EMPLOYMENT AGREEMENT (the Agreement) is made as of this 1st day of August ,
2007 between Vuzix Corporation, a Delaware corporation with its principal office at 75 Town Centre
Drive, Rochester, New York, 14623 (the Company) and Grant Russell, having an address at 11775
Chateau Wynd, Delta, British Columbia, Canada VYE 3C9 (the Executive).
WHEREAS, the parties hereto wish to enter into an employment agreement to employ the
Executive as the Companys President and Chief Executive Officer and to set forth certain
additional agreements between the Executive and the Company.
NOW, THEREFORE, in consideration of the mutual covenants and representations
contained herein, the parties hereto agree as follows:
1. Employment Period.
The Company hereby employs the Executive, and the Executive hereby accepts employment with the
Company, on the terms and conditions contained in this Agreement.
2. Duties and Status.
(a) Engagement. The Company hereby engages the Executive as the Companys Chief Financial
Officer, on the terms and conditions set forth in this Agreement; it being understood that
Executives service as an officer of the Corporation is subject to his election and reelection as
such by the Companys Board of Directors (the Board); provided, however, that if Executive is not
so reelected, he may terminate his employment with the Company for good reason in accordance with
the provisions of Section 4(c) of this Agreement.
(b) Duties. During the Employment Period, the Executive shall exercise such authority, perform
such executive duties and functions and discharge such responsibilities as are consistent with the
position held by him, including those commensurate duties assigned to him by Board. During the
Employment Period, the Executive shall devote his full business time, skill and efforts to the
business of the Company. Notwithstanding the foregoing, the Executive may make and manage passive
personal business investments and engage in personal business activities, provided that such
activities do not either interfere with the business of the Company or affect his ability to render
the services to the Company required of him under this Agreement. Executive may serve in any
capacity with any civic, educational or charitable organization, or any trade association, without
seeking or obtaining approval by the Board, provided such activities and service do not materially
interfere or conflict with the performance of his duties hereunder. Executive may serve on the
Board of Directors of any entity, whether or not for profit, provided that such service is
permitted by policies and procedures approved by the Board or is specifically approved by the
Board; it being understood that any fees or other
compensation received for such service shall be retained by the Executive, without any oblation
to account therefor to the Company.
3. Compensation and Benefits.
(a) Salary. During the Employment Period, the Company shall pay to the Executive, as
compensation for the performance of his duties and obligations under this Agreement, a base
salary (which shall be paid in accordance with the normal payroll practices of the Company) (the
Base Salary), as follows:
(i) Executives Base Salary shall initially be at the rate of $175,000.00 per annum,
(ii) On or before the date upon which the initial offering of shares of the common
stock of the Company to the public, (the IPO), the Executives then existing Base
Salary shall be increased by to $275,000 or such greater amount as shall be determined
by the Board, from the Base Salary in effect immediately preceding the effectiveness of
(iii) Executives Base Salary may be increased by the Board at any time. Executives
Base Salary may not be decreased from the amount in effect at any time without the consent
of the Executive.
(iv) Executives base salary shall be subject to review each year for possible
increase by the Board of Directors in its sole discretion.
(i) During the Employment Period, the Board may, at its sole discretion, but shall
not be obligated to, award Executive such periodic, annual or other bonuses as it shall
determine. The foregoing does not constitute an agreement or representation by the Company
that the Executive will be considered for or awarded any bonus.
(ii) During the Employment Period, the Executive shall participate in all bonus plans
established by the Board for senior executives, on a basis that is consistent with the
level of participation by other senior executives of the Company. Such bonus plans shall
in all cases have reasonably achievable objectives that are agreed to in advance by the
Executive and the Board, acting in each case in good faith.
(c) Equity Participation.
(i) During the Employment Period, the Executive shall retain all rights, in accordance
with the terms of each respective award, under stock options outstanding and held by the
Executive on the date of this Agreement.
(ii) In addition to the options described in the foregoing clause (i), the Board in its sole
discretion may determine to grant the Executive additional awards under any other stock option or
equity based incentive compensation plan or arrangement adopted by the Company during the
Employment Period for which the Companys senior executives are eligible. The level of the
Executives participation in any such plan or arrangement, if any, shall be determined by the Board
in its sole discretion.
(iii) To the greatest extent permissible in accordance with applicable IRS regulations,
options to acquire Company stock which may be granted to the Executive shall be in the form of
qualified options. Any options which cannot be granted in the form of qualified options will be
granted to the Executive as non-qualified options.
(d) Other Benefits. During the Employment Period, the Executive shall be entitled to
participate in all of the employee benefit plans, programs and arrangements of the Company in
effect during the Employment Period which are generally available to senior executives of the
Company. Such participation shall be subject to and on a basis consistent with the terms,
conditions and overall administration of such plans, programs and arrangements. In addition,
during the Employment Period, the Executive shall be entitled to fringe benefits and perquisites
comparable to those of other senior executives of the Company. Such fringe benefits shall include,
but not be limited to, 4 weeks of vacation pay per year, to be used in accordance with the
Companys vacation pay policy for senior executives.
(e) Automobile Allowance. During the Employment Period, the Company will, at the option of Executive, either (i) reimburse the Executive for the costs of an
automobile at the rate of $750.00 per month or (ii) bear all expenses associated with the rental by
Executive of an automobile for his use while in Rochester, New York, for the purpose of providing
the services required of him pursuant to this Agreement.
(f) Business Expenses. During the Employment Period, the Company shall promptly pay or
reimburse the Executive for all actual, reasonable and customary expenses incurred by the
Executive in the course of his employment including but not limited to travel, entertainment,
subscriptions and dues associated with the Executives membership in professional, business and
civic organizations; provided that such expenses are incurred and accounted for in accordance
with the Companys policies as then in effect.
(g) Travel Reimbursement. Reimbursement for the cost of travel to and from Rochester, New
York, for the purpose of providing the services required of him pursuant to this Agreement
4. Term and Termination of Employment.
(a) Executives employment with the Corporation shall continue until terminated by
either Executive or the Company, with the consequences of any such
termination being as set forth in the following provisions of this Agreement. The period
commencing on the date of this Agreement and ending on the effective date of such termination is
referred to in this Agreement as the Employment Period.
(b) Termination for Cause. The Company may terminate the Executives employment hereunder for
cause. For purposes of this Agreement and subject to the Executives opportunity to cure as
provided in Section 4(d) hereof, the Company shall have cause to terminate the Executives
employment hereunder if such termination shall be the result of the Executives:
(i) willfully engaging in conduct which is materially injurious to the Company;
(ii) willful fraud or material dishonesty in connection with his performance
(iii) deliberate or intentional failure to substantially perform his duties hereunder that
results in material harm to the Company; or
(iv) the conviction for, or plea of nolo contendere to a charge of, commission of a
(c) Termination for Good Reason. The Executive shall have the right at any time to terminate
his employment with the Company for good reason. For purposes of this Agreement and subject to
the Companys opportunity to cure as provided in Section 4(d) hereof, the Executive shall have
good reason to terminate his employment hereunder in the following cases:
(i) a material diminution during the Employment Period in the Executives duties,
responsibilities, position, office or title as set forth in Section 2 hereof;
(ii) a breach by the Company of the compensation and benefits provisions set forth in
Section 3 hereof;
(iii) a material breach by the Company of any of the terms of this Agreement, other
than as specifically provided herein; or
(iv) the relocation of Executives principal place of business at the request of the
Company beyond 30 miles from its current location
(d) Notice and Opportunity to Cure. Notwithstanding the foregoing, the Company may not
terminate the Executives employment for cause pursuant to Section 4(b)(i), Section 4(b)(ii) or
Section 4(b)(iii),,and the Executive may not terminate his employment for good reason unless (1)
the party seeking to terminate the Executives employment shall have first provided the other
party with written notice of the intended
termination and the reason for such termination (breach) and (2) if such breach is susceptible of
cure or remedy, a period of thirty (30) days shall have elapsed between the delivery of such notice
and the termination of this Agreement without the breaching party having, in the reasonable opinion
of the party alleging a breach, effectively cured or remedied such breach.
(e) Termination Upon Death or Permanent and Total Disability. The Employment Period shall be
terminated by the death of the Executive. The Employment Period may be terminated by the Board of
Directors if the Executive shall be rendered incapable of performing his duties to the Company by
reason of any medically determined physical or mental impairment that can be expected to result
in death or that can reasonably be expected to last for a period of either (i) six or more
consecutive months from the first date of the Executives absence due to the disability or (ii)
nine months during any twelve-month period (a Permanent and
Total Disability). If the
Employment Period is terminated by reason of Permanent and Total Disability of the Executive, the
Company shall give 30 days advance written notice to that effect to the Executive.
5. Consequences of Termination.
(a) Without Cause or for Good Reason. In the event of a termination of the Executives
employment during the Employment Period (i) by the Company other than for cause (as provided
for in Section 4(b) hereof), (ii) by the Executive for good reason (as provided for in Section
4(c) hereof) or (iii) due to death or disability (as provided for in Section 4(e) hereof) the
Company shall pay the Executive and provide him with the following:
(A) Salary. The Executives then current base salary payable for the Non-Compete Period (as
defined in Section 8 hereof); plus
(B) Bonuses The entire bonus that would have been payable pursuant to any agreement,
understanding, arrangement or plan (Bonus Arrangement) in which Executive is entitled to
participate in accordance with the provisions of Section 3(b) for the year in which the
termination of his employment occurred as if he had been employed for the entire year, provided
that, in the opinion of the Board the Executive is likely to have met any bonus plan goals for the
relevant period had he not been terminated; plus
(C) Earned but Unpaid Amounts. Any previously earned but unpaid salary through the
Executives final date of employment with the Company, and any previously earned but unpaid
bonus amounts pursuant to any Bonus Arrangement for any completed fiscal year prior to the date
of the Executives termination of employment.
Payments of the amounts described above will be made in accordance with the timetable and
schedule contemplated for such payments, as though such termination had not occurred.
As a condition to its obligation to make any of the payments required of it under this Section
5(a), the Company, in its sole discretion, may require Executive to execute a release, in such form
as it may reasonably require, releasing the Company and its officers, directors, employees, and
agents, from any and all claims and causes of action, including, but not limited to those arising
form Executives employment and the termination of his employment with the Company.
(ii) Equity. Any existing stock options, restricted stock grants, stock appreciation rights
and other similar awards outstanding at the date of termination shall immediately vest and will, in
all other respects, continue to be governed by, and continued in accordance with, their applicable
plan and grant documents; provided, however, that the period during which any options or right
relating to such grants may be exercised by Executive shall be the longer of the date specified in
such grants or the date that is thirty (30) days after the end of the Non-Compete Period (as
defined in Section 8 of this Agreement). If the extension of any such exercise period shall cause
any Incentive Stock Option (as defined in Section 422 of the Internal Revenue Code of 1954, as
amended) (an ISO) to cease be treated as an ISO, then the Executive shall have the right to elect
whether to treat such stock option as a non-qualified stock option having the extended exercise
period provided for in this Section or to continue to treat such stock option as an ISO having the
original expiration date.
(iii) Other Benefits. Continued coverage under all health, life, disability and similar
employee benefit plans and programs of the Company on the same basis as the Executive was entitled
to participate immediately prior to such termination for the Non-Compete Period; provided that the
Executives continued participation is possible under the general terms and provisions of such
plans and programs. In the event that the Executives participation in any such plan or program is
barred, the Company shall arrange to provide the Executive with benefits substantially similar to
those which the Executive would otherwise have been entitled to receive under such plans and
programs from which his continued participation is barred. If Executive is covered under
substitute benefit plans of another employer prior to the expiration of the Non-Compete Period,
the Company will no longer be required to continue the respective coverage described in this
(b) Other Termination of Employment. In the event that the Executives employment with the
Company is terminated during the Employment Period (i) by the Company for cause (as provided for
in Section 4(b) hereof),or (ii) by the Executive other than for good reason (as provided for in
Section 4(c) hereof) (except as otherwise provided in Section 6(c)(i)), the Company shall pay the
Executive (or his legal representative) any earned but unpaid salary and annual bonus amounts for
any completed fiscal year prior to the date of the Executives termination of employment, but only
to the extent such amounts are payable in accordance with the terms of any such
plan, through the Executives final date of employment with the Company, and the Company
shall have no further obligations to the Executive.
(c) Withholding of Taxes. All payments required to be made by the Company to the Executive
under this Agreement shall be subject to the withholding of such amounts, if any, relating to tax,
social security, excise tax and other payroll deductions as the Company may reasonably determine it
should withhold pursuant to any applicable law or regulation.
(d) No Other Obligations. The benefits payable to the Executive under this Agreement are not
in lieu of any benefits payable under any employee benefit plan, program or arrangement of the
Company, except as provided specifically herein, and upon termination the Executive will receive
such benefits or payments, if any, as he may be entitled to receive pursuant to the terms of such
plans, programs and arrangements. Except for the obligations of the Company provided by the
foregoing and this Section 5, the Company shall have no further obligations to the Executive upon
his termination of employment.
(e) No Mitigation or Offset. If the Executives employment is terminated pursuant to the
provisions of Sections 4(b), 4(c) or 4(e), the Executive shall not be required to mitigate the
damages provided by this Section 5 by seeking substitute employment or otherwise.
6. Change of Control.
(a) Definition. For purposes of this agreement, a Change of Control shall mean:
(i) the approval by the stockholders of the Company, and the completion of the transaction
resulting from such approval, of (A) the sale or other disposition of all or substantially all
the assets of the Company or (B) a complete liquidation or dissolution of the Company;
(ii) The sale, in a single transaction or in a series of related transactions, of all or
substantially all of the outstanding shares of the capital stock of the Company;
approval by the stockholders of the Company, and the completion of the transaction resulting from
such approval, of a merger, consolidation, reorganization or similar corporate transaction,
whether or not the Company is the surviving corporation in such transaction, in which the
outstanding shares of common stock of the Company are converted into (A) shares of stock of
another company, other than a conversion into shares of voting common stock of the successor
corporation (or a holding company thereof) representing fifty percent (50%) or more of the voting
power of all capital stock thereof outstanding immediately after the merger or consolidation or
(B) other securities (of either the Company of another company) or cash or other property;
(iv) pursuant to an affirmative vote of a holder or holders of seventy five percent (75%) of
the capital stock of the Company entitled to vote on such a matter, the removal of a majority of
the individuals who are at that time members of the Board of Directors; or
(v) the acquisition by any entity or individual of one hundred percent of the capital stock
of the Company.
Notwithstanding the foregoing, it is understood by the parties to this Agreement that a
Change of Control shall not include any transaction the purpose of which is to reorganize the
Companys corporate structure, reincorporate the Company in another jurisdiction or undertake any
other action which does not materially affect the ownership and control of the Company at the time
of such transaction.
(b) Vesting of options upon a Change of Control. Notwithstanding anything to the contrary in
any stock option contract between the Company and the Executive or in any stock option plan or
similar plan of the Company, upon the occurrence of a Change of Control, all options held by the
Executive which shall not yet have vested will vest and become immediately exercisable. After such
a Change of Control, the Executives options shall remain exercisable for the period remaining
under the relevant stock option contract and shall not have a shortened period of exercisability as
a result of the Change of Control, except for statutory stock options which shall, at the election
of the Executive made at the time of the Change of Control, (i) expire 90 days after his
termination (or 1 year if the Executives termination results from his death or permanent and total
disability) or (ii) be converted into non-qualified stock options expiring at the end of the entire
term of such option under the relevant stock option contract.
(c) Severance upon a Change of Control.
(i) If the Executives employment is terminated within one year of a Change of Control for
any reason other than by the Company for cause, or if tbe Executive elects to terminate his
employment by Company (whether or not for good reason) after the expiration of 120 days after
and on or before the two-year anniversary date of the Change of Control, the Executive shall be
entitled to the payments described in the preceding Section 5(a), except that the Non-Compete
Period (as defined in Section 8 hereof) applicable for the purposes of Sections 5(a) and 8 hereof
shall be doubled and all payments and benefits that are stated as a function of the Non-Compete
Period shall be adjusted accordingly.
(ii) If the Executives employment is terminated within one year of a Change of Control for
any reason other than by the Company for cause, the Executive shall be not be required to
mitigate the damages provided by this Section 6 of this Agreement by seeking substitute employment
or otherwise and there shall be no offset by the Executive with respect to the payments and
benefits set forth in this Section 6 of this Agreement, except as otherwise qualified in Section
7. Indemnification and Insurance.
(a) Indemnification. The Company shall, to the fullest extent permitted by law and by its
Certificate of Incorporation and Bylaws, indemnify Executive and hold him harmless for any acts or
decisions made by him in good faith while performing his duties pursuant to this Agreement. The
Company shall advance to Executive all costs and expenses incurred by him in connection with any
such proceeding or claim within 20 days after receiving written notice requesting such an advance.
Such notice shall include, to the extent required by applicable law, an undertaking by Executive to
repay the amount advanced if he ultimately is determined not to be entitled to indemnification
against such costs and expenses. The indemnification provided for in this Section 7(a) shall be in
addition to, and not in diminution of, any indemnification to which the Executive may be entitled
pursuant any other Agreement between him and the Company and, if this Agreement shall conflict with
any others such agreement, then the provisions that provide the Executive with the greater rights
to indemnification shall control.
(b) Directors and Officers Liability Insurance. On or before the effective date of the IPO,
the Company (which, for these purposes, shall include any successor company), shall obtain and
maintain in effect during the Employment Period and thereafter for the statute of limitations
applicable to any claim that could be made against the Executive for actions or failure to act
during the Employment Period a policy of directors and officers liability insurance providing
coverage to Executive to the extent that it provides such coverage for any other senior executive
officer or director.
8. Restrictive Covenants.
(a) Obligations of the Parties. In the event that the Executives employment with the Company
is terminated for any reason (the effective date of such termination being referred to as the
Termination Date), the Executive and the Company shall negotiate in good faith the terms and
conditions under which the Executive may seek future employment. If a good faith agreement thereon
cannot be reached, the terms of this Section 8 shall govern. In any event,
i. For up to a 4 month period after the Termination Date, Executive will cooperate with and
assist the Company to make a smooth transition in management and, if requested by the Company, will
be available to consult during regular business hours at mutually agreed upon times.
ii. After the Termination Date, Executive will provide such information as the Company may
reasonably request with respect to any matter that relates to the Company or its business in which
the Executive was involved while employed by Company.
iii. After the Termination Date, Executive will assist and cooperate with Company in
connection with the defense or prosecution of any claim that may be
made by or against the Company or any affiliate that relates to any matter in which Executive was
involved or as to which Executive has knowledge, including providing testimony in any proceeding
before any arbitral, administrative, judicial, legislative or other body or agency.
iv. Executive shall be entitled to reimbursement for all properly documented expenses incurred
in connection with rendering services under this Section, including, but not limited to,
reimbursement for all reasonable travel, lodging, meal expenses, and legal fees, and Executive
shall be entitled to a per diem amount for his services equal to 1.5 times his then most recent
annualized Base Salary under this Agreement, divided by 240 (business days).
(b) Non-Compete Covenant. Subject to 8(a) herein, the Executive covenants and agrees that for
the period of twenty-four (24) months from the date the Executive is no longer an employee of the
Company (the Non-Compete Period) for any reason other than because of a termination by the
Executive for good reason or a termination by the Company without cause, the Executive will not,
directly or indirectly, compete with the Company by carrying on anywhere in the United States of
America (the Territory) a line of business substantially similar to the business and activities
of the Company as conducted at the time of termination (the Business). All of the foregoing of
this Section 8(b) shall be qualified by Section 6(c) of this Agreement. For the avoidance of doubt,
if there has been a Change of Control, the term Business shall not include the business of the
acquiring entity involved in such Change of Control, except to the extent that the business of such
entity is the same or substantially the same business as that conducted by the Company immediately
prior to such Change of Control. Executive shall continue to be bound by the restrictions and
obligations arising under this Section 8 for the duration of the Non-Compete Period,
notwithstanding the fact that such Non-Compete Period shall extend beyond the Term of this
(c) Definition of Compete. For purposes of this Agreement, the term compete shall mean (a) calling on, soliciting or taking away, as a client or customer any
individual, partnership, corporation or association that was a client or customer of the Company
during the 12-calendar month period immediately preceding any such act for the purpose of competing
with the Company; (b) hiring, soliciting, taking away or attempting to hire, solicit or take away
any employee of the Company either on behalf of himself or any other person or entity for the
purpose of competing with the Company; or (c) for the period of this Agreement, entering into or
attempting to enter into any business offering goods and services which are substantially similar
to or competing in any way with the goods and services which are then being offered by the Company.
(d) Direct or Indirect Competition. For purposes of this Agreement, the words directly or
indirectly as they modify the word compete shall mean: (a) acting as an agent, representative,
consultant, officer, director, independent contractor or employee of any entity or enterprise,
which is competing (as defined in Section 2, above) with the
Business; (b) participating in any such competing entity or enterprise, or the Affiliate of such
entity or enterprise, as an owner, partner, limited partner, joint venturer,
creditor or stockholder (except as a stockholder holding less than a five percent interest in a
corporation whose shares are actively traded on a regional or a national securities exchanged or in
the over-the-counter market); or (c) communicating to any such competing entity or enterprise the
names or addresses or any other information concerning any past, present or identified prospective
client or customer of the Company or any entity having title to the goodwill of the Company with
respect to the Business..
Data. For purposes of this Agreement,Trade Secrets shall mean any
scientific or technical information, design, process, procedure, formula or improvement, or any
portion or phase thereof, whether or not patentable, that is owned by, or that has, at the time of
determination of its status, been used by the Company and that is not generally known to
competitors of the Company, and information concerning proposed new products, software and
marketing processes, market feasibility studies, and proposed or existing marketing techniques or
plans relating to the Business that are not generally known to competitors of the Company. The term
Confidential Information shall mean any data or information, other than Trade Secrets, that is
owned by, or that has, at the time of termination of its status, been used by the Company relating
to the Business and is not generally known to competitors of the Company, including, but not
limited to, Proprietary Customer Information (as defined below), information relating to the
Business, the identity of suppliers, customers, subscribers, advertisers, sales methodology,
software and information about the personnel of the Company. The term Proprietary Customer
Information shall mean all information concerning the identity and purchasing habits of customers
of the Company with respect to the Business to the extent that such information is a valuable
component of the Business and is not generally ascertainable by parties unaffiliated with the
Company. The terms Trade Secrets, Confidential Information and Proprietary Customer Information are
hereinafter sometimes collectively referred to as Confidential Data.
The Executive agrees that, during the period set forth in 8(b), above, and thereafter for so
long as such information remains Confidential Data, he will keep confidential and not directly or
indirectly divulge, furnish, make accessible to anyone or appropriate for his own use any
Confidential Information, and that at no time will he or it divulge, furnish and make accessible to
anyone or appropriate for his own use any Trade Secrets. Executive further acknowledges and agrees
that the Company has a legitimate interest in protecting Proprietary Customer Information from
misappropriation or diversion by Executive or any competitor. Executive hereby acknowledges and
agrees that the prohibitions against disclosure of Confidential Data recited herein are in addition
to, and not in lieu of, any rights or remedies which the Company may have available pursuant to the
laws of any jurisdiction or at common law to prevent the disclosure of trade secrets and other
confidential proprietary data, and the enforcement by the Company of their rights and remedies
pursuant to this Agreement shall not be construed as a waiver of any other rights or available
remedies which it may possess in law or equity absent this Agreement.
(f) Reasonableness of Restrictions. Executive recognizes that the territorial and time
limitations set forth in Section 8(b), above, are reasonable, not burdensome and
are properly required by law for the adequate protection of the Company, and in the event that such
territorial or time limitations are deemed to be unreasonable by a court of competent jurisdiction,
then Executive agrees and submits to the reduction of either said territorial or time limitation,
or both, to such an area or period as said court shall deem reasonable.
(g) Injunctive Relief. Executive acknowledges that Executives expertise in the Business is of
a special, unique, unusual, extraordinary and intellectual character, which gives said expertise a
peculiar value, and that a breach of the provisions of this Agreement cannot be reasonably or
adequately compensated in damages in an action at law and that such breach will cause the Company
irreparable injury and damage. Executive further acknowledges that Executive possesses unique
skills, knowledge and ability and that competition in violation of this Agreement would be
extremely detrimental to the Company. By reason thereof, Executive agrees that the Company shall be
entitled, in addition to any other remedies they may have under this Agreement or otherwise, to
temporary, preliminary and/or permanent injunctive and other equitable relief to prevent or curtail
any breach of this Agreement, without proof of actual damages that have been or may be caused to
the Company by such breach or threatened breach; provided, however, that no specification in this
Agreement of a specific legal or equitable remedy shall be construed as a waiver or prohibition
against the pursuing of other legal or equitable remedies in the event of a breach.
of Company. For purposes of this Section 8, the term Company shall mean
the Company and/or any present or future subsidiary, parent or affiliate.
All notices, requests and other communications pursuant to this Agreement shall be in writing and shall be deemed to have been duly given, if delivered in person
or by courier, telegraphed, telexed or by facsimile transmission or sent by express, registered
or certified mail, postage prepaid, addressed as follows:
If to the Executive:
11775 Chateau Wynd
Delta, British Columbia, Canada VYE 3C9
If to the Company:
75 Town Centre Drive
Rochester, New York, 14623
Attn: Chief Financial Officer
Either party may, by written notice to the other, change the address to which notices
to such party are to be delivered or mailed.
Except as specifically provided herein, any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration, conducted before a
single arbitrator in the State of New York, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the arbitrators award in any
court having jurisdiction. The Company shall bear the expense of any such arbitration proceeding
and shall reimburse the Executive for all of his reasonable costs and expenses relating to such
arbitration proceeding, including, without limitation, reasonable attorneys fees and expenses;
provided, however, that if the Company shall prevail in any such proceeding then the Executive
shall reimbursement for all expenses paid by the Company on his behalf in connection with such
11. Waiver of Breach.
Any waiver of any breach of this Agreement shall not be construed to be a continuing waiver or
consent to any subsequent breach on the part either of the Executive or of the Company.
12. Non-Assignment; Successors.
Neither party hereto may assign his or its rights or delegate his or its duties under this
Agreement without the prior written consent of the other party; provided, however, that the parties
hereto hereby agree in advance that (i) this Agreement may be assigned to, and shall inure to the
benefit of and be binding upon, the successors and assigns of the Company upon any sale of all or
substantially all of the Companys assets, or upon any merger, consolidation or reorganization of
the Company with or into any other corporation, all as though such successors and assigns of the
Company and their respective successors and assigns were the Company; and (ii) this Agreement shall
inure to the benefit of and be binding upon the heirs, assigns or designees of the Executive to the
extent of any payments which may become due to them hereunder. For avoidance of doubt, all payments
due or to become due from the Company to Executive pursuant to the terms of this Agreement shall
continue to be made after the death of the Executive. As used in this Agreement, the term Company
shall be deemed to refer to any such successor or assign of the Company referred to in the
To the extent any provision of this Agreement or portion thereof shall be invalid or
unenforceable, it shall be considered deleted therefrom and the remainder of such provision and
of this Agreement shall be unaffected and shall continue in full force and effect.
14. Captions. Captions and headings in this Agreement are for convenience of reference only
and do not constitute a part of the Agreement.
This Agreement may be executed in one or more counterparts, each of which shall be deemed to
be an original but all of which together will constitute one and the same instrument.
16. Governing Law.
This Agreement shall be construed, interpreted and enforced in accordance with the laws of
the State of New York, without giving effect to the choice of law principles thereof.
Any covenant or agreement of the parties which by its term contemplates performance after the
Expiration of this Agreement shall survive and remain in full force and effect notwithstanding the
fact that the Employment Period has lapsed or that this Agreement or Executives employment
hereunder, has been terminated.
18. Entire Agreement.
This Agreement constitutes the entire agreement by the Company and the Executive with respect
to the subject matter hereof and except as specifically provided herein, supersedes any and all
prior agreements or understandings between the Executive and the Company with respect to the
subject matter hereof, whether written or oral. This Agreement may be amended or modified only by
a written instrument executed by the Executive and the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
||/s/ Grant Russell
||/s/ Paul Travers
||President and Chief Executive