EXECUTIVE EMPLOYMENT AGREEMENT
This
EXECUTIVE EMPLOYMENT AGREEMENT (this
“Agreement”) is made as
of March ___, 2009 (the “Effective Date”) by and
between GetFugu, Inc., a Nevada corporation (the “Corporation”), and Xxxxxxx
Xxxxxx (the “Executive”).
WHEREAS, the Corporation and
Executive wish to enter into a written employment contract which will govern the
terms and conditions applicable to Executive’s employment with the Corporation
as President and Chief Executive Officer.
NOW THEREFORE, in
consideration of the mutual covenants and conditions set forth herein and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties hereto agree as follows:
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1.
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Duties
and Responsibilities.
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A. Executive
shall serve as President and Chief Executive Officer of the Corporation and
shall in such capacity report directly to the Corporation’s Board of Directors
(the “Board”). Executive
shall have overall authority and responsibility for the day-to-day management of
the affairs and business of the Corporation and its subsidiaries, if any, and
shall have primary responsibility for the formulation, implementation and
execution of strategic policies relating to the Corporation’s business
operations, financial objectives and market growth.
B. Executive
agrees to serve as President and Chief Executive Officer of the Corporation
during the Employment Period specified in Paragraph 2 and to perform in good
faith and to the best of his ability all services which may be reasonably
required of him hereunder that are in keeping with his title and status and to
be available to render services at all reasonable times and places in accordance
with such reasonable directions and requests made by the Corporation acting by
majority vote of the Board. Executive shall, during the term hereof,
devote his full working time, ability, energy and skill to the performance of
his duties and responsibilities hereunder. Executive’s principal
place of employment shall be the Corporation’s executive offices located in San
Francisco, California, but Executive may be required to travel to other
geographic locations at the Corporation’s expense from time to time in
connection with the performance of his duties hereunder.
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C. The
Board will take under consideration the appointment of Executive as a member of
the Board promptly following the Effective Date, and will consider re-nominating
Executive for membership on the Board each year during the Employment
Period.
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2.
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At-Will
Nature of Employment.
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A. Executive’s
employment with the Corporation is “at will” and is terminable “at will” by the
Corporation or the Executive, with or without cause. No
person or entity has the authority to alter the at will status of Executive’s at
any time except in a written agreement executed by both the Executive and the
Corporation. No statement or writing made in connection with
performance reviews, recommendations, promotions, transfers, or any other
context shall result in any change in the at will nature of the employment
relationship between Executive and the Corporation. The period during
which Executive’s employment continues in effect shall be referred to herein as
the “Employment
Period.”
B. Upon
termination of the Employment Period, the Executive shall be deemed to have
resigned from the Board of Directors and all other offices and committee
memberships then held by the Executive with the Corporation.
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3.
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Cash
Compensation and Bonus.
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A. For
the first 12-month period beginning on the Effective Date, Executive shall be
paid a base salary at the annual rate of Two Hundred Fifty Thousand Dollars
($250,000). For the second 12-month period beginning on the one-year
anniversary of the Effective Date, Executive shall be paid a base salary at the
annual rate of Three Hundred Twenty-Five Thousand Dollars
($325,000). For the third 12-month period and for each subsequent 12
month period following the Effective Date, Executive’s base salary shall be
equal to the base salary for the immediately preceding 12-month period plus
5%. Base salary shall be paid at periodic intervals in accordance
with the Corporation’s payroll practices for salaried employees, but not less
frequently than two times per month.
B. Executive
shall be entitled to receive an annual bonus equal to two percent (2%) of the
Corporation’s net profits before income taxes for each fiscal year during the
Employment Period, payable no later than thirty (30) days after the completion
of the Corporation’s audit for such fiscal year. Such bonus shall be
pro-rated for any portion of a fiscal year during the Employment
Period.
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C. The
Corporation shall deduct and withhold from the compensation payable to Executive
hereunder any and all applicable Federal, State and local income and employment
withholding taxes and any other amounts required to be deducted or withheld by
the Corporation under applicable statutes, regulations, ordinances or orders
governing or requiring the withholding or deduction of amounts otherwise payable
as compensation or wages to employees.
D. If
Executive’s employment is terminated by the Corporation at any time following
the three-month anniversary and prior to the three-year anniversary of the
Effective Date, then Executive shall be entitled to receive cash severance
payments equal to twelve months salary at the rate in effect at the time of such
termination. If Executive’s employment is terminated by the
Corporation at any time following the three-year anniversary of the Effective
Date, then Executive shall be entitled to receive cash severance payments equal
to twenty four months salary at the rate in effect at the time of such
termination. Such severance payments shall be paid at
periodic intervals over twelve months in accordance with the Corporation’s
payroll practices for salaried employees.
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4.
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Equity
Compensation.
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The
Corporation hereby grants to Executive 10 million shares of the Company’s Common
Stock (the “Award Shares”) pursuant to the terms set forth herein and in a
“Restricted Stock Award Agreement” in customary form providing an award to
Executive on substantially the following terms:
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The
Award Shares are subject to an option held by the Corporation to
repurchase the Award Shares at a price of $0.005 per share (the
“Repurchase Option”). The Repurchase Option may not be
exercised by the Corporation at any time when the Executive remains a
full-time employee of the Corporation or at any time when the Corporation
is in material breach of this Agreement. The repurchase option shall
expire based on the following
schedule:
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Ø
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1,000,000
shares – The repurchase option expires on the mutual execution of this
Agreement (i.e., on the Effective
Date).
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Ø
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83,333
shares – The repurchase option expires on the first day of each of the
first 12 calendar months following the Effective
Date.
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Ø
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166,666
shares – The repurchase option expires on the first day of each of
calendar months 13 to 24 following the Effective
Date.
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Ø
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250,000
shares – The repurchase option expires on the first day of each of
calendar months 15 to 36 following the Effective
Date.
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Ø
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250,000
shares – The repurchase option expires on the first day of each of
calendar months 37 to 48 following the Effective
Date.
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Ø
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The
repurchase option shall expire in its entirety immediately upon the
earlier to occur of (a) a change in control of the Corporation, (b) a sale
by the Corporation of substantially all of its assets, (c) the entry by
the Corporation into an agreement or acceptance by the Corporation of a
term sheet to engage in a change of control transaction or a sale of
substantially all of its assets, or (c) the termination of Executive’s
employment by the Corporation; provided however, that the repurchase
option shall not
expire, and may continue to be exercised by the
Corporation, if the Executive’s employment is terminated
because the Executive has engaged in acts or omissions which cause
material harm to the Corporation (as shall be determined under California
Law), provided that the Corporation shall first have provided Executive
with 30 days prior written notice (which notice shall specify in detail
the alleged cause for termination), following receipt of which of notice
Executive shall have an opportunity to cure the acts or
omissions allegedly giving rise to the reason for
termination.
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All
of the certificates for the Award Shares shall be issued to Executive on
the Effective Date, but the certificates shall be held in escrow by the
Corporation’s counsel pursuant to an escrow agreement, and released to
Executive periodically as the repurchase option
expires. Executive will issue a proxy to vote all of the
Award Shares in favor of Xxxx
Xxxxx.
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5.
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Expense
Reimbursement.
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Executive
shall be entitled, in accordance with the reimbursement policies in effect from
time to time, to receive reimbursement from the Corporation for all business
expenses incurred by Executive in the performance of his duties hereunder,
provided that Executive furnishes the Corporation with vouchers, receipts and
other details of such expenses in the form reasonably required by the
Corporation sufficient to substantiate a deduction for such business expenses
under all applicable rules and regulations of federal and state taxing
authorities.
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6.
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Fringe
Benefits.
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A. Executive
shall, throughout the Employment Period, be eligible to participate in all group
term life insurance plans, group health plans, accidental death and
dismemberment plans and short-term disability programs and other executive
perquisites which are generally made available to the Corporation’s executives
and for which Executive qualifies.
B. Executive
shall accrue paid vacation benefits during the Employment Period at the rate of
three (3) weeks year per 12-month period commencing on the Effective Date and
may take his accrued vacation at such times as are mutually convenient to
Executive and the Corporation; provided that no more than ten (10) days’ unused
vacation time shall be carried over to subsequent years of service.
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7.
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Restrictive
Covenants.
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A. During the Employment
Period:
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(i)
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Executive
shall devote his full working time and energy solely and exclusively to
the performance of his duties described herein, except during periods of
illness or vacation periods. Notwithstanding the foregoing, Executive may
sit on not-for-profit or other boards of directors and provide advisory
services to third parties provided that doing so does not materially
interfere with his duties or obligations under this
Agreement.
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(ii) Executive
shall have the right to perform such incidental services as are necessary
in connection with (a) Executive’s private passive investments, but only
if Executive is not obligated or required to (and shall not in fact)
devote any managerial efforts which interfere with the services required
to be performed by him hereunder, or (b) Executive’s charitable or
community activities, or participation in trade or professional
organizations, but only if such incidental services do not interfere with
the performance of Executive’s services
hereunder.
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B. After the Employment
Period:
Executive
will not, either directly or indirectly, for a period of 12 months
following termination of the Employment Period: (i) contact, for
purposes of soliciting employment, any employee of the Corporation;
or, (ii) contact for the purpose of inducing any termination or
breach of any contractual relationship with the Corporation, any individual or
entity that has a contractual relationship with the Corporation.
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8.
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Non-Competition.
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During
any period for which Executive is receiving payments from the Corporation
(excluding any period after the first six months during which Executive is
receiving severance payments hereunder), Executive shall not directly or
indirectly:
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(i)
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own,
manage, operate, join, control or participate in the ownership,
management, operation or control of, or be employed by or connected in any
manner with, any enterprise which is engaged in any business competitive
with or similar to that of the Corporation; provided, however, that
such restriction shall not apply to any passive investment representing an
interest of less than two percent (2%) of an outstanding class of
publicly-traded securities of any corporation or other enterprise which is
not, at the time of such investment, engaged in a business competitive
with the Corporation’s business; or
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(ii)
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encourage
or solicit any of the Corporation’s employees to leave the Corporation’s
employ for any reason or interfere in any other manner with employment
relationships at the time existing between the Corporation and its
employees; or
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(iii)
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solicit
any customer of the Corporation or induce any customer or vendor of the
Corporation to terminate its existing business relationship with the
Corporation or interfere in any other manner with any existing business
relationship between the Corporation and any customer, vendor or other
third party.
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Executive
hereby acknowledges that monetary damages may not be sufficient to compensate
the Corporation for any economic loss which may be incurred by reason of his
breach of the foregoing restrictive covenants. Accordingly, in the
event of any such breach, the Corporation shall, in addition to the termination
of this Agreement and any remedies available to the Corporation at law, be
entitled to obtain equitable relief in the form of an injunction precluding
Executive from continuing such breach.
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9.
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Proprietary
Information.
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A. Executive
hereby acknowledges that the Corporation may, from time to time during the
Employment Period, disclose to Executive confidential information pertaining to
the Corporation’s business and affairs, technology, research and development
projects and client base, including (without limitation) financial information
concerning clients and prospective business opportunities. All
information and data, whether or not in writing, of a private or confidential
nature concerning the business, technology or financial affairs of the
Corporation and its clients (collectively, “Proprietary Information”) is
and shall remain the sole and exclusive property of the
Corporation. By way of illustration, but not limitation, Proprietary
Information shall include all trade secrets, research and development projects,
financial records, business plans, personnel data, computer programs and client
lists and accounts relating to the business operations, technology or financial
affairs of the Corporation, other similar items indicating the source of the
Corporation’s revenue, all information pertaining to the salaries, duties and
performance ratings of the Corporation’s employees and all financial information
relating to the Corporation’s clients and their proposed or contemplated
business transactions.
B. Executive
shall not, at any time during or after such Employment Period, disclose to any
third party or directly or indirectly make use of any such Proprietary
Information, other than in connection with the Corporation’s business and
affairs.
C. All
files, letters, memoranda, reports, records, data or other written, reproduced
or other tangible manifestations of the Proprietary Information, whether created
by Executive or others, to which the Executive has access during the Employment
Period shall be used by Executive only in the performance of his duties
hereunder. All such materials (whether written, printed or otherwise
reproduced or recorded) shall be returned by Executive to the Corporation
immediately upon the termination of the Employment Period or upon any earlier
request by the Corporation, without Executive retaining any copies, notes or
excerpts thereof.
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D. Executive’s
obligation not to disclose or use Proprietary Information shall also extend to
any and all information, records, trade secrets, data and other tangible
property of the Corporation clients or any other third parties who may have
disclosed or entrusted the same to the Corporation or Executive in connection
with the Corporation’s business operations.
E. Executive’s
obligations under this Paragraph 9 shall continue in effect after the
termination of his employment with the Corporation, whatever the reason or
reasons for such termination, and the Corporation shall have the right to
communicate with any future or prospective employer of Executive concerning
Executive’s continuing obligations under this Paragraph 9.
F. In
addition to the foregoing provisions of this Paragraph 9, if requested by the
Board, Executive shall enter into the Corporation’s customary form of
“Proprietary Information and Inventions Agreement” (or similar agreement) that
is required of other executives of the Corporation.
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10.
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Successors
and Assigns.
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The
provisions of this Agreement shall inure to the benefit of, and shall be binding
upon, the Corporation, its successors and assigns, and the Executive, the
personal representative of his estate and his heirs and legatees.
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11.
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Notices.
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A. Any
and all notices, demands or other communications required or desired to be given
hereunder by any party shall be in writing and shall be validly given or made to
another party if served either personally or if deposited in the United States
mail, certified or registered, postage prepaid, return receipt
requested. If such notice, demand or other communication shall be
served personally, service shall be conclusively deemed made at the time of such
personal service. If such notice, demand or other communication is
given by mail, such notice shall be conclusively deemed given forty-eight (48)
hours after the deposit thereof in the United States mail addressed to the party
to whom such notice, demand or other communication is to be given as hereinafter
set forth:
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To the
Corporation:
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__________________________
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__________________________
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__________________________
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Attention:
Chairman of the Board
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To Executive:
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__________________________
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__________________________
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__________________________
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B. Any
party hereto may change its address for the purpose of receiving notices,
demands and other communications as herein provided by a written notice given in
the manner aforesaid to the other party hereto.
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12.
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Governing
Law.
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The
provisions of this Agreement will be construed and interpreted under the laws of
the State of California applicable to agreements executed and to be wholly
performed within the State of California. If any provision of this Agreement as
applied to any party or to any circumstance should be adjudged by a court of
competent jurisdiction to be void or unenforceable for any reason, the
invalidity of that provision shall in no way affect (to the maximum extent
permissible by law) the application of such provision under circumstances
different from those adjudicated by the court, the application of any other
provision of this Agreement, or the enforceability or invalidity of this
Agreement as a whole. Should any provision of this Agreement become
or be deemed invalid, illegal or unenforceable in any jurisdiction by reason of
the scope, extent or duration of its coverage, then such provision shall be
deemed amended to the extent necessary to conform to applicable law so as to be
valid and enforceable or, if such provision cannot be so amended without
materially altering the intention of the parties, then such provision will be
stricken and the remainder of this Agreement shall continue in full force and
effect.
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13.
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Remedies.
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All
rights and remedies provided pursuant to this Agreement or by law shall be
cumulative, and no such right or remedy shall be exclusive of any
other. A party may pursue any one or more rights or remedies
hereunder or may seek damages or specific performance in the event of another
party’s breach hereunder or may pursue any other remedy by law or equity,
whether or not stated in this Agreement.
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14.
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Counterparts; Delivery by
Facsimile.
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This
Agreement may be executed in more than one counterpart, each of which shall be
deemed an original, but all of which together shall constitute but one and the
same instrument. This Agreement and any signed agreement or
instrument entered into in connection with this Agreement, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine or PDF attachment to electronic mail, shall be treated in all manner and
respects as an original agreement or instrument and shall be considered to have
the same binding legal effect as if it were the original signed version thereof
delivered in person. At the request of any party hereto or to any
such agreement or instrument, each other party hereto or thereto shall
re-execute original forms thereof and deliver them to all other
parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine or electronic mail to deliver a signature
or the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine or electronic mail as a
defense to the formation of a contract and each such party forever waives any
such defense, except to the extent such defense related to lack of
authenticity.
[Signature
Page Follows]
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IN WITNESS WHEREOF, the
parties have executed this Executive Employment Agreement as of the day and year
written above.
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GETFUGU,
INC.
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By:
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Name:
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Title:
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EXECUTIVE
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Xxxxxxx
Xxxxxx
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