EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT
(the
“Agreement”) is made and entered into to be effective as of September 1, 2008 by
and between MIP
Solutions, Inc.,
a
Nevada corporation (the “Company”),
and
Rocky Xxxxxxx Xxxxxx (the “Executive”).
NOW,
THEREFORE,
in
consideration of the agreements of the parties contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Employment.
The
Company hereby employs Executive to serve as its President and Chief Executive
Officer (collectively, the “Position”),
and
Executive agrees to serve in the Position with the Company,
or to
serve in such other position or positions as the Company and Executive may
agree
from time to time. The
Executive hereby accepts such employment and agrees to devote his best efforts
to the business and affairs of the Company, and pursuant to the general
direction of the Board of Directors of the Company (the “Board”).
2. Term
of Employment.
The
term of the Executive’s employment shall continue until terminated by either
party pursuant to the terms of this Agreement. Executive is employed by the
Company “at will” and Executive’s employment may be terminated at any time, by
Executive or the Company, for any reason and for no reason.
3. Compensation
and Expenses.
(a) Salary.
As
compensation for the Executive’s services following the financing defined below
(the “Financing”),
during the term of the Executive’s employment hereunder, the Company shall pay
the Executive an annual salary (the “Salary”)
of
$140,000, payable in 24 equal semi-monthly installments, subject to required
tax
and other fiduciary withholding requirements. Until such time as Company
receives the Financing, Executive shall be paid $60,000 per annum in director’s
fees, salary, other payments, or a combination of the above. Subject to
compliance with all applicable securities laws, prior to the Financing, the
$60,000 shall be paid in cash and/or restricted stock, as may be mutually
agreed.
(b) Financing.
The
“Financing” means when the Company secures a cumulative investment of $2,000,000
starting from the date of this Agreement.
(c) Expenses.
The
Company shall reimburse the Executive for all reasonable and necessary business
expenses incurred by him in connection with the performance by him of his duties
hereunder and in accordance with the Company’s policies and procedures with
respect thereto, as they may be changed from time to time.
(d) Signing
Bonus.
As a
one time signing bonus, subject to compliance with all applicable securities
laws, and for services actually already rendered as a Consultant, Executive
shall be issued 50,000 shares of restricted stock of the Company to be issued
January 2, 2009. Additionally, Executive shall receive and be granted the
100,000 shares which were due at the conclusion of his consultancy, upon
execution of this Agreement.
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(e) Director
and Officer Insurance; Indemnification.
The
Company shall obtain, within thirty (30) days of the date of this Agreement,
reasonable director and officers’ insurance covering Executive’s tenure. The
Company shall indemnify and hold Executive harmless, pursuant to he terms of
a
written Indemnification Agreement from any and all actions, suits and losses
that arise from his employment by, or services on behalf of, the
Company.
(f) Stock
Options.
Subject
to compliance with all applicable securities laws and pursuant to the provisions
of a to-be-created Stock Option Plan, the Company shall grant to Executive
an
incentive stock option to purchase 1,200,000 shares of registered common stock
of the Company. Such stock options shall vest ratably over 48 months, and shall
provide that in the event of (i) any change of control of the Company, and
(ii)
the termination of Executive’s employment without Cause as defined in Section 6
hereinbelow within 18 months following the change of control, all such options
shall become fully vested. Until such Stock Option Plan is instituted and
approved by the Board, the Company shall provide an equivalent pro-rata amount
of stock on a month by month basis, all to be issued in 2009.
(g) Vacation.
The
Executive shall be entitled to 20 annual paid personal days. Personal days
taken
for vacations shall be taken at such times as the Executive and the Company
may
mutually agree.
(h) Other
Employee Benefits.
The
Executive shall be entitled to participate in the Company’s health insurance
plans or programs and such other benefit plans as may be adopted, from time
to
time, by the Company, to the extent that they, by their terms, cover the
Executive. Nothing in this Agreement shall preclude the Company or any affiliate
of the Company from terminating or amending any employee benefit plan or program
at any time or from time to time.
4. Restrictive
Covenants.
(a) Other
Business Ventures.
During
the term of the Executive’s employment hereunder, the Executive shall not,
without the prior approval of the Board, directly or indirectly, either as
an
officer, director, employee, agent, advisor, consultant, principal, stockholder,
partner, owner or in any other capacity, on his own behalf or otherwise, in
any
way engage in, represent, be connected with or have a financial interest in,
any
business which is or, to the best of his knowledge, is about to become
competitive with the business of the Company; provided, however, that nothing
herein contained shall be deemed to prohibit the Executive from being a passive
investor owning up to 1% of any class of outstanding securities of any company
whose stock is publicly traded.
(b) Proprietary
Information and Inventions Agreement.
The
Executive agrees that the Executive’s employment by the Company is conditioned
upon the Executive promptly signing an agreement in substantially the form
of
the Company’s standard form of Proprietary Information and Inventions Agreement.
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5. Termination
of Employment by Executive For Good Cause.
In the
event the employment of the Executive with the Company is terminated by the
Executive for “Good Cause,” the Executive shall immediately and fully vest in
all of the Severance Benefits set forth in Section 7 below. For purposes of
this
Section 5, “Good Cause” shall be defined as: (i) a decrease in Executive’s
compensation of greater than twenty-five percent (25%) of his compensation
(x)
immediately prior to such decrease or (y) in the aggregate over a period not
exceeding two years (not including any decrease in compensation that is applied
to each of the Company’s executive officers equally), (ii) a material change in
Executive’s corporate position, title or responsibilities, or (iii) the locating
of the principal offices of the Company which causes Executive to have to
commute more than 50 miles from his present home without the Executive’s
consent. In the event of the existence of Good Cause, the Executive may
terminate his employment at any time.
6. Termination
of Employment Without Cause.
In the
event the employment of the Executive with the Company is terminated without
“Cause”, the Executive shall immediately and fully vest in all of the Severance
Benefits set forth in Section 7 below. For purposes of this Section 6, “Cause”
shall be defined as the Executive’s: (i) violation of any material provisions of
any written agreement between the Company and Executive, (ii) being convicted
of
a felony and lapse of all rights of appeal, or (iii) commitment of any act
of
willful misconduct, gross negligence, or dereliction of his duties. In the
event
the employment of the Executive with the Company is terminated with “Cause”, the
Executive shall not receive any of the Severance Benefits set forth in Section
7
below.
7. Severance
Benefits and Election.
In the
event that the employment of the Executive is terminated (i) by the Executive
for Good Cause pursuant to Section 5 or (ii) by the Company without Cause
pursuant to Section 6, Executive shall have thirty days to elect the Release
Severance or the No-Release Severance as set forth below:
(a) No-Release
Severance.
Executive may elect to receive the following severance benefits without agreeing
to a general release of all claims known and unknown: The Company shall pay
Executive: (i) a lump sum equal to six month’s base salary of the Executive;
(ii) any and all accrued but unpaid bonuses and (iii) any and all target bonuses
for the six month period following such termination of employment, in all such
cases within 30 days from the effective date of the termination (the “No-Release
Severance”).
(b) Partial
Option Acceleration.
Additionally, upon election of the No-Release Severance, the Executive shall
(A)
immediately and fully vest in and have the right to exercise 50% of any and
all
otherwise unvested stock options granted to Executive.
(c) Release
Severance.
Executive may elect to receive the following severance benefits upon agreeing
to
a general release of all claims known and unknown: The Company shall pay
Executive: (i) a lump sum equal to twelve month’s base salary of the Executive;
(ii) any and all accrued but unpaid bonuses and (iii) any and all target bonuses
for the twelve month period following such termination of employment, in all
such cases within 30 days from the effective date of the termination (the
“Release Severance”).
(d) Full
Option Acceleration.
Additionally, upon election of the Release Severance, the Executive shall
immediately and fully vest in and have the right to exercise any and all
otherwise unvested stock options granted to Executive.
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(e) Election
Period.
The
thirty day period during which Executive may elect the Release Severance or
the
No-Release Severance shall commence the day following Executive’s last day of
employment and shall expire on the 31st
day
following Executive’s last day of employment. In the event that Executive does
not timely elect the Release Severance or the No-Release Severance, it shall
conclusively be deemed election of the No-Release Severance and the right to
elect the Release Severance shall be forever waived. Nothing herein shall create
any obligation on the Company to notify Executive of his right to elect the
Release Severance or the No-Release Severance.
(f) Release. In
the
event that Executive elects the Release Severance, then Executive agrees as
follows: Executive, on behalf of himself or herself and his heirs, successors
and assigns, hereby fully releases and forever discharges the Company, and
its
officers, directors, agents, employees, attorneys, parents, affiliates, and
subsidiaries (the “Released Parties”), from any and all claims, actions and
liabilities of any kind or character whatsoever, arising in law or in equity,
known or unknown, suspected or unsuspected, that Executive has ever had, now
has
or may now have against the Released Parties, including, without limitation,
all
claims directly or indirectly related to or arising out of Executive’s
employment by the Company, the performance of his duties during that employment,
and/or the termination of or his resignation from that employment. This waiver
and release specifically includes, but is not limited to, all claims, if any,
whether arising in tort or in contract, related to Executive’s employment,
including any and all claims for wrongful discharge or wrongful termination;
claims for alleged violation of public policy or breach of implied covenant
of
good faith and fair dealing; claims for breach of fiduciary duty; claims for
negligent or intentional infliction of emotional distress; claims arising in
connection with Executive’s compensation, benefits, warrants and/or stock
options; claims for breach of express or implied contract or for further
monetary compensation by way of additional salary or bonus allegedly due
Executive by reason of his employment with the Company; and all other claims,
based on common law or federal or state statute, including claims for
discrimination based on age arising under state statute or the federal Age
Discrimination in Employment Act, the Older Workers’ Benefits Protection Act, or
any similar federal or state law prohibiting age discrimination.
Executive
further understands and expressly agrees that this Release specifically extends
to all claims, whether those claims are presently known to the party or not,
or
suspected by the party or not. Executive agrees that he has not assigned or
transferred, in whole or in part, any of the claims, actions or liabilities
released by him herein. By signing below, Executive expressly waives the
benefits of Section 1542 of the California Civil Code, which
provides:
“A
general release does not extend to claims which the creditor does not know
or
suspect to exist in his favor at the time of executing the release which if
known by him must have materially affected his settlement with the
debtor.”
8. Noninterference.
Executive agrees that, during the term of his employment and for a period of
12
months thereafter, he shall not, on his own behalf or on behalf of any other
person, solicit or in any manner influence or encourage any current or
prospective customer, employee or other person who has a business relationship
with the Company or any affiliate, to terminate or limit in any way their
relationship with the Company, or interfere in any way with such relationship.
For purposes hereof, (i) the term person is to be construed in the broadest
sense and means and includes any natural person, company, limited liability
company, partnership, joint venture, corporation, business trust, unincorporated
organization or any governmental authority, and (ii) a person shall be
considered a “prospective” customer or employee if the Company or any affiliate
has entered into discussions or otherwise made contact with the person for
the
purpose of any such engagement within the six-month period prior to any
solicitation by the Executive, and such fact is known or made known to the
Executive.
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9. Non-Competition.
The
Executive agrees not to, during his employment and for a period of 12 months
thereafter, voluntarily or involuntarily, directly or indirectly, individually
or on behalf of any entity or person, as a partner, stockholder, director,
officer, principal, agent, employee, or in any other capacity or relationship,
engage in, aid, or assist, in any competition with the Company within the United
States of America or any foreign country where the Company conducts business.
The Company and the Executive acknowledge the reasonableness of this covenant
not to compete and the reasonableness of the geographic area and duration of
time which is part of this covenant. The provisions of this paragraph 10 shall
survive the termination of this Agreement by either party.
10. Voluntary
Agreement.
Executive expressly acknowledges and warrants that he has read and fully
understands this Agreement; that he has had the opportunity to consult with
legal counsel of his own choosing in order to have the terms and conditions
of
this Agreement fully explained to him or her; that he is not executing this
Agreement in reliance on any promises, representations or inducements other
than
those set forth herein; that he understands he is giving up legal rights by
signing this Agreement; and that he is executing it voluntarily, free of any
duress or coercion, after due deliberation, with a full understanding of what
it
means to do so.
11. Mediation,
Venue and Arbitration.
If a
dispute arises in connection with this Employment Agreement, Executive and
Company agree that any legal action, mediation or arbitration will be conducted
in the court, arbitration or other body having subject matter jurisdiction,
in
the city of Palo Alto, California, and venue shall be proper only therein.
Any
dispute, controversy or claim arising out of or relating to provisions of this
Employment Agreement shall be finally settled by arbitration in accordance
with
the Commercial Arbitration Rules of the American Arbitration Association (AAA)
or the Judicial Arbitration and Mediation Service (JAMS), or other mutually
acceptable arbitral body, in effect on the date of this Agreement. The
arbitration tribunal shall adopt rules of procedure supplementary to the rules
of the AAA or JAMS as it deems equitable under the circumstances. An award
rendered by the arbitrator shall be final and binding, and judgment may be
entered upon it in any court having jurisdiction. In no event shall this
subsection be construed as conferring upon any court authority or jurisdiction
to inquire into or review such award on its merits.
12. Miscellaneous.
(a) Governing
Law.
This
Agreement shall be governed by, and construed, interpreted and enforced in
accordance with, the internal laws of the State of California without reference
to principles of conflict of laws.
(b) Captions.
The
section headings contained herein are for reference purposes only and shall
not
in any way affect the meaning or interpretation of this
Agreement.
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(c) Entire
Agreement.
This
Agreement sets forth the entire agreement and understanding of the parties
hereto with respect to the subject matter hereof, and supersedes all prior
agreements, arrangements and understandings, written or oral, between the
parties hereto with respect to the subject matter hereof.
(d) Further
Assurances.
Each
party hereto shall furnish to the other party hereto such instruments and other
documents as the other party may reasonably request for the purpose of carrying
out or evidencing the transactions contemplated by this Agreement.
(e) Attorneys’
Fees.
If any
lawsuit or other action or proceeding relating to this Agreement is brought
by
either party hereto against the other party hereto, the prevailing party shall
be entitled to recover reasonable attorneys’ fees, costs and disbursements (in
addition to any other relief to which the prevailing party may be
entitled).
(f) Notices.
Any
notice, request, consent or approval required or permitted to be given under
this Agreement or pursuant to law shall be deemed effective upon the actual
receipt by the Executive or the agent for service of process for the Acquirer
or
Company, as applicable.
(g) Amendments;
Waivers.
This
Agreement may be amended, modified, superseded, canceled, renewed or extended
and the terms or covenants hereof may be waived, but only by a written
instrument executed by the Executive and the Company or the Acquirer as the
case
may be. The failure of either party at any time or times to require performance
of any provision hereof shall in no manner affect such party’s right at a later
time to enforce the same. No waiver by either party of the breach of any term
or
covenant contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
(h) Severability.
Any
term or provision of this Agreement which is prohibited, invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent (but only to the extent) of such prohibition, invalidity or
unenforceability without invalidating or affecting any other term or provision
hereof, any such prohibition, invalidity or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such term or provision in any
other
jurisdiction.
(i) Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed to be an original, but all of which together shall constitute one and
the
same instrument.
(j) Successors
and Assigns.
The
terms and provisions of this Agreement shall inure to the benefit of, and shall
be binding upon, the successors and assigns of the Company and/or Acquirer.
In
view of the personal nature of the provisions of this Agreement to be performed
by the Executive, the Executive shall not have the right to assign or transfer
any of the obligations or rights and benefits hereunder, nor shall said rights
and benefits be otherwise subject to voluntary or involuntary alienation except
as provided herein.
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(k) No
Rules of Construction. No
rules
of construction are intended by the parties hereto and none shall be employed
or
used in the interpretation of this Agreement. For all purposes, both parties
hereto shall be deemed joint authors hereof.
IN
WITNESS WHEREOF,
the
parties have duly executed this Employment Agreement as of the date first above
written.
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MIP
Solutions, Inc.,
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a
Nevada Corporation
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By:
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/s/
Xxxxxx X. Xxxxxx
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Name and Title:
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Xx Xxxxxx, Corporate Secretary and Treasurer
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Address:
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000
Xxxx Xxxxx Xxxxxx, Xxxxx 000
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Xxxxxxx,
XX 00000
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/s/
Rocky Xxxxxxx Xxxxxx
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Rocky
Xxxxxxx Xxxxxx
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