a Nonstatutory Stock

Option or an Incentive Stock Option and shall be evidenced by an Agreement that

specifies the terms and conditions of the Option. Options shall be subject to the

terms and conditions set forth in this Section 6 hereof and such other

terms and conditions not inconsistent with this Plan as the Committee may

specify.

        6.2.

The Exercise Price of an Option granted under this Plan shall not be less than

one hundred percent (100%) of the Fair Market Value of the Common Stock on the

Date of Grant. Notwithstanding the foregoing, in the case of an Incentive Stock

Option granted to an Employee who, on the Date of Grant is a Ten-Percent

Shareholder, the Exercise Price shall not be less than one hundred and ten

percent (110%) of the Fair Market Value of a share on the Date of Grant.

        6.3.

The Option Period shall be determined by the Committee and specifically set

forth in the Agreement; provided, however, that an Option shall not be

exercisable after ten (10) years (five (5) years in the case of an

Incentive Stock Option granted to a Ten-Percent Stockholder) from its Date of

Grant.

 

3

 

 

 

        7.    Exercise of Options.

        7.1.

An Option may, subject to the terms of the applicable Agreement evidencing the

Option, be exercised in whole or in part by the delivery to the Company of a

notice of the exercise, in such form as the Committee may prescribe,

accompanied, in the case of an Option, by (a) a full payment for the

Shares with respect to which the Option is exercised or (b) irrevocable

instructions to a broker to deliver promptly to the Company cash equal to the

exercise price of the Option. To the extent provided in the applicable

Agreement, payment may be made by (i) delivery (including constructive

delivery) of Shares (provided that such shares, if acquired pursuant to an

option or other award granted hereunder or under any other compensation plan

maintained by the Company or any Affiliate, have been held by the Participant

for at least six (6) months) valued at Fair Market Value on the Date of

Exercise or (ii) delivery of a promissory note as provided in

Section 7.2 hereof.

        7.2.

To the extent provided in an Agreement and permitted by applicable law, the

Committee may accept as payment of all or a portion of the Exercise Price a

promissory note executed by the Participant evidencing his or her obligation to

make future cash payment thereof. Promissory notes made pursuant to this

Section 7.2 shall (a) be secured by a pledge of the Shares received

upon exercise of the Option, (b) bear interest at a rate fixed by the

Committee, and (c) contain such other terms and conditions as the Committee

may determine in its discretion.

        8.    Restricted Stock Awards.    Each

grant of Restricted Stock under this Plan shall be subject to an Agreement

specifying the terms and conditions of the Award. Restricted Stock granted

under this Plan shall consist of Shares that are restricted as to transfer,

subject to forfeiture, and subject to such other terms and conditions as may be

determined by the Committee. Such terms and conditions may provide, in the

discretion of the Committee, for the lapse of such transfer restrictions or

forfeiture provisions to be contingent upon the achievement of one or more

specified Performance Goals.

        9.    Capital Adjustments.    In

the event of any change in the outstanding Common Stock by reason of any stock

dividend, split-up, recapitalization, reclassification, combination or exchange

of shares, merger, consolidation, liquidation or the like, the Committee may,

in its discretion, provide for a substitution for or adjustment in (a) the

number and class of shares subject to outstanding Awards, (b) the

consideration to be received upon exercise or payment of an Award, (c) the

Exercise Price of Options, (d) the aggregate number and class of shares

for which Awards thereafter may be granted under this Plan, (e) the

maximum number of Shares with respect to which an Employee may be granted

Awards during the period specified in Section 5.1(b) hereof, (f) the

maximum number of Shares that may be issued pursuant to the exercise of

Incentive Stock Options as specified in Section 5.1(c) hereof, and

(g) the maximum number of Shares which may be issued as Restricted Stock

during the term of the Plan as specified in Section 5.1(d) hereof.

        10.    Termination or Amendment.    The

Board may amend or terminate this Plan in any respect at any time; provided,

however, that, after this Plan has been approved by the stockholders of the

Company, no amendment or termination of this Plan shall be made by the Board

without approval of (a) the Company’s stockholders to the extent

stockholder approval of the amendment is required by applicable law or

regulations or the requirements of the principal exchange or interdealer

quotation system on which the Common Stock is listed or quoted, if any, and

(b) each affected Participant if such amendment or termination would

adversely affect such Participant’s rights or obligations under any Award

granted prior to the date of such amendment or termination.

 

4

 

        11.    Modification, Substitution of

Awards.

        11.1.

Subject to the terms and conditions of this Plan, the Committee may modify the

terms of any outstanding Awards; provided, however, that (a) no

modification of an Award shall, without the consent of the Participant, impair

any of the Participant’s rights or obligations under such Award and (b) in

no event may (i) an Option be modified to reduce the Exercise Price of the

Option or (ii) an Option be cancelled or surrendered in consideration for

the grant of a new Option with a lower Exercise Price.

        11.2.

Anything contained herein to the contrary notwithstanding, Awards may, at the

discretion of the Committee, be granted under this Plan in substitution for

stock options and other awards covering capital stock of another corporation

which is merged into, consolidated with, or all or a substantial portion of the

property or stock of which is acquired by, the Company or one of its

Affiliates. The terms and conditions of the substitute Awards so granted may

vary from the terms and conditions set forth in this Plan to such extent as the

Committee may deem appropriate in order to conform, in whole or part, to the

provisions of the awards in substitution for which they are granted. Such

substitute Awards granted hereunder shall not be counted toward the Share limit

imposed by Section 5.1(b) hereof, except to the extent it is determined by

the Committee that counting such Awards is required in order for Awards granted

hereunder to be eligible to qualify as “performance-based compensation” within

the meaning of Section 162(m) of the Code.

        12.    Foreign Employees.    Without

amendment of this Plan, the Committee may grant Awards to Eligible Persons who

are subject to the laws of foreign countries or jurisdictions on such terms and

conditions different from those specified in this Plan as may in the judgement

of the Committee be necessary or desirable to foster and promote achievement of

the purposes of this Plan. The Committee may make such modifications,

amendments, procedures, sub-plans and the like as may be necessary or advisable

to comply with provisions of laws of other countries or jurisdictions in which

the Company or any of its Affiliates operate or have employees.

        13.    Stockholder Approval.    This

Plan, and any amendments hereto requiring stockholder approval pursuant to

Section 10 hereof, are subject to approval by vote of the stockholders of

the Company at the next annual or special meeting of stockholders following

adoption by the Board.

        14.    Withholding.    The

Company’s obligation to issue or deliver Shares or pay any amount pursuant to

the terms of any Awards granted hereunder shall be subject to satisfaction of

applicable federal, state and local tax withholding requirements. To the extent

provided in the applicable Agreement and in accordance with rules prescribed by

the Committee, a Participant may satisfy any such withholding tax obligation by

any of the following means or by a combination of such means:

(a) tendering a cash payment, (b) authorizing the Company to withhold

Shares otherwise issuable to the Participant, or (c) delivering to the

Company already-owned and unencumbered Shares.

        15.    Term of Plan.    Unless

sooner terminated by the Board pursuant to Section 10, this Plan shall

terminate on the date that is ten (10) years after the earlier of that

date that the Plan is adopted by the Board or approved by the Company’s

stockholders, and no Awards may be granted after such date. The termination of

this Plan shall not affect the validity of any Awards outstanding on the date

of termination.

        16.    Indemnification of Committee.    In

addition to such other rights of indemnification as they may have as members of

the Board or Committee, members of the Committee shall be indemnified by the

Company against all reasonable expenses, including attorneys’ fees, actually

and reasonably incurred in connection with the defense of any action, suit or

proceeding, or in connection with any appeal therein, to which they or any of

them may be a party by reason of any action taken or failure to act under or in

connection with this Plan or any Award granted

 

5

 

 

hereunder, and against all amounts reasonably paid by

them in settlement thereof or paid by them in satisfaction of a judgment in any

such action, suit or proceeding, if such members acted in good faith and in a

manner which they believed to be in, and not opposed to, the best interests of

the Company.

        17.    General Provisions.

        17.1.

The establishment of this Plan shall not confer upon any Eligible Person any

legal or equitable right against the Company, any Affiliate or the Committee,

except as expressly provided in this Plan. Participation in this Plan shall not

give an Eligible Person any right to be retained in the service of the Company

or any Affiliate.

        17.2.

Neither the adoption of this Plan nor its submission to the Company’s

stockholders shall be taken to impose any limitations on the powers of the

Company or its Affiliates to issue, grant, or assume options, warrants, rights,

or restricted stock, or other awards otherwise than under this Plan, or to

adopt other stock option, restricted stock, or other plans, or to impose any

requirement of stockholder approval upon the same.

        17.3.

The interests of any Eligible Person under this Plan are not subject to the

claims of creditors and may not, in any way, be assigned, alienated or

encumbered except to the extent provided in an Agreement.

        17.4.

This Plan shall be governed, construed and administered in accordance with the

laws of the State of Delaware.

        17.5.

The Committee may require each person acquiring Shares pursuant to Awards

granted hereunder to represent to and agree with the Company in writing that

such person is acquiring the Shares without a view to distribution thereof. The

certificates for such Shares may include any legend which the Committee deems

appropriate to reflect any restrictions on transfer. All certificates for

Shares issued pursuant to this Plan shall be subject to such stock transfer

orders and other restrictions as the Committee may deem advisable under the

rules, regulations and other requirements of the Securities and Exchange

Commission, any stock exchange upon which the Common Stock is then listed or

interdealer quotation system upon which the Common Stock is then quoted, and

any applicable federal or state securities laws. The Committee may place a

legend or legends on any such certificates to make appropriate reference to

such restrictions.

        17.6.

The Company shall not be required to issue any certificate or certificates for

Shares with respect to Awards granted under this Plan, or record any person as

a holder of record of such Shares, without obtaining, to the complete satisfaction

of the Committee, the approval of all regulatory bodies deemed necessary by the

Committee, and without complying to the Board’s or Committee’s complete

satisfaction, with all rules and regulations, under federal, state or local law

deemed applicable by the Committee.

        17.7.

To the extent that the Plan provides for issuance of stock certificates to

reflect the issuance of Shares, the issuance may be effected on a

noncertificated basis, to the extent not prohibited by applicable law or the

rules of any stock exchange or automated dealer quotation system on which the

Shares are traded.

 

6

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