Document:

Exhibit 10.1

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of                     , 20       by and between Interlink Electronics, Inc., a Nevada corporation (the “Company”), and                         (“Indemnitee”).

 

WITNESSETH THAT:

 

WHEREAS, highly competent persons have become more reluctant to serve corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities.  Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions.  At the same time, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself.  The articles of incorporation and the bylaws of the Company may require indemnification of the officers and directors of the Company.  Indemnitee may also be entitled to indemnification pursuant to Chapter 78 of the Nevada Revised Statutes (“NRS”).  The NRS expressly provides that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect to indemnification;

 

WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;

 

WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

 

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;

 

WHEREAS, this Agreement is a supplement to and in furtherance of the articles of incorporation and the bylaws of the Company and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and

 

 

WHEREAS, Indemnitee does not regard the protection available under the Company’s articles of incorporation, bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as a director and/or officer without adequate protection, and the Company desires Indemnitee to serve in such capacity.  Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that Indemnitee be so indemnified.

 

NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a director and/or officer from and after the date hereof, the parties hereto agree as follows:

 

1.             Indemnity of Indemnitee.  The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time.  In furtherance of the foregoing indemnification, and without limiting the generality thereof:

 

(a)           Proceedings Other Than Proceedings by or in the Right of the Company.  Indemnitee shall be entitled to the rights of indemnification provided in this Section l(a) if, by reason of his Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company.  Pursuant to this Section 1(a), Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful.

 

(b)           Proceedings by or in the Right of the Company.  Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company.  Pursuant to this Section 1(b), Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, as well as amounts paid in settlement, in connection with such Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company; provided, however, if applicable law so provides, no indemnification against such Expenses or settlement shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged by a court of competent jurisdiction to be liable to the Company with respect to the matter claimed for indemnification, after exhaustion of all appeals therefrom, unless and to the extent that any court of the State of Nevada or the court in which such action or suit was brought shall determine that such indemnification may be made.

 

(c)           Indemnification for Expenses of a Party Who is Successful on the Merits or Otherwise.  Notwithstanding and in addition to any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably

 

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incurred by him or on his behalf in connection therewith.  If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with the defense.  For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

2.             Additional Indemnity.  In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including, without limitation, a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee.  The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 of this Agreement) to be unlawful.

 

3.             Contribution.

 

(a)           Whether or not the indemnification provided in Sections 1 and 2 of this Agreement is available, in respect of any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such action, suit or proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee.  The Company shall not enter into any settlement of any action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

 

(b)           Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall contribute to the amount of expenses (including, without limitation, attorneys’ fees and disbursements), judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction or events from which such action, suit or proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are

 

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jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the transaction or events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered.  The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

 

(c)           The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

 

(d)           To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

 

4.             Indemnification for Expenses of a Witness or in Response to a Discovery Request.  Notwithstanding any other provision of this Agreement, to the extent that Indemnitee, by reason of Indemnitee’s Corporate Status, is a witness, or is made (or asked) to respond to a discovery request for documents or information, in any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified against all Expenses paid or incurred by Indemnitee in connection therewith in the manner set forth in this Agreement, without an undertaking.

 

5.             Advancement of Expenses.  Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding.  Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee, without requiring Indemnitee or his counsel to waive any attorney client privilege or work product protection, and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses.  Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free and made without regard to Indemnitee’s ability to repay such advances.

 

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6.             Procedures and Presumptions for Determination of Entitlement to Indemnification.  It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the NRS and public policy of the State of Nevada.  Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:

 

(a)           To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification, without requiring Indemnitee or his counsel to waive any attorney client privilege or work product protection.  The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to Indemnitee unless, and to the extent that, such failure actually and materially prejudices the interests of the Company.

 

(b)           Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) of this Agreement, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the election of the Board:  (1) by a majority vote of the Disinterested Directors (as hereinafter defined), even though less than a quorum, (2) by a majority vote of a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum, (3) if there are no Disinterested Directors or if the Disinterested Directors so direct, by Independent Counsel (as hereinafter defined) in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee, or (4) if so directed by the Board, by the stockholders of the Company.  Notwithstanding the above, if there has been a Change in Control, then the Board shall order that determination shall be made by Independent Counsel.

 

(c)           If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b) of this Agreement, the Independent Counsel shall be selected as provided in this Section 6(c).  The Independent Counsel shall be selected by the Company.  Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in this Agreement, and the objection shall set forth with particularity the factual basis of such assertion.  Absent a proper and timely objection, the law firm, or member of a law firm, so selected shall act as Independent Counsel.  If a written objection is made, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit.  If, within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section 6(a) of this Agreement, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition any Court in the State of Nevada or other court of competent jurisdiction for resolution

 

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of any objection which shall have been made by Indemnitee to the Company’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 6(b) of this Agreement.  The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) of this Agreement, and the Company shall pay all reasonable fees and expenses of Indemnitee and Independent Counsel incident to the procedures of this Section 6(c), regardless of the manner in which such Independent Counsel was selected or appointed.

 

(d)           In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.  Neither the failure of the Company (including by its directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

 

(e)           Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on: (i) the records or books of account of the Enterprise (as hereinafter defined) (including, without limitation, financial statements); (ii) information supplied to Indemnitee by the officers of the Enterprise in the course of their duties; (iii) the advice of legal counsel for the Enterprise; or (iv) information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise.  In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise, or the Enterprise itself, shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.  Whether or not the foregoing provisions of this Section 6(e) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Company.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

 

(f)            If the person, persons or entity empowered or selected under this Section 6 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination with respect to entitlement to indemnification in

 

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good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 6(f) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to item (4) of Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination, the Board or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.

 

(g)           Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.  Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement.  Any costs or expenses (including, without limitation, attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

 

(h)           The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty.  In the event that any action, claim or proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such action, suit or proceeding.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

 

(i)            The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

 

7.             Remedies of Indemnitee.

 

(a)           In the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii)

 

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advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section 6(b) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within ten (10) days after receipt by the Company of a written request therefor or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Nevada, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification.  Indemnitee shall commence such proceeding seeking adjudication within one (1) year following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 7(a).  The Company shall not oppose Indemnitee’s right to seek any such adjudication.

 

(b)           In the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b) of this Agreement.

 

(c)           If a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 

(d)           In the event that Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall pay on his behalf, in advance, any and all expenses (of the types described in the definition of Expenses in this Agreement) actually and reasonably incurred by him in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.

 

(e)           The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement.  The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance, to the extent not prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

 

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(f)            Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

 

8.             Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

 

(a)           The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the articles of incorporation and the bylaws of the Company, any agreement, a vote of stockholders, a resolution of the Board or otherwise.  No amendment, alteration or repeal of this Agreement or of any provision of this Agreement shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.  To the extent that a change in the NRS, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the articles of incorporation, the bylaws of the Company and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.  No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

 

(b)           To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents or fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person serves at the request of the Company, the Company shall obtain coverage for Indemnitee under such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies.  If, at the time of the receipt of a notice of a claim pursuant to the terms of this Agreement, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies.  The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

 

(c)           In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

(d)           The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy purchased by the Company, or contract or agreement to which the Company is a party.

 

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(e)           The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

 

9.             Exception to Right of Indemnification. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

 

(a)           for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or

 

(b)           for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of Company securities pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or similar provisions of state statutory law or common law; or

 

(c)           subject to Section 7(d), in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee (including, without limitation, any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees), unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.

 

10.          Duration of Agreement.  All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is a director and/or officer of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter for (i) an additional three (3) years or (ii) so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 7 of this Agreement) by reason of his Corporate Status, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement, whichever such additional term is longer.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including, without limitation, any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.

 

11.          Security.  To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral.  Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.

 

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12.          Enforcement.

 

(a)           The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as a director and/or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director and/or officer of the Company.

 

(b)           This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter of this Agreement.

 

13.          Information Sharing.  If Indemnitee is the subject of or is implicated in any investigation, whether formal or informal, by a governmental or regulatory entity or agency, the Company shall, to the extent permitted by law or the rules of such governmental or regulatory entity or agency, provide to Indemnitee any factual written information provided to the investigating entity concerning the investigation; provided, that by executing this Agreement, Indemnitee agrees to use such information solely in connection with the defense of such investigation and, if Indemnitee is not then serving the Company as an officer or director, shall execute a confidentiality agreement.

 

14.          Definitions.  For purposes of this Agreement:

 

(i)            A “Change in Control” shall be deemed to have occurred if (i) any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing a majority of the total voting power represented by the Company’s then outstanding voting securities, (ii) during any period of two (2) consecutive years, individuals who at the beginning of such period constituted the Board, together with any new directors whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination was previously so approved, cease for any reason to constitute a majority of the Board, (iii) the stockholders of the Company approve a merger or consolidation or a sale of all or substantially all of the Company’s assets with or to another entity, other than a merger, consolidation or asset sale that would result in the holders of the Company’s outstanding voting securities immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least a majority of the total voting power represented by the voting securities of the Company or such surviving or successor entity outstanding immediately thereafter, or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company.

 

11

 

(b)           “Corporate Status” means the status of a person who is or was a director, officer, employee, agent or fiduciary of or consultant to the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving at the express written request of the Company.

 

(c)           “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

 

(d)           “Enterprise” means the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of the Company as a director, officer, employee, agent or fiduciary.

 

(e)           “Expenses” means all reasonable and documented attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery, documents, or information in any Proceeding.  Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent.  Expenses shall also include any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

 

(f)            “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent:  (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.  The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

(g)           “Proceeding” means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was an officer or director of the Company, by reason of any action taken by him or of any inaction on his part while acting as an officer or director of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer,

 

12

 

employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding any such proceeding initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his rights under this Agreement.

 

15.          Severability.  The invalidity or unenforceability of any provision of this Agreement shall in no way affect the validity or enforceability of any other provision.  Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws.  In the event any provision of this Agreement conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.

 

16.          Modification and Waiver.  No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

17.          Notice by Indemnitee.  Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder.  The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company.

 

18.          Notices.  All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given:  (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.  All communications shall be sent:

 

(a)           To Indemnitee at the address set forth on the signature page hereto.

 

(b)           To the Company at:

 

Interlink Electronics, Inc.
 31248 Oak Crest Drive
 Westlake Village, CA 91361
 Attention: Chief Executive Officer

 

13

 

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

 

19.          Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.  This Agreement may also be executed and delivered by facsimile or other form of electronic transmission and in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

20.          Headings.  The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

21.          Governing Law and Consent to Jurisdiction.  This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Nevada, without regard to its conflict of laws rules. The parties hereto hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought in any court of the State of Nevada (the “Nevada Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Nevada Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) irrevocably appoint, to the extent such party is not otherwise subject to service of process in the State of Nevada, the Company’s then current agent for service of process in Nevada as its agent in the State of Nevada for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Nevada, (iv) waive any objection to the laying of venue of any such action or proceeding in the Nevada Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Nevada Court has been brought in an improper or inconvenient forum.  The Company shall ensure that its then current agent for service of process maintains a current mail and e-mail address for Indemnitee so it can promptly notify the Indemnitee of any action it undertakes on behalf of the Indemnitee under (iii) above.  The Company shall bear the cost of engaging its then current agent for service of process to act as agent for service of process for Indemnitee and any related costs or expenses.

 

[Remainder of page intentionally left blank; signature page follows.]

 

14

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written.

 

 

	
 
    	
INTERLINK   ELECTRONICS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Steven   Bronson
    
	
 
    	
Title:
    	
Chief   Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
INDEMNITEE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
(Signature)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
(Print   Name)
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

Signature Page to Indemnification AgreementExhibit 10.2

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”), dated as of July 13, 2010, is entered into between Interlink Electronics, Inc., a Delaware corporation with principal offices located at 546 Flynn Road, Camarillo, CA 93012, (“Interlink Electronics” or the “Company”) and Steven N. Bronson, an individual residing at 78 10 Afton Villa Court Boca Raton, Florida 33433 (“Executive”)(each a “Party” and collectively, the “Parties”).

 

W I T N E S S E T H :

 

WHEREAS, Interlink Electronics desires to employ Executive, and Executive are willing to accept such employment on such terms and conditions as set forth below,

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, Interlink Electronics and Executive agree as follows:

 

1.                                      Employment.  Interlink Electronics hereby employs Executive as its Chairman and Chief Executive Officer, subject to the terms and conditions set forth in this Agreement.

 

2.                                      Term. The term of this Agreement shall commence on July 15, 2010, and terminate on July 14, 2011 (the “Term”), subject to earlier termination pursuant to the provisions herein. The Term of this Agreement shall automatically renew for additional one year periods unless the Company or Executive provides written notice to the other party that the Agreement shall not be renewed at least thirty (30) days prior to the renewal date.

 

3.                                       Duties. Executive shall serve as Chairman and Chief Executive Officer and shall perform all duties commensurate with his positions and as may be assigned to him by the Board of Directors of the Company.  It is understood that Executive will not devote his full business time and energies to the business and affairs of the Company, however Executive shall use his best efforts, skills and abilities to promote the interests of the Company and to diligently and competently perform tl1e duties of his positions.

 

4.                                       Compensation and Benefits.

 

4.1                                Compensation. During the term of this Agreement, as compensation for the satisfactory performance of all duties to be performed by Executive hereunder, Interlink Electronics shall pay Executive guaranteed compensation of $200,000.00 per annum, through the issuance, on July 15, 2010, of the Company’s common stock, $.00001 par value, valued at $200,000.00 of based on the closing share price on July 14, 2010 (the “Shares”).  The Shares shall vest at the rate of 1112th per month on the 15th day of each month during the Term of this Agreement commencing on August 15, 2010 and ending on July 15, 2011.

 

 

4.2                                Residential and Travel Accommodations. The Company acknowledges that the Executive resides in Boca Raton, Florida and that he shall periodically commute to the Company’s principal offices in Camarillo, California. Accordingly, the Company shall provide Executive residential accommodations within the following California counties: Ventura, Los Angeles or Santa Barbara. Prior to securing residential accommodations the Executive shall advise the Company’s Compensation Committee of the cost of the residential accommodations. The Company shall also pay for all of Executive’s travel expenses in commuting to the Company’s principal office.

 

4.3                                Bonus Compensation. Executive shall be entitled to earn and receive bonus compensation provided that certain performance goals are achieved by the Company. Bonuses shall be granted in accordance with a bonus plan to be adopted by the Company, the terms and conditions of which shall be determined by the Company’s Compensation Committee.

 

4.4                                Executive Benefit Plans. The Executive shall be permitted during the Term to participate in the Company’s medical plans, life and long term disability insurance plans and retirement plans pursuant to their terms and conditions. Executive shall be entitled to participate in any other benefit plan offered by the Company to its executives during the Term of this Agreement.

 

5.                                       Reimbursement of Business Expenses. During the term of this Agreement, upon submission of proper invoices, receipts or other supporting documentation satisfactory to Interlink Electronics and in specific accordance with such guidelines as may be established from time to time, Executive shall be reimbursed by Interlink Electronics for all reasonable business expenses actually and necessarily incurred by Executive on behalf of Interlink Electronics in connection with Executive’s performance of services under this Agreement.

 

6.                                       Representations as to Employability.

 

6.1                                Absence of prior restrictions. Executive represents and warrants that Executive is not party to, or bound by, any agreement or commitment, or subject to any restriction, including, but not limited to agreements related to previous employment containing confidentiality, non-solicitation, non-poaching or non-compete covenants, which would adversely affect the business of Interlink Electronics or Executive’s performance of duties under this Agreement.

 

6.2                                Absence of third party proprietary information. Executive represents and warrants that Executive is not in possession of and will not bring onto the Company’s premises or access or utilize any proprietary information of any prior employer or other third-party that Executive is not permitted to have. Executive represents, further, that Executive will be able to fulfill Executive’s duties hereunder without such proprietary information by utilizing only information that is generally available in the public domain or the rightful property of Executive or the Company.

 

 

7.                                       Confidentiality and Proprietary Information.

 

7.1                                Non-Disclosure. During the course of Executive’s employment with Interlink Electronics, Executive will learn of Confidential Information (as defined below) and Executive may develop Confidential Information on behalf of lnterlink Electronics. Executive agrees that Executive will not use or disclose to any Person (except as required by applicable law or for the proper performance of Executive’s duties and responsibilities for Interlink Electronics) any Confidential Information obtained or created by Executive incident to Executive’s employment or any other association with Interlink Electronics. Executive understand that this restriction shall continue to apply after Executive’s employment terminates, regardless of the reason for such termination.

 

7.2                                Protection of Information. All information, data, documents, records and files, in any kind of media, relating to the business (whether past, present or future) of Interlink Electronics (“Confidential Information”), whether or not prepared by Executive, shall be the sole and exclusive property of Interlink Electronics. Executive agrees to safeguard all Confidential Information and to surrender to Interlink Electronics, at the time Executive’s employment terminates or at such earlier time as requested, all tangible forms of Confidential Information of Interlink Electronics then in Executive’s possession or control, and to destroy or retrieve any copies, such that no Confidential Information which was at any time in Executive’s possession or control will exist in tangible form other than what Executive have turned over to Interlink Electronics or destroyed.

 

7.3.                             Work for Hire/ Assignment. Executive will promptly disclose to Interlink Electronics all designs, software, computer code, processes, inventions, improvements, discoveries and other information related in any way to the business of Interlink Electronics (collectively “Developments”) conceived, developed or acquired by Executive alone or with others during the term of this Agreement, whether or not conceived during regular working hours, through the use of Company time, material or facilities or otherwise. All such Developments shall be considered “work for hire” and Interlink Electronics shall be the sole and exclusive owner of such Developments. Additionally, Executive hereby agrees to assign, transfer, and convey to Interlink Electronics any and all rights and/or interest Executive may have in the Developments. The Parties acknowledge that the assignment under this Agreement does not apply to any development for which no equipment, supplies, facility, or trade secret information of the Company was used and which was developed entirely on Executive’s own time, and (a) which does not relate (i) directly to the business of Interlink Electronics or (ii) to its actual or demonstrably anticipated research or development; or (b) which does not result from any work performed by Executive for the Interlink Electronics.

 

8.                                       Application of IRC Section 409A.

 

a.                                       If Executive is a “specified employee” within the meaning of Internal Revenue Code (“IRC”) Section 409A(a)(2)(B)(i) and any payment required to be made or benefit required to be provided pursuant to this Agreement is subject to IRC Section 409A and not exempt from those requirements under any applicable regulations

 

 

or other guidance of general applicability, then any such payment otherwise payable on account of Employee’s separation from service during the period service ending on the date that is six (6) months after the separation from service shall be paid in a lump sum on the date that is six (6) months after Executive’s separation from service instead of the date on which it would otherwise be paid; provided, however, that deferred compensation to which Executive is entitled under this Agreement need not be delayed under this subparagraph to the extent those payments would comply with the requirements of Treasury Regulations Section 1.409A-l(b)(9)(iii), which generally requires that the total of such payments not exceed two (2) times the lesser of (1) Executive’s annualized compensation based on his annual rate of pay in the year before the Executive’s separation from service or (2) the Code Section 401(a)(l 7) limit applicable to qualified plans during the year of Executive’s separation from service, In determining whether Executive is a “specified employee” Interlink Electronics (or its delegate) may, but need not, elect in writing, subject to applicable limitations under IRC Section 409A, any of the special effective rules prescribed in Treasury Regulation Section 1.409A-l(i).

 

b.                                       To the extent applicable, it is intended that this Agreement comply with the provisions of IRC Section 409A, so as to prevent inclusion in gross income of any amounts payable or benefits provided hereunder in a taxable year that is prior to the taxable year or years in which such amounts or benefits would otherwise actually be distributed, provided or otherwise made available to Executive. This Agreement shall be construed, administered, and governed in a manner consistent with this intent and the following provisions of this paragraph shall control over any contrary provisions of this Agreement.

 

c.                                        Payments and benefits under this Agreement payable upon Executive’s termination or severance of employment with Interlink Electronics that constitute deferred compensation under IRC Section 409A shall not be paid or provided prior to Executive’s “separation from service” within the meaning of lRC Section 409A.

 

d.                                       For purposes of lRC Section 409A, the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments so that each payment is designated as a separate payment for purposes of IRC Section 409A.

 

e.                                        References in this Agreement to IRC Section 409A include both that Section of the IRC itself and any guidance promulgated thereunder.

 

f.                                         Interlink Electronics makes no representation or warranty and shall have no liability to Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to IRC Section 409A but do not satisfy an exemption from, or the conditions of, such Section.

 

9.                                       Termination. This Agreement may be terminated prior to the expiration of the Term set forth in Section 2 upon the occurrence of any of the events set forth in, and subject to the terms of, this Section 9.

 

 

9.1                                Voluntarily. Executive may terminate this Agreement at any time by giving no less than thirty (30) days written notice to Interlink Electronics

 

9.2                                Death. This Agreement will terminate immediately and automatically upon Executive’s death.

 

9.3                                Disability. This Agreement may be terminated at Interlink Electronics’ option, immediately upon notice to the Executive, if Executive shall suffer a permanent disability. For the purposes of this Agreement, the term “permanent disability” shall mean Executive’s inability to perform Executive’s duties under this Agreement for a period of ninety (90) consecutive days due to illness, accident or any other physical or mental incapacity, as determined by the Board of Directors of Interlink Electronics. In the event that a dispute arises with respect to Executive’s disability, the parties shall each select a duly licensed medical doctor to make such a determination. If the two doctors so selected cannot agree on a determination, they will mutually select a third duly licensed medical doctor and the decision of the majority of the three doctors will be binding.

 

9.4                                Termination by Interlink Electronics for Cause. Interlink Electronics may terminate this Agreement upon thirty (30) days written notice to Executive for “Cause,” as defined below. “Cause” shall mean (i) the willful and material breach or the material failure by Executive to perform Executive’s duties and obligations under this Agreement, provided Executive does not cure such breach within thirty (30) days of Executive’s receipt of written notice of such breach, (ii) Executive’s commission of a material act of dishonesty or gross negligence in the performance of Executive’s duties hereunder, including but not limited to making any material misrepresentations to the Company (iii) Executive willfully engaging in conduct materially detrimental to the business of Interlink Electronics or (iv) Executive being convicted of a crime involving moral turpitude.

 

9.5                                Termination by Executive for Good Reason. Executive may terminate his employment by written notice to Interlink Electronics for “Good Reason,” as defined below. “Good Reason” means one or more of the following: (1) Executive’s assignment by Interlink Electronics, without Executive’s written consent, to duties or responsibilities which are not consistent with that of duties and responsibilities as set forth herein; (2) reduction by Interlink Electronics, without Executive’s written consent, of Executive’s salary and bonus pursuant to Section 4.1 and Section 4.3, above; or (3) Interlink Electronics’ material breach of its obligations under this Agreement, which breach has continued uncured for a period of thirty days after its receipt of written notice from Executive.

 

9.6                                Compensation in Event of Termination.

 

a. Voluntary Termination. Upon Executive’s voluntary termination of this Agreement pursuant to Section 9.1, Executive shall be entitled to receive the compensation, as set forth in paragraph 4 above, up to the date of termination, and after such date shall not be entitled to any Compensation under this Agreement, and Executive will no longer

 

 

continue any vesting but instead will retain any equity that has vested as of the date of termination.

 

b.                     Termination for Death or Disability.  If Executive’s employment is terminated due to the Executive’s Death or Disability pursuant to Sections 9.2 or 9.3, then Executive or his beneficiaries will be entitled to receive: (i) Executive’s Compensation, as set forth in Section 4, above, to the end of the monthly pay period immediately following Executive’s date of termination, (ii) accrued Bonus Payments payable to the Executive under the Management Bonus Plan and (iii) all equity and/or options issued to Executive by Interlink Electronics but not yet vested shall is immediately fully vest.

 

c.                                                                  Termination for Cause. Upon the termination of this Agreement pursuant to Section 9.4, the Executive shall be entitled to receive his Compensation, as set forth in paragraph 4, above, to the date of termination, and after such date shall not be entitled to any Compensation, benefits or other rights granted herein to the Executive.

 

d.                                                                       Termination by Executive for Good Reason or by Interlink Electronics Without Cause.  If executive’s employment is terminated by the Executive for Good Reason pursuant to Section 9.5, or by Interlink Electronics without cause, then Executive will be entitled to receive: (1) Executive’s Compensation, as set forth in Section 4, above, to the date of termination; (2) a severance payment equal to twelve (12) months of Executive’s Compensation, as set forth in Section 4, above; (3) bonus compensation earned by Executive pursuant to paragraph 4.3, above; (4) benefits, pursuant to paragraph 4.4, above, for twelve (12) months following the date of termination; (5) any vested company match 401k or other retirement contribution; and (6) all equity or options issued to Executive by Interlink Electronics but not yet vested shall is immediately fully vest.

 

9.7                                        Release. In no event shall the Executive be entitled to receive any payments, amounts, rights, or benefits under this Section 9 unless Executive executes a release concerning any claims Executive may have against Interlink Electronics in a form reasonably acceptable to Interlink Electronics.

 

10.                                        Change In Control Provision.  In the event there occurs a change in control with respect to Interlink Electronics then the Executive shall be entitled to receive a change in control payment in an amount equal to one (1) times the Executive’s then annual salary, payable upon the date the “change in control” occurs. Additionally, upon a Change in Control any equity securities or options held by the Executive that are subject to a vesting period, shall immediately fully vest. For the purposes of this Section “Change In Control” shall mean the consummation of any of the following transactions effecting a change in ownership or control of the Company: (i) a merger, consolidation or reorganization, unless securities representing more than fifty percent (50%) of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly and in substantially the

 

 

same proportion, by the persons who beneficially owned the Company’s outstanding voting securities immediately prior to such transaction; or (ii) any transfer, sale or other disposition of all or substantially all of the Company’s assets; or (iii) the acquisition, directly or indirectly by any person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company), of beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities pursuant to a tender or exchange offer made directly to the Company’s beneficial holders.  In no event, however, shall a Change in Control be deemed to occur in connection with (i) a merger of the Company, the sole purpose of which is to reincorporate the Company in another jurisdiction, or (ii) any public offering of Common Stock, the primary purpose of which is to raise capital; or (iii) an increase or decrease of the Executive’s beneficial ownership in the Company.

 

11.                                Miscellaneous.

 

11.1                         Survival. The provisions of Sections 7, 8 and 9 shall survive the termination of this Agreement.

 

11.2                         Entire Agreement. This Agreement sets forth the entire understanding of the Parties relating to the Executive’s employment with Interlink Electronics and merges and supersedes any prior or contemporaneous agreements between the Parties pertaining to the subject matter hereof.

 

11.3                         Modification. This Agreement may not be modified unless in writing and signed by the Party against whom the same is sought to be enforced.

 

11.4                         Waiver. Failure of a Party to enforce one or more of the provisions of this Agreement or to require at any time performance of any of the obligations hereof shall not be construed to be a waiver of such provisions by such Party nor to in any way affect the validity of this Agreement or such Party’s right thereafter to enforce any provision of this Agreement, nor to preclude such Party from taking any other action at any time which it would legally be entitled to take.

 

11.5                         Assignment. This Agreement and all any rights or obligations hereunder are not assignable by Executive, but may be assigned by Interlink Electronics upon the sale of substantially all of its assets.

 

11.6                         Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and transmitted via email, and shall be deemed to have been given at the time of transmittal, as follows:

 

	
To Interlink Electronics:
    	
Interlink Electronics Inc.
    
	
 
    	
546   Flynn Road
    
	
 
    	
Camarillo,   CA 93012, USA
    
	
Attn.:  
    	
Lorin   E. Krueger, Chairman
    
	
 
    	
Compensation   Committee
    
	
 
    	
of   Interlink Electronics, Inc.
    

 

 

	
To Executive:
    	
Steven N. Bronson
    
	
 
    	
7810 Afton Villa Court
    
	
 
    	
Boca   Raton, Florida 33433
    

 

11.7                         Severability.  If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect the validity and enforceability of the other provisions of this Agreement,  and the provision held to be invalid or unenforceable shall be modified so as to be enforced as nearly as possible according to its original terms and intent but only to the extent necessary to eliminate such invalidity or 1menforceability.

 

11.8.                      Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California.

 

11.9                         Counterparts. This Agreement may be executed in any number of counterparts, including facsimile and email pdf signatures which shall be deemed as original signatures. All executed counterparts shall constitute one agreement, notwithstanding that all signatories are not signatories to the original or the same counterpart.

 

IN WITNESS WHEREOF, each Party hereto has duly executed this Agreement as of the date set forth above.

 

 

	
Interlink Electronics Inc.
    	
 
    	
Steven N. Bronson
    
	
 
    	
 
    	
 
    
	
/s/ Lorin E. Krueger
    	
 
    	
/s/ Steven N. Bronson
    
	
 
    	
 
    	
 
    
	
Lorin   E. Kreuger, Chairman
    	
 
    	
 
    
	
Compensation   Committee
    	
 
    	
 
    
	
of   Interlink Electronics, Inc.

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