EMPLOYMENT AGREEMENT
EXHIBIT
10.11
This
agreement (“Agreement”) is made
as of the 22nd day of
June, 2009 (the “Effective Date”) by and
between, on the one hand, Diligent Board Member Services,
Inc., a Delaware corporation, 00 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (“DBMS,” the “Company,” or “Employer”), and, on
the other hand, Xxxxxx
Xxxx, an individual residing at 000 Xxxxxxxxx Xxxx, Xxxxxxxx, XX 00000
(“Executive”). All
references to currency are to US dollars unless otherwise
indicated.
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1.
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Employment. DBMS
hereby employs Executive and Executive hereby accepts employment upon the
terms and conditions hereinafter set
forth.
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2.
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Term. Unless
earlier terminated pursuant to Article 5 below, this Agreement shall
commence on the Effective Date and shall continue in effect until
terminated by DBMS upon 90 days prior written notice to Executive
(hereinafter the "Term"). The
foregoing notwithstanding, this Agreement may be terminated, without
further obligation, by either party on written notice provided on or prior
to July 22, 2009.
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3.
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Duties. During
the Term, Executive shall perform the duties set forth on Schedule
A.
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4.
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Compensation. For
all services rendered by Executive and for all covenants undertaken by
Executive pursuant to this Agreement, DBMS shall provide, and Executive
shall accept, the following.
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4.1.
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Base
Compensation. DBMS shall pay a base cash compensation to
Executive as per Schedule
B.
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4.2.
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Fringe
Benefits. During the Term, DBMS shall extend to
Executive other fringe benefits as per Schedule B. DBMS makes
no provision for retirement or death in service benefits to the Executive
save as may be provided from time to time within the terms of DBMS’s
pension or profit sharing plan, if any, or as may be required by
law.
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5.
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Termination.
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5.1.
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Termination of
Executive for Cause. DBMS may terminate this Agreement
for “cause,” upon
the occurrence of one or more of the
following:
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(a)
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Executive
commits a material act of dishonesty, deceit, or breach of fiduciary duty
in the performance of Executive’s duties as an employee of
DBMS;
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(b)
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Executive
neglects or fails, on a reccurring basis and in a material respect, to
perform Executive’s job duties as defined in Schedule
A;
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(c)
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Executive
substantially violates any written policy or reasonable expectation of
DBMS regarding employee behavior or conduct that has been communicated to
Executive by DBMS or such employee behavior or conduct is outside the
remit of Executive’s job description and Executive does not cure such
breach within thirty (30) days after written notice from
DBMS;
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(d)
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Executive
is convicted of, or pleads nolo contendre to, (i) any felony, or any
misdemeanor involving moral turpitude or (ii) any crime or offense
involving dishonesty with respect to DBMS;
or
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(e)
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Executive
materially breaches any provision of this Agreement and does not cure such
breach within thirty days after written notice from DBMS, except that such
cure period shall not apply to any breach by Executive of the restrictive
covenants in Article 8 of this
Agreement.
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In the
event DBMS opts to terminate this agreement for cause, DBMS shall provide
written notice of such termination which shall also specify the reason for such
termination.
In the
event DBMS terminates this Agreement for cause, all obligations of DBMS under
this Agreement shall terminate.
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5.2.
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Illness or Disability
of Executive. If Executive is unable for health reasons
to perform services for DBMS for a continuous period of more than 90 days,
Executive shall be deemed to be permanently and totally disabled. The
Executive shall be paid all compensation due under this Agreement until
Agreement is terminated pursuant to Article
2.
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5.3.
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Death of
Executive. This Agreement will terminate immediately
upon the death of Executive, and in such case the surviving named
beneficiary or Executive’s estate shall receive any compensation earned
and unpaid as of the date of Executive’s
death.
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5.4.
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Resignation by
Employee. In the event that Executive voluntarily
resigns as an employee of DBMS, all obligations of DBMS under this
Agreement shall terminate on the effective date of such
resignation.
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6.
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Expenses. In
addition to the compensation payable hereunder, the Executive shall be
entitled to incur other expenses (detailed in Schedules A and B herein) on
behalf of DBMS in the performance of the Executive’s duties. Executive
will charge such expenses to DBMS credit or charge cards, or to DBMS
vendors or, if Executive pays such expenses from his own resources,
Executive will be reimbursed upon submission of appropriate
vouchers.
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7.
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Devotion to
business. Throughout
Executive’s employment pursuant to this Agreement, Executive will devote
100% of Executive’s professional and business hours and Executive’s
undivided attention to the business and affairs of DBMS and its divisions
and affiliates, except as otherwise set forth in this
Agreement. Nothing in this Agreement will preclude Executive
from devoting reasonable periods as may be required for outside activities
and engagements that will not reflect adversely on DBMS, and that are not
inconsistent with the mission or purposes of DBMS, including, but not
limited to, such activities as the following: (a) service as a director,
trustee, or member of a committee of any organization involving no
conflict of interest with the interests of DBMS; (b) fulfilling speaking
engagements, teaching at continuing education seminars, or fulfilling
other professional or business educational opportunities;
or
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(c) engaging in charitable and community
activities that are not inconsistent with the mission and purposes of
DBMS.
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8.
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Restrictive
Covenants.
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8.1.
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Competition. Executive
agrees that while this Agreement is in effect, and for a period of two
years after its termination, Executive will not, without the written
consent of DBMS, engage, directly or indirectly, either as principal,
agent, proprietor, director, officer, employee or consultant, or
participate in the ownership, management, operation or control, of any
business directly competitive with the business conducted by DBMS at the
date of termination of this Agreement. A business competitive
with the business of DBMS shall include, without limitation, a business
that manufactures, provides or markets software for digital board books or
board portals–whether delivered via the Application Service Provider model
or as installed software–to desktop PCs, laptops, PDAs, mobile phones and
computing devices (or other form of computing or electronic device).
Nothing in this section shall prevent Executive from purchasing securities
of any business whose securities are regularly traded on any national
securities exchange, or in the over-the-counter market; provided that such
purchases shall not result in Executive owning, directly or indirectly, at
any time, one percent (1%) or more of the voting securities of any entity
engaged in any business competitive to that carried on by DBMS at the
termination of this Agreement. The geographic area of the
restrictions set forth in this section shall be the United
States and its territories and possessions, together with any other
countries in which DBMS shall have been actively promoting its services or
the licensing or franchise of the right to promote its services within the
12 month period prior to termination of the employment of
Executive.
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8.2.
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Recruitment of
personnel. Executive agrees that he will not, while this
Agreement is in effect and for a period of two years thereafter, directly
or indirectly, individually or in concert with other persons, aid or
endeavor to solicit or induce
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(a)
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then
remaining employees of DBMS or its affiliates, or agents, licensees,
franchisees, or consultants performing regularly contracted work for DBMS
or its affiliates, to leave their employment or independent contractor
positions to accept employment or contractor positions with another person
or entity, or
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(b)
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then
customers of DBMS to obtain from another person or entity products or
services similar to or competitive with the products or services then sold
or provided by DBMS.
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(c)
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The
geographic area of the restrictions set forth in this Article 8.2 and its
preceding subsections shall be the United States and its territories and
possessions, together with any other countries in which DBMS shall have
been actively promoting its services or the licensing or franchise of the
right to promote its services within the 12 month period prior to
termination of the employment of
Executive.
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8.3.
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Confidential
Information. Executive agrees that he will not, while
this Agreement is in effect or at any time thereafter, use or disclose to
any unauthorized person any trade secrets or other confidential
information of DBMS or its affiliates. Executive acknowledges
and agrees that trade secrets and other confidential information, whether
created by Executive in connection with his employment or by others,
constitute DBMS’s sole and exclusive property. For purposes of
this section, the term “confidential information” includes all documents,
materials and other information, whether in oral, written or electronic
form, that have been or will be furnished by or on behalf of DBMS to
Executive (or that have been or will be created for DBMS while Executive
is employed by DBMS), and includes, without limitation, all notes,
analyses, compilations, materials, manuscripts, books, pamphlets, tapes,
CDs, products, product information, mailing lists, customer information
and customer lists, business plans, business methods, web site designs,
technology information, software, source code, pricing information, and
any studies or other documents or materials prepared by the Executive
which contain or reflect all or any portion of the originally disclosed
materials. Notwithstanding the foregoing, Confidential
Information does not include information that: (i) was or
becomes generally available to the public other than as a result of a
disclosure by the Executive or Executive’s agents; or (ii) becomes
available to the Executive on a non confidential basis from an independent
source without breach of any confidentiality obligations. or (iii) which
Executive is required to disclose under applicable laws or regulations or
in connection with judicial or administrative proceedings, provided that
to the extent possible Executive shall notify DBMS if compelled to
disclose confidential information, prior to its disclosure, so as to
permit DBMS an opportunity to seek a protective order or other appropriate
relief it deems prudent. Executive will return all documents
and other tangible evidence related to DBMS’s trade secrets and any
confidential information on termination of this Agreement with or without
cause. No breach or alleged breach of this Agreement by DBMS
shall alter the obligations of Executive set forth in this
Article.
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8.4.
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Right to Injunctive
Relief and Other Remedies. Executive agrees that the
restrictions contained in Article 8 are necessary for the protection of
DBMS and any breach thereof may cause DBMS irreparable harm for which
there may not be adequate remedy at law. Executive consents in
the event of such breach to the issuance of injunctive or other equitable
relief in favor of DBMS restraining the breach of the Article 8 covenants
by any court having jurisdiction. Executive agrees that the
rights of DBMS to obtain an injunction shall not be considered a waiver of
DBMS’s rights to assert any other remedy it may have at law or in
equity. With regard to any preliminary injunctive or similar
equitable relief that may be granted to enforce the covenants set forth in
Article 8, Executive waives the requirement of a bond being posted in
connection with such relief.
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9.
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Non-Disparagement. During
the term of this Agreement and thereafter, Executive shall not, directly
or indirectly, disparage or make negative, derogatory or defamatory
statements about DBMS, its business activities, or any of its directors,
officers, employees, affiliates, agents, or representatives or any of
them, to any person or business entity. Neither DBMS nor its
directors, officers, employees, affiliates, agents and representatives
shall, directly or indirectly, disparage or make negative, derogatory or
defamatory statements about Executive. Except pursuant to a
subpoena validly issued or enforced by a court, arbitrator, agency, or
other governmental body of competent jurisdiction, or in response to a
valid investigative demand by a governmental body, neither Executive nor
DBMS (including any of its directors, officers, employees, affiliates,
agents and representatives) will testify, consult, cooperate or otherwise
communicate with any other person concerning any legal proceeding,
judicial or administrative, against or adverse to Executive, DBMS or an
affiliate of DBMS, actual or contemplated. Executive and DBMS
shall give prompt notice (i.e., no later than five (5) business days
following receipt) to each other of any such subpoena or investigative
demand before taking any action in response
thereto.
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10.
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Inventions. Executive agrees that all inventions
conceived of or developed by Executive during the term of the Executive’s
employment with DBMS, whether alone or jointly with others and whether
during working hours or otherwise, which relate to the business or
interests of DBMS shall be DBMS’s exclusive property. Executive
shall (i) promptly disclose in writing to DBMS each invention related to the business or interests of DBMS that
is conceived or developed by
Executive during the term of Executive’s employment with DBMS, (ii) assign
all rights to such inventions to DBMS and (iii) assist DBMS, at DBMS’s expense, in every way to obtain and protect any patents,
trademarks or copyrights on such
inventions.
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11.
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Miscellaneous.
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11.1.
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Severability. If
any provision of this Agreement shall be adjudicated to be invalid, it
shall not affect the remaining provisions of this Agreement. In
addition, if any provision of this Agreement shall be adjudicated to be
invalid as it relates to the restrictive covenants in Article 8, such
provision shall be modified automatically to provide for the maximum
restriction on Executive that is lawful as, for example, by decreasing the
geographical area or duration of any such
restriction.
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11.2.
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Further
assurances. Each of DBMS and Executive agrees, at the
expense of DBMS, to do such acts and execute such documents as are
reasonably necessary to implement fully his or its respective covenants
under this Agreement.
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11.3.
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Succession. This
Agreement shall extend to and be binding upon Executive and his heirs,
administrators and executors and upon DBMS and its successors and
assigns.
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11.4.
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Entire agreement;
waiver. This Agreement contains the entire and only
agreement between DBMS and Executive with respect to the subject matter
hereof. This Agreement supersedes all prior representations,
agreements and understandings, whether oral or written, upon the subject
matter hereof. All waivers and modifications of this Agreement
shall be in writing and signed by the party against whom enforcement of
such waiver or modification is sought. No waiver or failure or
delay by either party to enforce a right set forth in this Agreement shall
operate as a waiver of any term or condition of this Agreement as applied
to the same or similar circumstances occurring
thereafter.
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11.5.
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11.6.
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Compliance with
Applicable Laws and Regulations. This Agreement is to be
construed, and the compensation provided under this Agreement is to be
paid, in such manner and at such times as shall comply with all applicable
laws and regulations, including but not limited to, Internal Revenue Code
Section 409A and the regulations and guidance promulgated thereunder by
the U.S. Department of the
Treasury.
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11.7.
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Notices. Any
notice or other communication required or permitted to be made or given to
either party pursuant to this Agreement shall be sufficiently made or
given on the date of mailing if the notice or communication is in writing
and is delivered by hand or sent to the recipient by nationally recognized
courier or certified mail, return receipt requested, addressed to the
intended recipient at his or its address set forth in the preamble to this
Agreement or to such other address as the recipient shall have designated
by written notice given to the party providing
notice.
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11.8.
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Arbitration.
All disputes between the parties to this Agreement shall be resolved by
arbitration before a single arbitrator in New York, New York, in
accordance with the commercial arbitration rules of the American
Arbitration Association. At any hearing, the parties shall have
the right to submit argument and evidence, including testimony, by IP
videoconference. This agreement to arbitrate, together with any
proceedings in connection with an arbitration award, shall be governed by
the Federal Arbitration Act, 9 U.S.C. Sec. 1 et
seq.
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(a)
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Notwithstanding
anything to the contrary in Article 11.8, each of the parties shall have
the right to seek a temporary or preliminary injunction or other
provisional equitable relief in a court having jurisdiction. If
a party files an action requesting provisional relief in a court, such
party shall make a motion, which motion all the other parties shall join,
to refer further proceedings (other than any hearing on the imposition or
lifting of provisional remedies) to arbitration in accordance with this
Article 11.8.
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(b)
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DBMS
and Executive agree that any arbitration pursuant to this Agreement may be
consolidated, before the same arbitrator, with any other arbitration
pursuant to any employment or corporate governance agreements providing
for arbitration and to which DBMS or any of its officers, directors or
shareholders are parties. In the sound discretion of the
arbitrator, the issues to be heard may be consolidated or severed for
purposes of hearing.
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11.9.
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Legal
Fees. Executive, and his heirs, shall be entitled
to reasonable attorney’s fees incurred in the successful defense or
enforcement of any of their rights
hereunder.
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11.10.
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Article
Headings. The article headings in this Agreement are for
convenience only and shall not be considered a part of, or modify,
explain, enlarge, restrict or in any way affect, the construction or
interpretation of any provisions of this
Agreement.
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11.11.
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Counterparts. This
Agreement may be executed in counterparts. Facsimile and
electronic signatures shall be treated as originals for all purposes of
this Agreement.
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12.
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Condition
precedent. This Agreement is subject, as a condition precedent, to
approval by the Company’s Board of Directors. This Agreement shall be
submitted to the Board at its next regularly-scheduled meeting, which is
scheduled for June 25, 2009.
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WITNESS
the signatures of the parties hereto as of the date first written
above.
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| Diligent Board Member Services, Inc. | Executive | ||||
| By: |
/s/
Alessandro Sodi
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/s/
Xxxxxx X. Xxxx
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Alessandro
Sodi
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Xxxxxx
X. Xxxx
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CEO
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| Responsibilities | June 22, 2009 to August 17, 2009: | |
| Advisor to President. | ||
| Responsibilities | August 17, 2009 and thereafter: | |
| This position is subject to the subsequent election by the Board of Directors of the Executive as Executive Vice President, Chief Financial Officer. | ||
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Job
Title:
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Executive Vice President, Chief Financial Officer | |
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Function:
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The Chief Financial Officer (CFO) provides both operational and financial support to the organization. The CFO supervises the finance unit and is the chief financial spokesperson for the organization. The CFO reports directly to the President/Chief Executive Officer (CEO) on all strategic and tactical matters as they relate to budget management, forecasting needs and the securing of new funding. | |
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Reports
to:
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President
& CEO
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Accountabilities:
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● | Assist in performing all tasks necessary to achieve the organization's mission and help execute staff succession and growth plans. |
| ● | Train the Finance Unit and other staff on raising awareness and knowledge of financial management matters. | |
| ● | Work with the President/CEO on the strategic vision. | |
| ● | Assist the CEO in identifying new funding opportunities. | |
| ● | Provide the CEO with an operating budget. Work with the management team to ensure success. | |
| ● | Oversee the management, coordination and consolidation of all fiscal reporting activities for the organization and its subsidiaries including: organizational revenue/expense and balance sheet reports. | |
| ● | Working with the Company’s Auditors, prepare and file all financial reports required by the Securities and Exchange Commission and by the New Zealand Exchange. | |
| ● | Oversee all purchasing and payroll activity. | |
| ● | Develop and maintain systems of internal controls to safeguard financial assets of the organization. Oversee the coordination and activities of independent auditors ensuring compliance issues are met, and the preparation of the annual financial statements is in accordance with U.S. GAAP. | |
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| ● | Attend Board meetings after being appointed Financial Director. | |
| ● | Monitor banking activities of the organization. | |
| ● | Investigate cost-effective benefit plans and other fringe benefits which the organization may offer employees and potential employees with the goal of attracting and retaining qualified individuals. | |
| ● | Oversee the production of monthly reports including financial statements and cash flow projections for use by Executive management, as well as the Audit/Finance Committee and Board of Directors. | |
| ● | Assist in the design, implementation, and timely calculations of wage incentives, commissions, and salaries for the staff. | |
| ● | Oversee Accounts Payable and Accounts Receivable. | |
| ● | Oversee business insurance plans and health care coverage analysis. | |
| ● | Oversee all tax reporting activity world wide. | |
| ● | Initiate and maintain internal controls as required under Section 404 of Sarbanes Oxley. |
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SCHEDULE
B:
Base
Compensation:
Base
compensation of $210,000 per annum will be paid bi-weekly to the Executive by
Company.
Insurance
Benefits:
Health
Insurance: Full family health insurance coverage will be provided to
the Executive as part of, and pursuant to, the terms of the Company’s
contributory health insurance plan.
Disability
and Term Life Insurance:
There
currently is no disability or term life insurance offered by
Company.
Pension
and Profit Sharing:
There is
currently no pension or profit sharing plan offered by Company.
Marketing
Expenses:
Vacation:
The
Executive will be entitled to a minimum of 3 weeks paid vacation per year - plus
public holidays and personal days - as per Company policy.
Stock
Based Compensation/Bonus Program:
Executive
shall be entitled to participate in the DBMS 2007 Stock Option and Incentive
Plan and any successor plan available to other executives of DBMS (the “Plan”).
Pursuant to the terms and conditions of the Plan, and upon execution by
Executive of a Restricted Stock Agreement substantially similarly to agreements
executed by individuals previously awarded shares of the Company’s common stock,
the Company shall award Executive shares of Company’s common stock upon approval
of this Agreement; as follows:
250,000
shares, on each of August 17, 2009, August 17, 2010 and August 17, 2011, upon
approval of this Agreement by the Company’s Board of Directors, subject to the
Restricted Stock Agreement.
The
Restricted Stock Agreement will provide, among other things, that the shares
will not vest for a period of one year from the award date and until Executive
has paid to the Company the taxes due on such shares at that time.
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Tools:
Desktop
and laptop computers, cell phones, business cards and office required by
Executive to fulfill his duties in the multiple countries in which Company
operates will be provided by Company as required. All marketing materials will
be provided by Company.
Travel
Expense Reimbursement:
Executive
shall be entitled to reimbursement of reasonable travel expenses incurred in
connection with travel on behalf of DBMS, upon submission of appropriate
documentation and incurred in accordance with DBMS’s travel expense policy (as
adopted and amended from time to time).
When
traveling internationally, Executive will be paid an additional $250 per day to
cover personal expenses incurred when traveling on behalf of
Company.
Reservation
of Rights:
Nothing
in this Schedule B shall be deemed to limit the ability of Company to adopt,
amend, revoke or replace any fringe benefit plans or Company policies or from
taking any action in connection therewith that is applied uniformly to all
executive employees of DBMS.
