EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT ("Agreement") is entered into as of this 27th day December,
2006, by and among Migo Software, Inc., a Delaware corporation (the "Company")
and Xxxxxxx Xxxxxxx (the "Executive").
RECITALS
The
Company desires to employ Executive as Senior Vice President, Business
Development, and Executive desires to be so employed by the Company on the
terms
and subject to the conditions hereinafter set forth.
NOW
THEREFORE, in consideration of the mutual covenants set forth herein and for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby mutually agree as
follows:
1. Employment
Agreement.
On the
terms and conditions set forth in this Agreement, the Company agrees to employ
the Executive and the Executive agrees to be employed by the Company for the
Employment Period set forth in Section 2 hereof and in the position and with
the
duties set forth in Section 3 hereof. Terms used herein with initial
capitalization are defined in Section 21
below.
2. Term.
The
initial term of employment under this Agreement shall be for a term (the
"Initial Term") from January 1, 2007 through and including December 31, 2007.
Unless either party terminates the Executive's employment by way of written
notice in accordance with Section 11 given to the other party at least 30 days
prior to the Expiration Date, the term of employment thereafter shall be
extended indefinitely, unless and until either party provides 30 days written
notice to the other party in accordance with Section 11 that such indefinite
term shall end at the end of such 30 day notice period. The parties' obligations
under Sections 7, 9, 10 and 11 hereof shall survive the expiration or
termination of the Employment Period.
3. Position
and Duties.
The
Executive shall serve as Senior Vice President, Business Development of the
Company during the Employment Period. As Senior Vice President, Business
Development of the Company, the Executive shall render executive, policy and
other management services to the Company of the type customarily performed
by
persons serving in a similar capacity. The Executive shall perform such duties
as the Chairman of the Board may from time to time reasonably determine and
assign to the Executive provided that such duties do not constitute a material
departure from the services and responsibilities routinely provided by the
Executive. The Executive shall devote the Executive's reasonable best efforts
and substantially full business time to the performance of the Executive's
duties and the advancement of the business and affairs of the Company during
the
Employment Period.
4. Place
of Performance.
In
connection with the Executive's employment by the Company during the Employment
Period, the Executive's primary place of employment and work location shall
be
as designated by the Company except for reasonable travel on Company
business.
5. Compensation.
(a) Base
Salary and Bonus.
During
the Employment Period, the Company shall pay to the Executive an annual base
salary (the "Base Salary"), which initially shall be at the rate of $200,000.00
per year. The Base Salary shall be reviewed no less frequently than annually
and
may be increased (and not decreased, other than in an across-the-board reduction
in the base salaries of all or substantially all of the employees of Company's
services business in the United States) at the discretion of the Board. If
the
Executive's Base Salary is increased, the increased amount shall be the Base
Salary for the remainder of the Employment Period. The Base Salary for the
2007
year shall be payable as follows: $100,000 by way of the loan described in
paragraph (b) below and the remaining $100,000 in monthly or in such other
installments as shall be consistent with the Company's payroll procedures in
effect from time to time. In addition to the Base Salary, Executive shall be
eligible for an annual bonus in the discretion of the Compensation Committee
of
the Board of Directors, and shall be based upon factors related to the
Executive's performance and the success of the business, as established by
the
Compensation Committee.
(b) Loan.
Simultaneously with the execution of this Agreement, the Company shall loan
Executive the sum of $100,000 to be represented by a Promissory Note delivered
by Executive to the Company. The Company agrees to forgive one-twenty fourth
(1/24) of the principal balance of the Note as of the end of each bi-monthly
pay
period of employment during 2007, such that the Note will be forgiven in full
upon the completion of one year of employment with the Company.
(c) Stock
Option Grants.
During
the Employment Period, the Executive shall be eligible to participate in the
Company’s Stock Option Plan in accordance with the terms and conditions therein.
As of the Effective Time, the Executive shall be granted initial stock options
for 200,000 shares of common stock of the Company at an exercise price of $0.20
per share. Said stock options shall be subject to the following vesting: (i)
33%
of such options shall vest 12 months after the date hereof; (ii) the remaining
options shall vest monthly over a period of 24 months (subject to accelerated
vesting)); (iii) Accelerated Vesting shall occur if Executive is terminated
not
for Good Cause (as defined below), if Executive resigns for Good Reason (as
defined below), or upon a Change of Control (as defined in the Stock Option
Plan).
(d)
Benefits.
During
the Employment Period, the Executive will be entitled to all employee benefits
and perquisites made available to similarly situated senior executive employees
of the Company. Nothing contained in this Agreement shall prevent the Company
from changing carriers or from effecting modifications in insurance coverage
for
the Executive.
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(e)
Vacation;
Holidays.
The
Executive shall be entitled to all public holidays observed by the Company
and
vacation days in accordance with the applicable vacation policies for senior
executives of the Company, which shall be taken at a reasonable time or
times.
(f)
Withholding Taxes and Other Deductions.
To the
extent required by law, the Company shall withhold from any payments due to
the
Executive under this Agreement any applicable federal, state or local taxes
and
such other deductions as are prescribed by law or Company policy.
6. Expenses.
The
Executive is expected and is authorized, subject to the business expense
policies as determined by the Board, to incur reasonable expenses in the
performance of his duties hereunder, including the costs of entertainment,
travel, and similar business expenses incurred in the performance of his duties.
The Company shall promptly reimburse the Executive for all such expenses in
accordance with Company policy.
7. Confidentiality;
Work Product.
(a)
Information.
The
Executive acknowledges that the information, observations and data obtained
by
the Executive concerning the business and affairs of the Company and its
Affiliates and their predecessors during the course of the Executive's
performance of services for, or employment with, any of the foregoing persons
(whether or not compensated for such services) are the property of the Company
and its Affiliates, including information concerning acquisition opportunities
in or reasonably related to the business or industry of the Company or its
Affiliates of which the Executive becomes aware during such period. Therefore,
the Executive agrees that he will not at any time (whether during or after
the
Employment Period) disclose to any unauthorized person or, directly or
indirectly, use for the Executive's own account, any of such information,
observations, data or any Work Product or Copyrightable Work (as defined below)
without the Board's consent, unless and to the extent that the aforementioned
matters become generally known to and available for use by the public other
than
as a direct or indirect result of the Executive's acts or omissions to act
or
the acts or omissions to act of other senior or junior management employees
of
the Company and its Affiliates. The Executive agrees to deliver to the Company
at the termination of the Executive's employment, or at any other time the
Company may request in writing (whether during or after the Employment Period),
all memoranda, notes, plans, records, reports and other documents, regardless
of
the format or media (and copies thereof), relating to the business of the
Company and its Affiliates and their predecessors (including, without
limitation, all acquisition prospects, lists and contact information) which
the
Executive may then possess or have under the Executive's control.
(b) Intellectual
Property.
The
Executive acknowledges that all inventions, innovations, improvements,
developments, methods, designs, analyses, drawings, reports, trade secrets,
know-how, ideas, computer programs, and all similar or related information
(whether or not patentable) that relate to the actual or anticipated business,
research and development or existing or future products or services of the
Company or its Affiliates that are conceived, developed, made or reduced to
practice by the Executive while employed by the Company or any of its
predecessors ("Work Product") belong to the Company and the Executive hereby
assigns, and agrees to assign, all of the Executive's rights, title and interest
in and to the Work Product to the Company. Any copyrightable work
("Copyrightable Work") prepared in whole or in part by the Executive in the
course of the Executive's work for any of the foregoing entities shall be deemed
a "work made for hire" under the copyright laws, and the Company shall own
all
rights therein. To the extent that it is determined, by any authority having
jurisdiction, that any such Copyrightable Work is not a "work made for hire,
"
the Executive hereby assigns and agrees to assign to Company all the Executive's
rights, title and interest, including without limitation, copyright in and
to
such Copyrightable Work, The Executive shall promptly disclose such Work Product
and Copyrightable Work to the Board and perform all actions reasonably requested
by the Board (whether during or after the Employment Period) to establish and
confirm the Company's ownership (including, without limitation, assignments,
consents, powers of attorney and other instruments).
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(c)
Enforcement.
The
Executive acknowledges that the restrictions contained in Section 7(a) hereof
are reasonable and necessary, in view of the nature of the Company's business,
in order to protect the legitimate interests of the Company, and that any
violation thereof would result in irreparable injury to the Company. Therefore,
the Executive agrees that in the event of a breach or threatened breach by
the
Executive of the provisions of Section 7(a) hereof, the Company shall be
entitled to obtain from any court of competent jurisdiction, preliminary or
permanent injunctive relief restraining the Executive from disclosing or using
any such confidential information. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies available to it for
such breach or threatened breach, including, without limitation, recovery of
damages from the Executive.
8. Termination
of
Employment.
(a) Permitted
Terminations.
The
Executive's employment hereunder may be terminated during the Employment Period
without any breach of this Agreement only under the following
circumstances:
(i) Death.
The
Executive's employment hereunder shall
terminate
upon the Executive's death;
(ii) By
the
Company.
The
Company may terminate the Executive's employment:
(A) if
the
Executive shall have been unable to perform all of the Executive's duties
hereunder by reason of illness, physical or mental disability or other similar
incapacity, which inability shall continue for more than three consecutive
months ("Disability");
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(B) for
Cause; or
(iii)
By
the
Executive.
The
Executive may terminate his
employment
with the Company for Good Reason.
(b)
Termination.
Any
termination of the Executive's employment by the Company or the Executive (other
than because of the Executive's death) shall be communicated by written Notice
of Termination to the other party hereto in accordance with Section 11 hereof.
For purposes of this Agreement, a "Notice of Termination" shall mean a notice
which shall indicate the specific termination provision in this Agreement relied
upon, if any, and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. Termination of the Executive's
employment shall take effect on the Date of Termination.
9. Compensation
Upon Termination.
(a) Death.
If the
Executive's employment is terminated during the Employment Period as a result
of
the Executive's death, (i) the Company shall pay to the Executive's estate,
or
as may be directed by the legal representatives of such estate, the Executive's
pro rata Base Salary through the Date of Termination and all other unpaid
amounts, if any, to which the Executive is entitled as of the Date of
Termination in connection with any fringe benefits or under any bonus or
incentive compensation plan or program of the Company, at the time such payments
are due, and (ii) the Company shall not have any further obligations to the
Executive under this Agreement (other than pursuant to any life insurance policy
for the benefit of the Executive).
(b) Disability.
If the
Company terminates the Executive's employment during the Employment Period
because of the Executive's Disability, (i) the Company shall pay the Executive
the Executive's pro rata Base Salary through the Date of Termination and all
other unpaid amounts, if any, to which the Executive is entitled as of the
Date
of Termination in connection with any fringe benefits or under any bonus or
incentive compensation plan or program of the Company, at the time such payments
are due, and (ii) the Company shall not have any further obligations to the
Executive under this Agreement (other than with respect to any disability policy
maintained for the benefit of the Executive).
(c) By
the
Company for Cause.
If the
Company terminates the Executive's employment during the Employment Period
for
Cause or if the Executive voluntarily terminates the Executive's employment
during the Employment Period without Good Reason, (i) the Company shall pay
the
Executive the Executive's pro rata portion of the Executive's Base Salary
through the Date of Termination and all other unpaid amounts, if any, to which
Executive is entitled as of the Date of Termination in connection with any
fringe benefits or under any bonus or incentive compensation plan or program
of
the Company, at the time such payments are due, (ii) the Executive shall fully
and immediately forfeit the Executive's rights with respect to any and all
outstanding stock options granted to the Executive and which have not yet become
vested and (iii) the Company shall not have any further obligations to the
Executive under this Agreement.
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(d) By
the
Company without Cause; By the Executive for Good Reason.
If the
Company terminates the Executive's employment other than for Cause, disability
or death, or the Executive terminates his employment for Good Reason, (i) the
Company shall pay the Executive the Executive's pro rata portion of Base Salary
through the Date of Termination and all other accrued but unpaid amounts, if
any, to which the Executive is entitled as of the Date of Termination in
connection with any fringe benefits or under any bonus or incentive compensation
plan or program of the Company, at the time such payments are due, (ii) the
options of Executive shall become fully vested and non-forfeitable as of the
Date of Termination, (iii) the Company shall pay the Executive an amount equal
to one month’s Base Salary, and (iv) the Company shall not have any further
obligations to the Executive under this Agreement (except as otherwise set
forth
in this Agreement). For purposes of clarity, it is understood and agreed between
the parties that no further accrual of pension or 401(k) benefits shall be
provided to the Executive (other than earnings on existing accounts and
balances) after the Date of Termination.
10.
Non-competition
and Non-solicitation.
(a)
Non-competition.
The
Executive acknowledges that in the course of his employment with the Company
and
its Affiliates and their predecessors, he has and will continue to become
familiar with the trade secrets of, and other confidential information
concerning, the Company and its Affiliates, that the Executive's services will
be of special, unique and extraordinary value to the Company and its Affiliates
and that the Company's ability to accomplish its purposes and to successfully
pursue its business plan and compete in the marketplace depend substantially
on
the skills and expertise of the Executive. Therefore, and in further
consideration of the compensation being paid to the Executive hereunder, the
Executive agrees that, during the Employment Period and for a period of 12
months following the Executive's termination of employment with the Company
for
any reason, he shall not directly or indirectly own, manage, control,
participate in, consult with, render services for, or in any manner engage
in
any business competing with the Stomp
Business as currently conducted, the Stomp Business being the sale of
software
solutions for home and business users for (i) Internet security and
privacy; (ii) data protection and disaster recovery; and (iii) PC
performance and reliability utilities in
any
country where the Company or its Affiliates currently conducts business.
Notwithstanding the foregoing, the ownership by the Executive of not more than
1% of the outstanding shares of any publicly held company shall not violate
the
provisions of this Section 10 so long as the Executive is not otherwise involved
in the management or operation of such publicly held company.
(b) Non-solicitation.
During
the Employment Period and for a period of 18 months following the Executive's
termination of employment with the Company for any reason, the Executive shall
not directly or indirectly through another entity (i) induce or attempt to
induce any employee of the Company or any Affiliate to leave the employ of
the
Company or such Affiliate, or in any way willfully interfere with the
relationship between the Company or any Affiliate and any employee thereof,
(ii)
induce or attempt to induce any customer, supplier, licensee or other business
relation of the Company or any Affiliate to cease doing business with the
Company or such Affiliate, or in any way interfere with the relationship between
any such customer, supplier, licensee or business relation and the Company
or
any Affiliate or (iii) initiate or engage in any discussions regarding an
acquisition of, or the Executive's employment (whether as an employee, an
independent contractor or otherwise) by, any businesses in which the Company
or
any of its Affiliates has entertained discussions or has requested and received
information relating to the acquisition of such business by the Company or
its
Affiliates upon or within the 18-month period prior to the Date of
Termination.
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(c) Enforcement.
If, at
the time of enforcement of this Section 10, a court holds that the restrictions
stated herein are unreasonable under circumstances then existing, the parties
hereto agree that the maximum duration, scope or geographical area reasonable
under such circumstances shall be substituted for the stated period, scope
or
area and that the court shall be allowed to revise the restrictions contained
herein to cover the maximum duration, scope and area permitted by law. Because
the Executive's services are unique and because the Executive has access to
confidential information, the parties hereto agree that money damages would
be
an inadequate remedy for any breach of any provision of this Agreement.
Therefore, in the event of a breach or threatened breach by the Executive of
any
provision of this Agreement, the Company may, in addition to other rights and
remedies existing in its favor, apply to any court of competent jurisdiction
for
specific performance and/or injunctive or other relief in order to enforce,
or
prevent any violations of, the provisions hereof (without posting a bond or
other security).
11. Notices.
All
notices, demands, requests or other communications required or permitted to
be
given or made hereunder shall be in writing and shall be delivered, telecopied
or mailed by first class registered or certified mail, postage prepaid, to
the
Company: at its principal office location; and to the Executive: at his address
as listed on the Company's then current payroll; or to such other address as
may
be designated by either party in a notice to the other. Each notice, demand,
request or other communication that shall be given or made in the manner
described above shall be deemed sufficiently given or made for all purposes
three days after it is deposited in the U.S. mail, postage prepaid, or at such
time as it is delivered to the addressee (with the return receipt, the delivery
receipt, the answer back or the affidavit of messenger being deemed conclusive
evidence of such delivery) or at such time as delivery is refused by the
addressee upon presentation.
12. Severability.
The
invalidity or unenforceability of any one or more provisions of this Agreement
shall not affect the validity or enforceability of the other provisions of
this
Agreement, which shall remain in full force and effect.
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13. Survival.
It is
the express intention and agreement of the parties hereto that the provisions
of
Sections 7, 9 10 and 11 hereof shall survive the termination of employment
of
the Executive. In addition, all obligations of the Company to make payments
hereunder shall survive any termination of this Agreement on the terms and
conditions set forth herein.
14. Assignment.
The
rights and obligations of the parties to this Agreement shall not be assignable
or delegable, except that (i) in the event of the Executive's death, the
personal representative or legatees or distributees of the Executive's estate,
as the case may be, shall have the right to receive any amount owing and unpaid
to the Executive hereunder and (ii) the rights and obligations of the Company
hereunder shall be assignable and delegable in connection with any subsequent
merger, consolidation, sale of all or substantially all of the assets of the
Company or similar reorganization of a successor corporation.
15. Binding
Effect.
Subject
to any provisions hereof restricting assignment, this Agreement shall be binding
upon the parties hereto and shall inure to the benefit of the parties and their
respective heirs, devisees, executors, administrators, legal representatives,
successors and assigns.
16. Amendment
Waiver.
This
Agreement shall not be amended, altered or modified except by an instrument
in
writing duly executed by the parties hereto. Neither the waiver by either of
the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure of either of the parties, on one or more occasions,
to enforce any of the provisions of this Agreement or to exercise any right
or
privilege hereunder, shall thereafter be construed as a waiver of any subsequent
breach or default of a similar nature, or as a waiver of any such provisions,
rights or privileges hereunder.
17. Headings.
Section
and subsection headings contained in this Agreement are inserted for convenience
of reference only, shall not be deemed to be a part of this Agreement for any
purpose, and shall not in any way define or affect the meaning, construction
or
scope of any of the provisions hereof.
18. Governing
Law.
This
Agreement, the rights and obligations of the parties hereto, and any claims
or
disputes relating thereto, shall be governed by and construed in accordance
with
the laws of the State of California (but not including the choice of law rules
thereof).
19. Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties respecting the
employment of the Executive there being no representations, warranties or
commitments except as set forth herein.
20. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be an
original and all of which shall be deemed to constitute one and the same
instrument.
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21. Definitions.
"Affiliates"
means any entity, as may from time to time be designated
by the Board, that is a subsidiary corporation of the Company, and each other
entity directly or indirectly controlling or controlled by or under common
control with the Company. For purposes of this definition, "control" means
the
power to direct the management and policies of such entity, whether through
the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meaning correlative to the
foregoing.
"Board"
means the board of directors of Company or its delegate.
"Cause"
means (i) the Executive's commission of a felony or crime involving moral
turpitude or the commission of any other act or omission involving dishonesty
or
fraud with respect to the Company or any of its Affiliates or any of their
customers or suppliers, (ii) the Executive's conduct which brings the Company
or
any Affiliate into substantial public disgrace or disrepute, (iii) the
Executive's substantial and repeated failure to perform duties of the office
held by the Executive as reasonably directed by the Board, and such failure
is
not cured within 30 days after the Executive receives written notice thereof
from the Board, (iv) gross negligence or willful misconduct in the performance
of his duties for the Company or any of its Affiliates, or (v) the Executive's
substantial failure to achieve annual performance goals as determined by the
Board and agreed to by the Executive; or (vi) the Executive's breach of Section
7 or 10 of this Agreement.
"Company"
means Migo Software, Inc. and its successors and assigns.
"Date
of
Termination" means (i) if the Executive's employment is terminated by the
Executive's death, the date of the Executive's death; (ii) if the Executive's
employment is terminated because of the Executive's Disability, 30 days after
Notice of Termination, provided that the Executive shall not have returned
to
the performance of the Executive's duties on a full-time basis during such
30-day period; (iii) if the Executive's employment is terminated by the Company
for Cause, the date specified in the Notice of Termination; or (iv) if the
Executive's employment is terminated during the Employment Period for any other
reason, the date on which Notice of Termination is given.
"Good
Reason" means, in the absence of a written consent of the Executive: (i) any
failure by the Company to comply with any of the provisions of Section 5 of
this
Agreement, other than an isolated, insubstantial or inadvertent failure not
occurring in bad faith and which is remedied by the Company within 10 days
after
receipt of notice thereof given by the Executive; or (ii) within the Employment
Period the Company's requiring the Executive, without Executive's consent,
to be
based at any office or location more than 50 miles from that identified in
Section 4 hereof.
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IN
WITNESS WHEREOF, the undersigned have duly executed this Agreement,
or have caused this Agreement to be duly executed on their behalf, as of the
day
and year first hereinabove written.
| MIGO SOFTWARE, INC. | Executive | ||
| By: | |||
|
Its: |
XXXXXXX XXXXXXX |
||
|
|
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