Full Press Release Details
EMPLOYMENT AGREEMENT
This Employment Agreement (the Agreement ) is entered into as of August 16, 2011 by and between Iridex Corporation (the Company ), and Dr. Dominik Beck
1. Duties and Scope of Employment.
(a) Positions and Duties. Executive will serve as President and Chief Executive Officer of the Company effective as of the date on
which Executive first commences fulltime employment with the Company (the Effective Date ). Executive will render such business and professional services in the performance of his duties, consistent with Executive s position
within the Company, as will reasonably be assigned to him by the Company s Board of Directors (the Board ). The Board may modify Executive s job title and duties as it deems necessary and appropriate in light of the
Company s needs and interests from time to time. The period of Executive s employment under this Agreement, which shall commence on the Effective Date, is referred to herein as the Employment Term. Executive agrees to
use his best efforts to commence employment with the Company on or prior to October 15, 2011. The parties agree that, except for the Company s payment obligations under Section 3(g) hereof, if any, this Agreement will automatically
terminate if Executive has not commenced employment with the Company on or before October 15, 2011; provided, however, that in the event that Executive is enjoined from commencing employment with the Company by his former employer the
parties shall use their commercially reasonable efforts to agree in writing on an appropriate extension of the October 15, 2011 deadline. The parties further acknowledge and agree that notwithstanding the parties execution of this
Agreement, Executive shall not be deemed to be an employee of the Company until and unless Executive formally commences fulltime employment with the Company.
(b) Board Membership. During the Employment Term, Executive will serve as a member of the Board, subject to any required Board and/or stockholder approval.
(c) Obligations. During the Employment Term, Executive will perform his duties faithfully and to the best of his ability and will
devote his full business efforts and time to the Company. For the duration of the Employment Term, Executive agrees not to actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without the
prior approval of the Board, which shall not be unreasonably withheld. It shall not be considered a violation of the foregoing for Employee to serve on corporate, industry, civic, religious or charitable boards or committees, so long as such
activities do not individually or in the aggregate significantly interfere with the performance of Employee s responsibilities as an employee of the Company in accordance with this Agreement.
2. At-Will Employment. The parties agree that Executive s employment with the Company will be at-will employment
and may be terminated at any time with or without Cause or notice. Executive understands and agrees that neither his job performance nor promotions, commendations, bonuses or the like from the Company give rise to or in any way serve as the basis
amendment, or extension, by implication or otherwise, of his employment with the Company. However, as described in this Agreement, Executive may be entitled to severance benefits depending on the
circumstances of Executive s termination of employment with the Company.
(a) Base Salary. During the Employment Term, the Company will pay Executive an annual salary of $300,000 as compensation for his
services (the Base Salary ), which will be prorated in the first and last year of employment and will be subject to review following the twelve (12) month anniversary of the Effective Date. The Base Salary will be paid
periodically in accordance with the Company s normal payroll practices and be subject to the usual, required withholding. Notwithstanding the foregoing, Executive shall be subject to the Company s regular employee performance review and
compensation adjustment process ( Compensation Process ), and nothing in this Agreement shall limit, restrict or preclude the Company from (i) increasing, decreasing or otherwise changing Executive s Base Salary, or the
terms of payment thereof, (ii) determining the procedures and criteria for payment of incentive or variable compensation, (iii) determining the amount of incentive or variable compensation, if any, to be paid to Executive at any time, or
determining that Executive is not entitled to an incentive or variable compensation payment, or (iv) discontinuing the Company s incentive or variable compensation programs, with or without substitution of a similar or dissimilar program,
in each event pursuant to the Compensation Process or otherwise without Executive s consent.
Bonus Plan. Executive will be eligible to earn cash bonuses through participation in the Company s Senior Staff Bonus Plan (the Bonus Plan ). All cash bonuses earned by the Executive through the Bonus Plan will be paid
in accordance with the Company s standard practices, but no later than two and one half (2 1/2) months after the calendar year in which such cash bonuses are earned.
(c) Stock Option. As of the Effective Date, Executive will be granted a stock option to purchase 135,000 shares of the
Company s Common Stock at an exercise price equal to the fair market value of Company common stock per share on the date of grant (the Option ). Subject to the accelerated vesting provisions set forth herein, the Option will
vest as to 25% of the shares subject to the Option one (1) year after the Effective Date and as to 1/48th of the shares subject to the Option monthly thereafter on the same day of the month as the Effective Date (and if there is no
corresponding day, the last day of the month), so that the Option will be fully vested and exercisable four (4) years from the Effective Date, subject to Executive continuing to be a Service Provider (as defined in the Company s 2008
Equity Incentive Plan (the Equity Plan )) through the relevant vesting dates. The Option will be subject to the terms, definitions and provisions of the Equity Plan and the stock option agreement by and between Executive and the
Company (the Option Agreement ), both of which documents are incorporated herein by reference.
Restricted Stock Unit Award. As of the Effective Date, Executive will be granted a restricted stock unit award for 75,000 shares of the Company s Common Stock (the RSU Award ). Subject to the accelerated vesting
provisions set forth herein, the RSU Award will vest annually, with 24,999 shares vesting after the first year and the remaining 50,001 shares vesting in equal annual installments of 16,667 shares each, over the remaining three (3) year period
following the one year anniversary of the Effective Date (such that, subject to Executive continuing to be a Service Provider on the relevant vesting dates, all shares subject to the RSU Award shall vest over the four (4) year period following
the Effective Date), subject to Executive continuing to be a
Service Provider (as defined in the Equity Plan) through the relevant vesting dates. The RSU Award will be subject to the terms, definitions and provisions of the Equity Plan and the restricted
stock unit award agreement by and between Executive and the Company (the RSU Award Agreement ), both of which documents are incorporated herein by reference.
(e) Equity. Executive will be eligible to receive awards of stock options, restricted stock units or other equity awards pursuant to any plans or arrangements the Company may have in effect from
time to time. The Board or its compensation committee will determine in its discretion whether Executive will be granted any such equity awards and the terms of any such award in accordance with the terms of any applicable plan or arrangement that
may be in effect from time to time.
(f) Relocation Benefits. It is the Company s understanding, and a condition
to Executive s continued employment as the Company s President and Chief Executive Officer, that Executive will relocate to the San Francisco Bay Area within twelve (12) months of the Effective Date. If Executive incurs expenses
relating to such relocation to the San Francisco Bay Area during the twelve (12) month period following the execution of this Agreement, the Company will reimburse Executive for up to $65,000 of Executive s reasonable and properly
documented relocation expenses, including, but not limited to, expenses such as monthly rent for temporary housing, travel, packing, and moving expenses, as well as reasonable costs, including, but not limited to, broker s fees, incurred in
connection with selling Executive s residence in Ohio and buying or renting a residence in the San Francisco Bay Area, so long as Executive remains an employee of the Company on the date such expenses are reimbursed. In order to receive such
reimbursement, Executive must comply with the Company s standard expense reimbursement policies.
(g) Pre-Commencement
Change of Control Fee. In the event that Executive has complied with all of Executive s obligations hereunder (including using his best efforts to commence employment with the Company on or before October 15, 2011) and prior to the
earlier to occur of (i) October 16, 2011 or (ii) the commencement of Executive s employment with the Company, the Company enters into a definitive agreement relating to a Change of Control (as defined below) that prohibits the
Company from hiring Executive, then, subject to (x) the closing of the applicable Change of Control, (y) Executive signing and not revoking a standard release of claims with the Company and its successor in a form acceptable to the Company
and its successor and subject to Section 8 below and (z) Executive agreeing to terminate this Agreement, the Company shall pay Executive a one-time lump sum cash payment equal to $500,000, less applicable withhold.
4. Employee Benefits. During the Employment Term, Executive will be entitled to participate in the employee benefit plans
currently and hereafter maintained by the Company of general applicability to other senior executives of the Company, including, without limitation, the Company s group medical, dental, vision, disability, life insurance, and flexible-spending
account plans. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.
5. Vacation. During the Employment Term, Executive will be eligible to accrue a
maximum of four (4) weeks of paid vacation per year on a monthly basis from the Effective Date during the Executive s first five (5) years of employment. After five (5) years of employment, Executive s vacation accrual will
increase as per the Company s vacation policy. Executive may also be eligible for holidays and sick/family care days pursuant to the Company s standard policies relating thereto, which may be modified from time to time at the
Company s discretion.
6. Expenses. During the Employment Term, the Company will reimburse Executive for
reasonable travel, entertainment or other expenses incurred by Executive in the furtherance of or in connection with the performance of Executive s duties hereunder, in accordance with the Company s expense reimbursement policy as in
effect from time to time.
(a) Termination for other than Cause, Death or Disability or Resignation for Good Reason In Connection With a Change of Control. If, in the event that within twelve (12) months following a
Change of Control, or at any time prior to a Change of Control if such termination is effected at the request of an Acquiror, (x) Executive terminates his employment with the Company (or any parent, subsidiary or successor of the Company) for
Good Reason, or (y) the Company (or any parent, subsidiary or successor of the Company) terminates Executive s employment other than for Cause, death or Disability, and, in each case, Executive signs and does not revoke a standard release
of claims with the Company in a form acceptable to the Company and subject to Section 8 below, then Executive will receive, in addition to Executive s salary payable through the date of termination of employment and any other employee
benefits earned and owed through the date of termination, the following severance from the Company:
(i) Continuing payments
of severance pay, less applicable withholding, at a rate equal to Executive s Base Salary rate, as then in effect, for twelve (12) months from the date of such termination in accordance with the Company s normal payroll policies;
(ii) Then-outstanding and unvested stock options in Company common stock held by Executive will immediately vest and become
exercisable as to one hundred percent (100%) of the then-unvested shares underlying such options (the Option Acceleration Amount ). Such options will remain exercisable following the termination for the period prescribed in
the respective option agreement(s) of Executive, which will not extend past the term of each option, as applicable. Additionally, one hundred percent (100%) of any then-unvested restricted stock unit awards then-held by Executive will
immediately vest (the Restricted Stock Unit Acceleration Amount ); and
(iii) Reimbursement by the Company
for the cost of premiums for Executive and Executive s covered dependents, if any, for group health insurance continuation coverage under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
( COBRA ) for up to twelve (12) months following Executive s termination of employment (the Enhanced COBRA Premium Reimbursement ), provided that (x) Executive and Executive s covered dependents
timely elect and remain eligible for continued coverage under COBRA and (y) such Enhanced COBRA Premium Reimbursement does not result in excise tax penalties for the Company under applicable laws (including, without limitation,
Public Health Service Act). Executive will be required to substantiate such COBRA costs within thirty (30) days of each such monthly premium payment, which amount shall be reimbursed within
ten (10) business days after the Company s determination that such substantiation is satisfactory.
Termination for other than Cause, Death or Disability or Resignation for Good Reason Apart From a Change of Control. Provided that Section 7(a) does not apply, if in the event that prior to a Change of Control (x) Executive
terminates his employment with the Company (or any parent or subsidiary of the Company) for Good Reason, or (y) the Company (or any parent or subsidiary of the Company) terminates Executive s employment other than for Cause, death or
Disability, and, in each case, Executive signs and does not revoke a standard release of claims with the Company in a form acceptable to the Company and subject to Section 8 below, then Executive will receive, in addition to Executive s
salary payable through the date of termination of employment and any other employee benefits earned and owed through the date of termination, the following severance from the Company:
(i) Continuing payments of severance pay, less applicable withholding, at a rate equal to Executive s Base Salary rate, as then in
effect, for (x) six (6) months following the date of termination if such termination occurs prior to the six (6) month anniversary of the date on which you commence employment with the Company, or (y) for twelve (12) months
following the date of termination if such termination occurs on or following the six (6) month anniversary of the date on which you commence employment with the Company. Any such severance payments shall be made in accordance with the
Company s normal payroll policies; and
(ii) Reimbursement by the Company for the cost of premiums for Executive and
Executive s covered dependents, if any, for group health insurance continuation coverage under COBRA for up to twelve (12) months following Executive s termination of employment (the COBRA Premium Reimbursement ),
provided that (x) Executive and Executive s covered dependents timely elect and remain eligible for continued coverage under COBRA and (y) such COBRA Premium Reimbursement does not result in excise tax penalties for the Company under
applicable laws (including, without limitation, Section 2716 of the Public Health Service Act). Executive will be required to substantiate such COBRA costs within thirty (30) days of each such monthly premium payment, which amount shall be
reimbursed within ten (10) business days after the Company s determination that such substantiation is satisfactory.
8. Conditions to Receipt of Severance; No Duty to Mitigate.
(a) Separation Agreement and Release of Claims. The payment of any severance set forth in Section 7 above is contingent upon
Executive signing and not revoking the Company s standard separation and release of claims agreement upon Executive s termination of employment that becomes effective no later than sixty (60) days following Executive s employment
termination date (such deadline, the Release Deadline ). If the release does not become effective by the Release Deadline, Executive will forfeit any rights to severance under this Agreement. In no event will severance payments be
paid or provided until the release actually becomes effective. Upon the release becoming effective and irrevocable, any payments delayed from the date Executive terminates employment through the effective date of the release will be payable in a