Employment Agreement Between Research Frontiers Inc. And Joseph M. Harary

AGREEMENT, dated as of January 1, 2009, between Research Frontiers Incorporated, a Delaware corporation with principal executive offices at 240 Crossways Park Drive, Woodbury, New York 11797-2033 (the "Company"), and Joseph M. Harary, residing at [address] ("Employee").


W I T N E S S E T H


WHEREAS, the Company desires to employ Employee upon the terms and subject to the terms and conditions set forth in this Agreement.


NOW, THEREFORE, in consideration of the premises, the mutual promises, covenants, and conditions herein contained and for other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the parties hereto intending to be legally bound hereby agree as follows:


Section 1. Employment.


The Company hereby agrees to continue to employ Employee, and Employee hereby agrees to continue to serve the Company, all upon the terms and subject to the conditions set forth in this Agreement.


Section 2. Capacity and Duties.


(a) Employee is and shall be employed in the capacity of President and Chief Executive Officer of the Company and shall have the duties, responsibilities, and authorities normally performed by the president and chief executive officer of a company, including responsibility for the overall and day-to-day operation of the Company, the hiring and termination of employees of the Company who are not officers of the Company, and such other duties, responsibilities, and authorities as are assigned to him by the Board of Directors of the Company (the "Board") so long as such additional duties, responsibilities, and authorities are consistent with Employee's position and level of authority as President and Chief Executive Officer of the Company. Employee shall also serve as Treasurer, Secretary, and General Counsel of the Company (or any combination of the foregoing) if requested to do so by the Board. Employee in carrying out his duties under this Agreement shall report solely to the Board. Notwithstanding the foregoing, after a Non-Extension Notice (as hereinafter defined) is delivered, Employee shall (i) resign from such offices then held by Employee with the Company or its subsidiaries as shall be requested by the Board and shall no longer have the duties, responsibilities, and authorities associated with the offices from which he has resigned, (ii) report to such person or persons as the Board may specify, and (iii) perform such transitional duties, responsibilities, and authorities as may be reasonably assigned to him by the Board.


(b) Employee shall devote substantially all of his business time and attention to promote and advance the business of the Company, except that Employee shall be permitted to (i) serve on the boards of directors of other corporations not engaged in competition with the Company and the boards of trade associations and charitable organizations, (ii) engage in charitable activities and community affairs, (iii) manage his personal investments and affairs, and (iv) teach or lecture; provided in each case that (A) such activities do not materially interfere with the proper performance of Employee's duties and responsibilities as the Company's President and Chief Executive Officer and (B) in the case of each activity described in clauses (i), (ii), and (iv), such activity is approved in advance by the Board, such approval not to be unreasonably withheld, except that, if all of activities described in clauses (i), (ii), and (iv) involve in the aggregate less than ten hours per month of Employee's time, such advance approval shall not be required but Employee shall promptly notify the Board of the nature of such activities.


(c) If (i) Employee is serving on the Board on the date a Non-Extension Notice is delivered or at a time that he is no longer employed by the Company and (ii) (A) a Change of Control (as hereinafter defined) has not occurred or (B) Employee's employment has been terminated by the Company pursuant to Section 9(c) or Employee, in breach of this Agreement, has terminated his employment prior to the Scheduled Date of Termination (as hereinafter defined) other than pursuant to Section 9(d), Employee shall promptly resign from the Board if he is requested to do so by the Board.


Section 3. Term of Employment.


The term of employment of Employee by the Company pursuant to this Agreement shall be for the period (the "Employment Period") commencing as of the date hereof and ending on December 31, 2013, unless further extended or sooner terminated in accordance with the provisions of this Agreement. On December 31, 2013, and on each subsequent December 31, the Employment Period shall be automatically extended for one additional year unless, not later than 90 days prior to such date, the Company shall have delivered to Employee or Employee shall have delivered to the Company written notice (a "Non-Extension Notice") that the Employment Period shall not be further extended.


Section 4. Compensation.


During the Employment Period, subject to all the terms and conditions of this Agreement and as compensation for all services to be rendered by Employee under this Agreement, the Company shall pay to or provide Employee with the following:


(a) Base Salary. The Company shall pay to Employee a base salary at the annual rate of at least $425,000, payable at such intervals (at least monthly) as salaries are paid generally to other executive officers of the Company.


(b) Bonus. Employee shall be eligible for a potential annual bonus in an aggregate amount of at least $150,000 upon the achievement of realistic and achievable goals. Not later than April 30 of 2009, and not later than March 15 of each subsequent year, the Board shall determine in good faith, after consultation with Employee, the goals for that year's bonus, which goals shall be specified in writing. The Board may, in its sole discretion, provide for a series of separate and independent goals to be met during the year, each of which is associated with its own potential bonus. Any bonus (including any bonus associated with a separate and independent goal) for any year shall be payable to Employee as soon as practicable after it is determined whether the applicable goals have been achieved.


(c) Equity Incentive Awards. In recognition of Employee's assumption of the title and duties of Chief Executive Officer and the services performed by Employee during 2008, as of January 1, 2009, the Company granted Employee 150,000 shares (the "Restricted Shares") of Restricted Stock under the Company's 2008 Equity Incentive Plan (the "Plan"). The Restricted Period (as defined in the Plan) shall lapse as to 1/36 of the Restricted Shares on the last day of each of the first 36 months during the Employment Period, subject to forfeiture of the Restricted Shares as set forth in the Plan and the accelerated lapse of the Restricted Period as set forth herein. In addition to the Restricted Shares, the committee established by the Board to administer the Plan may grant Employee additional equity incentive awards under the Plan or otherwise from time to time based upon his performance. Any such additional equity incentive awards shall be of a type and amount commensurate with Employee's position and consistent with the type and amount of equity incentive awards granted to the Company's other officers, directors, and employees.


(d) Vacation. Employee shall be entitled to annual paid vacation of 20 business days, which shall accrue in accordance with the policies of the Company in effect from time to time. Vacation days not used in the year earned may be carried into the first quarter of the subsequent year. For any vacation day not used prior to the end of the first quarter of the year subsequent to the year earned, Employee shall be paid an amount equal to his annual base salary in the year earned divided by 260.


(e) Employee Benefit Plans. Employee shall be entitled to participate in all employee benefit plans maintained by the Company for its senior executives or employees for which he is eligible.


(f) Withholding. Employee authorizes the Company to make any and all applicable tax withholdings from any compensation payable or provided to Employee hereunder.


(g) Disability Payments. Any compensation payable or provided to Employee hereunder shall be reduced by the sum of the amounts, if any, payable to Employee under disability benefit plans of the Company.


Section 5. Expenses.


The Company shall reimburse Employee for all reasonable expenses (including, but not limited to, business travel and entertainment expenses) incurred by him in connection with his employment hereunder in accordance with the written policy and guidelines established by the Company for executive officers.


Section 6. Patents.


Any interest in patents, patent applications, inventions, trademarks, trademark applications, copyrights, developments, processes, or other intellectual property ("Inventions") which Employee now or hereafter during the period he is employed by the Company under this Agreement or otherwise may own or develop relating to the fields in which the Company may then be engaged shall belong to the Company; and forthwith upon request of the Company Employee shall execute all such assignments and other documents and take all such other action as the Company may reasonably request in order to vest in the Company all his right, title, and interest in and to the Inventions free and clear of all liens, charges, and encumbrances.


Section 7. Non-Competition, Non-Solicitation.


Employee agrees that he will not during the period he is employed by the Company under this Agreement or otherwise and for a period of two years thereafter, directly or indirectly, (a) solicit the employment of, or, except for terminations of employees in the ordinary course of business during the period Employee is employed by the Company under this Agreement or otherwise, encourage to leave the employment of the Company or any of its subsidiaries, any person employed by the Company or any of its subsidiaries, (b) hire any employee or former employee of the Company or any of its subsidiaries, (c) compete with or be engaged in the same business as the Company or any of its subsidiaries, (d) be employed by, or act as consultant or lender to, or be a director, officer, or employee of, any business or organization which, during the period Employee is employed by the Company under this Agreement or otherwise, directly or indirectly competes with or is engaged in the same business as the Company or any of its subsidiaries, or (e) have a greater than one percent interest as owner, member, or partner of any business or organization which, during the period Employee is employed by the Company under this Agreement or otherwise, directly or indirectly competes with or is engaged in the same business as the Company or any of its subsidiaries.


Section 8. Confidential Information.


All confidential information which Employee may now possess, may obtain during or after the Employment Period, or may create prior to the end of the period he is employed by the Company under this Agreement or otherwise relating to the business of the Company or of any its licensees, customers, or suppliers shall not be published, disclosed, or made accessible by him to any other person, firm, or corporation either during or after the termination of his employment or used by him except during the Employment Period in the business and for the benefit of the Company, in each case without prior written permission of the Company. Employee shall return all tangible evidence of such confidential information to the Company prior to or at the termination of his employment.


Section 9. Early Termination.


Employee's employment hereunder may be terminated prior to December 31, 2013 or, if the Employment Period has been extended to a date later than December 31, 2013, prior to such later date (December 31, 2013 or such later date is hereinafter referred to as the " ...